,t*-> ^j ■S^r'l, T*!"!, iSSE: ^-1 fe^' J> ^*' •!, ,nv Danes and the Irish than from any other source. i The goal to be reached by cooperation ambng farmers is to make the rural districts a better place in which to live. Den- mark and Ireland illustrate in a concrete and time-tested way what can be done to this end. The story of their achievements under the most adverse conditions can but arouse our admira- tion for them and stimulate us to do as well or even better than ~ they have done. Denmark Denmark is about One-fourth the size of Wisconsin. Much of it was formerly a bleak waste of sand-dune. Only the east- ern part of the country and the neighboring islands were con- sidered fit for agriculture. In addition to its poverty in natural resources, the country was further impoverished by the Napole- onic Wars in the early part of the 19th century. In the second half of the nineteenth century Schleswig-Holstein was taken by the, Germans. Practically all of its commerte was gone. The peasant farmers were in a most pitifiil condition. Yet, to-day, less than a century later, this same Denmark is, in proportion tp its population, the wealthiest country in Europe. 10 Wisconsin State Board op Public Affairs. Dtenmark is essentially an agricultural country. It has an area of abaut 10,000,000 acres or about the size of Wisconsin's undeveloped area and a population somewhat larger than that of Wisconsin. More than $90,000,000 worth of butter, eggs and meats are exported by the farmers of Denmark annually. There is little poverty in Denmark. In 1906 the Danes had $208,- 000,000 in savings banks. Eighty-nine families out of every hundred own their own farms and houses. This small amount of tenancy is due to the fact that land holdings can be easily acquired. HOV?- DENMARK ACHIEVED HER SUCCESS First of all, much credit for Danish prosperity must be given to theii^ system of education. This includes the long-term ele- mentaiy schools, high schools, circulating schools from the agricultural colleges and experiment stations, technical schools, traveling experts, school and state bulletins, folk fests (farrri- ers' clubs), meetings to discuss life's problems and business, educational camp meetings and the University of Copenhagen. Pay, in his graphic work, "Cooperation at Home and Abroad", puts this factor first when he says: "Education, general and technical, homogeneity of interest, occupying ownership as dis- tiugiiished from ahsentee ownership, production for export in bulk are the causes underlying the aptitudes of the Danes for cooperation.", No one appreciates the value of an education more than the Dane. He regards ignorance as a "blasting, blistering, withering curse" that makes for backwardness and stagnation. , There are now seventy high schools in Denmark. They were conceived by Bishop Grundtvig, who spent years to bring about their adoption and extension. The aim of Grundtvig and his successors has been to arouse in the minds of the young stu- dents a desire for knowledge so intense that they will first enter one of the agricultural colleges, of which there are twenty-nine, and later enter the great University of Copenhagen. In the high schools four types of teachers are to be found. First, that patriotic and sympathetic individual, equally fam- iliar with Danish traditions and history, who is thoroughly in earnest and eager to pass his knowledge on. Next is the pian of letters, a master of his mother tongue, as well as verged s AGRlCULTTJEAt, Cg-OpERATION. 11 in the writings of the past that express the national ideal. The third type is a specialist in all that concerns his country's industries and their business methods. The fourth must be a specialist in national government organization and its legal system. The young people are very enthusiastic about these schools. Even the old people — gray-haired men and women — attend them for a week's camp meeting and listen to lectures- on Japan, Martin Luther, Wagner's operas, the Eepublic of China, Lloyd George and English social life — on anything, in fact, that will instruct the mind and- quicken the imagination. After com- pleting the high school and the agricultural college, the student enters the Ulliversiy of Copenhagen. This, with the agricul- tural colleges, has an enrollment of about 30,000. At the Uni- versity the student comes to understand the complexity of modern business, and to regard agriculture not only as a sci- ence of production but as a system of distribution. He finds that the farmers' business may include, the marketing of crops as well as the growing of them and that cooperative marketing is as essential as cooperative production. Having finished these agricultural colleges, Danish students are well equipped to deal intelligently with the problems they will meet. Unlike -the people of other countries, the Danes do not cease to be students after they leave college. They never stop learn- ing. Agricultural bulletins are eagerly read. Farmers' organ- izations meet and discuss local and national questions. LAND TENURE The success of rural cooperation depends in a very large, measure upon the terms and conditions of land tenure. Cooper- ation can not well succeed in a country where land tenancy pre- dominates. Denmark, however, has eliminated this barrier by means of her land legislation of 1899, 1904, and 1909. This legislation provides for the acquisition of land upoti 50-year loans at four per cent. At this rate, a laborer who has one-tenth the purchase price of a parcel of land can borrow the other nine- tenths on that margin of security, eithei* from a state bank or from one of the 536 cooperative savings banks. These small payments are spread over' a long period, and there- fore, include more than interest for the use of the capital. 12 Wisconsin State Board op Public Affairs. Danish money-market conditions are such that at this rate (4% ) not only are interest demands satisfied, but a sinking fund set aside which gradually repays the principal of the debt. This plan gave the peasants the desired opportunity and the splen- did response has proved that the founders did not miscalculate. There are approximately two hundred forty thousand farms in Denmark, averaging a little over forty acres each. Of these two hundred forty thousand farms, sixty-eight thousand con- tain less than one and one-half acres; sixty-five thousand are from one and one-half to thirteen and one-half acres; forty-six thousand run from' thirteen and one-half to forty acres; and sixty-one thousand vary from forty to one hundred and fifty acres. ' The ratio of indBpendent owners to all farm occupiers has, as a result of these land laws, - greatly increased. The result of the Danish system of education and this large percent- age of independent farmers has been a highly perfected sys- tem of cooperation. The small farmer realized two things clearly: (1) he must not only make his land produce abund- antly by skillful intensive tillage, but (2) , he must strive to realize the highest net income possible froin his product. The system of cooperative selling and cooperative buying as against individual buying and selling was adopted to bring about this second desired end. It was not without much doubting and shaking of heads, how- ever, that these ideas gained headway. "When the question of establishing cooperative dairiea arose, the older farmers were sure that all who tried it would come to grief. They said the sys- tem would cheek personal initiative in a "dead level of uniform-' ity", hinder improvements in processess, and financially penalize the more energetic and skilled members fo.r the benefit of the backward and stupid. Experience has proven that these fears were not well grounded. The various sizes of farnis — from li/^ to 150 acres, not includ- ing a few large estates — show conclusively that property is by no means so evenly distributed in Denmark as to destroy per- sonal initiative. Cooperation does not conduce to a "dead level of uniformity", but on the contrary it is constantly ele- vating the lower classes to a higher plane of economic well- being. It has inspired hope and optimism in thousands of peas- Agricultural Co-Operation. 13 ants' hearts. They are proud to own the land upoji which they live and it can hardly be said that a system that so greatly helps farmers to become owners of their homesteads will destroy personal initiative. The Danes work together that they may prosper individtially. The effectiveness of each man's effort as a producer is increased when combined with others; savings result when men group together for the purpose of buying and profits result from combined selling. Thus instead of "uniform- ity of a deadening sort we find that uniformity exists in Den- mark only to the extent that nearly all own their homes. In- stead of destroying personal initiative, we find tha,t only that phase has been destroyed which in other, countries manifests itself in the pernicious practice of one man preying upon an- other in an epidemic of individualito ; and instead of retard- ing the introduction of modem equipments for carrying on in- dustry, the cooperators of Denmark have greatly facilitated them. CO-OPERATIVE CREAMERIES. .Agricultural cooperation in Denmark began in 1882 with the cooperative creamery at Olgod, West Jutland. The movement spread rapidly. In 1908 there were, 1,101 cooperative creameries handling practically all the milk in the countty. In organizing a cooperative creamery in Denmark each member enters into a contract to supply all tbe product of his herd to the society for affixed period, usually ten to fifteen years. All the capital is procured by raising a loan on unlimited liability. As a rule, there is no reserve fund but the loan is paid out of net profits during the period for which all contracts are drawn. The general policy is controlled by the members, each having one vote and by an executive committee elected at this meeting. The creamery is managed by a competent butter maker appointed by this committee. Each member is paid at stated intervals for the butter fat he has furnished. He receives for his product not the market price at the time of payment but the lowest price which had pre- vailed during the period. Accordingly a profit accumulates swhich is divided among the farmers at the end of the' year in proportion to the amount of butter fat furnished. The skimmed milk returned to members is charged against them at a fixed price sufficient to cover all working expenses. 14 "Wisconsin State Board of Public Affairs. The cooperative creameries dispense with the middlemen and dispose of their produce themselves. For this purpose butter export associations have been form"ed. An attempt is made to maintain a high quality of output. They are conducted on a sound commercial basis and their managers often draw , high salaries. As early as 1908 the turnover of the six export asso- ciations then established amounted to over forty million dollars. At the present time this little nation ships about one million dollars worth of butter to England every week. CO-OPERATIVE bacon CURING SOCIETIES. - The Danish pork producers have been even more tardy than the butter makers, about organizing cooperatively. The first co- operative bacon factory was launched in 1885. The members of the bacon facto,ries, like members of creamery associations, con- tract to supply the society for a fixed period, generally ten years. They procure the necessary capital by raising a loan on unlimited liability. The method of raising loan-capital on unlimited liability,^ the method of gradually converting it into society-owned capital by reserving a sinking fund to pay off the debt when the original contracts terminate, and the method of distribution of the remain- der of the net profits among the members are the same as in the dairy products industry. The basis of distributing dividends in these associations is the number of hogs sent in. In 1910 there were thirty-four cooperative bacon factories with a total membership of about 93,000 farmers. In 1908 more than $1,545,000 worth of hogs were slaughtered to supply the rapidly growing trade. co-operative egg EXPORT SOCIETIES. The Danish Cooperative Egg Export Society was organized in 1895. The purpose of this organization is to standardize the output and bring about greater stability in prices. The central society is made up of a large number of local associations each of which contains at least ten members. Each producer must stamp the eggs with his own number and that of the group to which he belongs so that it is possible to ascertain exactly who supplied each egg. The farmer who sends in a bad egg is fined. The eggs are then sent to packing centers, Agricultural Co-Operation. 15 whence they are shipped according to a fixed price determined a week in advance by the managing committee. Although not twenty years old the Danish Egg Export Society consists of 550 groups and did a business, in 1908, of more than $6,600,000. Danish eggs bring fancy prices because th'cy are always fresh, well sorted, well packed, and guaranteed. COW-TESTING ASSOCl!A.TIONS. No one factor has been more potent in -giving Denmark her supremacy in the dairy industry than have the cow-testing asso- ciations. The movement began in 1892, when State Counselor B. Boggild, at a meeting of the Kildebund 'Creamery patrons in July of that year, explained how records of the individual cows could be obtained. The result was that fourteen farmers agreed to weigh the milk from each cow and send samples of it to the creamery. The creamery manager determined its richness by the Fjord centrifugal cream tester and published the record of the milk and butter yield from each cow, as well as the feed con- sumed. Shortly_ thereafter, and as a result of this, these men who had kept records formed the Kildebund Bull Association, with the object of improving their herds. Another State Counselor, Frederick Hansen, a. dg,iry expert employed by the government, and the. owner of a dairy farm, had for several years studied the richness of the milk of individual cows by occasional testing and had been weeding from his herd the animals which gave poor milk. His neighbors, who sent their milk to the same creamery, noticed the increase in richness of the milk from his herd, and began to inquire into the cause. "When sufiBcient interest had developed it was suggested that an association be formed for the purpose of testing the milk of individual cows, and-th*e econoriiy of their production, so that each taember of this association might have the sahie benefits of Mr. Hansen's investigations. A. meeting was called for this purpose, and the first co- operative cow-testing association was organized. A dairy •expert was employed to examine the milk. Active opera- tions began May 1, 1895, with 13 members, and so satisfactory have been the results th&,t the association now numbers twenty- four members owning 522 cows, and employs two men as cow testers. Five hundred thirty cow-testing associations had been organized up to the year 1909, in this progressive little country. 16 Wisconsin State Board of Public Affairs. Keports from Denm'ark show that the average butter production per eow in 1908 was 224 pounds. This average is actually twice as much as it was in 1884. The movem'ent has not stopped, with Denmark. The first association in Germany was organized in 1897, and in 1909 there were 207 such organizations. In Sweden, the number has in- creased from one in 1898 to 662 in 1909. Norway, Finland, Hol- land, Russia, and Scotland have quickly followed Denmark's lead. Increased prosperity has resulted wherever these associa- tions are in operation. WHOLESALE PURCHASING. This steteh of Danish cooperation would not be. complete with- out mentioning their extensive system of buying at wholesale. This business, conducted through a great central wholesale agency, amounted, in 1908, to $17,500,000. The commodities so handled include seeds, fertilizers, machinery and, in fact, every necessity for the operation and upkeep of the farm. Ireland. Ireland was at one time the leading dairy region of the world. Irish butter commanded the highest price in English markets where most of the surplus was sold. Two causes contributed to her loss of supremacy in the dairy industry. In the first place, other countries, especially Denmark, had improved the quality of their butter and secondly they could sell it for a lower price than the Irish because of their improved method of production' This of course destroyed the market for Irish butter in England. The situation became very serious, for it was evident that home- made butter could not compete with the factory made product. Privately owned creameries were established and offered flatter- ing prices for milk until the farmers had abandbned home churn- ing. They then gradually lowered the price until the farmers were no better off than when they churned their butter at home. An effective combination seems to have existed among these pri- vately owned creameries. This state of affairs finally became intolerable. The farmers decided to group together and own theiV own creamery. They formed joint-stock companies, but no sooner had they started operations on the joint-stock plan when trouble arose among themselves regarding the distribution of their income. The AGKICULTUEAi. Co-OPERATtON. 17 joint owners of the creamery divided into two opposing factions the one favoring a high return on capital, the other a high pur- chase price for milk. The result of these conflicting interests was that the joint-stock companies collapsed because, as Sir Horace Plunkett says, "They didn't know either the spirit or working of cooperation. They adopted the townsman's form of oi-ganization, wliich is wholly unsuited to the farmer 's industry. ' ' Meanwhile the individually owned creameries were taking a new lease of life because of the farmers' inability to distribute their earnings peacefully when they had them "right in hand. The farmers could not cooperate so long as there was a conflict of interest withiji their own ranks. With a fall of almost 50% in the price of homemade butter, it w^s suicidal to chum their own cream. Rather than go back to the old creameries some farmers were actually abandoning dairying and going into the production of dry cattle. Others were leaving the homesteads for the "new world" or the glamour of the fast growing city. The outlook had never been more discouraging in Denmark than it was at this stage in Ireland. Two men of much ability and sincerity now came forward to help the poor farmers out of their troubles. These men were Mr. R. A. Anderson and Sir Horace Plunkett^a peasant and a nobleman. Both believed that a wholesome and contented rural life is essential to a country 's prosperity. To make country life attractive was to them the first and foremost problem of twentieth century civilization. These men did not seek new ideas or principles but adopted the system of cooperation already worked out in other countries, notably in Denmark. We shall dwell on, the obstacles they have met and the way they have dealt with them, because although peculiarly stubborn in other lands, these same obstacles must be reckoned with right here in Wisconsin. The first obstacle to be met was the opjposition of all those whose ' source of persdnal income was menaced by a change in the eco- nomic system. This group included the country storekeepers, in places where cooperation in purchasing was advocated, and the independent creameries in places where cooperative cream- eries were advocated. Some of these who openly opposed the movement declared that cooperation was an infringement upon ' 'vested rights, ' ' others tried to belittle the whole idea, while still 18 Wisconsin State Board op Public Affairs. others declared that it would bring disaster upon the country. As is so often the ease, the vested rights element took refuge in their old plea for inaction, preaching that "the time is not ripe" and "the country is not ready" and meanwhile pulling what wires they could to make that view seem true. Obstacles were only a challenge to Anderson and Plunkett. They opened their campaign in 1889 in spite of the resentment of professisnal politicians and religious teachers and the skepticism of the rank and file of farmers themselves. They have continued their campaign ever since, despite the class war between landlords and tenants. To show with what persistence they faced the heavy odds against them it may be noted that fifty meetings were held before' the first cooperative creamery was started and' that in the first five years of this work only thirty- tliree were oi^ganized. The experience gained in this interval proved the need for some central organization to systematize the work not only of founding new societies but of helping those already started with practical counsel and advice. So in April, 1894, at a large public meeting in Dublin, the Irish Agricultural Organization Society was formed to meet this need, as well as to furnish technical information not as yet adequately supplied by the government schools. GOVERNMENTAL AID TO CO-OPEEATION It is doubtful if cooperation could have been carried on to any considerable extent by purely voluntary activity^ even with an efficient central organization such as the Irish Agricultural Organization Society. Two reforms, were necessary before Ire- land could be placed upon a sound economic basis. -Neithei: of these reforms could be brought about except by governmental action and aid. The first was adequate educational facilities and the second more favorable conditions of land tenure. REPORT OP THE RECESS COMMITTEE The first of these needs was em'phasized fully fifteen years ago. In 1896, through Plunkett 's influence a nonpartisan com- mittee of Parliament was appointed to investigate and report on conditions in those countries competing with Irish produce. The main problem was how large a part state aid was playing elsewhere in the success of cooperation. Eight countries were studied and IJie findings embodied in a memorable report. It Agricultural Co-Operation-. 19 was discovered that "agricultural education in each country was in advance of the Irish system. Foreign governments had not only organized departments for agricultural education but they were supporting other work in aid of agriculture, which they deemed could be more- advantageously carried on by the state than by private eiJort. The result of this report was the establishment in 1899 of a department of Agriculture and Technical Instructi6n foi' Ireland. LAND TENURE For many centuries the' greatest scourge in Ireland has been the ownership of Irish land by men who live, in England. The rents charged were exorbitant, the policy of the landlords hav- ing always been to exact "all the traffic will bea,r." No amel- ioration of the peasant's conditions could possibly come about so long as insatiable landlords had it in their power to extract from the peasant all but a bare existence. It is against these tremendous odds that cooperation has for nearly a generation been battling. It cannot be said that the Irish people did not desire to own land. The following statistics show how tenaciously they have clung to the soil even under the most unfavorable conditions. The total tillable area of the island is a little over twenty mil- lion acres, with a population, in 1901, of about four and a half millions, comprising some 910,000 families. As almost 550,000 of these families lived by farming, and as much of the avail- able area is very poor land, it is not surprising that the areas occupied were in round numbers as follows: Holdings under five acres in extent 147,000 Holdings between five and fifteen acres 153,000 Holdings between fifteen and thirty acres 136,000 Holdings over thirty acres 166,000 But, in addition to this congestion and pressure of popula- tion, there is the fucther fact that many landlords have m'oved. from the country and have not realized the bitter trials of the tenant class in attempting to meet high rents and make a re- spectable living. Governmental interference was necessary. Obviously, in this trying situation, the question has been how to shut off, with the least opposition, these increasing 20 Wisconsin State Board of Public Afi^airs. leakages of rent. Some have thought the best policy would be to fix, by governmental authority, an arbitrary maximum rental for each particular plot, and in fact legislation has been passed for this purpose. But the greater reliance seems to be placed upon the plan of buying out the landlords rather than by establishing a maxi- mum limit to their rapacity. The worth of this plan all de- pends, of course, on the amount paid the landlord for libera- tion; if the interest on this valuation equals or approaches the highest amount he has ever been able to extort as an annual rental, the transaction is obviously only the substitution of one oppression for another, whether in the nam'e of interest o,r rent. But this is not the intent of the Land Purchase Acts passed in 1903 and 1906. By these acts absentee owners are forced to sell to tenants providing the purchase amount asked by the landlord will, at 3i/^%, make a lower amount in interest than the rental charged. In othei' words, the Estates Commis- sioners, who have this matter in hand and who are appointed by the Board of Agriculture and Industries, are required to make an advance in all cases where the total yearly payment of the tenant as interest amounts to from 10% to 40% less than the rent. The judicial rent of the landlord is likewise fixed by the Estates Commissioner and is arbitrary. The state loans the total amount needed by the tenants on the advice of the Estates Commissioner, and charges 2%% in- terest to the farmer and %%. additional, which is used to create a sinking fund, which pays for the estate in 681^ years. That a great agragarian movement is on may be seen when we realize that in five years from 1903 to 1908, the total sale of lands from landlord to tenant has been $385,000,000 as against $115 - 000,000 from 1870 to 1903, a period of thirty years. Uji to 1903, 75,466 loans, with a total transfer of over 2,000,000 acres were recorded. It is safe to say that during the past decade six millions of acres m'ore have been purchased by the govern- ment from the landlords and transferred back to the tenants. By 1920 it is expected that most of the land will have been so transferred. SUCCIJSS OP CO-OPEBATION IN IRELAND , Some may judge the measure of success of the Agricultural OrgaJiization Society by the fact that there are now more than Agricultdral Co-Operation. 21 400 cooperative creameries on the little island. The prosper^ ity and optimism, however, which these have brought back into many lives have only been possible through the growth of a spirit of mutual respect and good will, which is perhaps- the greatest gain of all. Mr. Anderson's comment is given in part to show how highly the men at the head value the optimism that has resulted from tTie cooperative movement. "The wisdom of this course (ruling out factional issues) ai once, became apparent. Leading men of divers politics and religious persuasions joined the society and were elected upon the committee; and it is a noteworthy fact that up to the present time, although the one hundred thousand farmers who eom'pose oui' movemen;t arefoj^ the great ma- jority Roman Catholics and Nationalists, the representa- tion on the committee is about evenly divided between Catholics and Protestants, Nationalist and Unionist mem- bers. The one qualification insisted upon is that the per- son elected shall be a worthy representative of tbe cooper- ative movem'ent. "This rigid exclusion of political and sectarian ques- tions has created between men who before never exchanged a friendly word — simply because a common platform did not exist — firm and enduring friendships, based first on mutual toleration in the advancement of the common object and later on, the surest of all foundations, mutual esteem aijd appreciation. Our cooperative movement in Ireland has broken down many of the prejudices and softened much of the asperity which political and religious differences had fostered; it is slowly but surely uniting the people of our island and fitting them by its discipline and by the exex'- cise of brotherly qualities for a national existence." To show what has been accomplished in the face of difficul- ties and as an indication of the growih that may be looked for in the future, Mr. Plunkett recently publishejd in the Lon- don Times a resume of the first twenty-two years of Irish co- operation. Among other things, it shows a total business of $125,000,000 in that time by the various agencies and a turn- over of 1911 of nearly $15,000,000. This was distributed among §ome 900 rural societies with a membership of about 90,000. 22 Wisconsin State Board of Public Affairs. Anji despite the number of members and the magnitude of the enterprise the commercial failures have been rem'arkably few.. The building up of this promising system has not been without its burden of expense ; among other expenses being those incur- red in an unceasing campaign of education and organization to the financing of which the farmers and their friends have responded loyally. Of the $665,000 raised they have contributed three-fourths, the other quarter being secured from' the govern- ment. Certainly, considering the obstacles already mentioned, this is a most encouraging record, a victory worth while for its own sake even though only the beginning of greater things. And if such can be won under the conditions that prevailed in Ire- land, what may not be done in ' democratic, enlightened Wis- consin? It is a task for big, devoted men here as elsewhere,- but who will say that such men are not to be found am'ong us? And now, with this glance at the history of the movement, let us look into the methods adopted in the various enterprises so far organized in Ireland. For the sake of brevity and to avoid undue repetition we may compare them with the Danish meth- ods already outlined at length,' and be content for the most part , to point out the differences. The first and most important in- dustry is dairying. DAIRYING} The Irish creameries, like the JDanish, are financed at the start fromi two sources, viz: capital belonging to the members at the time of organization and capital borrowed from out- siders either the regular banks or the cooperative .credit banks, of which there are now 300 scattered over the country. But the borrowed part of this capital is, in Ireland, the sum of a number of small loans to the members as individuals instead of one large loan on their joint liability. For the capital turned in, whatever its source, the company issues stock of a corres- ponding par .value, each man's subscription usually being roughly proportional to the number of cows he has. A fixed rate of 5% is paid on this stock, giving a 1% m'argin over the present 4% rate at which members with good credit can borrow. After making the usual deductions from gross ineom'e, for cur- rent expenses and reserves for depreciation, the annual 5% in- terest, and the contingency fund, the balance of net income is Agricultural Co-Operation. 23 distributed among the members in proportion to the amount of butter fat contributed by each. There is thus no need of putting an arbitrary weekly value on the fat and during an annual accrued surplus, as the Danes do. Liability limited to the par value of the stock and management by a committee elected by the "one man, one vote" method are features al- ready familiar. These cooperative creameries are now well established. . Of the total output of exported Irish butter, valued at about $20,- 000,000 yearly, the cooperative creameries produce about one- half. Not only are they equipped with the most up-to-date machinery, but they are in a position to enforce, and do en- force; contracts tbat members shall bring them their whole out^ put. In some respects they are still far behind the Danes. In the first place, they have not, as we in "Wisconsin have not, gone into winter dairying as they should. Whereas in Denm'ark the production is so continuous and regular that winter receipts are but slightly lower than the yearly average, in Ireland the butter-making season is only four- to five months long. The Agricultural Organization Society is now making a determined campaign to alter this situation. In the second pl^ee, there are numerous unprofitable individual cows in the Irish herds. Once a thorough-going system of cow-testing is adopted, it will m'ake each cow renders an account for the food she consumes and will tend ultimately to eliminate the unprofitable animals. This, with winter dairying, will give the Irish herds a better average than the present one of only about 65% of the Danish average, the Irish cows averaging 450 gallons and the Danish cows 700 gallons of milk per year. Finally there is room' for much more - cooperation between the various societies. This should work in two ways; by establishing and enforcing a more uniform quality', of butter, and by establishing and enforcing a more uniform and centrally directed policy of marketing. Steps have already been taken to bring these about. poultry-produce selling A recent activity of the Agricultural Organization Society has been the establishment of poultry products associations, pat- terned entirely after the Danish system' already described. This is, of course, about thg simplest and easiest, form of a co- 24 Wisconsin State Board op Pubijc Affairs. operative enterprise to establish, as the outlay of invested capi- tal is small, the returns prompt and continuous and the product, at least the eggs, readily standardized. The eggs, in fact, are not only stamped, sorted and packed as by the Danes, but the producers are paid for them almost entirely by weight instead of by number. This is doubtless the reason why the value of the exports handled cooperatively in the two industries is about equal, al- though the .poultry produce is of much less value than dairy produce. The poultry and eggs thus handled are sold in the British market by a central salesmanagei? who receives a small commission. IRISH AGRICULTURAL WHOLESALE SOCIETY The Irish have taken a suggestion from the Danes in still another field. Before the days of cooperation such important supplies as seeds, f ertilizere and machinery were bought through dealers, who were not able, and generally not of a disposition, to test the quality of the goods nor to buy in such quantities as to secure the most favorable price. They also encouraged the pernicious system of long-time credit and charged excessively for the risk involved. I The Irish Agricultural Wholesale Society is changing all this. It is a federation of numerous local purchasing societies, and is able to secure very favorable rates because of the volume of its business. With its assured and steady purchasing power, it has been able to pay all expenses and effect from 25% to 40% savings to the farm'ers on fertilizers.- Almost equally important is the fact that it has improved qual- ity while it has lowered prices. For instance, all the seeds it han- dles are now guaranteed for purity and germination and with all its artificial manures goes a certified analysis of their con- tents. All kinds of machines not purchased outright by indi- viduals, are sold to the local societies to be hired out to such members as do not need the exclusive use of such an implement. Finally, it has agitated in season and out, for cash dealings be- tween the local societies and their members. As the local, associations must still do some credit business, the central society must itself extend them credit. Hence it is necessarjr for the central society to get from some outside source Agricultural Co-Operation. 25 working capital to use when it does not itself get credit from the manufacturers. This is raised partly by the sale of its own preferred stock and partly by loans^ — some advanced by the local societies out of surpluses held back for contingencies. Its own "wholesale" prices are made high pnough so as to leave some margin after paying expenses, interest and dividends on preferred stock. Thus the borrowed capital is gradually added to and displaced by its own surplus "profits" and the local societies' ownership of these assets, is acknowledged by issuing to them common stock, distributed in proportion to the value of the orders re- ceived. The central concern is managed by a Board of Direct- ors elected by the local societies, as in Denmark. OTHER BEGINNINGS At the present writing mutual live stock, insurance and bacon- curing associations are being advocated and in some places or- ganized on a basis that seems to insure success. General Conclusions. "We have noticed in the case of both Denmark and Ireland that cooperation to be successful requires an order of citizenship that only genuine technical and cultural education can produce. In addition to this it requires conditions of independent land owner- ship not purchased at a price which puts an unbearable interest burden on the farmer. Cooperation has been most successful when State aid has seconded the efforts of voluntary organizations once their earnest- ness and practicability have been proved. Back of these move- ments, voluntary or official, have always been broad-minded, un- selfish, inspiring men. But to give their vision and their pru- dence full effect, the financial resources and constraining power of the state have been clearly indispensable. 26 WisooNSiN State Board op Public Affairs. CHAPTEE II. CO-OPERATION IN WISCONSIN. I. Early History of So-called- Co-operation. We shall describe two movements that occurred in the early history of Wisconsin before taking up the real cooperative move- ment as we understand it to-day. Suffice it to say at this point that neither of these movements, one of which is known as the "Ripon Phalanx" and the other "The Purchasing Agent Sys- tem" are in any wise similar to present day cooperation either in form or in spirit. THE KIPON PHALANX. The Ripon Phalanx was an early adaptation on American soil of a French scheme of community-life worked out many years before and applied experimentally by anoted communist, Charles Fourier. His idea was that all the benefits of a " balanced civil- ~ ized life, with a thoroughgoing but not too cramping division of labor," could best be realized in aggregations (units) of 1,600 to 2,400 persons, who should live and carry on their domestic in- dustries in a large community-house on an ample tract of land- which they should own and part of their number work upon. This plan was decided at a meeting of the village lyceum in Kenosha (then called Southport) in the winter of 1843-1844, and the up- shot was the purchase from the federal government of a tract,of 1700 acres of good land at the original "gift price." The, pha- lanx here founded, both in form and in spirit, was on the whole a faithful reproduction of the earlier French phalanxes. The phalanstery, or common house, comprised two parallel rows of tenements 400 feet long with a large hall between. This served as a general dining-room where the great majority ate, although those so preferring could have their meals in their own apart- ments. Agricultural Co-Operation. 27 The economic organization was about as undiscriminating and uneoereive as it could have been made. The whole internal dis- tributive system was controlled by the most democratic princi- ples. Some of the questions thus decided were (1) who should supervise the different departments of work (chiefly agricultur- al) ; (2) how the net income should be divided between current labor and invested capital ("past labor") ;and above all, (3) how the various kinds of current labor should be paid. These last two questions they, decided by fixing an indiscriminate hour- wage for all men and all occupations, skilled and unskilled, ardu- ous and easy, and by distributing the balance of net income ("profits") three-fourths to labor according to annual individual wage-sums and one-fourth to capital according to the investment stake of each. The individual income-shares were determined by the time spent at work and the capital contributed. During its brief life of a half-dozen years, the phalanx was a success in the sense that it held its own against the world and its members made a comfortable living. But from the standpoint df membership it doubtless fell far short of expectations — the ■president's report of 1847 showed 157 residents, comprising 32 families and some unmarried adults. In 1850 steps were taken for its peaceful dissolution. Quite evidently this was not due to a feeling that capital was not being sufBciently rewarded, for the hour- wage was kept low enough to allow a 12% "dividend" to stock the first year and a goodly percentage thereafter. No ; the real reason is probably that "life in a Phalanx ... is not compatible with American ideas" — or the intuitive wisdom of any people, for that matier.- THE PURCHASING-AGENT SYSTEM The -first serious effort of Wisconsin farmers to cooperate oc- curred about 1870 with the general awakening of the National Grange. Here, as elsewhere, the local granges banded together in the support of a state purchasing-agent, who assembled orders from the respective associations and apportioned them at his dis- cretion among various manufacturers willing to sell directly at wholesale, purchasing in carload lots wherever possible. The amount of business transacted in this way during the six years 1875-80 inclusive, the period of greatest activity, is indicated by the following summaries taken -from the Grange reports: 28 Wisconsin State Board of Public Affairs. Year ■ No. of Members* Value of Orders Average per M.* 1875 18,653 $38,194.38 12.04 1876 18,427 115,882.31 6.29 1877 17,640 164,445.16 9.32 , 1878 7,093 86,391.92 12.18 1879 5,526 . 61,334.44 11.08 1880 4.651 55,560.20 11.93 The most striking feature of this table, of course, is the falling off of almost 50% in the business of 1878 as compared with that of 1877. What was the cause ? True, this decline came fast on the heels of the recommendations of the National Grange in 1877-7- ' 'There have been more failures than successes ... we advise the discontinuance of any [state agencifes] now in exist- ence." But this mixed confession and surrender, while it may have swayed the minds of some farmers inclined to follow such long-range authority, can hardly be accepted as a controlling cause independent of the conclusions reached by the great ma- jority of the members based upon their own experience. ' "Whfit then was the trouble with the purchasing-agent in Wis- consin? The dissatisfaction seems to have been due to the fol- lowing reasons: (1) Insufficient cost savings. (2) Unsatisfactory quality of goods. (3) Delays in filling orders. (4) Kequirement of "cash with order" payments. These objections cannot be accepted without examination, in unqualified condemnation of the state-ageiicy system. In the first place to what extent did they actually represent the facts? Again, where should the weight of responsibility for those facts rest? So far as the situation could have been improved, was the chief trouble a lack of efficiency in management or of loyalty on the part of the members ? And if improved, as it might have been, was the function it might have performed worth while ? In other words, what might legitimately be expected of such a system ? With loyal, intelli- gent backing need this normal expectation have been a realsonable ground for disappointment and desertion ? For answer to these very vital and pertinent questions we prob- ably cannot find more illuminating material than a letter written, '"Columns No. 2 and No. 4 are not particularly significant in this connection, as others than grange members were allowed to patronize the state agent. Agrioultural Co-Opeeation. _ 29 ■in 1885, by Mr. S. G. Kuiffein, of Milwaukee, then the state agent, to the State Bureau of Labor. This shows graphiqally how in- terwoven were all the factors in the system. What then was expected of the agency ? ' ' The general desire . . . is to save fully 25% on purchases." What was its sales policy? "We have not aimed to do more than cover expenses . For fear of disappointing them we sell all staples at about net cost to us without a margin that covers expenses . . . For eleven years we have shipped sugars at actual cost, receiving nothing for cartage or shrinkage ; nails at an acivanee of five cents a keg; barbed wire at %-% of a cent a pound profit from (mean- ing "margin on") carjoad lots, or an advance of about 5% on net wholesale rates for small lots. What were the savings actually realized? The saying to patrons naturally varies according to the advantages in their own local market . . . We are aWe to save them that much (25%)' on ma,ny things . . . On teas I think we save patrons fully 25% and the same on coffee, lubricat- ing and illuminating oils. ' ' What kind of patronage did the farmers actually give the agent? "Farmers use this agenpy as a bureau of information more than anything else, and as a regulation of local trade. The information imparted in the other , nine out qi ten letters is lised to enable the correspondent to buy more intelligently and to better advantage at home. ' ' What effect did this practice have on the expense necessarily charged to actual purchasers ? "Our correspondence is simplly immense . . . We sell about $100,000 per annum and mail prices and answer letters sufficient to "sell ten times the amount ... PerhaCps out of ten inquiries from new customers we get one order. ' ' Did the agency do anything to increase its volume of sales? "We do not restrict our sales to members of the Grange." What reason could the agent find for the above low percentage of patronage? "We do not sell on time, and it is probable that a, large portion of our correspondence is from parties who have not the means to biiy for cash and so do the best they can for time purchases where they have a local credit." But this does not mean that the great majority of all farmers could not 'get ahead' and so secure the benefits of cash trading. From a knowledge of . the cash factor in country bank deposits, especially in the well- festablished districts, lie must have known how many actually had money ahead and could command cash if they wished. 30 Wisconsin State Board of PuBiiic Affairs. Evidently with those in mind he says, "If the farmers were a unit in cooperation and would pay cash promptly on delivery or even on thirty or sixty days, goods could be shipped to them in broken lots as cheaply as dealers can buy of drummers. It costs the jobbers or wholesaler from 5% to 7% on the value of his goods to sell the same through traveling agents, and he could break bulk and make as much profit and do a safer business, if the farmers, through their organizations, would create a sure market. " ' ' This, would save the farmers all the profits made by local deal- ers in, carrying a stock in their vicinity." So in his judgment goods could even he bought on consider9,ble time by responsible credit associations. Then why was there not greater interest in organizing to that end? As if in answer he adds, "But of course they would have to forego the convenience of a local point of distribution," i. e., (1) of seeing before buying and (2) of im- mediate delivery," Here the situation of a generation ago is presented in a nutshell. There may have been minor and short-sighted attempts by un- principled manufacturers to palm off goods of a quality inferior to what was implied in their quotations, but the great trouble was that those who most needed to save could not pay promptly, and those who could pay cash valued the conveniences offered by local merchants above the savings to be had for waiting and buy- ing "sight unseen." These latter "wanted what they wanted when they wanted it" and the rest could command only local credit. And of both classes, so far as the inconvenience of pay- ing before using was concerned, it might be s.aid that tliey found, they could not "eat their cake and have, it, too." That the unfavorable declaration of the National Grange did not kill the "Wisconsin agency may be seen from the fact that it was still doing business in Milwaukee in 1886, and still under the old handicap of writing ten letters for every order. , II. Present Day Co-operation. Two voluntary organizations stand out in Wisconsin to-day as Sponsors of the cooperative movement — the American Society of Equity and the Right Relationship League. The Patrons of Husbandry are now concentrating the efforts of their 1200 mem- bers on the rural school question and have given up their active interest in cooperative work. One of these organizations the Agricultubal Co-Operation. 31 Right Relationship League, gives its whole time to the organiza- tion of cooperative stores and we will therefore discuss its work in the pamphlet on cooperative distribution. 'The other agency is the AMERICAN SOCIETY OP EQUITY From the issue of the Wisconsin Equity News, of June 10, 1912, we learn that the underlying principle, controlled market- ing, upon which the society was based, was first promulgated by one W. L. Hearron of Carlinville, 111., and that a number of local unions were organized by him in southern Illinois in the late nineties and early in 1900, that he outlined the plan to one J. A. Bveritt, of Indiana,polis, a seedsman and publisher of Up-To- Date Farming. Mr. Everitt appropriated the idea as his own and during the year 1902 published in his paper a series of arti- cles introducing this new idea into our agricultural literature. This brought about on December 24th, 1902, the incorporation, under the; laws of Indiana, of the American Sooiety of Equity of North America. Inexperienced leadership and inadequate finances were and are the greatest weaknesses of the organization. The plan of con- trolled and intelligent marketing has proven sound, and the necessity for a voluntary educational organization is acknow- ledged by students of social and economic progress. IN WISCONSIN Active organization work began in this state in 1903. The Wisconsin State Union was formed in January, 1906, and its state paper, the Wisconsin Equity News, was established in May, . 1908. An educational organization not assuming to engage in busi- ness activities, the actual results of the work and teachings of the society are not easily traceable; but, directly or indirectly, it is responsible for much of the cooperative spirit and activity in Wiseonsili, and warehouses, elevators, cream'eries, stores, and shipping and. buying associations of farmers are the result of its propaganda. The organization took a leading part in influencing the estab- lishment of the binder twine factory at our state prison, and to- gether with the Right Relationship League, secured the passage of our cooperative law (chap. 368, laws 1911). 32 Wisconsin State Board of Public Affairs. Personal jealousies and ambitions, lack of loyalty on the part of members, and neglect in keeping up annual dues from whien the organization derives its support, may be mentioned as sources of weakness. CO-OPERATION IN W15C0N5IN Unions and membera in cdch counttj ot the American 5ocielu of Etjuily. November. I, /7// Chart A. At the present time, the "Wisconsin Branch of the A. S. of B. has over 10,000 members in good standing. Its greatest strength as shown on the accompanying chart (See chart A) is in Miarathon, Pierce, St. Croix, Polk, Door, Trempealeau, Vernon, Dodge, Caluihet and Dunn counties. The state head- quarters are located in Madison, in charge of M. Wesley Tubbs, state secretary and editor of the official state paper. The. other officers are President Emeritus, Thomas Emmerton, Bloomer; Presfdent, Ira M, J. Chryst, Sparta; Vice Pres., J. H. Camahan^ Agricultural Co-Operation". ■ 33 Blaek River Falls, while the Hon. D. 0. Mahoney of Viroqua, is president of the board of directors. It is interesting to note that the mutual understanding be- tween the officers of the Right Rehitionship League and those of the Society of Equity was further emphasized by the signing of a working agreement between these organizations on May 31, 1912. Even before the Society of Equity or the Right Relationship League had come into Wisponsin, sheer necessity had forced some form of united effort in certain lines, notably in the production of butter and cheese. The records in Wisconsin for 1909 show that farm-made cheese brought fourteen cents a pound. As a result, only one pound of cheese out of every one hundred forty- six is made on the farm. On the other hand, farm-made butter brought an average of twenty-two cents a pound while factory- made butter sold for twenty-eight. Only eight of each 113 pounds of butter are made on the farm. During- the past few years co(5perative activities of all kinds have been organized. It is safe to say that at the present time, there are upwards of one thousand organizations in Wisconsin, clI of which are more or less cooperative in principle. Nearly every phase of cooperative activity, with the exception of credit, has been attempted, some of them with considerable success. Farmers' coijperation has shown itself in mutual fire insur- ance companies, grain elevators, potato and tobacco warehouses, fruit growers ' associations, live stock breeders ' associations, cow- testing associations, dairy associations, cooperative egg m'arket- ing, live stock shippers* association, mutual telephone companies and stores, while cooperative laundries and cooperation in the vegetable industry are at present receiving a good deal of at- tention. cow TESTING ASSOCIATIONS^ Following closely the lead of the Newaygo County Dairy Test- ing Association of Freemont, Michigan, which claims the credit of being the first organization of this character in the United States, the Wisconsin Dairymen's Association began the work in Wisconsin by the organization of such an association in the 'We are indebted to Mr. A. J. Glover, of Ft. Atkinson, Wis., Secre- tary of the Wisconsin Dairymen's Association, and to Mr. H. C. Searles, Fond du I^ac, Supt. of the' Cow Testing Associations, for this material on cow testinK. 3— PA 34 Wisconsin State Board of Public Affairs. neighborhood of Rosendale, in September, 1905. In May, 1906, Mr. H. C. Searles, now superintendent of the eow-testing asso- ciations of the state, began the work as expert tester. Late in the season Mr. H. K. Loomis, started similar work on a m'ore limited scale in Sheboygan county. In 1907, several associations were organized upon what was termed "the fifty cent plan". The work was conducted in the following manner : 9as£. WISCONSIN" COOPERATIVE. COW TE.6T1NG AS50CIt^T10N5 Chart B. Each person who joined an association was required to pdy fifty cents per year for having the milk of one cow tested once a month. It became necessary for each member to weigh and sample the milk of each cow in his herd and then take the samples to the creamery where they were tested by the butter maker. This system proved very unsatisfactory, since in the Agricultural Go-Operation. 35 busy seasons, farm'ers would neglect to weigh and take the sam- ples and after being tried for a year or two at twenty-seven places, the plan was abandoned, and the "dollar plan" of test- ing which we shall presently discuss was adopted. Since the cow-testing associations were, organized six years ago, 1452 dairymen have belonged to them and 17,548 cows have completed a year's record. But the work has not shown great results, because the reports show that few have continued the testing for more than one year. HOW ORGANIZED A cow-testing association should consist of about 25 members owning in all not fewer than 400 cows and preferably 500 or 600. The present method of testing cows is to charge $1.00 per year for each cow. Tliis sum is paid to the ' treasurer of the association and he in turn pays it to the man who does the testing. Besides this expense, each member furnishes the books for keeping the records of his cows, the acid and the necessary apparatus for conducting the work, an expense very small *in- deed. The first step taken in organizing an association is to get the required number of dairy farmers to sign a paper pledging themselves to furnish a given number' of cows. After the re- quired number of cows are pledged, a meeting should be called a constitution and by-laws adopted, and officers elected.^ It is the duty of these officers, with the aid of the Wisconsin Dairym'en's Association, to select a man to take charge of the work. This man visits each member's herd once a month and weighs the milk of each animal in the herd for one day. From' the weight and test, he calculiates the amount of fat produced for one day, and estimates the amount of milk and fat produced for the month. If the farmef is interested in knowing what it costs to produce butter fat, the tester will help him' determine the ainount of feed each animal is consuming. The tester must be taken from place to place and it becomes the duty of those in the associa- tion to convey him from one m'ember's house to another. This work is usually arranged so that no one has to drive more' than a mile or two. In some cases an extra sum is paid to the testei' and he furnishes his own conveyance. 1 See appendix for the farmers' agreement and the by-laws now be- ing use'd by the State Dairymen's Association. 36 Wisconsin State Boaed op Public Affairs. At the end of the year, the tester, with the aid of. a representa- tive of the "Wisconsin Dairymen's Association, takes the records and calculates the amount of milk and fat each animal has pro- duced and the profit or loss. The books are then returned to the owners. Ml-. H. C. Searles of Fond du Lac, is superintendent of these associations. It is his duty to help organize them and see that' they are properly conducted. H^ visits each association sev- eral times a year, for the purpose of looking after the work. Owing to the constant change in men who are selected to do. the testing work, it becomes necessary for him to secure a good- many testers in the course of a year and give them instructions regarding the m'ethod of operating the association. If it were not for this he would be ahle to superintend a larger number of associations. On May 12th, 1912, Mr. Searles submitted to Mr. Glover, the following report which shows the number of as- sociations in operation at the present time, giving the names and addresses of the secretaries and stating the number of mem!- bers in each association. (See Chart B). (1). The Beloit Cooperative Cow-Testing Association began the second year's work April 10, 1911, with 23 members and 470 cows. Officers, Pres., Chas. Lathers, Beloit, Wis. ; Sec. and Treas., Edw. Salmon; Tester, B. C. Baltzer, Beloit, Wis. (2). The Dunn County School of Agriculture Cow-Testing Association began the second year's work, March 6th, 1912, with 24 members and 415 cows; Manager, Prin. W. W. Sylvester, Menom'onie, Wis. ; Tester, Ernest Le June, Elk Mound, Wis. (3). Bloomer and Eagle. Point Cow-Testing Association be- gan the fourth year's work May 10th, 1912, with 26 members and 450 cows. Officers, Pres., J. H. Kelley, Eagle Point, Wis. ; Sec. and Treas., li. V. Bartlett, Eagle Point; Tester, Gordon B. Grimes. (4). The Fort Atkinson and Milton Cow-Testing Associa- tion began the fourth year's work Feb. 1st, 1912, consisting of 100 cows on the dollar plan. Manager, Wm'. Kammer, Milton Jet., Wis.; Tester, Harold Ulrich, Fort Atkinson, Wis. (5). The Northern Division Winnebago County School of Ag- riculture Cow-Testing Association began its third year April 1st, 1912, with 23 members and 400 cows. Manager, Prin. J. M. Humphreys, Winneconne, Wis.; Tester, G. Ellis, Winnecoime, Wis. AORIGUtiTURAti Oo-OpERATION. 8? (6). Southern Division Winnebago County School of Agricul- tTire Cow-Testing Association began the second year's work April 1st, 1912, with 16 members and 330 cows. Manager, J. M. Humphreys, Winneconne, "Wis.; Tester furnished by the school. (7). The Wautoma Dairy Improvement Association was or- ganized Dec. 1st, 1911,, with 30 m'embers and 350 cows. Man- ager, Prin. D. E. Dafoe, Wautoma, Wis. ; Tester furnished by the school. (8). The Koshkonong Cooperative Cow-Testing Association was organized April 1st, 1912, with 37 members and 470 cows. Officers, Sec. and Treas., Herman Olson, Cambridge, Wis., R. P. D. ; Tester, Roy C. McMuUin. (9). The La Crosse Tuberculin and Dairy Testing Association began the second year's work April, 1911, with 35 members and 550 cows. Manager, Frank B. Balm'er, Onalaska, Wis. ; Tester, Ole Hansen. (10). The Inter-state Park Cooperative Cow-Testing Asso- ciation, St. Croix Falls, Wis., was organized in April, with 400 cows and 26 members. (11). Stanley, Wis., farmers will organize June 1st, 1912, with 26 members, owning 430 cows. Total number of cows under test 4465; number of members belonging to cow-testing associations 287. It will be noted that the association is testing 4465 cows. The dairy farmers of the state are putting $4465 into operating cow- testing associations while the appropriation from the state to the Wisconsin Dairymen's Association is $3000 per year. In other words, for every dollai' that the state gives, the farmers , belonging to the cow-testing associations put in $1.50. THE PURPOSE AND OBJEGT OP COW TESTING It has been thoroughly demonstrated that there are great dif- ferences in cows, and the only sure way to determine these dif- ferences is to weigh and test each cow's milk. It is not pos- sible to determine the quality of milk by its color, or estimate the amount of milk that an animal produces by observing how iii'uch she gives at a milking. The way to obtain exact informa- tion is to weigh and test the milk periodically. A cow that does not produce at least one hundred and fifty pounds of fat in a year will not pay for the, feed she consumes. It costs but little more to keep an animal that will produce 300 38 "Wisconsin State Board of Public Affairs. pounds of fat than one that produces only 150 pounds. There is a profit in the one but no profit in the other. It is a well known fact that animals capable of producing but 150 pounds of fat in a year tend to produce animals of the same capacity. In order to improve the dairy herd it beconles necessary to breed to animals that will show a higher test. Because an animal has a pedigree is no assurance that it is capable of producing a large amount of milk. If breeding is to be done intelligently it be- comes necessary to know the animals that are profitable and those that are unprofitable. Yearly records are tlie best guides ; with these and a knowledge of the animals' breeding powers, conformation and other characteristics, a dairy farmer is in a position to build up a herd of good dairy cows. When we take into consideration the present prices of land, the cost of hired help, the demands of our civilization, we find no place on the farm for an unprofitable animal. The cow-testing associa- tion helps the farmer in securing a profitable herd of eows; it also helps him to see the importance of preparing the right kind of ration for his herd and giving them daily, care. ' WHAT THE COW-TESTING ASSOCIATIONS HAVE DONE It is not an easy matter to show exactly in tabular form what the cow-testing associations h9,ve aeconiplished. One of the serious difficulties of cow-testing work is to get the dairy farm- ers to realize the importance of its continuation year after year. There is a universal tendency among dairymen who have be- longed to cow-testing associations to believe that one year's record gives them complete information concerning the indi- vidual differences of the animals in their herds. A year ago at the time of reorganizing the Fort Atkinson Cow- Testing Association, one man said in substance : "The Association has been of great value to me. I found that I own a very ordinary herd and it is my intention to dis- pose of nearly all the animals in my herd. In view of this, it would not pay me to continue testing them. When pur- chased cows or heifers raised on the farm fill their places then I shall resume the test work. ' ' Such instances as this are very common and make it impossible to continue the work year after year. The State Dairymen's Association failed this year to reorgan- ize cow-testing associations at the following places: Waupixn Agricultueal Co-Opeeation. ;)!) Rice Lake, Racine, and West Salem. A number o£ dairymen at each of these places would like to continue the work, but there are not enough of them to pay a reasonable compensation for a tester. Another thing that prevents giving the exact increased pro- duction of the herds is the fact that, on the average, fifty animals are sold from the herds in every cow-testing association before they complete their year 's work. The owners find the records so low that they do not retain the cows. Since the Dairymen's Association does not use anything but a complete year's work in their calculations, the records of these animals are eliminated. In some instances, men began to test and found their herds so poor at the end of six months they withdrew from the associa- tion. In other cases, men owning pure hreds found their herds m'aeh below their expectations, thus tending to prevent profitable sales of their animals. In other words, they could make a better sale by talkiaig pedigree than by talking pedigree and record. If the purchaser knew the breeder was keeping a record of each animal, he might request a record of the animal he intended to purchase, and this might embarrass the owner. The following tabulated statements, showing the increase that has been made in two different associations, comes to us through Mr. Glover from Mr. Searies, Supt.^ of Cow-Testing Associations. It must be remembered that the dairymen suffered by the drought during the years 1910 and 1911 and there was a tendency to limit the amount of grain fed, which doubtless reduced the average production. Name of Association: West Salem Cow-Testing Association. Began test, Feb. 1, 1909; ended, Feb. 1, 1912. Summary: ^ s ^ fa 1 II First year's average of all herds Second " '' " ' '" Third " " " 5.232 5.085 5,935 5.287 B.ir2 6,381 3,547 4,639 6,165 703 1,094 2,618 4.3 4.6 4.5 4.8 4.6 4.6 4.3 4.3 4.3 228 233 269 253 286 297 152 195 265 41 44 113 S66 40 70 69 84 00 77 76 89 97 82 18 40 71 58 40 82 61 .S30 50 30 77 33 5( 40 2f .36 9f 38 3f 26 98 ?9 60 35 85 535 90 39 92 50 50 37 48 52 P9 43 80 13 73 28 80 46 76 S2 17 2 29 2 50 1 93 2 43 2 14 1 50 1 97 2 30 Second " " '" same ' Average amount of gain for all herds '• one herd...:... 40 Wisconsin State Board of Public Affairs. Name of Association: Bloomer and Easrle Point Cow-Testing Association.* Began test, May 1, 1909; ended IMay 1, 1911. Summary ; 1 s S5 1 fa « ^ 5,000 5,434 3,854 5,399 4,981 6,B22 434 1,545 1,641 4.3 4.1 5.3 5.0 . 4.2 4.0 216 226 204 273 209 2ii9 10 69 60 463 76 68 34 60 26 82 82 61 46 80 94 S30 95 40 00 34 29 44 19 33 56 43 42 $32 81 28 38 25 97 38 63 27 90 37 52 $2 06 1 70 First year's average of one herd Second " " " same "' First year's average of one herd Second " " "" same " Average amt. of gain for all herds one herd 1 75 1 87 1 83 1 86 ' There were 72 unprofitable cows sold during the first year before their year's work was completed; their i-ecords do not appear on this report. An opinion of the value of cow-testing associations from a mem- ber may be helpful. Mr. W. il. Clark, who was a member of the Rice Lake Cow-Testing Association for three years, writes to Mr. Glover, of the Dairymen's Association as follows: "Mr. A. J. Glover, Fort Atkinson, Wis. Dear Sir : — Tour letter of inquiry at hand and I am pleased to reply. Previous to entering the testing association, our average production for three years was about 200 pounds of fat per cow. The first year of the association we raised it to 308 pounds of fat per cow. We then ' entered our entire herd in the Wisconsin Dairy Cow Competition and made an average of 405 pounds of fat per cow, placing every cow and two bulls in the Register of Merit. During all this time' the herd remained practically the same except that heifers were added as they freshened, no culling was done, and the gain was made only by better care and feeding. Previous to the test, I had sold a party several head of cattle and offered him a cOw for $150.00. The next year after the test was made I sold the same cow to the same man for $275.00. Bulls are being sold from two to three times the price I got before the test and I sell many more of them. Since making our official test our average has held good on the whole. I could write pages of the benefits of a testing association but trust this will meet the requirements of your inquiry. Agricultural Co-Operation. 41 I will always be glad to furnish any assistance I am able to further the interests of the 'dairy industry. Yours truly, [Signed] W. 11. Clark." These figures for the Blootner and Eagle Point and for the "West Salem Cow-Testing Associations, covering only two and three years respectivelj^, are enough to convince every dairy com- munity in Wisconsin of the value of such associations. In the Bloomer Association, after only two years' work, the average amount of gain for all the herds was ten pounds of fat, while in the West Salem Association, the average gain for all the herds is 41 pounds of fat per cow. Cow-testing associations have proved tbeir worth and have had a powerful influence everywhere in interesting the young people in the deeper problems of farm life. It is a movement conducive to better community spirit, stimulating healthy rivalry. Wis- consin dairy farmers cannot do more for the upbuilding of the dairy industry than by fostering and organizing cow-testing as- sociations in every part of the state. THE dairy industry Wisconsin stands to-day as the greatest producer of butter and cheese in the union. Recent figures given out by the United States Census Bureau show that, in 1909, Wisconsin made one out of every eleven pounds of butter, and one out of every four pounds of cheese prodiiced in the United States. The magnitude of the dairy industry can scarcely be realized even by reference to the following statistics for the year 1909 : -WISCONSIN DAIRY STATISTICS FOR THE YEAR 1909. No. of Rec'd for or pounds. valued at Cheese of all kinds produced in factories. .145,171,235 $20,706,749 Other cheese-factory products sold 234, 022 Cheese produced on farms 1,433,702 90,118 Butter produced in cre'ameries 105,307,356 29,468,363 ntber creamery products sold 1,739,650 Farm-made butter 7,952,480 1,750,948 Products of milk condenserles 3,771,600 Milk produced other than that furnished creameries, etc 9,807,000 Estimated value of milk and cream shipped to points outside of Wisconsin 2,595, 000 Skimmed milk ■ 6,795,600 Whey 2,043,000 Tot^l , : ■■: ?79,OQO,05Q 42 Wisconsin State Boabd op Public Affairs. Number of cheese factories 1 , 928 " creameries ^ 1,005 " skimming stations ,. 88 " condenseries 19 patrons of clieese factories 39 , 847 " patrons of creameries 83 , 083 " patrons of condenseries — 3,150 cows contributing to clieese factories 438,106 cows contributing to creameries 770,904 cows contributing to condenserieg 47,305 The question of economical production and marketing of but- ter and cheese becomes of the greatest importance when we realize that in the cheese industry alone forty thousand Wisconsin farm- ers, in 1909, received an average of approximately $600 a year, more than fifty dollars for each of their cows. In the creameries, 83,000 farmers are receiving an average of approximately $400 annually, which means a little more than $42 per cow. We have seen elsewhere in this report that there are thousands of cows on Wisconsin farms that "do not earn their board." We have attempted to show that the average yield per cow in Wisconsin needs to be increased at least from 1500 to 3000 pounds of milk per year in order to place the dairy farm on a moderately paying basis. How this can be accomplished has been elsewhere shown. With this increase in the number of cows and in the average production, our next step is to consider the method of making the product. The day of homemade butter and cheese is past. Mgures compiled by the United States Census Department for ld09 prove this point conclusively. The early experience of Wisconsin farmers in the dairy indus- try at the time of the substitution of machine methods is similar to that of Ireland already related. Although from the outset there was some agitation for cooperative creameries financed either by joint loans as in Denmark, or by contribution of share- capital by the m'embers themselves, little was acco-mplished. As in Ireland, while the farmers debated and discussed the best type of organization, private individuals organized scores of joint stock factories which worked primarily for dividends on stock and only incidentally for returns to the farmers supplying milk to the factories. The early experience of Ireland was re- peated in Wisconsin and in some quarters is still being repeated. Many of these privately-owned factories made fortunes for their owners in a few years and were then sold out to others who fol- lowed the example laid down by their predecessors. Agbicultukal Co-Opeeation. 43 These privately owned companies offered for a brief period high prices to attract the farmers. Later they quoted prices for their milk, which always left a sufficient margin to the owners to pay factory expenses and a good return on the stock invested. The farmers had no alternative except to make butter and cheese at home. This did not pay as the difference in prices between the factory-made and homemade product was too great. Complaints became general. The f ariiiers/ were not receiving just returns for the milk, and following exactly the ex- ample of the Irish farmers, organized joint stock companies. This plan worked a little better, because it was at least closer to the farmer and his interest. This action, however, divides the farm- ers in the coihmunity into two classes, those who own stock and those who do not. The owners of stock, of course, want the high- est possible dividends, while the patrons of the creamery or cheese factory want the highest possible return on their butter-fat. This plan of organization, however defective it may seem, both in creameries and cheese factories, is very general throughout Wi^ consin to-day. We have received many letters from farmers com- plaining very bitterly of this form of organization, and we have visited some communities which showed plainly the effects of such an organization in dividing the community sharply into two fac- tions, the "ins" and the "outs." A description of this type of organization follows : "We organized our factory and made provision for a rainy day and for paying our just obligations by levying a sinking fund of 5 cents per hundred pounds of milk. It "took three years to meet our outstanding debts in addition to keeping up repairs, but finally we began to see daylight and declared an 8% dividend op the paid up stock. This was a new day in our work and soon there was a call for stock. But the Stock was all taken. "The next year we paid 16% on the stock and the year fol- lowing 32% dividend was declared. Then all the patrons 'wanted stock as an investment, and we saw danger ahead. And so we changed our plan which has worked beautifully evei? since. We determined to continue the sinking fund of 5 cents per hundred pounds of milk, and from this, we de- cided to pay a flat 6% interest rate on the paid up stock, and then if any money was left at the end of the year it was to be paid out pro rata, on the pounds of butter fat delivered 44 Wisconsin State Board op Public Affairs. by the share-holding patrons. Now we have an arrangement whereby pd,trons can obtain stock and become members at any time. Although this is not true cooperation, we find it works, and at the end of 1911, we paid back to the share- holders a cent and a half per pound of butter fat delivered for the year. ' ' Big stock dividends and cooperation do not go together and the letter quoted above is an example of what awaits that form of organization, as a general rule. The next step in Wisconsin was toward some form of coopera- tive organization. One of the most common forms was for the farmers to organize and build the factory, secure a good cheese maker or butter maker, rent him the factory for so much a year, and pay him a certain number of cents per pound for the making. Here is a typical letter from one such factory : "The cheese maker pays $100 rent for the factory per year and furnishes all supplies and receives 1% cents per pound of cheese for making." For dairy farmers not well versed in fundaniental cooperative principles, this type of organization and management is good, providing the butter maker is capable and honest. There are many creameries and cheese factories similarly man- aged located in the southern and eastern parts of the state, not- ably in Green, Iowa, Sheboygan, and Dodge counties. co-operative factories From the hundreds of letters which we have received from co- operative cheese factories and creameries, we are convinced that the most permanent and satisfactory results are secured in those places where the patrons own, operate and manage the factory or creamery. We are further convinced that the failures. have been due to the following reasons : ' (1) Lack of sufSeient support (too few cows), (2) improper organization, (3) poor management. The history of the cooperative fheose factories and cream,eries elsewhere in the United States shows that the Wisconsin experi- ence is the experience everywhere among dairy farmers. If these Agricultural Co-Opebatioij. 45 three vital weaknesses, lack of sufficient support, improper organ- ization and poor management, can be guarded against, the co- operative dairies of "Wisconsin would be placed on a safe basis. How can this be accomplished? SUFFICIENT SUPPORT The first thing necessary is to find out whether the required amount of milk can be depended upon absolutely. It is true that in several instances in this state creameries have been started and have been a success with less than four hundred cows supplying milk, and cheese factories have been started with less than two hundred cows; yet the best authorities generally agree that if 400 cows for a creamery and 200 cows for a cheese factory cannot be relied upon to supply milk, the situation should receive very careful consideration and attention before any or- , ganization is effected. "In "Wisconsin at the present time there are 1005 local creameries, the average number of cows per creamery is 767, and the average membership is 83 ; while there are 1928 cheese factories, with an average of 228 cows and 21 farmers per factory. If it is not possible to secure a mem- bership of 75 to 100, or a promise of from 200 to 500 cows, the farmers should plan to do either one of two things': first, ship the milk or the cream to a distanx creamery; or, ' second, establish a skimming station."^ PBOPER ORGANIZATION If a sufficient amount of milk or cream is assured, the next thing is the organization. As a general rule, experience has demonstrated that farmers should avoid "creamery promo- ters, ' ' who go through the state working up organizations, selling the stock, and getting up articles of incorporation and by-laws, , in order to load machinery upon the organization at two or three tim'es its real value. Such tactics have retarded the cooper- ation in many places and we cannot but warn communities of such practices. The more reliable supply houses now see the dangento their own interests in this promoting work, for when the farmers learn that they -have paid two or three times as n-'Uch for machinery as they should, there is immediate dissatis- » Coulter, Cooperation Among Farmers, p. 45. 46 Wisconsin State Board of Public Affairs. faction with the house and it loses their trade. It is the pri- vate promoter especially, who is not connected with any house and who has nothing to lose except his reputation, who needs careful watching. HOW TO RAISE MONET Let two or three of the live and progressive farmers call a meeting, giving sufiBeient notice so that all interested will be present. At the meeting three plans along strictly cooperative lines may be proposed for the raising of the money. (1) Let each patron take one or more shares of stock, which will be sufBeient to cover the first outlay, and pay cash for the same. (2) Let each patron sign an agreement which provides for the borrowing of the amount of money necessary to build and equip the creamery or cheese factory and which further provides that each person signing the agreement stand respon- sible for the payment of the sum borrowed. (3) Let each patron subscribe for one or more shares of stock, and in case the patron is not able to pay cash, let him give his negotiable note to the association for the face-value of the same. It should be the aim to make the subscribed stock cover the original investment cost of the plant and machinery. But should this not be sufficient, let the association borrow the bal- ance on its note at the local bank. With the cash and notes as security there should be no' difficulty in getting the necessary amount at the local bank. Of these three plans for raising money for the original in- vestment, this last plan seems to be the most practicable. It is rather difficult to get farmers in most localities to pay cash for shares, because as a general rule they do not have the ready iTioney. The second plan suggested is the one used very widely in or- ganizing cooperative creameries and cheese factories in Minne- sota largely through the influence of Prof. T. L. Haecker, of the University of Minnesota, who was a pioneer in this field. It is a plan modeled very closely after the Denmark system of organization. Most of the cream'eries and cheese factories so organized in Minnesota have been a success. This plan enables the creamery or cheese factory to begin operations without re- Agricultural Co-Opbration. 47 quiring the individual patrons to raise the money. At the same time it gives the association the funds to buy the lumber, mater- ials, and machinery and obtain the benefit of the lowest cash pieces. It is an ideal system if the parties to the agreement are honest and capable. An exainination of this plan, however, reveals legal difficulties of very grave nature. Let us suppose the organization becomes insolvent through insufficient support or bad management. In such a case each signer of the agreement becomes personally re- sponsible for the amount of the loss. It is purely a partnership agreement, and as such "each member would be liable for the full amount due on the agreement"; according to the opinion of L. H. Bancroft, attorney general of Wisconsin, (April 23, 1912.) The third plan presents no such difficulties. It makes each member liable only for the par value of the stock which he holds. In other words, the third plan presents not partnership liability but a corporate liability. On this point, the " attorney-general has written as follows : "As to stockholders in corporations organized under sec- tion 178 6e it is provided: 'The capital stock held by mem- bers shall be exempt from execution and attachment except for debts of the association, and no member shall be liable for such debts beyond a sum equal to the par value of his capital stock paid up, etc' " ' ' This section applies only to corporations organized under it, and whatever its effect as to the stockholders in such corporations it surely imposes no liabilities on the stock- holders of a corporation organized under chapter 86 or un- der the provisions of chapter 368, laws of 19ll (new co- operative law.) As to the stockholders in such corporations, the only liability in addition to the amount of stock sub- scribed for and in the absence of participation in fraud, mismanagement, etc., is that imposed by section 1769 on the stockholders of every corporation for debts due to clerks, servants and laborers to an amount equal to the stock owned, etc." It will be seen that this last form of organization is just as practicable and much safer from a legal standpoint than the one which raises the money by means of a partnership agreement which, in reality, is nothing less than an unlimited liability agree- ment. / 48 Wisconsin State Board op Public Appairs. At the same time, provision should be made in the by-laws for the creation of a fund, from which should be set aside interest charges, sinking fund for paying off, stock issue, a certain amount for taxes, insurance, repairs and depreciation of the plant, and for an education fund in advancing the cause of co- operation in the community. As time goes on further provision should be made for the talking up of all stock shares, and gradually making the factory or creamery free of debt and owned by all the patrons'. . The new cooperative law (section 1736e — 13, general statutes) makes the distribution of earnings in all new cooperative asso- ciations mandatory at first. The directors, subject to revisions by association at any gen- eral or special meeting, shall apportion the earnings as follows: 1. Interest not to exceed 6% on paid up capital stock. 2. Not less than ten per cent of net profits for a reserve fund until a sum. has •accumulated equal to 30% of paid up capital stock. 3. Five per cent of the reserve fund for teaching coo'peration. 4. The remainder of net profits by uniforia dividend based upon the amount' of butter fat supplied., It will be noticed that this division of earnings is subject to revisions by the association at any general or special meeting. This must be interpreted to mean that the association may ap- portion its earnings after organization, with or without ad- herence to the plan laid down in the law governing cooperative associations in Wisconsin, providing the association so decides. In the appendix, suggested articles of agreement, articles of incorporation and by-laws many of which have been followed with success at different places in Wisconsin, are given. Of course, such changes could be made as local conditions demand. As a general rule, five cents on each one hundred pounds of milk, or % of a cent per pound of butter fat in cream received at the creamery is retained to form the fund for the purposes above stated. The am'ount taken out is scarcely felt by thepatrons for after this is deducted, they will get more for their milk than they received before from! the privately owned creamery. So the creamery or cheese factory can be made to pay for itself from the profits which, prior to the establishment of cooperative factories, were lost entirely. AgeicuLturAL Co-OperatIoN. 49 tJnder this plan a creamery that is receiving milk from' five hundred cows should be receiving, at a conservative estimate, five thousand pounds of , milk. a day. If five cents per hundred of this , went into the sinking fund, it would mean two dollars and a half a day, so that it would require from, three to four years to pay off the loan. If the association, does not feel dis- posed to pay off the stock issue the general rule of cooperative _ associations is to pay only interest charges for the use of the same. Just what the current rate of interest is in each com- munity is a local question, but in this state under the coopera-. tive law, the maximum! issix per cent. The experience of many creameries and cheese factory associ- ations leads us to the conclusion that the association should keep its hand on its stock issue and m'anage it more carefully than many associations do to-day. Provision should be made so that when a stockholder ceases to be a patron of th^ creamery or cheese factory, either the association or one or more of the remaining • stockholders should have the option td purchase his stock at par or , at its market* value. In order to m'ake its validity secure, accord- ing to the opinion of the attorney-general such a J)rovision should be included in the articles of incorporation, subscription' agreement, by-laws and on the face of the stock ce,rtificates is- sued. According to a decision handed down by the Wisconsin Supreme Court, siich a provision, if contained in the by-laws alone, would be invalid. (67 Wis. 401). In addition to these financial provisions in the by-laws, pro- vision should also be made for at least three other important rules which every such organization should have. Dr. John Lee Coul- ter, in his excellent little book, "Cooperation among Farmers," states these' regulations clearly : ' ' The first of these rules is that each member will deliver as clean and pure a sample of milk as is possible and that he will accept pay for the cream taken fj-om the milk in propor- tion to the butter fat which it contains. The second rule should be that each farmer will deliver all of the milk which he produces on the farm and which he does not use for family purposes, or that he will pay a certain fine which will be used to help to m'aintain the skimming station. The third . rule should set a certain hour each forenoon when abso- lutely all of the milk which is to be delivered must be at, the skimming station. 4— PA ■ . " 50 Wisconsin State Board op Pubi.ic Affairs. ' ' The significance of the first rule must be plain to every one. Without good milk we cannot have good cream, with- out good cream it is impossible to make the best grade of butter, and without the best grade of butter the farmers cannot expect to get the best prices. The significance of the second rule is that unless the farmers absolutely agree to patronize the skimming station and send all of their milk to it, the burden of maintaining it may fall upon the shoulders of a few and the expense willbe so great that it will fail. Competing companies often offer a small advance for a short time as 'bait', and as scon as the factory has failed from lack of patronage they reduce their prices. The importance of the third rule is that if the milk is allowed to be delivered at any time during the day the person in charge of the skimming station must keep his engine .running, or ready to run, a large part, of the tim'e. He cannot keep his sepa- ator clean and sanitary, and he cannot deliver the cream to the transportation company, or take it to the creamery which he is supplying each day, as he should do. There are many minor rules which each group of farmers must natur- ally agree upon am'ong themselves. In European countries there are a great number of these skimming stations, as well as a considerable number, of successful ones in this country." There has been some doubt as to the legality of rule two and three in the minds of some of our farmers. According to the attorney-general, these provisions may be maintained and en- forced if they are clearly laid down at the time of organization and inserted in farmers' agreements and in the by-laws. The relative place of Wisconsin along cooperative dairy lines is well shown in the following chart taken from the report of the United States Census Bureau for 1911 : Agricultural Co-Operation. 51 Number of Greamerie» and Okeese Factmes as shown by the Records of the Dairy Dwision. Bureau «f Animal Industry. 1911. Cbeambries Chxbsi: Faotorieb Location Co-opera- tive Total Co-opera- tive Total Alabama 2 4 9 252 35 34 8 8 IS ' 247 137 592 69 30 1 39 60 33 309 838 3 51 22 51 e 34 za 2 744 3 109 199 29 12S 461 2 143 2 4 Sg 58 173 11 245 3 1,000 9 Arizona 1 i 32 ' e 15 1 1 4 California 3 Colorado 168 1 19 1 Idalio Illinois 6S 77 31S e 19^ 2 2 1 5 6S 24 Kansas 15 8 Maine 7 1 Maryland ■ 9 Massachusetts . 9 101 6oe 1 16 15 10 2 7 1 1 3 24 Minnesota > 235 SO 2 7 Nevada 3 118 2 43 30 9 6 92 39 917 1 3 Ohio 3 230 1 14 66 South Carolina ..". 116 55 1 2 Bhode Island 2 Tennessee 2 21 i m 7 17 1 347 Texas . , '. Dtah 1 2 Virginia . . . , 49 Washington ■. . . 3, 2 244 1,784 ^ Total 2.120 6,284 S49 3,846 To suminarize these figures, we find that only one out of every five creameries and cheese factories in Wisconsin is co- operative, according to the government standards, This means 52 Wisconsin State Board of PubijIC Affairs. tbat only one-fifth of the dairy machinery in Wisconsin is owned by those primarily interested in dairy farming. But an investi- gation into the conduct and managment of nearly three hundred of these plants owned by farmers has disclosed some very impor- tant facts. Out of 169 cooperative creameries from which we have re- ceived reports, 72 (42%) make provision for voting by shares and not by the fundamental cooperative principle of "one man, one-vote." A glance at the chart will show the location of the two kinds. Few indeed have made any provision, for any sur- plus fund, or even to have any profits after paying expenses at the end of the year. Only 22% of the creameries heard from, attempt to have any surplus; of this number only 2% make any provision for a depreciation fund. Twenty per cent make pro- vision for repairs and maintenance, while a little over 2% make provision for an educational fund. Many, even in the more pro- gressive communities, are not yet convinced of the value of cow- testing associations; and in 57% of these cooperative cream'eries no effort has been made to increase the amount of butter fat pro- duced. Only four per cent knew how such increased prodi^etion could be brought \about. A proper keeping of books is essential to- the management of a farmers' creamery, yet only 21% report that these farmers' organizations have resulted in a better system of acounts kept by the farmers. Again the reports show that not quite 6% have made an effort to raise the quality, as well as the quantity, of product. Ap- parently no attempt is made to have one breed of cows used by eU the fanners supplying milk to the creamery. One and one- half per cent of the creameries use the tuberculin test on all cows supplying milk to the creamery an,d 10% have used the test on part of the cows. The creamery is the logical place from which other cooper- ative enterprises spring. It is a remarkable fact, and a striking weakness, that only 1% of them have gone ahead and gathered other cooperative enterprises about them, such as laundries, fer- tilizing associations, cow-testing associations, egg-marketing as- sociations, live stock breeders' associations, live stock shippers' associations, and the like. Likewise only 7% have worked in connection with other cream- eries to secure higher prices and lower transportation rates. It Ageicultukal Co-Operation. 53 is noteworthy, however, that more than 95% of the creameries report that they are working to secure a purer and fresher grade of milk and cream, and 27% report that the establishment of the cooperative creamery has resulted in an extension of social ac- tivities among the farmers. W15C0N61N COOPERATIVE GHEE5E ^hQTOKllb AND CKEAIYlERlt'J. L. Coulter, Cooperation among Farmers, pp. 129-130. Agricultuuaij Co-Operation. 79 elation which pays the current rate of interest on the outstand- ing shares of the ^tock and, after laying aside a small per cent for a sinking fund and a surplus, turns the rest back to the patrons in proportion to the business done, is preferable to a joint stock company, which aims always to pay big dividends to its share- holders. The history of farmers' organizations prove con- clusively that the former brings contentment and success, while the latter brings misunderstandings and disaster. Co-OPEEATIVE Marketing op Eggs In an earlier chapter, we described the success which had been attained in Denmark since 1895 when cooperation was in- troduced in the "marketing of poultry products. Due to this form of organization, the value of their export trade rose from about $2,000,000, in 1895, to over $5,900,000, in 190^, the total number of eggs imported into England from Denmark in the latter year being 422,000,000. Profit in the poultry business is largely a question of marketing. , More attention should be 'given to the marketing of poultry and eggs in Wisconsin. The poultry industry is increasing rapidly and is assuming large proportions. The efficient marketing of poultry and eggs becomes important when we realize that the annual value of these two products is considerably greater than that of tobacco, or potatoes. The United States Census for April, 1910, reports 9,433,110 fowls on 163,107 farms, valued at $4,468,703. The farmers of "Wisconsin will be interested in an egg mar- keting association at Dassel, Minnesota. This association was organized by 70 farmers some three years ago. Th6y followed largely the Danish plan of collecting, sorting, grading and packing. Each mem'ber signed a contract not to bring in eggs over seven days old, to put them in carton boxes, containing one dozen eggs each, stamped Avith the producer's number and the date. The eggs in each carton are required to be of uni- form size and color. The very small and the very large eggs are not marketed. These eggs are then taken to the manager of the association, who disposes of them directly to the retail grocery stores in the Twin Cities. He is paid one cent a dozen for his work. The association guarantees each carton m a printed form on the box as follows : ,"Eggs in this package, if. they have our trade mark on them, are guaranteed to be strictly fresh, clear and uni- 80 Wisconsin State i3oAKD oe Public Affairs. form in size; and if found otherwise, we wish you would do us the favor to report it, giving number found on egg • cr carton and such eggs will be repfaced free of charge." The farmer who sends the bad eggs can be easily detected by his number and he must m'ake good the loss, and in addi- tion pay a fine to the association to pay tracing expense and any injury done the association's reputation. In case the of- fense is repeated, the offender is dropped from the membership. What have been the results? During the first year, the egg- selling department handled 49,019 dozen eggs, securing an aver- age of five cents a dozen more for their product than was paid for the miscellaneous eggs, or, an average of over $22 per m'ember. The second year, the association shipped 60,000 dozen eggs with the same success, while the Dassel Produce company (a private concern) shipped 120,000 dozen more in carton box lots. In all, 180,000 dozen eggs were sent from this little town during the year ending December 31, 1911, for which these pro- gressive farmers received nearly $50,000 in cash or $9,000 more than they could have received under the old system, whereas two years before only enough eggs were taken in trade at the village grocery stores to supply the 500 people living in Dasse'l. Tv/o hundred fifty members now belong to- the organization. What has been accomplished in this little town may be worked out in every progressive community in Wisconsin. So far as we have been able to learn, the Blue Mounds Egg Association of Blue Mounds, Wisconsin, deserves credit for being the first and only association of this kind in the state. It is small, but it has in it great possibilities. A letter from Charles I. Brigham gives this information regarding the association: "Our Egg Association is not extensive. Last year a few of us began shipping eggs together to a Milwaukee grocer. The eggs were brought to me and packed here by my house- keeper. "This year four of us are shipping together, but now each one makes up and fills his own cartons and brings them here ready to put into the case and ship— thus saving work by my housekeeper. Each carton bears the name of - the association and of the m'ember filling it. "Last year we paid the. members for the eggs the price Agricultural Co-Operation. 81 that one of the local stores paid in trade and towards fall one cent above that, and at the end of the season each mem- ber received 6% additional. At the store mentioned the price in cash would be 2i/^ cents per dozen less than trade. "At this time of the year when all eggs are fresh, the eggs may (and in April did) net the association less than the association pays its members for them. "A larger association would require some one with time to run it. This little association almost runs itself." The association issued the following report for 1911 to each of its seven members : BLUB MOUNDS EGG ASSOCIATION Eggs Shipped In 1911 Recelyed for eggs shipped Home Bros. Co $344.52 Received for stamps and pads .99 Total receipts $345.51 Piiid members for eggs $302 . 60 Paid for stamps, pads, ink $1.21 Paid freight 3.73 P.aid postage .99 Paid crates and cartons 14.57 Paid iniscellaneous 2.78 23.28 6% dividend 18.16 Cash on hand 1.47 $345.51 Paid for Members Eggs Dividend Chas. J. Brigham $47.95 $2.88 Kate Cunneen (Palmer) 88.67 5.32 Daisy Cunneen 41.77 2.51 Mrs. Eobt. Helmenstine 23.17 1.39 Mrs. Jacob Tollen : 33.14 1.99 Mrs. C. ,T. Dagenhart 7.65 .46 Mrs. Anton Doklten 60.25 3.61 $302.60 $18.16 This association differs but little from the Dassel plan or that followed so successfully abroad. All that is needed to-day in the different farming communities of this state is the convic- tion that what has been done elsewhere, can be done in "Wis- consin. As Alfred Carlstad, of Dassel, says: "The hen always does a good .iob laying a fresh egg, and it is up to the pro- ducer to see that it reaches the consumer while still fresh. ' ' Marketing eggs by the individual method has been tried and found wanting, and cooperative marketing pays. It is not hard, therefore, to see which policy should be followed in the future. Cooperative marketing of eggs has succeeded and will suc- ceed if proper business methods are used. 6— PA 82 Wisconsin State Board of Public Affairs. MUTUAL TELEPHONE COMPANIES. The last ten years have witnessed a very remarkable increase in the number of telephones used in the rural districts. Their work could not be done by big line companies. As a result the farmers themselves have organized mutual telephone com- panies in many communities. CO-OPERATION IN W15C0M51N farmera' Telephone Companiej Chart H. Those in a community who desire a telephone line form them- selves into an association, (generally incorporated) and pay in a membership fee, usually $20 to $25, which is placed in the construction and maintenance fund. This fee is supposed to cover the initial cost of construction and installation and leave Agkicultqkai. Co-Operation. 83 a balance for repairs and taxes. Usually no reserye fund is provided, the membership fees being used to cover any expenses, repairs and maintenance during the year. Generally no rental is charged, as assessments are levied on the members to meet extra expenses. The growth of these mutual organizations tends to show not only another phase of the expensive cooperative movement among farmers, but also the spirit of a new progressiveness on the farm. The lonely and isolated farm is fast disappearing from our mod- ern life and the telephone has been no small factor in bringing fibout this result. In 1912, 309 mutual telephone companies in Wisconsin sup- plying telephones to 21,049 rural' families, reported to the Rail- road Rate Commission.^ See Chart H. This makes an average of 68 members in each of these associations. Unfortunately mutual telephone companies are not required to report to the Railroad Commision unless a rental is charged to nonm'embers. But little information is, therefore, available regarding the detailed workings of such companies. Enough of them have however reported to show the great naed of (1) a better system of audit, (2) a more satisfactory and permanent plan of organization, providing among other things, for a rental charge to all subscribers, sufficient to pay expenses, taxes, de- preciation and a small reserve fund for extension and unforeseen contingencies. 'Acknowledgment is due the Kailroad Rate Commission for the in- formation embodied in the accompanying chart. 84 Wisconsin State Board of Public Affaiiis. CHAPTER IV. LESSONS AND PEOSPEC'TS And now we have come to the point where we may summarize the meaning of cooperation for the farmers of Wisconsin. The great aim of cooperation is to increase productioh and to get the product into the hands of the consumer as econom- ically as possible. But getting the product into the hands of the consumer is a very intricate process where growers and consumers are as far removed as they are at present. The orig- inal producers cannot attend personally to all the details of the manufacture, transportation and marketing of . their output. They can, however, hire competent men on a regular salary to take care of some of these phases of production and marketing. They can only afford to do this, however, by cooperating with other producers so that they will be able to raise the necessary capital, by contribution or joint loans, to employ competent men to attend to their interests. Secretary James Wilson of the Department-of Agriculture, es- timates that only 46% of what the- consumer pays for his product gets back to the farmers. It is not essential to our purpose that his figures be absolutely accurate. >The main question is whether the fai^ner is receiving all that rightfully belongs to him or whether he should organize more thoroughly and receive a larger ratio of the retail price. If the present charges of manufactur- ing, distributing, and retailing farm products by private con- cerns were not excessive, there would be no object in changing the system. It is evident that 50% of the selling price is a high rate to pay for putting the goods into the consumer's hands. Experience has already gone far to show that co- operative agencies give improved service at a diminished cost. How important is a further application of this principle may be judged from the fact that the present annual retail value of farm produce in this country is about $9,000,000,000, Assuming that half of this represents the cost of marketing under the present system, let us suppose that only 5% of the other half could be saved to them by hiring their own coopera- Agricultural Co-Opebation. 85 tive factory managers and sales agents. - That would mean a net gain of $225,000,000. It is perfectly legitimate to dwell on the reduction of costSj because cooperation c'an unquestionably accomplish more through the savings which producers may realize by conduct- ing their own distribution, than through increases in the whole- sale prices obtained. The latter, however, is worthy of con- sideration. As already intimated, it is a matter of the best adjustment of supply to demand hy m'arketing ccmmoditiies where and when they will bring the largest net return. When freight rates vary with distance, it is partly a matter of supply- ing a given market from the nearest producing center. But it is impossible deliberately to adapt supply to the changeable conditions of the markets, and incidentally cope with the rail- roads, without a strong centralized control over the disposition of that supply. This m'eans cooperation in large units if not throughout an industry. The smaller local groups may do something toward eliminating middlemen, but they can do al- most nothing toward the scientific distribution of their output without some commonly recognized authority to decide where and when the local product shall go. CREDIT EVOLUTION But the above mentioned holding of goods for an advantage- ous market, involves a new departure in cooperation which is' only just beginning to receive the attention its importance de- serves. Whoever controls a commodity in the expectation of exchanging it favorably, must in some way receive from society enough to live on and, perhaps, also prepare for the next sea- son's crop. This is true of an individual or of an association. But in return for these advances the business world custom- arily requires the holder to pledge his product as security for the value advanced. In other words, the nominal owner se- cures "credit" and becomes only a conditional or partial owner. He loses title, not to the goods, but to some of the value they will command when exchanged. His title still enables him to say when the exchange shall be made. Heretofore, the farmers as a class have elected to sell their commodities at once rather than to hold them for the "timely" market. The buyers (speculators) have done the holding and secured the "credit" to enable them, not only to advance the 86 Wisconsin State Boaed of Public Affairs. -purchase price to the farmers, but to pay their own running expenses meanwhile. As a matter of fa^t, they have secured their credit largely from the banks, who gather up in small amounts and control most of the "liquid" capital and reloan it at nominally moderate rates, for three or four m^onths on such commodities as the farmer raises. The people thus furnish the basis of credit through their deposits of actual cash in the banks. The banks, instead of advancing it to the actual producers have for the most part turned it over to mar- ket specialists, who have bought outright with it the agricul- turalist's claims on that future "timely" market, generally at a sharp discount. ■European countries have recognized and met this situation by the establishment of cooperative credit associations, by which the different individual farmers have pledged their potential joint credit. By means of these associations, they have created "actual" credit for all at such favorable terms that rural life has been regenerated and reforms made possible because the control of farm credit has again been placed in the hands of the farmers. But what necessary function have these middlemen speciji- lators fulfilled that they should thus intrude in the marketing process? The answer might be given that they have been able to offer the banks a tacit guarantee , of knowing when to sell to the, best advantage and thus how to get a price that would insure the widest margin of protection to the banks on their loans. The better the knowledge and the better the protection these isolated farmers can offer to direct their orig- inal sales in a "timely" market, just as they have already banded together in hiring experts to place their quick-money sales, the greater will be their prosperity. If they can, will the banks have any excuse for preferring the independent spec- ulators to the salaried experts? It is just these questions which are now engaging the attention of Congress, the American Bankers' Association and the Southern Congress of Commercial Clubs, as well as numerous financiers and economists. EECIPROCITY The basic assumptions are (1) that the total cost of getting agricultural products into the consumer's hands may be sub- stantially reduced by the elimination of superfluous and un- Agricultural Co-Operation. 87 necessary high-priced middlemen and (2) that the benefit of the resulting saving in effort and money is largely appropri- ated by the producers. This latter assumption is probably valid to the extent that the producers are organized and the consum- ers unorganized, for if the latter could act together they could say to the farming element, "Here, y\)u are effecting enormous savings by extending your control over the distributive and manufacturing processes. We demand a share in these sav- ings through the medium of price reductions." In fact it is not at all impossible for the consumers to organize their own purchasing agencies which shall meet the producer half way. We should then indeed have something approaching an "in- dustrial democracy" with three distinct elements in primary industries: the producers, the railroads, and the consumers. The division of labor would still continue, but with fewer in- dependent units. The mere suggestion of organizing consumers recalls the fact that a generation ago the granges attempted this very thing and that one decade saw the brilliant rise of the movement and its utter collapse. Whether the causes of that failure were of a temporary or permanent nature, is not here of momejit. The point to be emphasized is that no matter how much the farm- ers unite both as producers and as consumers, they cannot ex- pect that the rest of their countrymen are going to stand idly by and see them appropriate all the benefit in both directions from the resulting savings in commercial operations. Bpth producers and consumers of. any and all kinds of -wealth may and ought to agree that the mere process of reaching each other shall be made as simple and direct as possible, and that neither element can go all the way to meet the other nor can it take to itself all the savings. It is, of course, a venturesome thing to predict how far co- operation may be extended in the future. But a review of the apparent causes for its slow adoption and many failures will throw some light on the future. Americans haVe enjoyed the richest endowment of natural resources man ever inherited. The supply of exploitable wealth seemed boundless and only recently have we paused to ask whether the resources of the country are really unlimited. We have "subdued nature" in a destructive, waste- ful manner. The natural aeeom'paniment of this rampant spirit 88 Wisconsin State Boaed of Public Affairs. has been an individual prodigality and wastefulness proverb- ial in Americans. The farmers have by no means escaped the contagion of this influence; in fact, in some respects they have been typical offenders. On the whole they have had plenty of ' ' easy money ' ' and they have made little serious effort either to increase gross income or to save. But a new era seems to be dawning upoij the rural life of our country. Soil depletion and erosion have so cut down crop-income that it has begun to affect money-income and these losses, while not entirely per- manent take time to repair. Meanwhile any ide'a that really means saving and economy gets a more attentive ear than formerly. Not only that, but when the farmer's own initiative has largely achieved, soil- repair, the demand will still continue from a rapidly increas- ing population for efiSeiency in the production and distribution of our food supply. In the second place, undisciplined and grossly unintelligent individualism influenced American thought during most of the nineteenth century. So for a long time our farmers who had been affected by the spirit of individualism preferred to place themselves at the- mercy of a chaotic imper- sonal market, rather than to submit to those restrictions in mar- keting which cooperation involves. They preferred the tyranny of events to the personal supervision of hired agents, whose in- structions on the "placing" and "timing" of sales they would be obliged to follow. Fallacies like these are hard to overcome but not incurable. Farmers should see that all life is team- work ; that others must be consulted and united with. The past century in this country was our age of pioneering, when population was spread out over vast areas and the means of communication and intercourse were meager at best. Geo- graphical isolation and crude conditions of pioneer life are the natural enemies of industrial cooperation, but tlianks to the rapid growth of transportation agencies, they will never be such an obstacle in the future as they have been in the past. But for any thoroughgoing, lasting cooperation, especially among the members of the community as a unit, men must be close acquaintances as well as near neighbors. Yet the condi- tions of settlement in our country have in many sections op- posed just such friendly confidence. The mixture of races, different tongues, customs, traditions, religious prejudices have Ageicultueal Co-Opeeation. ' i59 all tended to hinder the development of cooperation, industrial and social. Whatever limits friendly understanding and intercourse af- fects business possibilities and these subtle influences shpuld not be overlooked when dealing with cooperation. The adop- tion of the English language as our common tongue leads us to judge each other by our motives instead of by our man- ners, and growing determination to think for ourselves in- stead of letting religious institutions and mercenary politi- cians think for us, will brighten the hope for cooperation. Another j-eason for the slow growth of coopei^ation in Amer- ica, has been the m'obility of population. When land was cheap, and competing opportunities called to the farmer from many directions, a roving habit was encouraged. Not knowing how long they would remain in one place men were reluctant to cast their lot with those organizations that required investment or the assumption of joint obligations. But as the country becomes settled and its various sectional advantages become known, this adventurous restlessness will give way to a desire for a perma- nent location. The introduction of greater comforts and the development of non-industrial interests in farm life, and the increasing realization of the disadvantages of the city will discourage the shifting of population from country to city and will encourage well-knit, harmonious rural communities. Another difficulty in the way of cooperation has been the lack of adequate machinery for the work. If organization means anything, it means that the many must delegate power to a few of their own number to carry out the expressed pur- pose of a majority, the few being responsible in the sense of having to surrender that power if they do not use it. Where adequate authority is not given to the executive body, or_ where individual members by refusing to contribute their promised share of output or patronage, the organization is doomed for lack of physical vitality. Not only, then, must the responsible few be provided with adequate facilities, to handle the traffic promised, but the obligation of those who promise it shovdd be reduced to the form of legal contract (e. g. the milk supply contracts) so far as possible. In both these respects progress has a,lready been made resulting from experience as to the capital requirements of enterprises of various sizes and the systematizing of members' rights and 90 _ Wisconsin State Board op Public Affairs. duties. Standardization, the present day slogan, will take on its deepest significance when applied to cooperation. But finally, perhaps the, most frequent obstacle to coopera- tion where it has actually been attempted, has been the lac'k of business wisdom among the farmers themselves. This has been nowKere more conspicuous than in their choice of men to conduct the enterprises they have undertaken. Generally these employees have had work enough to do so it was neces- sary to compensate them. But too often, even when these men were elected on their merits and not on exterior bland- ishments, they have been incompetent because the compen- sation allowed would not command an efficient person. The eooperators have fixed their gaze so steadfastly on the first cost of the management of their enterprises that they could not focus oh the larger issue pf "net cost." The fact that the manager was expected to take over the duties of half a dozen middlemen seems quite generally to liave been over- looked. The result of this iJolicy has been not to reduce the, sum paid out as earnings to, those independent agents as com- pared to what would induce one real live man to take over their work, but to reduce it far below what would command even one competent man. Many failures are due primarily to this cause. • The lesson is that not even a cooperative society is free from the necessity of paying a competitive price for the important human factor in its work. Where the middleman is really superfluous or his charges exorbitant, he will ultimately disappear, but not until the co- operators have learned to pay the necessary price for his sal- aried successor. If the foregoing teaches anything, it teaches that success in any line of endeavor is a matter of time at best. But what the rate of progress is, depends upon the confidence of the persons interested. There is a limit to what human effort can achieve at any hour or any particular day, but whether that limit is reached depends on the will and courage of those who have it in their power. So when we are asked "How fast will coopera- tion come ? " we can only reply by another query : ' ' How strong is the faith of the farmers?" Agricultural C6-0peration. &1 The Practical Application in Wisconsin The facts revealed seem to indicate that ■ the time has now arrived for the state of Wisconsin to take an active interest in directing the cooperative movement within its borders. Fail- ures in the past in- no wise argue against this proposition but rather are a strong endorsement of it, for it shows that the people have long felt a need and have been striving in an un- organized way and without official recognition to satisfy it, Wisconsin has passed through the pioneering stage of industry into one that is more mature, better seasoned, more interested in common projects, in a word more like that where coopera- tion has become well established, and what is now needed is ofScial recognition and central organization. How shall the state organize its work? The answer must depend directly on what we mean by the state's direeticn of cooperation. Let us say that we mean "helping men to help themselves" by putting them in touch with information and knowledge of proper methods not now afforded. The state will lose if it attempts to force cooperation on the people of Wisconsin. To be successful the movement must necessarily be voluntary and self-controlled. This dissem- ination of knowledge and moral support is already being ably carried out in several lines of work by the University of Wis- consin, and it would seem that the University is the institution that can render the greatest service. The next question that naturally suggests itself is this^In , what department of the University should this work be placed? The principles of eoopei'ation are not merely for the benefit of the farmers. They apply just as effectively to those living in the towns and cities. Cooperation attacks the high cost of living and this is not a local problem. As a matter of fact, the city workers are even more vitally affected than those on the farms, and because it is a big universal problem, the Extension Depart- ment of the University seems the place where this great work can be carried on most successfully. Hence, we suggest that a new Division of Cooperation be created in this Department under the general supervision of the Board of Regents, by whom this new Director should be appointed. It may be argued by some that the Extension! Department of the Agriculural College is the place for this new Division. In 92 Wisconsin State Board of Public ApFAltiS. this belief we cannot agree. To be effective, the division should not only be of service to those of our people who .live on the farm and in the small town, important as this field is, bu^ such a di- vision should minister also to the 900,000 of our people who live in cities of 2,500 and over. Considering their need and the fact that even less has so far been done to enlighten them than the farmers, it seems evident that the work should be handled, not by the Extension Division of the Agricultural College, which is primarily and rightly concerned with farm problems, but by i:he Extension Division of the University, which represents all -interests, both the man on the farm and the worker in the city. To place the new Division in its charge, will simply be to place the movement officially on the broadest, soundest basis possible. (See chart I). THE PROGRAM IN OUTLINE The, Board of Re^ent^ President" Extension Deparlment Division ot Co-operaiion Direcloi Adminialrdtive Work Slandardizirm Reports Correspondence Condensing 5ldlisiic5 Educative Worls Oulaide Lecturing Chart I. Supervising £xpert TrAJniiT,':- Agricultural Co-Operation. 93 EDUCATIVE The director should devote by far the greater part of his time to educational work, as it is the most needed at, present and can be less successfully delegated to others. The time so devoted should be divided about equally between (1) lectures and correspondence, for the direct benefit of those interested in cooperation, and (2) special instruction to men attending, the University which will enable them to apply cooperation from fixst-hand knowledge if they become producei:s themselves, or to teach business methods in general and cooperative meth- ods in particular, if they become teachers. The five county agricultural schools already organized will naturally offer at first the best facilities for cooperative instruction when experts have qualified through the training to be offered at the Uni- versity. These men will naturally bend their best efforts to the practical working-out of cooperative ideas in their counties. In addition to the county agricultural schools now established, at least one high school in the counties not having agricultural schools should have an expert to teach cooperation and dis- seminate information throughout his county. If it be the larg- est high school in the county and include agricultural instruc- tion with the rest, so much the better. 77. Administrative. Although only a minor part of the director's t^me may be occupied with administrative duties, he must work out a system of records and reports that will enable him to keep himself informed about every cooperative enterprise in the state. Most of this record, whethel- gathered from voluntary reports or from official audits, would under the present law have to be kept in connection with the office of the Secretary of State, though a small portion would come through such other depart- ments as the Insurance Commission and the Dairy and Food Department. One of the first effects would.be to system'atize and unify the whole scheme of reports as well as the summ^aries drawn from them, so as not only to eliminate superfluous infor- mation but to put what was kept in easily digested, intelligible form. 94 Wisconsin State Board of PubijIC Appaies. "We m'ust remember that cooperation is to-day just in its infancy and we inay not reasonably expect it to come into full bloom in a day, or a year. Like everything else worth while, it will take tiine to develop strength; and the ablest man the state can find cannot boost , it into a foregone success over night. Economic progress in any form must come one step at a time. The surest way to court disappointment is to expect a clean sweep and a blazing triumph the first year. NOTE : This is Mr. Sinclair 's recommendation. It does not bind the Board. After the Board has considered the matter thoroughly, it will make its recommendations in its final report. Agricultural Co-Opebation. . 95 APPENDIX I. A. WISCONSIN CO-OPERATIVE LAW Chapter 368, Laws op 1911. An act to create sections 1786e— 1 to 1786e — 17, inclusive of the statutes, relating to the incorporation of cooperative associations, and the fees to be paid therefor. The people of the State of Wisconsin, represented in Senate and Assembly, do enact as follows: Co-operative associations; who may organize; purposes. Section 1786e — 1. Any number of persons, not; less than five, may associate themselves as a cooperative asso- ciation, society, company, or exchange, for the purpose of con- ducting any agricultural, ddiry, mercantile, mining, manufac- turing or mechanical btisiness on the coopertive plan. For the purposes of this act, the words "association", "company," "corporation", "exchange", ".society" or "union", shall be construed to mean the same. Articles: contents. Section 1786e — 2. They shall sign and acknowledge written articles which shall contain the name of said association and the names and residences of the persons forming the same. Such articles shall also con- tain a statement of the purposes of the association and shall designate the city, town or village where its principal place of business shall be located. Said ^articles shall also state the amount of capital stock, the number of shares and the par value of each. Articles: verification; filing; charter. Section 178oe — 3. The original articles of incorporation organized under this act or a true copy thereof, verified as such by the affidavits of two of the signers thereof, shall be filed with the secretary of state. A like verified copy of such articles and certificates of the secretary of state, showing the date when such articles were filed with and accepted by the isecretary of state, within thirty days of such filing and acceptance, shall be filed with and recorded by the register of deeds of the county in which the principal place of business of the corporation is to &6 Wisconsin State Board op Public Affairs. be located, and' no corporation shall, until such articles be left for record, have legal existence. The register of deeds shall forthwith transmit to the secretary of state a certificate stat- ing the time when such copy was recorded. Upon receipt of such certificate the secretary of state shall issue a certificate of incorporation. Filing fee. Section 1786e — i. For filing of articles of in- corporation of corporations, organized under this act, there shall ,be paid the secretary of state ten dollars and for the filing of an amendment to such articles, five dollars. For recording a copy of such articles the register of deeds shall receive a fee of twenty-five cents to be paid by the person presenting such papers for record. Directors: election; duties; election of officers. Section 1786e — 5. Every such association shall be managed by a board of not less than five directors. The directors shall be elected by and from the stockholders of the association at such time aud lor such term of office as the by-laws may prescribe, and shall hold office for tim'e for which elected and until their successors are elected and shall enter upon the discharge of their duties; but a majority of the stock- holders shall have the power at any regular or special stock- holders' meeting, legally called, to remove any director or offi- cer for cause, and fill the vacancy, and thereupon the director, or officer so, removed shall cease to be a director or officer of said association. The officers of every such association shall be a president, one or more vice-presidents, a secretary and a treas- urer, who shall be elected annually by the directors, and each of said officers must be a director of the association. The of- fice of secretary and treasurer may be combined, and when sO' combined the person filling the office shall be secretary-treasurer. Amendments: how adopted; recording. Section 1786e — 6. The association may amend its articles of incorporation by a majority vote of its stockholders at any regular stockholders' meeting, or at any special stockholders' meet- ing called for that purpose, on ten days' notice to the stock- holders. Said power to amend sha,ll include the power to in- crease or diminish the amount of capital stock and the number of shares. Provided, the amount of the capital stock shall not be diminished below the amount of paid-up ca,pital at time amendment is adopted. "Within thirty days after the adoption. Agricultural Po-Operatiqn. 97 ' of an amendment to its articles of incorporation, an association ':shall cause a copy of such amendment adopted to be recorded in the ofSce of the secretary of state and of the register of deeds of the county where the principal place of business is located. Business authorized to be conducted. Sectiok 1786e— 7. An association created under this act shall ' have power to conduct any agricultural, dairy, mercantile, mining, manufacturing, or mechanical business, on the cooperative plan and may buy, sell and deal in the products of any other co- operative company heretofore organized or hereafter organized under the provisions of this act. Stock; issue; limit; vote. Section 1786e — 8. No stock- holder in any such association shall own shares of a greater aggregate par value than one thousand dollars, except as here- inafter provided, or be entitled to more" than one vote. Subscription of stock in other associations. Sectiox 178Se — 9. At any regular meeting, or any regularly called special meeting at which at least a majority of all its stockholders shall be present, or represented, an association organized under this act may, by a majority vote of the stockholders present or represented subscribe for shares and invest its reserve fund, or not to exceed twenty-five per cent of its capital, in the capital stock -of any other cooperative associa- tion. Purchasing business of other associations: pa3Tiient, stock .issue. Section 1786e — 10. "Whenever an association, created under this act, shall purchase the business of another association, person or persons, it may pay for the same in whole or in part by issuing to the selling association or per- son shares of its capital stock to an amount, which at par value would equal the fair market value of the business so purchased, and in such case the transfer to the association of such business at such valuation shall be equivalent to payment in cash for the shares of stock so issued. Certificates of stock; when held in trust; issue. Section '1786e — 11. In case the cash value of such purchased business exceeds one thousand dollars the directors of the association are authorized to hold the shares in excess of one thousand dollars in trust for the vendor and dispose of the same tp such persons, and within such times as may be mutually satisfactory to the ■parties in interest, and to pay the -proceeds thereof as cur- 7— P A 98 Wisconsin State Board of Public Apfaiks. rently received to the former owner of said business,- Certificates of stock shall not be issued to any subscriber- until fully paid, but the by-laws of the association may allow subscribers to vote as stockholders; provided, part of the stock- subscribed for has been paid in cash. "stockholders may vote by mail. Section 1786e — 12. At any regularly called general or special meeting of the stock- holders a written vote received, by m'ail from any absent stockholder and signed by him may be read in such meet- ing and shall be equivalent to a vote of each of the stockhold- ers so signing; provided, he has been previously notified in writing of the exact motion or resolution upon which such vote- is taken and a copy of same is forwarded with and attached tO' the vote so mailed by him. Earnings; apportionment. Section 1786e — 13. The direc- tors, subject to revisions by the association at any general or special meeting, shall apportion the earnings by first paying dividends on the paid-up capital stock not exceeding six per- cent per annum, then setting aside net less than ten per cent of the net profits for a reserve fund until an amount has ac- cumulated in said reserve fund equal to thirtjr per cent of the paid-up capital stock, and five per cent thereof for an educa^- tional fund to be used in teaching , cooperation, and the re- mainder of said net profits by uniform' dividend upon the amount of purchases of shareholders and upon the wages and salaries of employes, and o^e-half of such uniform dividend ta- nonshareholders on the amount of their purchases, which may^ be credited to the account of such non-shareholders on account: of capital stock of the association; but in productive associa- tions such as creameries, canneries, elevators, factories, and the like, dividends shall be on raw material delivered instead of on goods purchased. In case the association is both a selling and a productive concern, the dividends may be on both raw material delivered and on goods purchased by patrons. Distribution of dividends. Section 1786e— 14. The profits or net earnings of such association shall be distributed to- those entitled thereto, at such times as the by-laws shall pre- scribe, which shall be as often as once in twelve months. If such association, for five consecutive years shall fail to declare a dividend upon the shares of its paid-up capital, five or more- stockholders, by petition, setting forth such fact, may apply to Agkicultural Co-Opeeation. 99 the circuit court of the county, wherein is situated its principal place of business in this state, for its dissolution. If, upon hear- ing, the allegations of the petition are found to be true, the court may adjudge a dissolution of the association. Annual report; contents; filing. Section 1786e— 15. Every association organized under the term's of this act shall an- nually, on or before the first day of March of each year, - make a report to the secretary of state; such report shall contain the name of the company, its principal place' of business in this state, and generally a statement as to its business, showing total amount of business transacted, amount of capital stock subscribed for and paid in, number of stock- holders, total expenses of operatioii, amount of indebtedness or liabilities, and its profits and losses. Co-operative associations heretofore organized; may adopt provisions of this act. Sectiois^ 1786e — 16. All cooperative corporations, companies, or associations heretofore organized' and doing business under prior statutes, or which have at- tempted to so organize and do business, shall have the benefit of all the provisions of this act, and be bound thereby on filing with the secretary of state a written declaration signed and swo,m to by the president and secretary to the effect that said cooperative company or association has by a majority vote of its stockholders decided to accept the benefits of and to be bound by the provisions of this act. No associa- tion organized under this act shall be required to do or per- form anything not specifically required herein, in order to become a corporation or to continue its business as such. Use of term "co-operative" limited to corpor&,tions under this act. Section 1786e — 17. No corporation or association hereafter organized or doing business for profit in this state shall be entitled to use the term "cooperative" as part of its corporate or other business name or title, railess it has com- plied with the provisions of this act; and any corporation or association violating the provisions of this section' may be en- joined from doing business under such name at the instance of any stockholder of any association legally organized hereunder. Section 2. This 'act shall take effect and be in force from, and after its passage and publication. i 100 . Wisconsin State Bo.\rd op Public Affairs, B. LIST OF COMPANIES ORGANIZED UNDER THE NEW ' ^ 1911 CO-OPERATIVE LAW. Date of Name Location Incorporation Almond Cooperative Creamery Co Almond July 18, 1911 -Alma Center Cooperative Mercantile Co. Alma Center Sept. 20, 1911 -American Cooperative Association .... Wausau Feb. 7, 1912 -Alma Center Cooperative Produce Co. The Alma Center .March 27, 1912 3rookvllle Cooperative Telephone Co., Viroqua July 5, 1911 Browntown CoBperatite Mercantile Co. BrowntoWn Sept. 9, 1911 Benoit Cooperative Society Benoit Oct. 12, 1911 Commonwealth Fuel and Supply Co., The Green Bay April 17, 1912 Consumers Cooperative Trading Co... Madison June, 22, 1911 Chequamegon Farihers' Association .... Washburn Jan. 30, 1912 Consumers Cooperative Co New Lisbon ... I March 13, 1912 JDmerald Cooperative Creamery Asso- • elation iSmerald (Filed acceptance of Ch. 368, March 11, 1912) Farmers' Cooperative Creamery of Mer- rillan .' . . Merrillan April 27, 1912 Farmers Equity Co8perat.ve Associa- tion Campbellsport April 27, 1912 Forest Creamery Company, The Emerald .,. April 22, 1912 Farmers Equity Produce Company Wausau (Filed acceptance of Ch. 368, Feb. 10, 1911,) Glenwood, City Cooperative Co Glenwood Feb. 1, 1912 Olencoe Cooperative Creamery Co Arcadia March 28, 1912 Highland Cooperative Co Highland Sept. 6, 1911 Iloricon Cooperative Co Horicon Feb. 16, -1912 Jimeau Cooperative Mercantile C'o. .. .Tuneau April 12, 1912 Kenosha Consumer's Cooperative Co. . . Kenosha Nov. 27, 1911 Lake Shore CoSperative Creamery Co.. Randolph Nov. 11, 1911 Little Falls Mercantile Co Ceronda March 30, 1912 Marion Cooperative Creamery Co Marion .Oct. 2, 1911 Monqua CoSperative Society Moqua Nov. 23, 1911 Mt. Sterling Cooperative Creamery Co., The Mt. Sterling Dec. 9, 1911 North Osbom Cooperative Cheese and Butter Co , . . . Seymour R. R. No. 38. . .May 11, 1912 Peoples Cooperative Co . Fall River July 28, 1911 Pleasant Hill Creamery Co Vesper .Dec. 11, 1911 Park Palls Cooperative Co Park Falls '..March 19, 1912 Rib Lake Cooperative Co Rib Lake. July 24, 1911 River Falls Cooperative Creamery Co., The '. River Falls March 19, 1912 Rolling Ground Farmers' Cooperative Creamery Co Soldiers Grove March 27, 1912 Spring Valley Cooperative Creamery Company Spring Valley July 22, 1911 Schleswig Cooperative Dairy Kiel April 5, 1912 So. Randolph Cooperative Co So. Randolph May 6, 1912 V. S. Cooperative Company Kenosha Nov. 22, 1911 Waupun Cooperative Commission Co. . . Waupun Nov. 17, 1911 , Woodford Cooperative Mercantile Co... Woodford Nov. 23, 1911 Wittenberg Cooperative Co Wittenberg March 21. 1912 Waupun Cooperative Company Waupun April 11, 1912 Woodland CoSperaJive Company Woodland June 5, 1912. Agricultural Co-Operation. ' 101 C. FORMS OP AGREEMENT, BY LAWS, ETC. (1) For. Use in Organizing Co-operative Creameries and Cheese Factories When the farmers of any community decide to organize a cooperative creamery or cheese factory the following sugges- tions and forms of Agreements, Articles of Incorporation and By-Laws may prove helpful. First Meeting. A temporary chairman and secretary should be elected; the advisability of starting a creamery or cheese factory, and the most desirable location should be; discussed, and the value of each share should be decided upon. If it be deemed advisable to form an association, a commit- tee should be elected to canvass the surrounding territory to ascertain if there is a sufiScient number of stockholders and cows to warrant an association. Organization Agreement. (To be used at first meeting) We, the undersigned citizens of -, S1;ate of Wis- consin, do hereby agree to form ourselves into an association for the purpose of , and to take the number of shares of stock,, at the par value, to wit : dollars each, and furnish the \ ' from the number of cows set opposite I cream j our. names. Provided, however, that if cows and stock- holders are not secured before '■ — 19 — , this agree- ment shall be null and void. ' Names Shares ■. Cows* ■ Articles op Incorporation. Know All Men By These Presents : That the undersigned adult residents of the State of Wisconsin, do hereby make, sign, -and agree to the following: 102 Wisconsin State Board of Public Affairs. Article I. The undersigned have associated and do associate tlieniselves together for the purpose of forming a cooperative association under Chapter 368, Laws of Wisconsin 1911 (Revised Statutes 1786e— 1— 17). Business The business of said association shall be to conduct any dairy- ing, cream'ery, or cheese factory business on the cooperative plan. Article II. Name and Place of Business The name of said association shall be Coop- erative Company, and its principal place of business shall be located at in the County of , and State of Wisconsin, and branch offices and places of business may be conducted in other localities wh6n desired. Article III. Capital Stock. The capital stock of this association shall be dollars, divided into shares of the par value of dollars each^ The shares of capital stock of this association are non-assessable. Article IV. Neither said . association nor any officer nor agent thereof shall have any power or authority to contract any indebted- ness or liability in behalf of said association which together, with all other outstanding indebtedness and liability of the association shall exceed the amount of the par value of the out- standing capital stock. Article V. Directors and Officers , The management of this association and the conduct of its affairs shall be vested in a board of — directors, who shall be chosen annually by the stockholders at the regular an- nual meeting of the association and shall serve for a period of Agricultural Co-Operation. 103 •one year, or until their successors shall have been duly elected and qualified. The board of directors shall choose from their number a presi- ■Aent, vice president, secretary and treasurer, for the term of one year or until their successors have been elected and have ■qualified. The stockholders may make such rules and regulations for the carrying on of the business as may be deemed advisable— the same to be included in the By-Laws of the Association. Article VI. The names aad residence of the persons .forming this associ- a,tion will be: residing at ■ • ■ residing at • • ■ residing at ■♦ residing at residing at Article Til. These articles may be amended by resolution setting forth such amendment or amendments adopted at any meeting of i;he stockholders by a majority of stock outstanding. (Amendments: how adopted: recording. Section 1786e-6. {Ch. 368, 1911). The association may amend its articles of .incorporation by a majority vote of its stockholders at any regular stockholders' meeting, or at any special stockholders' -■meeting called for that purpose on ten days' notice. Said power to amend shall include the power to increase or diminish the amount of capital stock and the number of shares. Provided, the amount of capital stock shall not be diminished below the amount of paid-up capital at time amendment is adopted. ""Within thirty days after the adoption of an amendment to its articles of incorporation, an association shall cause a copy of -such amendment adopted to be recorded in the ofSce of the secretary of state and of the register of deeds of the county "Where the principal place of business is located.) i04 Wisconsin State Board op Public Affairs. In Witness Whereof, we have hereunto set our hands and ^eals this day of 1912.. Signed in presence of State op Wisconsin ) County of , \ Personally came before me this day of ........ -a the above named to me known to be the persons who executed the foregoing- articles and acknowledged the same. Notary Public, Wisconsin I My commission expires State op Wisconsin, ^ • County of ■ \ And being each duly sworn, doth each for himself depose and say that he is one of the original signers of the original articles of the association : that he has compared the foregoing copy with said original articles and that the same is a true and correct copy of such original articles and of the., whole thereof. (2) Suggested Agreement and Articles For Covy Testing As- sociations Because of the importance of the dairy industry in Wiscon- sin and of the great posibilities in this work in eliminating the unprofitable or "boarder" cow, by m'eans ofi cow-testing asso- ciations, the following contracts dealing with the organization of such associations are here presented : — Agreement Whereas , (name of association) Association has: been organized for the purpose of providing for the coopera- tion of its members in testing periodically the milk of their Agricultural Co-Operation. 105 -■cows and for the improvement of their dairy interests; and "Whereas, it is purposed by the said' Association to engage a suitable person for that purpose as soon as enough subscrip- tions are obtained to warrant said Association to engage such person. "We, the undersigned, members of said association eacli for himself and not one for the other, severally agree to pay the sum of a year for each cow, set opposite our :respective names to said Association for that purpose. Said -fees to be paid in quarterly installments in advance, the first pay- ment to be made as soon as such person is engaged by said association. Bach one of us, also agrees to furnish board and lodging for said person at least one day each month and to convey him to his next place of work, or should said person furnish his own conveyance, each one of us agrees to feed and shelter said person's horse for at least one day each month. Said person need not work on Sunday, but shall have l^oard and lodging over Sunday at the place he works Saturday. The following are the articles under which a cow testing association is operated: Articles op Incorporation. We, the undersigned, desiring to become incorporated under, the provision of the Act No of the Public Acts entitled and the Acts amendatory thereof and supplementary thereto, do hereby make, execute and adopt the following Articles of Association, to-wit: Article I. The nam'e by which said association shall be known in law is Article II. The purpose for which it is formed is generally to promote the dairy interests of its members and particularly to provide means and methods for improvement of dairy cows and for test- ing periodically the cows of the members. Article III. Its principal office and place of business shall be at .... 106 "Wisconsin State .Board of Public Affairs. Article IV. 1 'The number of its directors shall be Article V. The names of the directors for the first year of its existence- are as follows': Article VI. Any person may become a member of this association and. be entitled to its benfits and privileges upon being accepted, by its board of directors and upon complying with the re- quirements of its by-laws. v In witness whereof, we, the parties hereby associating for- the purpose of giving legal effect to these articles, hereunto- sign our names this day of , A. D. 191...., State of , County of ' On this day of , 191 . . ,. before me, a notary public in and for said county, personally appeared known to me to be the persons named in and who executed! the foregoing instrument and severally acknowledged that they executed the same freely and for the intents and pur- poses therein mentioned. '■ Notary Public, My eonimission expires . .' Agricultural Co-Operation. ' 107 By-Laws. Article I. Annual and Special Meetings. The annual meeting of this corporation shall be held at a place to be designated by the board of directors in on the day of • • of each year at eight o 'clock in the evening, for the purpose -of electing a board of directors, and qf. the transaction of such other business as may lawfully come before said m'eeting. Special meetings may be called by the board of directors or by the president, a,nd notice therof shall be given by the Sec- retary by mailing to each member a written or printed notice thereof at least five days prior to such meeting. Such notice shall state the object of the meeting and no other business shall be transacted thereat. ■ Artible II. Board of Directors. Section 1. The board of directors shall consist of members. They shall be elected at each annual meeting, the first elections to be held on the day of ..;.; A. d: i9i.... Section II. The board of directors shall have the manage- ment and control of the business of the corporation, and shall employ such agents as they may deem advisable and fix the rates of compensation of all officers, agents and employees. Section III. Whenever any vacancies occur in the board of directors by death, resignation or otherwise, the same may be filled without undue delay by the majority vote of the remaining members of the board_. The person so chosen shall hold ofSce until the next annual meeting or until his successor is eleeted and qualified. Section IV. The board of directors shall meet on the first of each month, at such times and in such places as they may by resolution determine. Section V. A majority of the directors shall constitute a quorum at all meetings of the board. 108 Wisconsin State Board of Publjc Affairs. Article III. OfSeers. Section I. The officers of the corporation shall consist of president, vice president, secretary and treasurer. The office of secretary and treasurer may be held by the same person. The officers shall be elected by the board of , directors by a majority vote of the whole number of directors. The first elections shall be held immediately after the election of the board. Subsequent elections shall be held annually on the day of the regular meeting of the board next ensuing elec- tion, the day to be fixed by resolution of the board of direc- tors. Section II. In case of death, resignation, or removal of any officer, the board shall elect his successor who shall hold office for the unexpired term. Article IV. Membership. Any person acceptable to the board of directors may be- come a member upon paying a membership fee of twenty-five (25) cents. Article V. Duds. Bach member shall pay a fee of 25 cents annvially on or be- f pre the first of The first annual dues to be payable on or about the day of .....!.., 191 .... No member shall be allowed to participate in the election of the board of directors who shall not have paid his annual dues in advance. Article VI. Amendments. These by-laws may be amended, added to or altered by a majority vote of all members at the annual meeting, or at a special meeting called for the purpose. Agricultural Co-Operation; 109 Suggested By-Laws For Co-operative Butter and Cheese Factories Article I. Name and Object. Section 1. The name of this association shall be the Cooperative. Section 2. The purpose of this association shall be to carry- on the manuafcture of butter and cheese and all other dairy- products in such manner as -will conduce to the greatest con- venience and profit over the greatest amount of territory.. Aliso to purchase,, use and hold real and personal estate neces- sary for the transaction of the business of the association'. Article II. Corporate PoAvers. Section 1. The corporate powers of this association shall be- vested in a board of directors, except such poAvers as are or may be reserved by statute or by these rules and regulations, to be exercised by the association as a whole. Article III. Membership. Section 1. The association shall include any person who- has been accepted and regularly enrolled on the company's books as a member. Section 2. Each member shall be entitled to one vote only. Section 3. New members may be admitted by a majority vote of the association. Members- shall be permitted to withdraw only as follows: The member desiring to withdraw shall give at least one month's notice of his application thereof. Such application shall only be allowed on a vote of two-thirds of all the members present and voting at any meeting; provided, however, that any member living more than three miles by the nearest road from, the factory building may make appli- cation to the board of directors and the said board in its dis- cretion may grant permission to such members to withdravr from the association. 110 ' "Wisconsin State Board op Public Affairs. Section 4. No proxy voting shall be allowed, but stoekhwM- €rs may vote by mail in any regularly called general or spe- ■cia.l meeting of the stockholders. A written vote received by mail from any absent stockholder and signed by Mm may 'be read at such meeting and shall be equivalent to a vote of -each of the stockholders so signed; provided that he has been previously notified in writing of the exact motion or resolu- tion upon which such vote is taken, a,nd a copy of the same is forwarded with and attached to the yote so mailed by him: {Section 1786E— 12— Statutes of Wisconsin.) Section 5. The acceptance by a member of a stQck certifi- cate shall constitute a contract between such member and the company and assent of such stockholder to these by-laws and to amendments legally adopted- Section 6. Each member of the company becomes subject to, accepts and agrees to abide, by >these rules and regulations and ■all future amendments enacted by the company. I , Article IV. Capital Stock. Section 1. The capital stock of this association shall be thousand dollars which shall be divided into hundred shares of dollars each, which shall be paid in at such times, and in such amounts as the board of directors may determine and may be paid either in cash, prop- erty, labor or securities, as the board of directors may deter- > ffliine. Section 2. "When a note is given to. the association for stock, it may be paid by a certain percentage deducted from each pound of butter fat or each hundred pounds of milk delivered by, each such stockholder. Provided, however, that no certi- ficate shall be issued nor any interest paid on any share of stock until it is fully paid. It is further provided that all stock may be retired as fast as money accruing from the sinking fund will g.]low. All stockholders shall receive six (6) per cent interest on their stock until it is retired by the association. Section 3. After all stock has been retired, each patron con- tributing to this factory all their milk or cream that he has Agricultural Co-Operation. Ill "for sale becomes a member of, and has a right to vote in, this ^association. Section 4. Shares of stock shall be non-assessable and non- "transferable except as provided in Section 5 of this article. Section 5. All shares must, before issue, be registered on "the books of the association, by being surrendered, and new ones issued in the name of the purchaser, who by acceptance "thereof agrees to all the by-laws and rules of the association, 'including also all amendments that may be legally adopted, and thereby shall become a member of the company. No shares can be transferred until all claims of this company ^against the owner of such shares have been paid. Section 6. If any member of the association desires to dis- Tpose of his share or shares, he shall first offer to sell same to the company at par value; if the company decline to pur- chase, the member may find a purchaser acceptable to the company and have same transferred to said purchaser on' the books of the company in accordance with the rules. If a member removes from the territory and ceases to be a patron of the association and establishes a residence elsewhere, the board of directors shall purchase the share or shares owned by the said nonresident member. Sections five (5) and six (6) of this article shall be printed •on each and every certificate of stock issued by the company. Article V. The duties of the respective officers shall be as follows: President. "Section 1. The president shall preside at all meetings of the association. He shall have power to call special meetings of the association whenever, in his judgment, the business of the association shall require it. He shall also, upon a written request of ten per cent of the stockholders or three members of the board of directors, call a special meeting. Vice President. ■ Section 2. The vice president shall perform the duties of the president when the latter is absent or unable to perform •.the duties of his office. 112 "Wisconsin State Board op Public Affairs, Secretary. Section 3. The secretaiy shall keep a record of all the meet- ings of the association and make and sign all: orders upon the treasurer and pay over to the treasurer all money which, comes into his possession, taking the treasurer's receipt there- for. The secretary shall make a report to the annual meeting of the association, setting forth in detail the gross amount of milk and cream receipts and the net amount of receipts front. products sold and all other receipts, the amount paid out for running expenses, the sums paid out for milk and cream, and all other matters pertaining to the business of the association. A like statement shall be made each month and posted con- spicuously in the creamery building at the time of the divis- ion of the previous month's receipts aforesaid. The secretary shall give bonds in the sum of dollars, same to be- approved by the board of directors. Treasurer. Section 4. The treasurer shall receive and receipt for all moneys belonging to the association, and pay out only upon orders signed by the secretary. The treasurer shall give bonds. in the sum of dollars, same to be approved by the board of directors. ' Article YI. The Board of Directors. The board of directors who are elected at the annual meet- ing for one year shall- attend to the general affairs of the as- sociation and appoint such agents or officers as in their .iudg- rcent the interests of the association require. They shall keep or cause to be kept, a correct account of all the milk fur- nished by stockholders or patrons and a correct account of sales. They shall establish prices and have full power of the business of the association, and in all cases pursue such meas- ures as in their judgment will tend to the best interests of the association. They shall make a full report of their doings, and a full statement of the business at each regular meeting or whenever called on to do so by the vote of the stock- holders. Agricultural Co-Operation. 113, Section 2. The board of directors shall appoint one of their members sales- manager, who shall with the butter or cheese maker have full control of the sale of all products and the- buying of all supplies; but shall confer with the directors from time to time. Section 3. The directors shall have regular monthly meet- ings on the last ilonday of each month. Quorum. Section 4. A majority of the directors shall constitute a quorum for the transaction of all business at mee\ings of the directors. Article VIi: Educational Committee. The directors shall appoint an educational committee of three stockholders to periodically place before the people in printed matter, public meetings or otherwise, the benefits of cooperation. Article Till.' Butter Maker or Operator. Section 1. The board of directors shall secure the services of a competent operator and pay him the salary they deem suffi- cient. Said operator shall make out and deliver to the secretary om or before the, tenth of each month a true statement of the num- ber of pounds of cream delivered by each patron for the pre- ceding month, and the total yield of the factory for the said" m'onth, and the number of pounds of butter or cheese, if any,- drawn out by the same person. Section 2. It shall also be the duty of the operator to take- from every patron's daily delivery of cream a proportionate- amount of said cream and place in jars suitable for such pur- poses. On the fifteenth and last day of each month he shall fix samples for the composite bi-monthly milk test. Section 3. The operator shall test the milk of each patron at least three times a week. 8— PA "114 Wisconsin State Board op Public Affairs. "Section 4. The building shall be kept in a clean and sanitary • condition by the operator. Smoking and chewing of tobacco shall be prohibited in the creamery. The butter maker shall .^enforce this rule strictly. Article IX. Milk Furnished. Section 1. The several members shall furnish all the milk :from all the cows subscribed by each, all the milk to be sound, fresh, unadulterated, pure and unskimmed, and patrons of the -association, not members, may by agreement with the board of ' directors, furnish such amounts of milk as may be so agreed^ upon. The association shall receive all such milk so furnished, manufacture the same into butter, cheese, or both, and sell and .receive all moneys for the product. Section 2. Any member or patron of the association found skimming, watering or in any manner adulterating his milk -offered at the factory shall forfeit to the association as follows: For the first offense ten dollars; for the second offtense, twenty- five dollars; fpr the third offense, he or she shall forfeit all ; interest in the association and also all claims for milk thereto- fore delivered to the association. But no such forfeiture shall be adjudged without first affording to the member or patron ► charged with having so skimmed, Avatered or adulterated his .milk, full opportunity to defend himself or herself from such . charge. Any member who sends in any bloody or impure milk, or .^any milk from any cow within four days before calving, shall, if convicted of having so done knowingly, forfeit as pre- scribed above. Section 3. During the interval between the twentieth of May and the twentieth of September of each year, all milk shall be delivered at the factory as early at least as 9:00 is- the morning and during the remainder portion of the year as -early as 12:00. Section 4. Members and patrons furnishing whole milk may take from the separator or the tank at the creamery four- fifths of the quantity of milk (in pounds or quantity) deliv- 8, 1912. Story of the success of the Monm'oUth county. New Jer- sey Farmers' Exchange. International Institute of Agriculture. Agricultural Coopera- tion and Organization in the United States. (In Bulletin of the Bureau of Economies and Social Intelligence, V; 1,, No. 1, September 30, 1910, p. 211-38.) Describes cooperative societies for the sale of produce in the L'nited States, also cooperative elevator. It gives also the principles of cooperative marketing.. John Hopkins University. History of Cooperation in the United States. (In Studies in History and Political Sci- ence. 1888. v. 6.) Gives history of the movement up to date of publication treating among other things of cooperative marketing. McVey; F. L. Capitalism and Cooperation. Clippings from Farm, Stock and Home, January 1, 1912. Claims that cooperation is the solution of the present agricultural problem. Marketing the Fruit. Clipping from Wisconsin Agricultural- ist. January 4, 1912. States that the cooperative marketing of fruits is a sue- ' cess in the Ozark country. Mathews, J. L. Agrarian Pooling in Kentucky. Charities, May, 2, 1908, v. 20, p. 192-6. Describes the efforts of Kentucky farmers to secure higher prices through cooperative marketing. 126 "Wisconsin State Board of Public Affairs. Mathews, J. L. Farmers' Union and the Tobacco Pool. At- lantic, October 1908, v. 102, p. 482-91. The pooling of agricultural products particularly that of' tobacco is described. Minnesota — Bureau of Labor. Cooperative Associations. (In Bulletin. 1908, no. 76.) Law of Minnesota with reference to cooperative associa- tions. Minnesota Cooperative Live Stock Shippers' Association.. Clippings from the Wisconsin Farmer, January 18, 1912,. , Account of the annual meeting. Missouri Agricultural Experiment, Station. Cooperation Among- Fruit Growers. (In Bulletin no. 97) This is an article by W. H. Chandler and gives a list of cooperative fruit exchanges in the United States. Myrick, Herbert. How to Cooperate. 1898. This book contains much useful information about co- operative marketing, farmers* and people's exchanges and other cooperative enterprises in the United States. Norton, C. W. . Marketing of Table Grapes. (In OfScial Re- port of the Thirty-Fifth Fruit Growers' Convention, Sac- ramento, California, Dec. 1, 2, 3, 4, 1908) Describes successful methods of raising and marketing- table grapes. Pardee, James Dvluth and its Advancement. Clipping from Wisconsin Library Bulletin, June 1911. Speaks of the Producers' Cooperative Market Associa- tion and of the warehouse maintained at Duluth. Parsons, Frank. Cooperative Undertakings in Europe and America. Arena, August 1903, v. 30, p. 159-67. Describes different kinds of cooperation in the United States, including cooperative marketing. Payne, Will. Cooperation — Colorado Apples, Virginia Pota- toes; Retail Stores. Clipping from Saturday Evening Post, July 16, 1910. The author shows the results of cooperation among farmers in Michigan, Iowa, Virginia, California, Texas, and '; Colorado. Agricultural Co-Opekation. ' 127 Pennsylvania-^Department of Agriculture. Marketing Horti- cultural Products. (In Bulletin 1911. No. 202) Speaks in high term's of farmers' cooperative associa- tions. Perry, G. E. Cooperative Commission Company. Clipping: from "Waupun Leader, January 17, 1912. ' One form of the business of this association is the ship- ping of live stock. Powell, F. W. Cooperative Marketing of Califormia Fresh Fruit. Clipping from Quarterly Journal of Economies. Febr-uary 1910, v. 24, no. 2. Powell, G. H. Cooperation in the Handling and Marketing of Fruit. (In U. S. Agricultural Department. Yearbook^ 1910, p. 391-406) This is also published as a separate bulletin. It describes- the organizations of the fruit growers of Florida, Cali- fornia and Georgia. Successful Cooperation in Kansas. Arena, May 1905, v. 33 p. 550-51. Gives conditions of success in cooperation. ','The rec- ord of cooperation is a record of wonderful success when- ever wisdorri has be,en exercised in securing the right kind' of management and when the members have been enthused' ■with the true cooperative spirit. Successful Cooperation in Kansas. Outlook, September 28,. 1901, V. 69, p. 201. The editorial treats of, the success of a cooperative ele- vator at Solomon, Kansas. Tomhave, "W. H. Improved Marketing of Live Stock. Clip- ping from the Farm'er, December 2, 1911. The author tells what the cooperative shipping associa- tions are accomplishing in Minnesota in saving .time, labor and expense for the farmer. Tomhave, W. H. Marketing Stock. Clipping from Fa'rm,. Stock and Home, n. d. ' Methods of cooperative shipping of stock are described- Traynor, Edwin. Cooperation an Industr,ial. Force. Clipping- ■ from Farm, Stock and Home. February 15, 1912. The author gives an account of the development of co- operation and speaks of the fruit growers' organizations of Oregon and California. 128 "Wisconsin State Board of Public Affairs. Tubbs, M. W. American Society of Equity. -Clipping from Wisconsin Equity, News, April 10, 1911. v. 2, no. 23. Gives the objects, plans and accomplishments of the society which is organized to promote cooperative mar- keting. . .United States — Bureau of Manufactures — Department of Com- m'erce and Labor. Cooperative Selling Associations in the United States. Clipping from Daily Consular and Trade Reports, December 29, 1910. , Describes farmers' cooperative associations through which produce is marketed. , United States — Department of Agriculture — Buteau of Statis- tics. Marketing Grain and Live Stock in the Pacific Coast •Region. (In Bulletin 89, October 27, 1911.) Considers cooperative marketing by farmers. States that in Oregon, "Washington and Idaho 200, farmers' coopera- tive warehouses were reported in 1910. Yincent, C. Cooperation Among Western Farmers. Arena, March 1904, v. 31, p. 286-92. Cooperative marketing of the grain producers of Kansas, Nebraska, and Oklahoma. i Warwood, W. S. Cooperation in the West. Atlantic, April, 1900, V. 85, p. 509-46. Gives the conditions of success in cooperative market- ing. "In any successful cooperative m'ovement there must be thorough confidence, absolute honesty, a free and full understanding by all concerned of the problems arising, and a firm determination to keep the business within the control of the membership." "Wilson, A. D. Marketing Farm Prod'ucts. Clipping from The Farmer, December 2, 1911. States that the farmers about Litchfield, Minnesota, have in the past year marketed over $100,000 worth of live stock through their cooperative shippers' association, ^ood, H. A. Farmers' Trust. World Work, July 1903, v. 6, p. 3651-56. Describes the success of an incorporated cooperative buying and selling association at Rockwell, Iowa. Agricultural Co-Operation. 129 Youngman, Anna. Tobacco Pools of Kentucky and Tennessee. Journal of Political Economy, January 1910, v. 18, p. 34- 49. Tt-eats of the cooperative selling agencies of tobacco ' growers in Kentucky and Tennessee. II. Agricultural Co-operation in Wisconsin Compiled by W. E. Jillson, Madison, Wis., Marc^i, 1912. Adams, H. G. List of Creameries and Cheese Factories vn Wisconsin, 1906. Gives list of creameries and cheese factories in Wiscon- sin with their owner, showing those that are cooperative. American Society of Equity. Second Annual Report of the Convention held at Eau Claire, Wis., January 14^17, 1908. Gives purpose of the society and many facts about con- ditions of cooperation in Wisconsin in 1908. Bemis, E. W. Cooperative Distribution. (In United States Department of Labor, Bulletin v. 1, September 1896, p. 610-44.) Speaks of laws of Wisconsin with reference to prohibi- tion of all giving of credit in cooperative distribution. Benefits to be Dervved from Cooperative Markets. Clipping from Wisconsin Agriculturalist, February 8, 1912. Describes a successful farmers' marketing organization at Sparta, Wisconsin. Cooperation; Utilizing Corporation Laws for Cooperative Prog- ress, Arena, May 1906, v. 35 p. 537-38. Gfives an account of the Right Relationship League in 1906. Speaks of election of J. B. Smith of Madison, Wis- consin, as president. Cooperative Buying. Clipping frofa Wisconsin Equity News February 25, 1911. Speaks of the work of the American Society of Equity in Dodge county, Wisconsin. Cooperative Firms of Wisconsin, January 1912. Clipping from Wisconsin State Journal, January 22, 1912. List of the cooperative firms that have filed articles of incorporation under the laws of 1911. 9— PA 130 Wisconsin State Board of Public Affairs. Caoperative Movement. Outlook, February 13, 1909, v. 31 p. , 323-24. Discusses the cooperative stores in Minnesota and Wis- consin. Coulter, J. L. Pepin county Cooperative Company. (In his Cooperation Amtong Farmers, 1911, p. 267-8.) Coulter, J. L. Trying Cooperation in the West. World's Work, July 1909 v. 18, 11820-28. Gives an account of the Right Relationship League and speaks of its stores in Wisconsin in Dane and Pepin coun- ties and elsewhere. In 1909 the league had about 85 stores in all. Coulter, J. L. Wisconsin Dairy Statistics fori the Year 1909. (In his Cooperation Among Farmers, 1911, p. 41-46.) Creamery Company Formed at Price, Wisconsin. Clipping from Eau Claire Leader, February 1912. Dairy Company shows up well. Clipping from the Herald, Manitowoc, Wisconsin, February 3, 1912. Tells of a successful company at Saxonburg, Wiseonsiij. Dimick, R. E. Cooperation that Pails. Wisconsin Agriculr turist, March 11, 1909, v. 33 no. 10.. Speaks of, the success of telephone lines and creameries and gives reasons for failure of farmers' stores in Wis- consin. Farmers' Produce Company of Chippewa Falls. Clipping from Independent of Chippewa Falls, January 28, 1912. Annual report showing successful condition of company. Flower, F. A. Fourierism in Wisconsin. Magazine of west- ern history, February 1887, v. 5 p. 458-61. The author gives an account of the scheme ^of com- niunistie cooperation of the Wisconsin Phalanx in the year 1845. Harwood, W. S. Cooperation in the West. Atlantic, April 1900, v. 85 p. 539-46. Gives an account of cooperative creameries in Wiscon- sin in 1900. States that 1000 out of 1600 are cooperative. Industrial Confmission. Laws of Wisconsin Regarding Ware- houses. (In Report. 1901. v. XI p. 229-30.) Statutes regarding connection with tracks of railroads and also about warehouse receipts. Agkicultural Co-Opeeation. 131 International Institute of Agriculture. Agricultural Cooperch tion and Organization in the United States. (In Bulletin of the bureau of econon^iic and social intelligence, v. 1 no. 1. September 30, 1910, p. 212-38.) Gives number of cooperative dairies and cheese factories in "Wisconsin is 1908 i. e. dairies 274 cheese factories 243. Johns Hopkins University. History of; Cooperation in the United States. (In Studies. 1888. v. 6.) Includes an account of cooperation in Wisconsin, giv- ing information about the Wisconsin Phalanx, Gi*ange cOr ' ' operation, Farmers' cooperative insurance, and other forms of cooperation of about the year 1886. Give reasons for failure of some Grange stores and agencies. 'Lyon, C. N. Farmers' Telephone. Wisconsin Agriculturist, January 5, 1905, v. 29 no. 1. Tells of the success of the telephone line at Hixton, Wis- consin. Muncey, J. N. Successful Cooperative Creamery. Hoard's Dairyman, September 3, 1909, v. 40 p. 921-2. Gives an account of the cooperative creamery at West Salem, Wisconsin and its successful methods. Nelson, N. G'. Cooperative Movement in the United Statesj Outlook, July 4, 1908, v. 89 p. .525-29. Tells of the Right Relationship League and of coopera- tive stores in Wisconsin in 1908 in Polk and Pepin coun- . ties and elsewhere. Speaks of cooperative creameries and elevators. Norwood Cooperative Cheese Factory. Clipping from the Antigo Journal, December 29, 1912. Gives an account of a successful cooperative cheese fac- tory in Norwood, Wisconsin. ^ ^ Oshkosh, Wisconsin, Cooperatvue Store. , Cooperative Bulletin 1886, V. 1 no. 1. ' ' 'Gives an account of the cooperative store of the Knights of Labor, operated at Oshkosh, Wisconsin in 1886. Tubbs, M. W. American. Society of Equity. Clipping from Wisconsin Equity News, April 10, 1911, v. 2 no. 23. Gives the objects, plans and accomplishnients of the so- ciety which is organized, to promote cooperative m'arketing. 132 Wisconsin State Board op Public Affairs. Westerman, C. W. Alliance of Farm and Labor Sought. Clip- ping from Milwaukee Sentinel, July 23, 1910. Describes a movement to bring about a closer alliance between the farmer and the trades unionist in Wisconsin, which will embody the establishment of cooperative dis- -tributing agencies in the industrial centers of the state. Wisconsin — Bureau of Labor and Industrial Statistics. Coop- eration in Wisconsin {In Second biennial report, 1885-86, p. 193-237.) History of cooperation in Wisconsin and account of stores in operation in 1886. ' Wisconsin-^Bureau of Labor and Industrial Statistics. Coop- m-ative Stores. (In Twelfth biennial report, part 1, 1906.) Gives history of cooperative store movement in the . United States, describes conditions in Wisconsin in 1905 and gives names of thirty cooperative stores. Wisconsin Agricultural Experiment Station. Cammuniiy Breeders' Associations. Bulletin no. 189, February, 1910. J Gives list of 31 community breeders' associations for dairy cattle improvement. Wisconsin Cooperative Union. Clipping fi^om Wisconsin Equity News, January 25, 1911. Tells of methods of the organization situated at Menom- inee, Wisconsin. Wisconsin State Grange, Patrons of Husbandry. Bulletin v. 1, 1875. Gives an account of the granges in Wisconsin in 1875 and reports of purchasing agents. Wisconsin State Grange, Patrons of Husbandry. Proceedings, 1874-1907. Constitution and by-laws of the society and annual pro- ceedings giving reports of committees and officers, includ- ing those dealing with cooperation and those of purchasing agents. Wisconsin State Legislature. An act to ereatei sections 1786e — 1 to 1786e — 17, inclusive, of the statutes relating to the in- corporation of cooperative associations and the fees to be paid therefor. (In Laws of 1911, Chapter 368 p. 402.) ^;-^2 if f .i*t. ? *: ,/? '{ I ■ V m / )4-. , ,. 11 N > V- S^, .-•".>^ .'A ■■^in*^ --^^ .,,^frf' ' , .-■.'■•r;.-.>y.i; x\