The Bismarck Tribune Newspaper, June 7, 1924, Page 10

~ cheaply.as possible, and thus the en~ PAGE TEN NATIONAL WHEAT GROWERS ADVISORY Frank O. Lowden, Oregon, Ill. Robert W. Bingham, Leuisville, Aaron Sapiro, Chicago, IIL. Herman Steen, Chicago, Il. Bernard M. Baruch Frank A. Brown Thos. D. Campbell ..... Arthur Capper Walter Cahpelle ..... Geo. E. Duis 155) 05 Day £5 | eee Li. Gough Clifford V. Gregory Carl Gunderson Geo, C, Jewett W. C. Lansdon S: R. McKelvie uiton Peteet Wm. R, Settle D. A. Wallace Carl Williams Vv CERS AND DIRECTORS GROW nd Forks, N. Ke Geo. E. Duis, G W. G. Ginther, les, N. D. A. J. Scott, Grand Forks, R. L. Taft, Grand Forks, OF RS AS; 7 ; COMMITTEE Chairman Vice Chairman Counsel Secretar New York, N. Y. Clarksburg, Ohio Hardin, Mont. Topeka, Kansas ntucky Grand Forks Larned, Kansas ‘CONTROLLING THE FLOW OF WHEAT [it Sevtember, 1923, the’ Federal Trade Amarillo, Texas | Chicago, Ill. Ss. Chicago, Ill. Petroleum, Indiana toe eee St. Paul, Minn. Oklahoma City, Okla. Vice-President Secretary Cashier BOARD OF DIRECTORS Grand Forks Arvilla Aneta Reynolds Geo. E. Duis W. G. Williamson O. G. Bothen J. H. Hjelmstad S. Mason S. H. Copenhaver B. O. Olsen 'T. H. Maloney . G. Ginther G. Mongeon zton Jamestown Devils Lake Sarles - Rolette of the National Wheat G The state association is now hi an allied unit of the American Whi operated with a measure ¢ tiv small volume of wh . Cathay : Max Bottineau Mohall Flaxton Van Hook Epping Dickinson . Rhame A. R. Josund A teinhaus k . Carlson . Bird A. N. Winge .. A. Morrow Rader J. Quam THE CONTROL CAMPAIGN The North Dakota Wheat Growers Association, with the as wers Advisory Committee, of O. Lowden of Illinois is chairman, is contemplating a state-wide mem- |} “SO TO CONTROL THE FLOW bership drive in June, with the announced intention of securing con-_ OF WHEAT INTO THE MAR- trol of the major portion of the wl farmers’ own sales agency, before the next harv istance which Frank heat crop of this state within the econd annual pool, as , Associated, and has andling its s ® Growe: success commensurate with the compara- | t handled. The real goal of commodity pooling, aside from promoting orderly | marketing, is to secure sufficient volume of one commodity through | one agency to insure a dominant position on the market, and to lower | cost of distribution by virtue of quantity sales direct to consumers in the case of wheat, to millers and exporters. It is this goal to which the Nor forward to a high degree of suc position in which the Elsewhere in ¢ an article by H, Elevator, in whi wheat area would special kken, pple This is a harsh statement but true! ‘th Dakota poolers aspire, and look by virtue of the most favorable wheat producers of the northwest are placed. ment of the Tribune, may be found nsulting engineer of the State Mill and! es that the “depreciation in the hard spring eem to be a SELF-INFLICTED punishment. Mr. Lykken bases his state- ment on the fact that wheat producers fh this state, could, with proper organization, ask any price within reason, and get it, for the quantity and quality to any other wheats, and creates a ral outstanding ate. The super-quality Hard Spring Wheat is raised in a com-| mall area, mostly in North Dakota, thus making controll- sales through a central unit a relatively simple matter. paratively ed nd; Governmental statisti variety and grade of wheat, g ctions for blending purposes, is © derproduce: ‘of the gluten of the North Dakota wheat is far superior | demand among millers that places facts that promise well for wheat jans, as well as others agree that reatly in demand by millers of all m a domestic basis; in fact is un- and therefore the national surplus or world surplus should have no bearing whatever on the price the millers ought to pay. There- fore with the demand strictly above par, the substitution of gradual merchandising for the customary dumping, should so regulate the sup- ply as to net the producers the actual commencial value of this product in accordance with its milling qualities. It is folly for producers to dump their wheat into speculative channels and expect a full reward. to:shis benefit Somebody must carry the load and paid. With government financialoa the farmer is placed in a position, and keep the ac conditions otherwise. Thir in North Dakota with a membersh the farmers of the state. With proj Such a marketing machine has that “somebody” is generally well sistance and a marketing machine where he can carry his own load, ruing profits for himself, besides bettering marketing already been established ip of over 15,000 or 25 percent of per support, able management, and added alligiance from a great many more wheat producers this should make wheat pcoling an important prosperity of this state. determining factor in the future MERCHANDISING Wherever you have the right kind of co-operative marketing as- sociation with commodity organization, you stop the dumping of farm crops, and you substitute for dumping, the crops. ‘The merchandising of farm crops means simply the control of the) crops so that the: i the world, in such times and in such quantities that th amovement of ‘those far at prices that are fair under given merchandising of farm go into the markets of y are absorbed commercial conditions, No one farmer can merchandise his crop, but every co-operative association organized on the commodity plan can merchandise crops be- cause when you get a commodity association then you have reached} the same point that ordinary busine DEMAND AN What would you think of a merchant who would stick up a sign} ona pile of shoes or hats or canned goods. this?” You'd likely think he was either crazy, or broke, or both; and you! wouldn't mis Did you eve across it like thi: you give us for it; far. certainly not. Did you ever hear of Gary shipping out a carload of rails where} has in the United States. D SUPPLY “What'll you gimme for see a car load of flour with a streamer stretched “We're going to sell this flour today. What will} he heard they needed a railroad, and maybe would build one some day. Not Gary. sold. He knows when a car 0 No one ever heard of a shoe factory making up a thousand pairs | of shoes, and then sending out salesmen to get offers on them. sires! ‘They set a price on those shoes first. Then the then they make them. But—when a farmer, under the old order, has a product to sell, | He simply dumps it out, wherever it is handiest, and says to the world to come on and get it. he doesn’t sell it. shopper, and never pays too much isn’t ready to buy, and has no particular need f rails leaves the factory, they are No y sell them, and The Id world is a good for anyshing: or ii pecially when she it. That’s the WHY of cooperative marketing. Reverse the old bogy of supply, and demand and you have demand | Demand comes first. Put a halter on supply, and lead; - 2 and supply. her. HIGH LIGHTS -OF THE WHEAT POOL CONTRACT (Continued from Page 9) the plan by any person or interest who might seek by persuasion or payment of unwarranted prices to destroy the association. This gives assurance we will stick , together, without which the plan would sure- ly. fail. POOLING PLAN ‘IS COMPARED TO ELEVATOR , (Continued from Page 9) fit. In/order to show a profit this manager must buy this grain as tire procedure tends to lower prices to the farmers. It.would be exped- jent for the manager to give the ners..qdvice;,on when to expect bulge in-the. market, for it would be to buy as much as, sible. on the low point, that. he might sell on a rise, in order to show a net gain. Farmer No, 1 may sell his wheat at'40 cents; Farmer 2 may sell-at 60 cents, and Farm- # No. 3-at 80 cents, “He does not vise the first.two farmers to wuit : mn’ though: the may feel for he is always roht, Still he is the farmers. empty es a the year what onal pens? The elevator manager says: “I have made a lot of profit because I have bought a lot of wheat on the low market and sold on a higher market (Often it is the reverse.) . I will declare a patronage dividend of five cents. Farmer No. 1 gets 45 cents; Farmer No. 2 gets 65 cents.and Farmer No. 3 gets 85 cents, Two made money on one; one made money on two; .and the association which was supposed to be cooperative, made money ON the farmers instead of making money FOR the farmers, If | the manager is unfortunate, either in his buying or selling, the farmer members are assessed to make good the losses. Elevators Encourage Dumping What I wish to emphasize is that the co-operative elevator encourages “dumping” on the part of the farm- ers and competition amongst each other. Then in tutn the: various ele- vators practive mass dumping at the terminals, for there ts no co-ordina- tion of tither sales or distrikution and they compete against each other as seriously as do the individual farmers, Thus we see that orderly and gradual marketing is impossible under this system. and thus the first determining factor in the law of sup- ply/and demand—time—is not allow- ed to function to the advantage of the producer. In North Dakota it is csimated that at least 70 per cent of the wheat raised is generally dump- ed on the market during a fow weeks in the fall, and the tem larders. ‘The wheat producer regards the ele- ry glut is bound to affect and lower prices gardiess of hungry mouths ‘and Dz | | Aar. The purpose of wheat pooling is ;KETS OF THE WORLD AS TO {GIVE THE FARMER A VOICE {IN | DERTERMINING BASIC | PRICE VALUES. The words express an idea that most people fail to grasp at first reading. We are not used to think- ing along such lines. The picture tells the story con- cretely. Under the cooperative plan, the farmer puts all his wheat into the pool. (Of course, it goes to his lo- cal elevator, but the wheat becomes part of the pool and is controlled by the directors elected.) But in- stead of selling helter-skelter on the gambling markets, the pooled wheat is sent to the local mills, or the factories, or to distant American plans, or to exporters as they need it. In the picture there are “pipes” from the grain fields to the pool and then from the pool to the con- sumers to show how the wheat} moves. But notice that there is a faucet on each pipe leading out fro mthe pool. The farmer dumps his wheat in as he can, but the wheat pool is only sent out when it’s wanted. “Control the flow of wheat”— that’s what the wheat pool will do,’ —anybody who can control the wheat of N. D. in this way has something to say about the price! vator as his market. If several ele- vators are locate@ at a point the competition may be keen, and the farmers may benefit accordingly, but if one or two elevators are there, the situation may be reversed, in spite of the fact that the demand at point of produdetion should have no bear- ing on the price, for the market’ for wheat is as wide as the world. True the market of the farmers’ élevator extends only to the nearest termin- al, but that merely emphasizes the fact that it has little control ‘over distribution in a board market, and therefore the “place factor” in sup- ly and demand means little as far s the local elevavor is concerned. | Lack of Information There need be little reference made to the third principle of merchandis- ing as referred to equality of infor- mation as between seller and buyer. The average elevator manager is lit- tle more than a warehouseman, and it would indeed be foolish to con- tend that he is as well versed in marketing and market conditions as the man to whom ‘he sells—men to whose desks run wires from all corn- ers of the earth over which comes! every available crop news, market “dope”, estimates of supply and con-| |sumption, in fact every conceivable in- formation’ with réserence to the pro- duct bought and sold, The foregoing outlines briefly why the farmers’ co-operative elevator has not succeeded in completely solving the farm marketing problem. As a warehouse it is ideal; as a place to handle, store and grade grain, we could wish for no better facilities, but as a merchandising machine it is} inadequate as results show. It was a step in the right direction, but | merely one step. No one knows this better than the farmer himself, al- though many of his.servants would] have him believe otherwise, for they see their idolized position as grain merchants fast loostng prestige with the advent of a new movement call- ed the “commodity pooling plan.” Commodity: Pooling Let us examine this plan. The purpose is to aivsfiate all the pro- jducers of one commodity into state marketing associations which in turn would be coordinated in'the use of centralized selling agencies, These ‘ociations are non-stock and non- profit, with only one aim—to control the flow of that commodity to market so that it may be sold in an orderly manner over a pesfod of actual con- sumptive demand, and distribute it | directly to all possible sources of ‘de- mand, They are sales departnients of the farm factory, and the ‘farmers through joint effort, hire expert sales- men to perform the necessary duties | of merchandising. 4 You will note that this sketchy and somewhat limited. definition of the | aim and purpose of this system meets ‘all the fundamental reqdirements of conditions vital to the proper func- tioning of the law of supply and de- mand. Orderly marketing ‘provides for’ a‘ ‘proper “time”; extended and direct markets for proper “place” and expert salesmen provide equality of information as between buyer and seller. At the present’time there are thir- teen such associations organized by states to handle wheat by co-opera- tive “pools”. Nine of these state! associations have affiliated and estab- lished a centrae selling agency, known as the American Wheat Grow=4) ers, Associated, Inc,, with headquar. ters at Minneapolis. The first wheat. pool association was organized in Washington three years ago and since then the movement has be- come national in scope. During the past, few months it has gained new impetus with the establishment of the National Wheat Growers Advis- ory Committee of which Frank 0. Lowden, former governor of Illinois is chairman, whose aim it is to assist farmers in perfecting present organi- zations ‘and establishing new one’! in other states. xt cannot be -saidy that results have been phenominal as yet, for one or the fundamental} requirements is control of the bulk of the wheat crop so tlt orderly marketing may be effective and the bargaining power sufficiently potent as to be a factog in price making. Leaders hope that this may be real- ized this’ year. Method of Operation These associations use the existing physical facilities for handling wheat, such as the local and terminal ele- vators but the selling of the wheat is done by expert grain salesmen, located at the central agencies, whol As!’ deal directly with the millers. the farmer always retains title ta his wheat until it is thus sold, there is no need of ‘hedging or margin trad- ing, and there is no need for capital stock, for the warehouse receipts can be used as collateral for any need- ed loans either to make advances to the farmer or as a revolving fund to finance sales operations. At the close of the pool, each grower re-| ceives an average price based on sales during the pool period for' his quan- tity and quality of wheat, with a differential based on freight rates. The wheat passing gradually through one sales channel eliminates competition among the growers, meets the demand as it exists, en- hances the bargaining power of the seller by virtue of a controlled sale thus pitting the buyers in bidding against each other, eliminates the speculative middlemen, and other- wise adopts sound principles of mer- chandising as practiced by industries other than agriculture. The associations are always in the control of actual farmers, for none other can be elected as members of the boards of directors, and as each member has only one vote, no small group can secure control. The. pooling associations are essen. tially service agencies rather profit-making institutions, pefform- ing a service-for the farmer. members that can better be done by experts than by themselves, Cost of Operation The question arises;—can these agencied perform this service at less expense than ‘the private agencies? we’ assume that it is admitted that it can’ be performed to better ad- vantage for the farmers in principle. Commission that reported to Congress the spread between the wheat grower and the mills and exporters was over 33 cents per bushel. This is divided into two items; over 18 cents per bushel going to the middle- men or grain dealers, and the balan to the transportation companie: These are the latest and most accur- ate figures obtainable. They of course include the fixed charges such as storage and indling. Further, the U. Department of Agriculture reports ‘that examining’ the records of 40 Kansas elevators showed that the average operating costs of these elevators for the years 1921 and 1922, including such items as aries and similar over-head ex- penses were 4.37 cents per bushel, We assume that thi is a fair aver- age for all e tors, including the farmers’ companies. On the other hand the total oper- ating cost for handling the 1922 pool of the North Dakota Wheat Growers Association was 2.4 cents per bush- el, this in spite of the fact that it was the first pool handled and was comparatively small—Some over 3 a | H(@ * Wholesale D 206-4th St. * million bushels, This cost was some- what higher with some state pools, and somewhat lower with others. It is therefore evident that pooling rep- resents a considerable saving in ser- vice charges, due primarily to con- centrated volume in a single agency, rather than spreading this voluéne among many agencies. Enemies of pooling have spread considerable adverse propaganda against the movement, declaring that ther operating cost of the North Da- kota Wheat Growers Association for 1922 was 13.7 cents per bushel, en- tirely ignoring the fact that .108 cents represented direct charges, such as storage and handling charges, interest paid banks, ete., over which the association has no control and that would be charged against the grain regardless of what channels it passed through; also .005 cents rep- resenting a commercial reserve, which is liquid asset, not to be in- cluded in expense. Thus we note that from every angle considered pooling wheat has its advantages, not only over the existing system operated by private dealers for personal gain, but also havoline is more than oil IT IS POWER * & REIBOLD, INC. istributors. Bismarck, N. D. “SATURDAY, JUNE 7, 1924 | over the farmer: elevator system operating for a profit to Be di8tribut- ed patronage dividends. The former is a service system, operat- ing on a non-proftt basis, with only one aim—higher prices for — the wheat sold; the latter two systems must buy as cheap as possible, either to net a profit for themselves, dr for members, and both aims depress the market. Just The Way, Business Does, Says Lowden * (Continued from Page 9) at the time of delivery; the associ- ation will then sell his wheat, with other wheat of like grade and qual- ity, to millers and exporters gradu- ally through the year, thus avoiding the disastrous pricé ‘smash that usually prevails during the week¢ as SEND : Showing Best Oscar H. SHRUBS, AND BULBS For Fall Planting. immediately following harvest. The} average price for, cach’ grade ‘with proper differentials for freight, will be paid each grower who has . his wheat in the podls. ue This. plan will enable farmers to meet organized buying with organ- ized selling; will enable them to study markets and thus be prepared to meet emergencies usually after having an opportunity to be pre- pared; will’ enable them to employ the most skilled grain men to work for them instead of against them; will enable them to develop a meth- od of. orderly marketing and mer- chandising the “wheat, instead of dumping it on the markets in a few weeks, as’ at present; will enable them in time to work out feasible methods of adapting supply to de- mand; and-in so doing will enable them. to sell wheat to better advan- tage and thus to gradually Lring the price of that commodity up to the level where it properly belongs. FOR WILL’S FALL LIST | Varieties of TREES Will and Company Bismarck,.N. D. Every step you take, every move you make, will be faster and surer if you have Delco-Light in and about your barn. Instead of having to carry a dangerous lantern, both hands will be free. Elec- tri power, too, will save your time and reduce the number of hours given each day to choring. You need Delco - Light NOW! B. K. SKEELS ——BISMARCK— Sn Lee RR RMT DOG'S HEAD BUCH rr eT POSITIVELY The Best Drink in. America. TRY IT—YOU’LL BE PLEASANTLY SURPRISED. Order it by the case'from your dealer. ‘If he cannot supply you then write or:;phone : The Mandan Beverage Co. 4 "Mandan, N. D. Phone 337 Price $5.50 per case delivered to your home with refund Iii nn IU LOL SE In answering this’ question’ let us first’ examine ‘thé cost of this ser- vice ‘pérforined by private “agencies. of ‘$1.50 upon'return of case and -bottles. sii ‘Just What I Wanted!” We've just the design you will like! best and a very good grade of wall paper, too. Spring is the time to:re- decorate your walls—make the home more beautiful and pleasant. Our stock of wall papers, paints, brushes and all kinds of supplies is very com- plete, in fact the largest west of the Twin Cities. WALL PAPER |é 4 -| We wish to emphasize the fact, we carry here:in Bismarck. the largest, stock of wall -paper of any concern wert, of the ‘Twin Cities. “Hundreds of pat- + terns, to select irom. We cheeriully ofier sugges- tions and color schemes .for home.decoration, We carry a full line of paints, varnishes: and enamels for 5 interior. and exterior uses. - Glass, Paint and Varnish Brushes, Wax, Polishing Qils and Brushes.. In -fact-everything found .in the most com- plete Paint store.. Special-prices on-barn paints. \ Bisinarck Pant & Glass Compaity H.E. Spolin, Local Mgr. 4th & Rosser Phone 3995 WHIZ AND: WHISKERS— | WHISKERS! LET'S GO TOGETHER AND WE CAN HELP. ‘ EACH orfeR! } HEY WAIT A MINUTE | IN AHURRY-1 WANT 10 GET MY. WHEAT TO MARKET AN' GET. MY MONEY ! THE WHEAT ‘PUPS WHAT po You KNow ApouT THAT! HE'S CATCHING UP WiTH ME! — — GUESS I'LL WAIT AN SEE WIthT THAT (DEA-WAS:NE RAD ABOUT HELPIN’ EACH OTHER ! —By CARMAOK NOW You.CAN SEE WHY 1 WANTED. US TO GO TOGETHER, CAN'T YON?