The Nonpartisan Leader Newspaper, April 19, 1917, Page 7

e AR == BY OLIVER S. MORRIS F YOU mention in the Pacific Northwest that you are inter- ested in the marketing of farmers’ products they tell you to “visit the Puyallup valley and see Paulhamus.” You are told that there you will find the most striking example of successful co-oper- ative effort of which the Pacific North- west can boast. I visited the Puyallup valley and I “saw Paulhamus.” The claims made about the farmers of Puyallup having developed a most . successful co-operative plan of market- ing were all true. But it was a good thing that I visited Puyallup when I did, because if I had been there a few weeks later there wouldn't have been any more co-operation left at all. The day before I got there the newspapers of Tacoma announced in bold headlines that the farmers had voted to sell out their co-operative stores and fruit can- neries to the California Fruit associa- tion, a private, profit-making corpora- tion, one of the big fruit exchanges and cannery combines in the field. I confirmed this at Puyallup and was just in time to see the last of “‘the most successful co-operative farmers'. effort in the Pacific Northwest.” A MILLION DOLLARS WORTH OF BERRIES The history of the Puyallup and Sumner Fruit Growers’ association and the events leading up to the sale of its successful properties to a private corporation is interesting. The Puyal- Iup valley is a miniature valley insig- nificant in area. It lies in Pierce coun- ty, western Washington. It averages ‘about twe miles wide and is only 17 miles long—one of the clefts of.the Cascade mountains at the._foot of Mount Rainier- (or Mount Tacoma). Yet this little valley marketed a crop, | chiefly berries, worth §1,126,000 last year, and it wasn't an extra big year either. Fifteen years ago the growers of the Puyallup valley were “broke.” They raised big crops but couldn’'t sell them. ‘What they did sell they got practically nothing for. One of these growers was W. H. Paulhamus. He had been a banker at Aberdeen, S. D., and came to Sumner, i#n the Puyallup valley, to take a position in a bank there. He started a dairy and berry farm, but like his neighbors could not make it pay. About 1903 the farmers formed the Puyallup and Sumner Fruit Growers’ association and Paulhamus joined. This association attempted to solve the marketing problem. The first year it lost $2800 besides all its capital. “We would have lost $10,000 besides that, if we had had it to lose,” is the way Mr. Paulhamus briefly sums wup that first year of the asseciation. - | The association met the next year, doubtful whether to continue the co- operative marketing enterprise. Paul- hamus was optimistic about it and he had his way. The association was continued, but with Paulhamus as the president and general manager, a pesi- tion he has held ever since. HOW ONE MAN MADE 5 A PAYING INDUSTRY Berries are very perishable. The first thing Paulhamus did was to devise - The Cannery at Puyallup Here is the story of a co-operative enterprise that ‘““ain’t.”” The farmers of Puyallup Val- ley, Washington, who co-operated to can berries and other fruits, have sold out the “most successful co-operative enterprise in the country’” to a private cannery combine, and the combine has hired their manager. Read Mr. Morris’ story of this enterprise. It is interesting as a story, and it has a moral, too. : methods of packing and shipping them that would preserve them in fit condi- tion as long as possible. And the next thing he did was to reach out for and develop markets. He also inaugurated rigid rules for co-operation. Members of the association had to market all their crops through the association, and as about 90 per cent of the valley farmers belonged, this meant practic- ally all the crop was in the hands of Paulhamus. He thought he knew how to make money for the growers and he went ahead, often without consult- ing the members or directors of the association. He did things and told the directors about it afterwards, es- pecially in cases where the directors hesitated or could not agree. The as- sociation became virtually a one-man proposition, and when the farmers saw that their manager was always right and was beginning to make money for them, they no longer tried to interfere. Paulhamus has held a dictatorship ever since. Methods unheard of before in berry marketing were worked out by Paul- hamus. Growers had to pack only sound berries that would keep well till they reached the market, and they had to be graded properly. He made grow- ers put an identification mark on their own boxes, and when there were com- plaints in the markets, he knew which grower to call on the carpet. It wasn't long before there were no complaints in the markets and buyers were reach- ing out for berries with the Puyallup valley label on them. He waged war on the railroads until they agreed to and did learn from him how to prop- erly ice refrigerator cars carrying ber- ries and maintain the proper tempera- ture, so that a Puyallup valley berry bought in Minneapolis was as sound as one.bought in .Seattle. He made railroads hustle the berry cars to market and raised the deuce when they didn’t. The railroads got tired of big claims for damaged fruit, too long de- layed en route, and learned the lesson Paulhamus had to teach them. TAKING CARE OF FRUIT TOO SOFT TO SHIP Then Paulhamus saw the need of some way to solve the problem of fruit too soft to ship when picked, and to absorb the part of the crop that couldn’t be worked off on the market promptly and which became too soft to ship. Paulhamus never glutted the market so that the price of the Puyal- lup berry went down. He studied the needs of the various markets. If Min- neapolis could only absorb one car of berries on a certain day, Paulhamus knew it in advance and he.never had two cars thare on that day to spoil, or to glut the market. But there was still the problem of absorbing in some way, The co-operative store at Puyallup SEVEN - The Strange Case of Puyallup How “Pure Co-operation” Suddenly Has Been Transformed Into “Pure Monopoly” on a profitable basis, the berries which could not be or were not shipped. Paulhamus told the growers to come through with $5 each to furnish capital for the establishment of a co-operative cannery at Puyallup. They did. It gave him about $3000 capital. He built a _cannery to can the part of the crop that could not be shipped. Out of the profits, without need to call on the farmers for any more capital, Paul- hamus enlarged this cannery from time to time, as the most successful canning business he built up demanded. The growers were now able to dispose of all their crop at a good profit. What could not be shipped at a good price was canned and sold at a good price. The growers also began to get divie dends. THE “CANNERY TRUST” BROUGHT TO TIME One of the big corporations owning a string of canneries on the Pacific coast saw the big business Paulhamus was doing and decided to cut in on it. They built a rival cannery at Sumner in the valley. It cost them $64,000. Paul- hamus didn't make any fuss about this competition coming in. He just kept on as he had been doing. The other fellows offered more money for berries than Paulhamus’ contracts with the growers called for. They offered to re- new these contracts for the growers on a more advantageous basis, when they expired with Paulhamus. Strangely enough, however, growers would not sell their berries to the other cannery. They spurned the offers for better con- tracts than their own co-operative cannery would offer. Paulhamus had simply told them to stand pat—that if they didn’t the rival cannery would put their own plant out of existence, and then give what it pleased for ber- ries in the Puyallup valley. One day the manager of the rival cannery came into Paulhamus' office. “We surrender,” he said. “I don't know how you do it, but you have got these damn growers sewed up. What'll you give us for our outfit?” 3 This was what Paulhamus was wait- ing for. He told the board of directors that the rival cannery was worth $20,- - 000, and the directors told Paulhamus to buy it at that. He did, and the co- operative association and Paulhamus have since run both canneries. On the small capital of less than $3000 these canneries did a business last year of $1,753,223.07. That sum is the cash re- ceipts of the business for the year end- ing December 31, 1916. It is some busie ness to do on $3000 capital. BIG CORPORATIONS’ NAMES ON FARMERS' PRODUCT ‘When I went through the cannery at Puyallup I saw the name “Armour & Co.” on a stack of boxes filled with preserves made by the co-operative plant. “We can fruit for many of the big- . gest canned fruit dealers in the coun- try, and put their labels on it,” said Paulhamus. Some of the best-known, high-class canned goods marketed under widely advertised trade marks are the product of this farmers’ cannery at Puyallup. It would be telling trade secrets to give a list. X Paulhamus was not satisfied with s i