COOPERATIVES: A Mighty Army

Oh, we are a mighty army

Though we bear no sword or gun

We’re enlisted till the struggle

For cooperation’s won

And beneath our banner blazoned

‘One for all and all for one’

Consumers marching on.

With all the fervor of an oldtime revival meeting, 2,854 delegates to the 23rd annual convention of the Consumers Cooperative Association last week roared out the chorus of their Battle Hymn of Cooperation. The windburned farmers who lounged in red plush chairs in Kansas City’s Municipal Auditorium, munching apples, had plenty to sing about. In 23 years, C.C.A. has become the largest co-op of its kind in the U.S. It has assets of $52.2 million, 449,000 member families, and last year sold $74 million worth of merchandise—everything from tractors to toilet soap.

Last week C.C.A. President Howard A. Cowden told the delegates about the biggest project ever undertaken by an American coop. To help ease the fertilizer shortage, C.C.A. will build a $16 million nitrogen plant at Lawrence, Kans. with $6,000,000 borrowed from C.C.A. members and the rest from the RFC. C.C.A. will also build a 5,000-barrel-a-day catalytic cracker for its refinery at Phillipsburg, Kans., open $1,000,000 worth of lumber kilns at its mill in Swisshome, Ore.

Burned Out. The man who started C.C.A.’s “consumers marching on” is President Cowden, now 58. While secretary of the Missouri Farmers Association in 1929, he decided that farmers could save money buying through a coop. With $3,000 put up by six farm coops, he set up C.C.A. as an oil and gasoline co-op in a garage in Kansas City. By the end of the year, he had 22 member coops, and had sold $310,000 worth of oil products.

When one load of poor-grade oil burned out the engines of his customers’ trucks and tractors at harvest time, Cowden decided to start mixing his own oil, took the first step toward producing his own products. In 1939, he raised $350,000 from $10 shares sold to C.C.A. members, and built a refinery. A month after the refinery went into operation, its supply of crude was shut off. Gowden raised another $120,000 from his members to help buy oil wells and pipelines for C.C.A. It now owns about 1,000 producing wells, more than 900 miles of pipelines.

Built Up. C.C.A. branched out, now produces 80% of the products it sells to its 1,400-member co-ops to retail. While prices are competitive with big chains, co-op members get refunds at the end of the year out of “savings” (i.e., profits). Last year, out of $6,700,000 in profits, C.C.A. members got refunds of $5,000,-ooo. C.C.A.’s growth has been helped enormously by the break co-ops get in tax laws. Unlike a corporation, which pays an income tax on dividends, C.C.A. pays no ^ taxes on its refunds. C.C.A. never claimed exemption on all its profits as did many farm co-ops which asked for the same tax treatment as non-profit foundations, trusts, etc. Thus C.C.A. will not be affected by the new tax law, which put a tax on the part of the profit the co-op itself keeps.

Now, C.C.A. is trying to shift expansion away from petroleum products which are 69% of its sales. It wants to boost sales in farm machinery, fertilizer, food and home appliances. By doing so, it expects to hit annual sales of $100 million.