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Consumers’ Cooperatives in the North Central States

Consumers’ Cooperatives in the North Central States

Copyright Date: 1941
Edition: NED - New edition
Pages: 447
  • Book Info
    Consumers’ Cooperatives in the North Central States
    Book Description:

    Consumers’ Cooperatives in the North Central States was first published in 1941. Minnesota Archive Editions uses digital technology to make long-unavailable books once again accessible, and are published unaltered from the original University of Minnesota Press editions. “Comprehensive, up-to-date analysis of the region having the longest history of successful consumer cooperation.” “Detailed case histories to 1940 of typical retail units and leading wholesale organizations.” “Practical recommendations and thoughtful criticism, useful to cooperatives and cooperators everywhere.” No other book on this subject is so rich in reliable facts, objective reporting, and comprehensive treatment as this study. It is based on extensive first-hand investigation by trained research men, with figures brought down to 1940. Case histories of the 3 leading wholesales and 15 local societies typical of some 800 in the region are included. Each discusses the origin, growth, membership, trends of operation, buying methods, price levels, advertising, financial organization, personnel, patronage returns, ratio of annual earnings to total assets and net worth, relations with other cooperatives in districts and regional federations for education, recreation, insurance, credit, etc. Every phase of operation of these carefully selected cases is expertly analyzed and described. Many are summarized with recommendations for future action. Of special value are the discussions of types of cooperatives, the analyses of basic community factors involved in successful cooperation, the suggested solutions for problems of organization and management, and the long-range view of possibilities for price regulation and customer satisfaction.

    eISBN: 978-1-4529-3797-7
    Subjects: Economics

Table of Contents

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  1. Front Matter
    (pp. i-x)
  2. Table of Contents
    (pp. xi-xvi)
  3. Part I. An Analysis of Consumers’ Cooperative Enterprise, with Particular Reference to the Finnish-Initiated Movement

    • 1 The Character and Forms of Cooperative Enterprise
      (pp. 3-17)

      Efforts to define a cooperative society or enterprise have led to much confusion and contradiction. Some writers make no clear distinction between cooperation as a general human phenomenon coexistent with society and cooperation in the form of specific cooperative enterprises. They tend to use the term cooperation in a broad generic sense as referring to any kind of coordinated effort. The difficulty with this usage is that it does not clearly distinguish between cooperative activities in such varying situations as everyday life in a family or neighborhood, a luncheon club, a business corporation, a labor organization, a public health office,...

    • 2 Social and Cultural Foundations of the Finnish-Initiated Movement
      (pp. 18-32)

      An adequate explanation of the genesis or development of a particular cooperative enterprise or movement involves an understanding of the total situation that influenced the goals and activities of the group or groups that sponsored it. Moreover, a generalization drawn from a study of one cooperative situation must be applied with caution to another. In the movement under study it therefore becomes necessary not only to analyze the major factors in the environment of the region where it developed but also to understand the character and goals of the Finnish immigrant groups in order to suggest why they developed consumers’...

    • 3 The Place of Cooperatives in the Community
      (pp. 33-40)

      The background of the Finnish-initiated movement discussed on the preceding pages reveals a deep hunger for the social satisfactions of fellowship, recognition, recreation, and intellectual growth. There was also a groping for group-wise techniques of satisfying these basic needs that led to the successive development of and participation in the temperance societies, the Socialist party, the Workers’ Hall associations, and the cooperative store-societies. Both the immediate function of satisfying practical economic needs and the ultimate objective of seeking a better social order are implied in this background.

      The part played by the cooperative societies in different community situations varies considerably....

    • 4 Problems of Organization and Membership in the Local Society
      (pp. 41-58)

      The local cooperative society is an important foundation of the Finnish-initiated movement in the upper lake region. It has served as a focal point for the initiation of the movement, as well as for the diffusion of cooperative sentiment and information. Moreover, the local societies provide the real financial strength of the cooperative institution, for they not only furnish the money for their own enterprises but also are an important source of financial backing for regional and district federations. At the end of 1939 this movement had 92 local distributive associations and 5 other local societies with store departments. These...

    • 5 Business Administration in the Local Society
      (pp. 59-78)

      Although smoothly functioning human relationships are essential to a strong cooperative enterprise, they are of course no substitute for sound business administration and management. As Jones points out: “Authorities would disagree on the emphasis that might properly be placed on individual factors. There can be little dispute, however, that sound financial setup and financial operating policies, skill in merchandising and satisfactory membership relations are three of the foundation stones on which a long-time cooperative program must rest.”¹

      These three factors not only are significant in themselves but interact upon each other to condition the general strength and efficiency of a...

    • 6 Regional Federations in the Finnish-Initiated Movement
      (pp. 79-95)

      The Finnish-initiated movement may be conceived to have undergone three phases of structural development. First, there was a phase of cooperative individualism when the local societies carried on their activity in virtual isolation. This phase continued throughout the first decade of the movement, for federated activity did not begin until several societies had been formed and they had come to feel the need for joint educational and commercial efforts. Second, a phase of regional federation followed wherein a number of widely scattered societies sought to coordinate certain educational and commercial activities on a regional scale. This began in 1917 and...

    • 7 Local District Federations in the Finnish-Initiated Movement
      (pp. 96-115)

      The more recent development of coordinated activity in the cooperative movement under study has been that of local district federations. Neighboring cooperatives in localized areas of the region combine into voluntary groups of varying size in order to promote their mutual interest. These local federations supplement the work of the regional organizations by (1) providing wholesale centers or bulk plants for the distribution of petroleum products, (2) organizing local production activities, such as creameries and sausage factories, (3) providing retail centers for expensive bulk merchandise, such as automobiles, farm machinery, and building materials, and (4) supplying other cooperative services, for...

    • 8 An Evaluation of the Finnish-Initiated Movement
      (pp. 116-136)

      The task now remains of viewing the movement as a whole in order to appraise its vitality to live and grow in the future. The difficulty of this task is already patent, for this study has amply demonstrated the complexity of the nexus of factors that condition the development and successful functioning of a single cooperative enterprise, to say nothing of a diversified movement. There have been brought into relief, however, certain factors that appear to have had special significance in the genesis and successful operation of the cooperative enterprises under study. The author therefore proposes to appraise the present...

  4. Part II. The Regulative Accomplishments and Possibilities of Consumers’ Cooperatives in the Present Economy

    • 9 Educating the Consumer
      (pp. 139-146)

      A number of writers have predicted that consumers’ cooperation will ultimately become the dominant form of economic organization, just as private capitalism is in the United States today.¹ Kallen and Warbasse have outlined commonwealths in which cooperative societies even take over the civil government. Although neither the experiments in the Finnish-initiated movement discussed here, nor the hundred years’ development of cooperation in Great Britain give much strength to these predictions, nevertheless this program merits consideration during the present period of political unrest. The final chapter in Part II is devoted to this purpose.

      The more immediate prospects for consumers’ cooperation...

    • 10 Meeting Monopoly and Monopolistic Competition
      (pp. 147-157)

      Some element of monopoly creeps into the pricing process whenever all sellers do not have access to all buyers on equal terms. Cases where all sellers do have access to all buyers are extremely rare, and therefore monopolistic competition is the usual condition in a competitive economy. Three aspects of monopoly and monopolistic competition will be considered.

      Under the assumptions of perfect competition sellers can be relied upon to expand output until the price they receive just covers the lowest total cost of each unit of production of the marginal producer. The theory of perfect competition assumes that all sellers...

    • 11 Weathering Monetary Disturbances
      (pp. 158-161)

      The theory of perfect competition assumes that the monetary system of the community registers prices and facilitates exchange without exerting any independent influence on the relative position of individual prices. Actually, the commercial banking system makes the supply of money highly variable. Changes in the supply affect the general price level, but not all individual prices move at the same time, in the same degree, or even in the same direction as the general level. Thus there are shifts in the real income commanded by various groups that tend to upset business calculations based upon expected prices. Such shifts may...

    • 12 Adjusting to Change
      (pp. 162-169)

      Change renders existing adjustments to economic conditions obsolete and creates uncertainty with regard to appropriate adjustments for the future. Four problems arising from change are considered.

      Speculation is both useful and inevitable as long as prices change. That the persons who will be affected by a change in price should try to anticipate the change is not only proper but it is also useful because it allows the present price to reflect anticipated future conditions as well as present conditions. Therefore speculation should operate to distribute the existing supply of goods between present and future uses and to moderate the...

    • 13 Modifying the Inequalities of Private Ownership
      (pp. 170-174)

      Private ownership of the instruments of production is an important source of inequality of income in the present economic system. Two aspects of this problem will be considered.

      About one third of the national income goes to the owners of property as remuneration for the services of their property and for their own services in administering it. The ownership of property is concentrated in the hands of a relatively small proportion of the population, and it is the greatest source of the extreme inequalities of income among individuals. The owners of property usually enjoy higher incomes from personal service than...

    • 14 The Probable Effectiveness of Cooperatives in the Present Economy
      (pp. 175-177)

      Because cooperative associations can voluntarily choose to operate their businesses in close approximation to conditions of perfect competition, they are able to improve upon the situations created by the irrationality of the consumer and the inability of all sellers to contact all buyers on equal terms. Private businesses, on the other hand, not only take advantage of the irrationality and ignorance of consumers and of the inequalities in the markets, but also try to aggravate these conditions in the hope of obtaining profits.

      Cooperative associations seem to be adopting sales and advertising methods that may help the consumer make rational...

    • 15 The Economic Operation of a Cooperative Commonwealth
      (pp. 178-194)

      An analysis of the economics of a completely cooperative commonwealth is of interest not because there is any prospect that such a society will develop soon, but rather because it throws some light on the ultimate accomplishments toward which consumers’ cooperation is striving and provides a basis for comparing this form of economic organization with alternative forms. Lange has described the operation of both the competitive economic system and a socialist system.¹ The present discussion follows Lange’s scheme of presentation, so that the economic operation of the cooperative commonwealth described here can be compared with the operation of the competitive...

  5. Part III. Case Studies of Consumers’ Cooperatives

    • 16 Brule Cooperative Association, Brule, Wisconsin
      (pp. 197-207)

      Brule is a small unincorporated village, with a population of about one hundred and fifty, located thirty-five miles east of Superior in northern Wisconsin. One of its claims to fame is that President Coolidge once spent a vacation there, and another that it is one of the very few towns with a cooperative having a virtual monopoly of local retail trade. Not many years ago timber provided the main economic resource of the area, but today dairy products account for approximately 80 per cent of the local income, while forest products come second with around 15 per cent. Farms have...

    • [Illustrations]
      (pp. None)
    • 17 Isanti County Cooperative Association, Cambridge, Minnesota
      (pp. 208-218)

      Cambridge is a town with a population of about sixteen hundred in 1940, located in a rich agricultural country forty miles north of Minneapolis. Dairy products, potatoes, and rye are the principal farm commodities of the surrounding area. Other sources of income for the town itself come from a woolen mill, a starch mill, and a state institution for epileptics located there.

      The Isanti County Cooperative Association, with headquarters at Cambridge, was organized by Swedish farmers as an oil association in 1932. There are no Finnish members in the society. Although about half a dozen farmers promoted the association with...

    • 18 Cloquet Cooperative Society, Cloquet, Minnesota
      (pp. 219-238)

      The largest retail cooperative society in point of sales in North America is located in Cloquet, Minnesota, a town with a population of about seventy-two hundred, twenty-one miles southwest of Duluth. The town itself is a former lumbering center that boasted several large sawmills before a forest fire nearly destroyed it in 1918. Since then lumbering has declined until it provides directly only about 10 per cent of the area’s income. Indirectly, however, a large proportion of the town’s income is still derived from the forests in the form of a variety of wood products manufactured in a large paper...

    • 19 Ely Cooperative Association, Ely, Minnesota
      (pp. 239-249)

      The small mining town of Ely is located on the Vermilion Iron Range in extreme northeastern Minnesota. It is near the Canadian border where highways end and canoe trails begin, about one hundred and fifteen miles north of Duluth and fifty miles northeast of Virginia. In normal times, about 85 per cent of its income is derived from the iron mines in the immediate vicinity, and the remainder comes from dairy farming, tourist trade, and forest products. From 1931 to 1935 local economic activity was severely depressed, unemployment was widespread, and extensive government relief became necessary. But in 1937 and...

    • 20 Floodwood Cooperative Association, Floodwood, Minnesota
      (pp. 250-260)

      Floodwood is a small rural town, with a population of five hundred and sixty in 1940, located forty-three miles west of Duluth in the Arrowhead district of northern Minnesota. The character of its early history may be gathered from its name. Since it is situated near the confluence of three rivers, one of which bears the same name, floods of wood were a familiar sight in the early days as the waters of these rivers carried the logs from numerous nearby lumber camps downstream to the sawmills below. The town’s economy was then based upon the sale of the wood...

    • 21 Farmers’ Cooperative Trading Company, Hancock, Michigan
      (pp. 261-269)

      The Farmers’ Cooperative Trading Company operates four stores — a central store in Hancock and branch stores in Calumet, South Range, and the unincorporated village of Chassell. These communities are all in the heart of the copper country in the Keweenaw Peninsula of Upper Michigan, and according to the 1940 census their populations are Hancock, 5,500; Calumet, 1,460; and South Range, 918.

      All except Chassell had their origin as mining towns about the middle of the last century and were prosperous for many years while this section was the premier copper-producing area in America. This fact, together with the famed...

    • 22 The Consumers’ Cooperative Company, Hibbing, Minnesota
      (pp. 270-280)

      As late as 1885, northeastern Minnesota was still a hunting ground for the Indians. Late in the seventies white men began to settle in and around the Lake Superior region, but even then they seldom penetrated the dense forests of white pine, the entangled undergrowth, and the swampy marshes of the hinterland. Little did they realize that hidden away in that wilderness lay some of the world’s richest iron ore deposits. Not until 1890 was ore discovered on what is now known as the Mesabi Iron Range, a formation of rich iron ore deposits extending for more than a hundred...

    • 23 The Elanto Company, Nashwauk, Minnesota
      (pp. 281-292)

      Nashwauk, incorporated in 1902, is located about one hundred miles northwest of Duluth, at the southern tip of the Mesabi Iron Range, in Itasca County, northern Minnesota. Its social and economic history is closely linked to the iron mines, whose operating debris dots the almost treeless landscape around the community. The discovery of iron ore upon the Range and the subsequent opening of the iron mines in the nineties attracted many diverse nationalities to these mining locations. Growing slowly and intermittently, today Nashwauk has a heterogeneous population of 2,300, with Finns, Italians, and Swedes predominating. Its economic well-being, based as...

    • 24 Orr Farmers’ Cooperative Trading Company, Orr, Minnesota
      (pp. 293-303)

      Orr, a small village with a population of about two hundred and thirty, is located one hundred and fifteen miles northwest of Duluth. It had its origin about forty years ago as a trading center both for the scattered homesteaders who took up small timber-covered tracts in the territory and for the numerous lumber camps to be found there in the late nineties. Numerous reminders of its frontier outpost days can still be seen in Orr. Indians from a nearby reservation are frequent visitors to the village, and one often sees a dweller from the hinterland trudging to his secluded...

    • 25 Rock Cooperative Company, Rock, Michigan
      (pp. 304-317)

      Rock, a small unincorporated crossroads village with a population of approximately two hundred and fifty, is located in the Upper Peninsula, twenty-eight miles north of Escanaba. The prewar depression and labor troubles caused Finnish immigrant miners to leave the mining and industrial centers of Ishpeming, Hancock, Calumet, and Marquette and to seek new homes in the cutover timber area near Rock. Thus between 1912 and 1915 settlement in the surrounding farm community was rather extensive. The two basic economic problems that confronted these workers and farmers in their new rural life were, first, to secure greater returns from the marketing...

    • 26 Rudyard Cooperative Company, Rudyard, Michigan
      (pp. 318-325)

      The unincorporated village of Rudyard, which had a population of about four hundred and fifty in 1940, is located twenty-four miles south of Sault Ste Marie. The principal nationality groups in the surrounding territory are the Finnish, the French, and the Dutch, the Finnish being the leaders in the local cooperative enterprise. As a result of the inducements of land agents, the first Finnish settlers came into the area around 1900 and were followed by many others during the first decade of this century. They were largely ex-miners from the copper country around Hancock or from the iron mines around...

    • 27 Soo Cooperative Mercantile Association, Sault Ste Marie, Michigan
      (pp. 326-340)

      Sault Ste Marine is located at the eastern end of the Upper Peninsula at the site of the famous Soo locks on the St. Mary’s River. It was the first white settlement in Michigan early in the seventeenth century and in 1662 became the first permanent settlement west of Montreal. Today it is the county seat and is an important lake port served by four railroads and three main highways.

      According to the 1940 census the city had a population of about 14,500 within the corporate limits. Approximately 42,000 people live within the retail trade zone of the city, and...

    • 28 Spooner Cooperative Association, Spooner, Wisconsin
      (pp. 341-351)

      “The center of Washburn County’s lake region and angler’s paradise” is one conception of Spooner, Wisconsin, as set forth on a tourists’ folder by the local business association. More prosaically, however, it is a former railroad town, recently turned rural, with a population of about twenty-six hundred. Located seventy-four miles south of Superior at the intersection of three major highways and two important branches of the Omaha railroad system, it has the distinction of being Washburn County’s largest town. Two small trading centers are about six or seven miles distant, on opposite sides of the town, and there are others...

    • 29 Virginia Cooperative Society, Virginia, Minnesota
      (pp. 352-362)

      Virginia, Minnesota, is located about seventy miles northwest of Duluth in the heart of the Mesabi Range district in St. Louis County. In 1940 its heterogeneous population numbered about 12,200 people, including a large Finnish element that has been responsible for the local cooperative activity. This small city was formerly a lumbering and mining center. The importance of lumber in its economy, however, began to wane by 1910 and had become relatively insignificant by 1925. Today from 65 to 70 per cent of its economic income is derived directly or indirectly from mining. With the extended application of machinery, this...

    • 30 Wakefield Cooperative Association, Wakefield, Michigan
      (pp. 363-370)

      Wakefield, a mining town with a population of about thirty-seven hundred, is located in the extreme western end of the Upper Peninsula. Its history is closely interwoven with the development of the iron mines and the growth of the lumbering industry in the territory. With the decline of lumbering, mining has come to be the basic economy. It accounts for 75 to 80 per cent of the income of the area, while farming, lumbering, governmental employment, and relief account for the remainder. The predominating nationalities attracted to the vicinity to work in the mines and lumber camps were Polish, Italian,...

    • 31 Central Cooperative Wholesale, Superior, Wisconsin
      (pp. 371-380)

      The Central Cooperative Wholesale¹ is owned and controlled by its member-societies. It is a service agency bearing the same relationship to the local cooperatives as the latter bear to their individual consumer members. Membership in the wholesale federation is limited to cooperative organizations. They become members through the ownership of a single $100 share. At the close of 1939 there were one hundred and sixteen shareholding members, one hundred and eight of which were active or patronizing societies. These member cooperatives control the Wholesale through delegates that they elect to represent them at the regular annual meeting held in Superior...

    • 32 Midland Cooperative Wholesale, Minneapolis, Minnesota
      (pp. 381-405)

      The story of a consumer-owned organization begins with the needs that drive individuals to seek means for the fuller satisfaction of their wants. Farmers, for example, require supplies of gasoline and oil, both to satisfy their families’ wants for light and heat and transportation and to permit the more effective use of their productive equipment, such as tractors and other farm machinery. Thus petroleum products have become increasingly important items in the farmers’ budget.

      A group of farmers in the country around Cottonwood, Minnesota, having experienced the benefits to be obtained from the cooperative marketing of their farm products, began...

    • 33 The Farmers’ Union Central Exchange, South St. Paul, Minnesota
      (pp. 406-427)

      The Farmers’ Union Central Exchange grew out of the farmer’s need for obtaining farm supplies at lower costs. In 1926 A. W. Ricker, now editor of theFarmers’ Union Herald, C. C. Talbott, later president of the North Dakota Farmers’ Union, and M. W. Thatcher, now general manager of the Farmers’ Union Grain Terminal Association, constituted a committee that organized a Minnesota branch of the Farmers’ Educational and Cooperative Union. The members of this committee and those who worked with them felt the need for uniting the farmers of the Northwest in a strong organization with a national affiliation that...

  6. Selected Bibliography
    (pp. 428-431)