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The Billings County Pioneer
Beach, North Dakota
September 27, 1945     The Billings County Pioneer
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September 27, 1945

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m THE BILLINGS COUNTY PIONEER Tax Question potlights pectacular Growth of Co-Operative Movement in U. in Recent Years Private Business Complains of Disadvantage; Co-Ops' Volume Tops Five Billion Dollars By AL JEDLICKA When congress ponders a new revenue bill this fall, one of the major propositions under discussion will be the taxation of co-operatives. Under pressure of established tax-paying en- terprises, the solons can be expected to comb the situation thoroughly, since, the rapid growth of co-operatives in the present century not only poses the question of tax equality, but also of maintenance of revenue. But though the question of taxdtion itself appears to head up the co-operative question now, there are other and even more deeply rooted underlying causes, principally the move- meat's threat to the tradition- al American business system. In this respect, the whole co- operative development may well shape as an economic evolution, though frequent cycles have robbed it of the consistency necessary for his- torical reform. At the present time, how- ever, American co-operatives are on a rising tide, with the strongly established farm organizations number- ing 4,390,000 members being steadily complemented by ur- ban consumer and manufac- tilting groups. During the 1943-'44 season rural marketing and pur- chasing co-operatives alone did over 5 billion dollars worth of business, mostly on a tax-free basis. As a result of the steady growth of co-operatives spearheaded by the farmer associations, and their ex- tension into various fields, tradi- tionally established American busi- nessmen are stirring uneasily. Whereas only the handler and sup- plier of agricultural products and material formerly had been pressed by the co-operatives, competition now has been extended to manu- facturers of farm machinery, hard- ware, paints, electric refrigerators, washing machines, toasters, clocks, cigars, cigarettes, lipstick, tires and batteries. In addition, co-operatives now drill wells, own pipe lines, refine petroleum, possess timber tracts, write insurance, and operate banks. telephone" companies and electric power installations. From the beginning, the co-opera- tive movement assumed the nature of ~ Joint enterprise for performing a non-profitable service for each participant's individual welfare. ~'hough contemporary history traces the real origin of the co-oper- atiye movement back to Rochdale, England, where poor working peo- ple organized a grocery co-op in 1844 to avail themselves of cheaper food. some historians credit the birth of the movement to local farm groups which 'banded together in the U. S in the 1820s to reduce in- surance costs. Following the establishment of the local fire insurance groups, the co- operative movement assumed an- other form in the U. S. after the civil war in the national farm Grange asocial and educational or- ganization also bent upon relieving stving~t economte conditions. Even- tually turning to co-operative meth, o~,~ ,attar its early objectives, th.~,~Gr~tnge failed in promoting a pur~ing.cQ-opbeeause of the un- scD~put0sity of agents;, bogged ,in p~l~ing Consumer.oo~ops partly as a result of the panic of 1873. and gave up a f~trm ~achinery manufactur- ing co:op overproduction anti under-serviCing. As the co-ope~atl~e movement be- gan to take root here during World War I and congress recognized it as an "instrument for aiding the 'farm producer; legislation was enacted to afford tax relief to operators. In 19t~, congress stipulated that farm- era, fruit growers and like assoct- atie~is organized and operated on a co-operative basis and acting as selling agents for their members should not be requested to PrY an income 'tax on earnings. In subsequent legislation, the solons provided that co-operatives could purchase as well as sell for producers; deal with non.members as well as members; become c~r- porations and pay interest on stock, and not be prosecuted under the anti-trust laws. The government also set up a fed. eral agency to loan money to co- operatives in 1921, with the financial machinery expanded through the farm credit act of 1933. In 1933, the securities act also permitted co-op- eratives to sell equities without prior approval of the Securities and Exchange commission, which exer- cises that ~ght over corporate Is- sues. Though historians claim for the U. S. the credit for the birth of the co-operative movement, the Reel,- dale enterprise of 1844 still receives general recognition for establishing the three general principles under which co-operatives widely function today. These principles include: 1. One vote to each member re- gardless of stock holdings. 2. Distribution of net savings to patrons in proportion to their pur- chases. 3. Limited fixed interest on cap- ital shares instead of variable and unlimited dividends. Organization of farm co-ops is rel- atively simple, with the pattern moulded to give each member an equal controlling interest in the operations. Upon subscribing for capital stock or paying a member- ship fee, the local group then adopts by-laws and elects a board of direc- tors. A manager is hired, policies outlined and facilities secured: Al- though in charge, the manager re- mains under supervision of the di- recting board. In addition to observing the Roch- dale principles in voting, savings distribution and stock payments; lo- cal groups often confine ownership to farmers raising products handled by the co-op; restrict securities transfers, and limit the amount of shares a member may hold. While co-operatives are .generally organized on the local level, they usually affiliate with regional groups to obtain maximum effi- ciency of operation, with the region- al bodies in tUrn sometimes combin- ing with national associations. But, in any case, the local group retains a voice in the broadened organiza- tion through the selection ef dele- gates. While merr~bership fees, stock sales and reserves provide working dapitel, cooperatives borrow on a lat~ge scale to finance operations, a study of the Farm Credit adminis- tration in 1939 revealing that ap- pro klmately one-half of the co-ops then existent resorted to loans. While figures show 4,390,000 mem- bers of 10,300 farm marketing and purchasing co-ops, the actual nun- bet of individuals participating in the movement may be considerably less since a person may belong to more than one organization. With 7,522 units and 2,730,000 members, the farm marketing co- operatives do by far the largest bus- iness, with 1943-'44 activities total- ing almost $4,500,000,000. Handling of dairy products accounted for $702,000,000; livestock. $636,000,000; grain, dry beans and rice, let52,000,- 000; cotton and its produc~, $258,- 000,000; fruits and vegetables, $160,- 200,000; poultry and eggs, $130,000 000; tobacco, $125,0{~,000; wool and mohair, $107,000,000; nuts. $49,- 000,000, and miscellaneous, $115,- 000,000. For the 2.778 purchasing co-ops with 1,660,000 members, total busi- ness for the 1943.'44 season was placed at $730,000,000. Seventeen major regional procurement organ- izations alone secured $151,640,000 of feed; $50,702,000 of gas, off and grease; $19,871,000 of fertilizer, and ;10,893,000 of seed. -- Never as successful in the U. S. as in Britain, American urban or con- sumer co-ops are iqsignificant alongside of the farm organizations It has been figured that there are no @ more than 400 units at the most with 110.000 members doing about $5,000,- 000 business annually. Though con- sumer labor co-ops have failed in the past, the CIO's entrance into the field on a limited basis bears watch- ing anew, with the union tactics ap- parently aimed at making up future tighter wage rates by reducing staple living costs. In singing the praises of farm co- ops, advocates describe the move- ment as a means of putting the country's gigantic rural plant on a more efficient basis, with resultant profits to the producer. This increased efficiency can be attributed to both the size of cooper- atives and the nature of their own- ership. By banding together, farm- ers are able to purchase goods at lower prices, and group distribution results in smaller overhead and de- creased handling charges. By own- ing the business, of oourss, cooper- afore avert dealers' margins. Though tax-exempt cooperatives have been the target of competitive businesses complaining of their tax preferment, R. Wayne Newton, manager of the National Association of Co-operatives, declares that the increased return of farmers results in payments of higher individual income taxes. At the same time. Newton says. the larger profits en- able operators to spend more on merchandise in the local communi- ties. Charges that co-ops are making huge profits on their operations only serves to emphasize the size of mar- gins formerly enjoyed by private dealers. Newton avers. By banding together for co-operative operations, farmers have tended to offset their Successful co-ops include reiinery at McPherson, Kan top, and grain elevator of Indiana Farm bureau at Indianapolis, Ind. previous disadvantage of being com- pelled to sell their products on a flexible open market and buy on a more or less rigid retail price level, he further states, In spearheading the opposition ~o tax-exempt co-operatives, the Na- tional Tax Equality association points to the fact that co-op reserves retained after patronage refunds re- main untaxed, thus enabling them to do business at lower 'cost while also permitting continuing expan- sion. As a result, the NTEA asserts, co-operatives are growing at a rate of 10 times that possible for tax- paying enterprises. Not only that but many tax-pay- ing corporations have shifted to a tax-exempt status either through ac- quisltion by co-operatives or by the voluntary action of stockholders, NTEA declares. As examples. NTEA president, Ben McCabe, cites the northern Call- fornia holdings of the Red River Lumber company, bought by the Fruit Growers' Supply company, a subsidiary of the California Fruit Growers' exchange; with a loss to the U. S. treasury of nearly $I,000,- 000 a year in tax revenues; the Ohio Cultivator company of Belle- rue; Ohio, purchased by the Na- tional Farm Machinery Co-oper- ative Inc with a loss of about $196,- 000 annually to Uncle Sam's coffers. and the Globe Refining company of McPherson, Kans taken over by the National Co-operative Refinery association. Against the background of al- ready established 'co-operatives and the shift of some tax.paying enter- prises to non-paying co-op basis. McCabe also cites the possibility of the growth of labor-sponsored con- sumer organizations, which would remain tax-free on two counts: one, because ownership would be vested in tax-exempt unions, and two, be- cause they would distribute earn- trigs before computing their levies. Study Co-Ops Facts on Farm Purchasing and Marketing Co-Ops 1943-44 Co-operative principle and the Geographic Division Associations Membership Business technique of co-operative action by ~ Number % Number % % rural and urban dwellers ~vere given West North Central 4,14240.2 1,348,630 30.71,531,040 29.7 extensive study in religious training EastNorth Central 2451 23.8 1,116,170 25.41,165,070 22.6 schools sponsored by Catholic and Pacific '826 8.0 244,270 5.6 798,42015.5Protestant groups throughout the Middle Atlantic 604 5.9 399.500 ~I 441,7908.6 United States this summer. South Atlantic 477 4.6 401,400 9.1 378,4407.3 Between June and September 57 West South Central 795 7.7 261,850 8.0 291,5005.8 rural life schools and institutes for Mountain ' 569 5.5 211,350 4.8 24{},910 4.8 Catholic priests and teaching sisters New, England 181 1.6 139,840 3.2 174,8003.4 were scheduled by the National East South Central ; 273 2.7 266,9~} 8.1 129,0302.5 Catholic Rural Life conference. Not less than 30,000 priests and nuns Total 10,300 100.0 4,390,000 100.O G,160,000 100.0 were tobecontacted. athleen Norris Says: When a Serviceman Wants a Divorce Bell Syndicate.--W~IU Features. If he comes home greet him a~ect/onate/y, with the ustml home meals and friendly gatherings, end as soon as you are alone, ask him in so many words, "What is this ahout a divorce, foe?" By KATHLEEN NORRIS WHEN your service hus- band writes you from some far-away place that he wants a divorce, the best thing to do is to ignore his request. Or, if you want casually to mention it, tell him you wish to wait until he comes home. Then go on with letters as usual. When he comes home greet him affec- tionately, with the usual home - cooked meals and friendly gatherings, and as soon as you are alone ask him in so many words, "what is this about a divorce, Joe?" If you keep it simple and friendly you'll get the truth out of him easily. He'll either mumble in embarrassment that gosh, he doesn't know why he wrote that letter, or he'll tell you: there is a girl in Belgium; French, Enghsh, Russian--perhaps American. She is pretty and sweet and 19 and gee, is she in love with him! Your part now is maternal and calm. Is she coming to America, Joe? Well. eventually, of course. And you'll be married here? Well, you see, they haven't gotten that far. Perhaps 'they are going to send Joe to the Pacific for occupation duty, in which case your argument must be that it would be folly to get a divorce, send for Vera and under- take the maintenance of you, your child, and his new wife, to say noth. ~g of her traveling expenses. Ask ~nim to write her that everything must wait until Joe comes back for good. Joy of Getting Home. This reasonable attitude must win, for Joe won't be too anxious, espe. cially in the pleasantness of getting home, to break off all his old asso- ciations and friendships, as well as his relations with you. After all, it isn't likely that Vera is going to of- fer him a good Job in some other city, and support him until he is self-supporting again. If, on the other hand, he is dis- charged from service, then help him in every- way you~ can to get re- established, without dwelling on his proposed change. Be as cheerful and natural as you can. Remember that thousands of these men come back whole in body, but sadly twisted in mind, and that only time can cure them. A few months -- per- haps even a few weeks of home life, of good meals, of movies and malted milks and swims and con- tacts with old friends, will be all the cure Joe needs. He will suddenly come to his senses, and although he may never apologize, never say that he feels himself a fool to have writ- ten that letter, he will be only too glad to sink back into his old nor- mal, happy, American ways= Violet's case is a little different. Her husband, in the service two years, has only recently left America. He came home after about six months and told her he was tired of her, he did not think that theirs was a successful marriage. He stayed home a few days, grew affectionate and kindly again, and went away wi~ the usual wrench of parting from wife and daughter. A few weeks later he wrote her a letter saying that theirs had not "She is pretty and sweet and 19 " HE'LL GET OVER IT The misery and loneliness o] war do strange things to a man, Many happily married soldiers and sailors who have been away ]or two or three years somehow decide that the wives they once thought were the loveliest women on earth are no longer satisfactory. Fre- quently they have met some younger girl while on occupa- tion duty in Europe or the Pa- cific area. She is flattered by attention, not used to luxuries, so she makes a big hit with the lonely serviceman. Presently he is persuading himsel] that his wife ut home is not so much, compared with this foreign woman. He even. tually gets up nerve to ask his wi e for a divorce so that he can marry this new love. Miss Norris tells wives who receive these heart.breaking letters to try to ignore them," or at least to take them as lightly as possible. A weary serviceman, ]ar away, endur. ing discom]ort and abuse, can easily convince himself that he wants u divorce. It isn't that he actually has stopped loving his wife, but that the girl at hand is so sweet, so comfort. ing, und his wife is so far away. been a successful marriage and he wished a divorce. Violet was stunned, but she wrote him temper- ately, saying she was sorry he felt so. and including the usual news of herself and the baby. Kent then began to send her long analytical letters explaining in just what psychological andphysiological ways she had failed him. He said he ha~l never in their six years together been really happy. He looked upon the whole thing as a failure. There was no other woman; he would al- ways send Violet money; but he would stop every cent of allowance right now if she did not at once start for Reno. Don't Pay Muck Attention. Instead. Violet wrote to me, and I advised her. as I advise all women in this fix, to go steadily on without paying much attention to such letters. I suggested that she write less often, but keep her occasional letters pleasant and ordinary. War is the real trouble, not these difficulties ending in "logical," and yet without a trace of logic about them! Perhaps Kent was being bit- ten from head to foot by tiny, pene- trating gnats. Perhaps his company had a bad cook, and he was having indigestion. Perhaps his top sergeant or young first lieutenant was puffed up with power -- arrogant, inexpe- rienced, unreasonable. Perhaps he had blisters on his feet or prickly heat on his neck. Perhaps he's Just bitterly homesick, bitterly lonely, feeling bitterly that Violet was hav- ing it pretty soft, in a cool clean fresh house, with good books, clear skies, plenty of ice and watermelon and the right to go to a movie or a dance whenever she wants to. There's a touch of the sadist in us all; lonely, a dreary barracks life sometimes brings it out. BRING ~OUR OWN SILVER There was a time when table silver was so precious that even the wealthy did well if they had enough to go around for the family. People of fashion who were invited out to dine sent an attendant ahead with a knife, fork and spoon, and their posi- tion at the table was determined by the quality of their table utensils. If your flatware was pewter you would have been ~eated below the salt containers -- which meant in no uncertain terms that you were of low position or modest means! WHO is the greatest hitter that baseball ever knew? It seemed to us.that the best way to round out this argument was to go ill a direct line to one who was a master at applying the ash. So I looked up Ty Cobb, author and producer of more than 4,000 base hits. No. Ty didn't name Cobb. He named Shoeless Joe Jackson. "I'll tell you why Jackson belongs on Ty Cobb top," Cobb said. "Back in those years we not only had to swing at a dead ball but also a boll that was doctored in every known way. We had the spit ball, the emery ball, the fuzzed-up bail--a ball that would do s lot of queer things and come at you with odd dips and breaks. So the good hitters of that period had to choke the bat and go in for punch hitting. "AH except Jackson. Joe still took his full swing and he wa~s often up there from .380 to ".410. I know I r, ould never have hit above .300 with that type of swing. Only Jackson, old Shoeless Joe, had the eye and the smoothness and the timing to do that. I used to wonder why he didn't strike out at least twice a game, taking a full cut at a ball that flopped and ducked from the treat- ment it got, either by emery or thumbnail or saliva. "Taking nothing away from Babe Ruth. the Babe never had to swing at a slippery or fuzzed-up ball. In those days you could lead the league with 10 or 12 home runs. The trick stuff had ended before Babe moved to the outfield in 1919. "I've often wondered what Joe Jackson would have hit against the pitching and the livelier ball that came in around 1920. The same might go for Nap Lajoie, another great natural hitter, who didn't have as deep or as full a lash as Jack- son used. With the livelier ,ball Jackson and Lajoie would have had infielders playing back in the out- field to keep out of hospitals. In one of the old-timer's games played in Boston with the lively ball, Lajoie's line drive hit the center field fence, and that was after Lajoie was through." About Hitting I asked Ty if he was ever tempt- ed to become a slugger. "Not with that dead, fuzzed-up ball," he said. "I always believed in playing percentage, and the per- centage was all against a free swinger in those days. "Later on I tried a few times to go out for distance, but by that time I had been around nearly 20 years and it was .a little late in life to change my swing or learn new tricks. You can't change the habits of 20 years in anything like a hur- ry, if you can change them at all. But I remember a series in St. Louis where I decided to take a chance on the slugging side and as I recall it, I picked up five home runs in two games, z '%Valter Johnson was the greatest pitcher I ever ~aced," Ty went on, "except Ed Walsh in 1908 when he won 40 ball games and saved 20 or 12 others. But when you speak of great pitchers, how can anyone over- look Cy Young? "Cy had been pitching 15 years" before I the Tigers, but he was still a great pitcher. He won something like 510 ball games, which is more than most pitchers ever worked in. Cy wusa big, bUrly fellow and he could bide that ball better than anyone I ever saw. He would turn his back to you in the windup and the ball would be on you before you knew what was happen- Ing. Cy had fine speed, a good curve ball and perfect control. He could pitch Into a tin cup. He was also smart and game. "The great thing about Walter Johnson was that you knew a fast ball was coming--but it didn't help. You never had to worry about a curve in those days from Waiter, or any change of pace. Just speed. Raw speed, blinding speed, too much speed. The answer is that Johnson still holds the shut-out and the strike-out record. With s better hitting, better scoring bali club. Johnson would have had several 40 game seasons on the winning side. Some day look up the records and see how many i to O games he lost. I can see that long, rubber right arm unwinding now, with the ball on top of you before you could even blink. No wonder a lot of ball players used to get sick on the day Johnson was to pitch." 'Crazy" Stunts I asked Ty what was the greatest thrill he got out of baseball. "On the bases," he said. "I liked to run and at times try out a few crazy things, such as scoring from first on a single or scoring from second on an outfield fly. "Every now and then I'd take a crazy chance where I actually had no chance at all. I knew that. But I also knew that a certain amount of crazy running would put more pressure on the defense and maybe start a Little hurrying. /