Wednesday, July 11, 2012

Farmer’s Trust – Rockwell Iowa

By H. A. Wood

Gathering of farmers in Rockwell, Iowa
In a weather-beaten , two-story farm building on the Iowa prairies is the headquarters of an industry in some ways more remarkable than any cooperative enterprise yet established, even that at Rochdale in England. It is a successful farmers' "trust."

The five hundred farmers who conduct the establishment were several years ago at the mercy of a single firm conducting the general store of the little town of Rockwell to which they went to do their trading. Their products were in good demand, but when they went to town for supplies and to market their grain and livestock the shopman paid them what he wished and sold them supplies at any price he wished - there was no competition. The farmers stood it stoically for a time, but at last rebelled. They turned dealers themselves.

Last year, with an expense for salaries, rent, insurance, etc., of less than $4,000, they carried on a business of more than $620,000 on a capital of $25,000. During thirteen years closing with March, 1903, this company of farmers has transacted more than $5,000,000 worth of business without the loss of a dollar. At no time has the capital stock been more than $25,000, and at no time has the indebt­edness been more-than $5,000.

A favorite meeting place in Rockwell, Iowa
The company is regularly incorporated under the laws of the State. The members come together only at the annual meeting. The articles of incorporation set forth the general nature of the business to be "buying and selling and dealing in all kinds of farm and dairy products, cattle, sheep, swine, poultry, dry-goods, boots and shoes, groceries, hardware, farm machinery, lumber, stone, brick, and all kinds of building material, grain and real estate; and dealing in all kinds of merchandise, and in buying and selling all such kinds of property on commission and otherwise."

The business is under the immediate charge of a general agent. The company has power to borrow money provided not more than $5,000 shall be borrowed at any one time while at no time may the firm be in debt more than $5,000. One of the provisions of the by-laws is that no shareholder "shall sign any bond, or sign, indorse or guarantee any note, bill, draft or contract, or in any way assume any liability, verbal or written, for the accommodation of any person, without the written consent of the director, in trans­acting any business for the society."

No person may become a shareholder except a practical farmer, and no member may own more than ten shares of stock.

Each share is worth $10. Provision is made for the expulsion of any shareholder who violates any of the provisions of the by-laws or constitution.

Elevator of Farmers Coop in Rockwell, Iowa
The staff of employees is very small. The business practically carries on itself. The company buys all the output of its members and sells to the farmers what they need. Others than members may buy, but such trade is not specially sought. Supplies are sold at a little above cost, though outsiders pay slightly more. The wary handled include farm implements and farm machinery, flour, fence wire, fuel, salt, lumber, oils, and the like. There has been so far very little retail­ing. The company does not come into compe­tition with the small dealers. It owns its own elevator for the storage of grain and maintains its own lumber-yard. Supplies of all sorts are bought in large quantities, in carload lots or more, and are then stored in warehouses.

When I first went to Rockwell the enter­prise appeared on its face merely a trust in miniature. But I found that these Iowa farmers court competition, welcome rivalry, invite healthy opposition. The point is well illustrated by the following incident:

It was discovered by the grain-dealers that these farmers were paying more through their agent for grain than the grain-dealers thought ought to be paid. The farmers were remonstrated with. The farmers responded that they were satisfied that they had been receiv­ing too little for their grain; hence they had raised the price. The grain-dealers, unable to bring the farmers to terms, then threatened to put an agent in town to outbid them.

President of the Farmers Coop in Rockwell, Iowa
They threatened also to sell farmers' supplies below the farmer company's price and to put up an elevator opposite the farmers' elevator and pay fifty cents for corn when the farmers could pay only forty-five.

To all of this the farmers replied: "Come right along; what we want is competition. We are paying more for produce now than is being paid in any other town in the State. We are selling to ourselves at lower rates than those of any other dealer in the State. If you can come in and pay us more than we can afford to pay, and sell to us lower than we can sell, we - which means the farmers - will gain both ways. If you establish a grain elevator opposite our own and pay more than we do, we will all go there and sell to you.

The grain-dealers returned to the attack with a threat to influence the railroad com­pany to stop shipping the produce and supplies of the farmers. But the farmers had a large amount of raw material which the railroad company wanted to ship, and they bought large quantities of goods. This made them desirable customers of the railroad. Moreover the railroad was a common carrier and could be compelled to haul. The farmers' position was impregnable.

Typical farm house in Rockwell, Iowa
Then an association of dealers in agricul­tural implements said to the manager: "We understand that you are selling to your members at wholesale rates. You must stop it. Your farmers must buy their machinery of the retailers to whom we sell. We won't sell any more at wholesale. "

Whereupon the farmers rejoined that if they could not compel a dealer to sell needful articles to them they would buy in the open market in other parts of the country; and that failing in this, they would manufacture implements and machinery for themselves. Again they won.

In investigating the workings of this com­pany in Rockwell; I found that these five hundred farmers are worth at least $5,000,000. Their farms are perhaps a hundred and sixty acres in size on an average, some of them considerably larger. The land has steadily in­creased in value in the last two decades, and particularly since the company was established, until such well-tilled, well-equipped farms as these men own are worth all the way from $5o to $8o per acre. As a body the members of the “trust" have nothing to do with politics.

The town of Rockwell has grown more than fourfold since the concern was established. More than half the population is made up of retired farmers, many of them members of the firm. They have administered the affairs of the town with discretion, economy and common sense. The town enjoys nearly all the modern public utilities - telephones, electric lights, a water system; it has fine public schools and a large private or parochial school, while there are the usual number of churches.

Public School in Rockwell, Iowa
The home life of the farmers does not materially differ from that of other progres­sive Western farmers. As the beneficent results of the advanced agricultural educa­tion of the last twenty years have become more widespread, the farm life of the west has advanced, until today, in the home of the progressive farmer, music, the best of magazines and books - indeed, some primary show of a love for real art, are distinguish­ing features, separating the farmer, of the present from the farmer of the past for all time to come.

As the success of the "trust" has been carried from farm to farm across the immediate country, similar organizations have been effected and favorable reports are being made. There appears to be no obstacle in the way of an indefinite ex­pansion of the plan.

The World’s Work Magazine.  July 1903.

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