Progressive Farmer
Mr. J.A. Wade of Halifax County, Virginia, as attorney for certain farmers, has instituted suit for compel General Manager R.R. Patterson and Warehouse Manager T.C. Watkins of the Tobacco Growers’ Cooperative Association, and Mrs. F.R. Edmundson to return to the members a half million dollars which he charged that these men have made a profits on redrying tobacco for the association, in addition to the salaries paid them. Mr. Wade also asks that a receiver for the association be appointed to handle these funds and conduct its business from now on.
In his investigations, covering the last few months, Mr. wade has represented himself as a friend of cooperative marketing, but he now tries to throw the organization into a receivership. If Mr. Wade is really an enemy in sheep’s clothing, he should be exposed and any effort to destroy the association resisted to the limit.
On the other hand, we wish to say just as emphatically that no matter whether officials of the association have made $5,000 or $500,000 by redrying association tobacco, the principle is wrong, and it should never be permitted to happen again. In spite of the extenuating circumstances in the particular case, the principle is fundamentally unsound. The laws of the state make it a crime for officials to trade with themselves, and even greater caution should be observed in the case of cooperative marketing associations where the hard-earned savings of the toiling poor are entrusted to the care of men paid to serve them.
In this respect every cooperative should be Caesar’s wife, above suspicion.
Over and over again Mr. Sapiro and others have stated it as one of the fundamental principals of cooperative marketing that no official of the cooperative could have any “adverse interest” to the farmer; each official would have no interest except what was also the membership’s interest.
Whenever any official begins to run any private business on association patronage, however, he straightaway develops an “adverse interest” to the membership’s interest.
It becomes to his interest to see how much he can make out of the membership instead of how much he can make for the membership—and this is an intolerable condition that should be forever prevented.
Of course, in the case of this redrying, it is stated that these officials, no matter how much money they made for themselves, nevertheless saved money to the members, because letters had been received asking for higher prices for redrying than these association officials charged; also that the directors of the Tobacco Growers Cooperative Association agreed that these officials might take stock in redrying plants. On the other hand, it is asserted that the directors expected only to create some competition for the benefit of the association, not a virtual monopoly of redrying for the benefit of the officials, and that if the Association had agreed to give any old established redrying company such a big volume of certain business as these officials were in a position to give themselves and di give themselves, almost any private company would have given the association as liberal terms on redrying; also that the Burley Association redried its own tobacco for much less per hundredweight than these officials charged our association members. Let us hope that the suit will at least bring out all the facts once for all, and if any officials have been wrongly assailed, relieve them of any unjust suspicion, whereas if any officials have taken advantage of the association and suit should make clear just who is to blame and to what extent.
When the editor of this paper first became aware some months ago that the association officials were redrying large quantities of association tobacco, and were reported as making large profits, we earnestly urged them for the sake of the association to agree to return all profits in excess of their original investment plus 8 per cent, and certainly not more than 10 per cent net profits per annum. We also advocated this policy in The Progressive Farmer and elsewhere. We still feel that such action would have done more to restore confidence and loyalty among the membership than anything else that could have happened. But, anyhow, whatever may be done about the past, there should be no more business of this kind; and we understand that the management will now repeat such positive assurances to members all over the Carolinas and Virginia.
Cooperative marketing associations, like individuals, must learn from there mistakes. Unquestionably a mistake has been made here. But because a mistake has been made is no reason for giving up the fight for cooperative marketing of tobacco. If any officials have been more anxious to make money for themselves than to serve the association, they ought to retire or be retired, but the association itself should go on an don, and every effort for a receivership should be fought to a finish.
From the front page of The Roxboro Courier, J.W. Noell, Editor and Publisher, Wednesday evening, Aug. 12, 1925
newspapers.digitalnc.org/lccn/sn92073208/1925-08-12/ed-1/seq-1/
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