VALLEY SETTLER
Published once a week in Palmor,
Alaska for the Matanuska Valley
Farmers' Cooperating Association,
for the purpose of giving’news of
the Association's workv, problems
and accomplishments.
by--- Lucille . LeDuc
*1.75 por year
10^ per copy
ALL COOP; HAVE PROBLEMS
We have just received a copy of
the Pacific Northwest Co-oporator,
the official paper issuod by the
Pacific Supply Co-op of Walla Walla
Washington. This is a very inter
esting issue because it is the pre
issuo of the Annual Meeting of the
Pacific Supply and many interesting
facts aro given. According to re
ports, the Pacific Supply did a
gross business of about twenty-five
million dollars this year, with a
net margin of about a millionor
a little over four per cent on the
dollar. This big wholesale Co-op
has had a very large growth and is
the feeder for supplies for many
northwestern co-ops. It has had
its ups and downs as woll as many,
other Co-ops, but the management
fells that they aro oh the right
track now because they have changed
their financial structure. In
stead of depending on a revolving
fund taken from the operating cap
ital each year, they are now sell
ing preferred stock--which returns
four per cent interest. The Pa
cific people found that when they
wero starting to grow, their finan
ciai problems grew also. However,
it was believed that when an organ
ization of this kind starts to ex
pand it is absolutely nocessary to
keep up with the new development.
This requires additional funds to
provido for larger facilities and
increased inventories. Also moro
money is required for operating
capital, as the accounts ’receivable'
become larger. This i’s true in any
business. When, and if, any well
established business refuses to en
large their capital structure and
physical facilities, they are us
ually on the down grade. For, if
the business is there to be .gotten,
and the established outfits refuse'
to expand and get the now business,
someone else will come in and take
nearly all of the business over. In
these days of Intense competition,
old and inadequate equipment and
insufficient capital, will c&use
| many businesses to fail* Neither
can the average business stand
still, and hold its own*
Our Matanuska Valley Co-op, is
subject to all of the things that
most other Co-ops aro, and wc have
to meet the same probloms. To bo
gin with,, this Co-op startod cut
with very little operating capital,
and it has never been sufficient
for the business wo aro doing. We
have always managod to got along
and pay our bills and take most of
the discounts that are allowed for
prompt payment or cash. But, a lot
of things have been noglcctcd that
should have been done. Now we find
that after fifteen years of use,
many of our facilities arc almost
fully depreciated. This includes
electrical wiring, water supply
pipes and most of the steam linos.
Wo haven't been able to koep our
buildings painted as wo would like
to and some are in bad repair. Now
perhaps some of our new members
would like to know why this hasn't
been done—so a word of explanation
will probably be welcome, about
here.
We should remember that our
stockholders and.producers are hav
ing just about the same trouble
that the Co-op is. They have been
expanding too, and they too have
been short of .funds. The parallel
betweon the Co-op and the membors
is a lot closer than most realize*
When the. membors prosper the Co-op
prospers, too. In. the early days
of tho Co-op, there was a very
small chance to soil the farmers'
products, and tho prices v/crc low.
. As a result of tho shortago of
funds, both the farmers and the Co
op have had to get along on what
they could get from time to time.
However, somo farmers have managed
to get more working capital in pro
portion to their needs than the Co
op. A few of our Valley farmers
made a pretty good stake during tho
hotter years, and this is evidenced
by the fact that soveral of our
best farms have boon sold during
the last few years, and tho owners
able to rotiro on the profit of the
salo. We maintain that the devel
opment that made this possible was
largely because of the development
of the Co-op*. As soon as the farm
ers wore able to sell their pro
ducts at a profit, they were able
to make a profit from tho farm.
They were able t6 stock up on cows
and machinery and the things ne
cessary to mako their farms click.
But, without tho building of a
sales organization and processing
plants,'this'would have been de
layed, or impossible*
continued on pago 6