VALLEY SETTLER
Published every Friday at Palmer
Alaska, bv the Matanuska Valley
Farmer's Cooperating Association,
for the p-irpose of ^ivin^, news of
the Association's work, problems,
accomplishments, and news of local
and general interest.
Bv-C .ii. Rasmussen._
Subscription rates: Yearly
Local . $1.00
By Mail 1.75
Sinule Copy .10
FINANCING FARMERS COOPERATIVES
ProbaVly few Cooperative members
know very much about the financial
set-up of their organization. Fin
ancing a Cooperative requires spec
ial met)' 'ds to meet special con
ditions. V/here the farmer members
of a Cooperative are well estab
lished on their farms and form a
Cooperative to enable them to pur
chase needed supplies at a more
iavoraoie price than the merchants
of their vicinity are willing to
giv© them, or when the prices of
products from the farm are so low
that a cooperative marketing asso
ciation seems to offer a tetter
chance to secure adequate returns,
the farmers are usually able to
supply most of the capital to fin
ance their cooperatives from their
own funds, or enough so that the
balance can be borrowed with a
large enough margin of security to
justify the investment from the
lenders standpoint.
Usually according to authorities
on Cooperative financing, the mem
bers buy a share of stock to qual
ify for membership. This entitles
him to have a vote and to partici
pate in the advantages of the orcan
ization. But not enough funds are
acquired by this method alone to
finance the business so it has us
ually been the practice to borrow
from the stock-holders in lar0er
amounts of money on short term
notes, repayable from earnings and
from refinancint. When a Coopera
tive is established in this manner
the individual members have a sub
stantial investment ritht from the
start and naturally it makes them
feel a sense of ownership and they
are more interested in making the
thing go, than they would be, if
they were just ^iven a membership
free of char0e and some benevolent
person furnished the workine capi
tal, gratis, and then carried on
the management for them.
The member who has a substantial
investment in the Cooperative, will
try to protect his interest by pat
ronizing his Cooperative and secur
ing all business of a profitable
nature that he can, for it. He will
not be so anxious for immediate fin
ancial returns, but will try to es
tablish a sound, useful organization
that will ,\;ive continuous returns.
The history of the M.V.F.C.A.,
shows that the members have never
civen any financial assistance to it
except the payment of the $5.00, for
the share of stock, and in many
cases, this was not paid in cash,
but from purchasc*savinL's, deducted
at the end of the year.
It is indeed fortunate that the
United States Government furnished
the funds to start this Cooperative
for the members would have been un
able to finance it themselves, and
while this was done on a benevolent
and charitable basis, yet is must be
understood, that it was not ..ranted
to the members, but that a distinct
obli0ation was assumed when this
Cooperative was taken over by the
members in the form of a promissary
note, that will have to be repaid
before the members really own the
facilities and capital they have ac
quired.
The most unfortunate thinu connect
ied with the method used here, is
that a considerable number of cur
members have never become conscious
jof their ownership in the equity
that has been acquired fcv their
participation in its business act
ivities, both by purchasin0 and sell
in0 to the Cooperative. Unconscious
ly it seems, they have become part
owners in a lar^e, successful j_row
ing organization. Much to the sur
prise of the more thoughtful and ex
perienced members, this small ele
ment would, apparently at the drop
of a hat, throw everythin^ over
board, their neighbors interest as
well as th»lr own, to satisfy some
personal ambition or to secure a
few additional funds that micht
jeopardize the financial set-up of
the Cooperative, and cause everyone
connected with it to lose their in
vestment also.
One of the fortunate things that
mitht be mentioned is the fact that
a substantial majority do realize
the importance of using discretion
and cood judgment, so that the bus
iness can be carried on in a success
ful manner, and the earnings of the
lost few years can be safeguarded.
However, it will require careful
nanagement to conserve these assets
against irresponsible agitation. It
san and must be done.