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"We must open the Mississippi and St. Lawrence rivers; we must bring out here to the Middle West the consumers and the manufacturers, so that they will be closer to the source of production. All these are things that can come if the farmers and the consumers join hands in working out the cooperative idea to its logical and ultimate aim.

"I see in the cooperative movement, judging from our experience here in Minnesota, an opportunity to bring town and country together. The interest of the two is the same and they must come together. The back-to-the-farm movement is absurd because the farmers are producing at a loss right now. Do you know that we in the Middle West produce six times as much as middle Europe and three times as much as the British farmer and measurably more than the New England farmer?"

When asked whether he thought the cooperative movement should, in view of the Minnesota experience, be confined to state organizations, Mr. Hughes stated: "The movement should not be organized on strict state lines. You might then have the various states competing with each other when they came to market with their products. It would be wise, whenever possible, to tie up in a national movement. Wisconsin and Minnesota

cheese factories are now cooperating in their shipments. North Dakota is linked up with our potato movement. Of course, there are some products which cannot be tied up in a national movement and potatoes happen to be one of them.”

The market for potatoes is regional, being largely within the region or close to it, where the potatoes are produced. With the single exception of the exchange of seed potatoes, there is no movement of potatoes from one potato region to another.

"There has been altogether too much of this 'milk and water' stuff concerning cooperation," continued Mr. Hughes. "Some day we shall all get together and solve this marketing problem, but we must not paint the skies too rosy a hue. The farmer has been cursed by the professional promoter. The farmer has organized in communities where he had no business trying to organize. They lack the volume, the spirit or the ability to cooperate. But where the farmer has the capacity and the proper spirit he can cooperate successfully.

"The effort back of the whole movement is simply to turn the tables on the buyer so that he must bid up to the full market value of the products produced by the farmer. And if the farmers will stand behind the cooperative movement with

the true cooperative spirit and the proper outlook upon the movement, they can accomplish this very

purpose."

CHAPTER THIRTEEN

The Equity Cooperative Exchange

One of the pioneers in the federation movement as applied to the larger farm cooperative movement was the Equity Cooperative Exchange, which had its inception in North Dakota in 1908, when the farmers of that state became dissatisfied with the price they were paid for their wheat at their chief terminal market, Minneapolis. They came to the conclusion, as a result of the experience suffered that year, that the local cooperative elevator was not enough in the direction of cooperation, to secure any substantial protection for themselves against the abuses from which they suffered when they came into the markets with their products.

The local cooperative elevator was but one step in the right direction for by it they merely eliminated one middleman, the local grain dealer. When they came to ship their grain to the terminal markets they found that they were still handicapped, and actually were suffering more from the abuses of their adversaries at these terminal markets than they had ever suffered at the hands of their local adversaries.

They felt that they could establish their own terminal marketing agencies themselves and thereby secure a fair price for their products, just as they had already demonstrated to be possible locally. Accordingly, the fight was started in 1908 and it was a bitter struggle for many years. Every party at interest, every power which could be brought to play at the terminal markets where they sought to do business, was brought to bear upon them. It should be kept in mind by the reader that this was in the days before any cooperative laws had been passed in the sense they are now known, and before any regulatory legislation had been adopted by Congress preventing discrimination against cooperatively owned and controlled business associations.

But after eight years of the most terrific kind of opposition and struggle, opposition from without and struggle from within the organization, the Equity Cooperative Exchange was on its feet with a paid-up capital of more than $1,560,000, owning 80 country elevators and a large terminal elevator at St. Paul with a capacity of 550,000 bushels of grain.

According to E. G. Horst, the Equity Cooperative Exchange carried on as follows: "Having learned the value of cooperation in the marketing of grain without the intervention of a host of mid

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