Show VI HAZARDS OP BESET OP CO-OP VENTURES 22 3 Per Cent of Retail Co- Co Cooperative operative Co-operative operative Stores Fail Say Statistics By HARDEN COLFAX S Special oJ C Correspondent of ot The examiner Standard Examiner Copyright 1926 1928 Consolidated Press Association WASHINGTON Aug Al T-Al- T Al Although though operative co retail stores In the United States do an annual business of ot somewhere around the tha tears fears ct pt some their existence may bo be maybe maybo threatened by a swelling tide ot of operative co-operative effort are shown to be groundless by examination ot of the tact facts Americans American are peculiar r folks In some somo respects The story of ot co- co cooperative operative co-operative operative merchandising In this country shows they are not will will- willIng will willing ing as a Q class claM to accept adde added l responsibility In order to save savo do a afew few tew pennies There Is no no- magic In the mere mero word operation co The history ot of the operative co store etore move moye movement ment on American soil Boll proves that such Buch ventures are subject to all of at the ha hazards rd that beset any In- In Individual In Individual merchant plus the han handicap that the management under han I ordinary conditions lack lacks jacks the In- In Incentive In Incentive which drives the ld Individual ual who controls a a business operative Co marketing has been held out as the tho solution of the agricultural problem Tre- Tre Tremendous Tremendous Tre Tremendous efforts official official and oth- oth otherwise oth otherwise are aro being belne exerted to pro pro- promote promote pro promote mote this movement And a separate problem Is II pre pre- pre by consumers opera co cooperatives cooperatives tives In an effort to discover just what are the facts In connection connection tion llon with consumers co operative co organization the department ot of labor ha has launched a Q revision of ot a study study It completed In 1922 giving the tho status statue of at such societies as ot of 1920 A partial report of ot this re- re revision revision re revision vision recently was wu made public and this week further t facts acts were Vero complied compiled which will form torm a future Installment M FELL FELlI Four years ago It was Indicated that the rather unsatisfactory con con- condition con condition among consumers oper co-oper- cooperatives co found to have existed In 1920 might bo attributed to the extraordinary conditions which came In that earlier year when high prices prevailed In tho the spring ring and a Q tailing falling r market m caught cot cot- collective col collective and ual merchants alike with stocks of ot costly goods which had to bo be sold old at heavy to- to reductions re reductions But the tho examination of ot the partial data gathered by the tho bu- bu bureau bu bureau reau ot of labor statistics In tn Its Ita rol- rol revision re revision vision of at this prior study Indicates that In subsequent years the high 1 mortality rate rats among consumers operatives co-operatives hu has continued continue Ith heavy proportionate loss lose to share shareholders holders the rule In True some operative co-operative stores are arc ripe with age and enjoy pros prosperity pertly But BuZ they are aro the tha exceptions exceptions exceptions The average age of ot those which have havo gon gone gono out of at business In the last six years yean was wu 41 4 years Tho The remarkable part about co operative co operative merchandising Is the tho high proportion of at failures due to the tho fact tact that members themselves tall fall to trade trado at the operative co-operative co I store even cven though they know they will receive a Q based either on profits or on the amount of at their purchases over a period perlo l of weeks 22 PER IER CENT PAID FAIL Approximately opera co co cooperative opera opera- tive stores were known n to have havo been In existence In 1920 not alt ail have been hear heard f from tram In the present study but of the replies received of at these thue 1200 havo bavo gone out of ot business That's Thais a mortality rate of at around U 22 per pel cent cent without awaiting further returns from the front Insufficient c capital unwise ex- ex extension ex extension tension of ot credit declining prices lack of at Interest and support by members Inefficient management and disproportionately high oper oper- operating operating expenses are the leading causes of ot failure In about the or- or order or order der named Before the war the tha department ot of agriculture made some somo research Into consumers operatives co-operatives and andas as a result rosult stated that tho the ma- ma majority majority ma majority of at co operative stores tores established established aro are unsuccessful In achievIng achieving ing their main object object object saving on purchases to members and a re- re reduction reduction re reduction of ot the tho high cost COlt of ot living Nothing that tho the department ot of labor has discovered about tho the sit sitt situation nation up to this time has nerved to change this conclusion SMALL SI PROFIT Figures ct rt hand are not definite but thus far tar Indicate that only about GO CO per cent of ot the tho opera co-opera- co tivo stores etore which are organized to return purchase dividends ac- ac actually actually ac actually do so 0 and that the average return Is around 8 0 per cent whon given With Indications pointing to the conclusions that less lees than 80 per cent of at consumers opera co cooperatives cooperatives tives lives survive that of ot those which live only about three fifths are arl profitable and that the averages average s profit measured In tho the return to members Is less Jess than the interest ot of a conservative hondo bond the tho w weak k stores of ot this class have hove set act an unenviable lable record which the tha re- re remarkably remarkably re remarkably efficient showings of at the tho stronger operatives co have bavo culty In overshadowing 00 00 |