fect them nationally, and there should be a service agency created to provide them with the information necessary to more successfully control their bargaining with the distributors.

In the fall of 1916 the writer proposed to the leaders of the Chicago Milk Producers' Association that a national conference on the marketing of milk be made a section of the National Conference on Marketing and Farm Credits which was to be held in Chicago that winter. This proposal was accepted, calls were issued, and 700 dairymen from various parts of the United States attended the sectional meeting and authorized the formation of a national committee to set up a national federation. This committee agreed upon a set of by-laws and formed a provisional federation which was incorporated under the laws of Illinois in February of 1917. Like most movements, the original organization committee consisted of some persons actually representative of milk producers' associations and some who were not. In time the directorate was changed until the federation became exclusively an organization controlled by representatives from the member associations. It is not a trading organization. It is a protective and service body.

In the first year or two of its existence it numbered 10 or 12 associations. To-day it numbers 27 regional marketing associations and one State federation of cooperative creameries comprising about 250 local creameries. The federation has under consideration the enlargement of its scope so as to make it the representative body for all of the cooperative dairymen in the United States.

During the war this federation confined itself to representation before the governmental bodies with a view to having fair play for its membership. In 1920 it established Washington headquarters and inaugurated a price-information service. In the same year it proposed to the National Board of Farm Organizations, of which it was a constituent member, the introduction into Congress of a bill whose purpose would be to secure for bona fide cooperative associations a certain degree of exemption from Federal prosecution. This bill was known as the Capper-Hersman bill. Our present president, John D. Miller, was one of its authors.

After some months of fruitless effort, the federation accepted a modified bill drawn up by Representative Volstead and later introduced into the Senate by Senator Capper, which became known as the Capper-Volstead bill. The purpose of this bill was to authorize cooperative associations, corporate or otherwise, to form and do business in interstate commerce. This bill provided that cooperative associations subject to the act should come under the jurisdiction of the Secretary of Agriculture, and thus removed, in major part, many difficulties of our regional associations arising from prosecutions initiated by Federal district attorneys.

This bill passed the Lower House twice in succeeding Congresses before it was finally enacted by the Senate and signed by President Harding. It has been declared to be the cooperators' bill of rights, and constituted, undoubtedly, the outstanding agricultural achievement of the Sixty-seventh Congress. It had been indorsed by both parties prior to its passage, and the vote upon it was a nonparty vote Through the efforts of the National Milk Producers' Federation. millions of dollars have been saved annually to the dairymen of the

country by the inclusion of moderate protection in the tariff act of 1922. The National Milk Producers' Federation stood unqualifiedly for protective duties on all of the dairy products and on the major vegetable oils which come into competition with American-produced oils and fats.

There was a general disposition in both Houses to give the dairy interests reasonable protection, in regard to butter, cheese, and tinned products, but there was some hesitancy over protecting whole milk and cream, and a stiff fight was put to keep casein on the free list. For a time, it was quite doubtful as to whether these last three items would be given the protection they needed. The manufacturers of coated paper, who were interested in obtaining casein as cheaply as possible, did all in their power to prevent the levying of a protective duty on this product. But, by diligent effort of the National Milk Producers' Federation and other bodies cooperating with it, this fight was won. Likewise, we won, in a spectacular battle, most of our contentions as to vegetable oils. A comparison of butter prices in Canada and in the United States shows that the dairy tariff is worth at least 8 cents a pound to the American producer. There are 1,500,000,000 pounds of butter produced in the United States, and this would mean an annual saving to the American dairymen of $120,000,000.

America has passed out of the stage of cheap farm land and cheap farm labor. Newer countries are entering dairying and are becoming important factors in the international trade situation. These countries are able to ship their products into the United States at such prices as would bankrupt American farmers if they had to compete. For that reason the gospel of a protective tariff has been generally adhered to as a matter of policy. Milk has reached the point in its balance of trade and dairy products when consumption almost equals production. Three years ago our net exports of combined dairy products were 2,600,000,000 pounds. In 1922 our combined exports were less than 100,000,000 pounds. It is clear that the domestic market is to be our great market of the future, and American cooperatives should shape their program to meet this condition.

Perhaps the most bitterly contested fight was that with the makers of filled milk over a bill introduced by Representative Voigt, of Wisconsin, to prohibit the movement in interstate and foreign commerce of this imitation product. Filled milk is made by extracting the butterfat from the whole milk and replacing it by some vegetable oil, principally cocoanut, and evaporating the resulting emulsion. The process turns out something that looks, tastes, and smells like pure, evaporated milk, but which does not have the growth-producing elements in it that whole milk contains. This fight required almost two years, but finally resulted in an overwhelming vote of both Houses of Congress to ban the product; and filled-milk making to-day is practically a dead industry But the federation proposes to continue this fight until every State in the Union has an antifilled-milk statute. To-day about 20 States have enacted laws to prohibit the manufacture and sale of filled milk.

The tariff fights on casein and vegetable oils are not over. Opponents of protective duties have taken these cases before the United States Tariff Commission, and the federation has assumed the burden of protecting American agriculture by appearances and arguments before this body, which, under the flexible tariff provision, has certain powers of investigation and recommendation with regard to changes in duties.

It is beyond the scope of this paper to enumerate all of the national activities of the cooperative milk marketing associations through their national federations. Such activities include representation of various kinds before Federal departments and commissions on a variety of questions, ranging from income-tax regulations to freight-rate reductions, statistical and economic services for member associations; organization efforts in the field, reorganization services to members who are planning changes in their structure and methods of operation, and the maintenance of friendly contacts with other groups.

FEDERATION'S ENLARGEMENT PROGRAM.

During the seven years of its life, the federation has quietly, but consistently, enlarged its activities. During that same time its constituent units have steadily enlarged the scope of operations so that to-day the interests of many of its members are identical with the interests of the butter and cheese cooperatives. Consequently, it has been determined to enlarge the scope of the federation to include all cooperative dairy marketing organizations whose interests might be served by affiliation. Within the past year, one State association, representing 250 local cooperative creameries, has been admitted to membership. It now represents about 250,000 milk producers from coast to coast who sell their milk and its products through the member associations.

The officers of the federation are: John D. Miller, president; W. F. Schilling, first vice president; H. W. Ingersoll, second vice president; F. P. Willits, treasurer; Charles W. Holman, secretary.

The directors are: John D. Miller, Susquehanna, Pa.; H. W. Ingersoll, Elyria, Ohio; W. A. Carrier, Strawberry Point, Iowa; C. R. Rice, Milwaukee, Wis.; W. F. Schilling, Northfield, Minn.; H. W. Tinkham, Warren, R. I.; A. C. Stoxon, Bassett, Wis.; F. P. Willits, Ward, Pa.; Jno. C. Near, Flat Rock, Mich.; Harry Hartke, Covington, Ky.; J. M. Henderson, Sacramento, Calif.; P. S. Brenneman, Jefferson, Ohio; Richard Pattee, Newton Highlands, Mass.; J. A. Scollard, Chehalis, Wash.; J. G. Thompson, Landover, Md.; P. T. Holt, Kenosha, Wis.; H. J. Schultz, Shipman, Ill.; D. G. Harry, Pylesville, Md.; A. O. McMakin, Shelbyville, Ky.; R. D. Cooper, Little Falls, N. Y.

The organizations affiliated with the National Milk Producers' Federation are: Dairymen's League Cooperative Association, Inc., of New York City; New England Milk Producers' Association, of Boston; Connecticut Milk Producers' Association, of Hartford; Interstate Milk Producers' Association, of Philadelphia; Maryland State Dairymen's Association, of Baltimore; Maryland and Virginia Milk Producers' Association, of Washington, D. C.; Dairymen's

Cooperative Sales Co., of Pittsburgh; Ohio Farmers' Cooperative Milk Association, of Cleveland; Summit County and Vicinity Milk Producers' Association, of Akron, Ohio; Northwestern Cooperative Sales Co., of Wauseon, Ohio; Michigan Milk Producers' Association, of Benton Harbor, Mich.; Cooperative Pure Milk Association, of Cincinnati, Ohio; Kentucky & Indiana Dairies Co., of Louisville, Ky.; Louisiana-Mississippi Dairymen's Cooperative Association, of New Orleans; St. Joseph Milk Producers' Association, of St. Joseph, Mo.; Southern Illinois Milk Producers' Association, of East St. Louis, Ill.; Milk Producers' Association of Chicago; Milk Producers' Marketing Co., of Chicago; Milwaukee Milk Producers' Association; Twin Ports Dairy Association, of Superior, Wis.; Iowa Cooperative Creamery Secretaries' and Managers' Association, of Waterloo, Iowa; Des Moines Cooperative Dairy Marketing Association; United Dairy Association of Washington, Seattle; East Tennessee Milk Producers' Association; the Farmers' Milk Producers' Association, Richmond, Va.; and the Associated Dairymen of California.

FUTURE DEVELOPMENT OF COOPERATIVE MILK MARKETING.

What will the future bring to the milk industry? It is clear to me that the larger the city the more difficult it is for farmers to own their own distributing systems for retail consumption of milk. But there are a number of small cities and even large cities throughout the country where there seems little doubt but cooperative associations will gain a foothold and either develop to where they become farmer monopolies supplying the cities, or they will utilize the maintenance of a number of routes as a basis of better bargaining arrangements with the private distributors. In some cities, cooperative consumer associations will be found as already exist in Minneapolis, where the Franklin Cooperative Creamery is a very potent factor in the milk situation of that city. There are some advantages to farmers maintaining direct-to-consumer milk operations. Among them are: 1. A reduction in the total number of routes now maintained for competition.

2. Elimination of milk wars.

3. Reduction of margins taken for milk distributions.

Among the disadvantages are:

1. Difficulty of securing competent technical help.

2. The opportunity afforded demagogues to make capital out of the so-called farmer monopolies.

There is no one between the farmer and the consumer where farmers maintain their own distributive systems, and the whole blame of the price of milk must necessarily fall upon the cooperative associations.

But, whatever may be the outcome, there is no doubt that we are moving toward a more satisfactory condition in the distribution of milk. There is a tendency toward stabilization. Dealers' spreads are being cut, and in many communities a satisfactory margin has been found on which dealers can live and do real service. Instead of the disastrous milk wars of the past, we may find, with a complete recognition of cooperative marketing, that both distributors and the farmers through their associations will discover many things which they can do together to improve the milk supply, to cut costs and to

increase consumption. Of one thing, at least, we may be sure: Cooperative marketing of milk is in this country to stay and the cooperative movement is growing stronger year by year.

Chairman WILLITS. Is there any discussion?

I have now the honor of introducing to you Mr. Richard Pattee, who will speak on "Types of collective bargaining organizations."

TYPES OF COLLECTIVE BARGAINING ORGANIZATIONS.

RICHARD PATTEE, managing director, New England Milk Producers' Association, Boston, Mass.

Cooperation as now practiced in the sale of dairy products in America has progressed from crude beginnings through various stages of development; nearly every cooperative unit started at the same point and has advanced along the same road. All along that road, from the primitive beginning to the most complete and complex operation, there are now units in successful operation, examples of the steps by which the most advanced progress has been made.

This development is divided in a general way into two stages: First, the bargaining; second, the operating each of which in turn is divided into lesser periods of progress.

This paper has to do with the subdivisions or lesser stages into which the bargaining period of development is divided.

First, let us define our terms. For my purpose, I will define a bargaining organization as a group of producers associated for the purpose of jointly negotiating the sale of their products upon common prices and terms. In this type of organization there is no merger of title in, no transfer of possession to, or distribution of return by the common agency or association. The bargaining organization is a means through which individuals, who continue to do business as individuals, may decide upon and carry out plans upon which the group has agreed. It is the machinery for determining the common will and judgment with respect to prices and conditions in the sale of their individual products.

Such organizations usually pass through certain clearly defined stages, which ultimately lead to the second major division, namely, the operating organization in which titles may be merged in, possession may be transferred to, and distributon of returns may be made by the producers' organization. These stages are exemplified by certain structural types of organization and processes of operation.

First type. The voluntary association for conference, recommendation, and negotiation. Such organizations are usually composed of producers, selling in a common market, who get together to discuss conditions and agree upon courses of action. Their effectiveness depends upon the willingness of the individuals to carry out in their private operations the plans and policies recommended and agreed to in the group conference. Such associations are based upon the faith in each member that the others will adhere to the course determined upon for all. Disciplinary power lies only in the moral obligation upon each to adhere to the program agreed to for all. There is no legal obligation or restraint. The machinery of organization is usually only such as will enable the meetings of the group to be called