A NEW WAY TO DO BUSINESS

"IN STARTING A COOPERATIVE ORGANIZATION, many of us think all we have to do is to get together and say we have a lot of cotton and the people will break their necks to buy it," Garrard told the directors. "It is not so. A cooperative business must be built up just like any other business. It must be built upon sound economic lines. Just having a lot of cotton from the membership is not going to get you a lot of customers. Customers come over a period of years and only after you have rendered a definite, concrete service," Garrard said.

"Selling cotton to the spinner depends upon something definite and direct. It depends upon uniform delivery of a standardized product," Garrard explained.

In 1921, Staple Cotton Cooperative Association set up and accredited its own staple types. The US. Department of Agriculture had developed a set of staple types in an attempt to satisfy this need of the cotton industry. However, these types were not in general use by the trade when Staplcotn began marketing cotton.

The Association quickly established its staple types and accredited them with the mills. The mills came to prefer them over other measures of class and very often referred to Staplcotn's Topp, Dale, Tily, Hedy, Chas and Fran when seeking price quotations from private shippers too.

Staplcotn was set up principally to sell and ship cotton direct to the mill trade. Large volume was critical to enable the Association to out-ship private cotton merchants. Staplcotn needed large stock from which to select shipments with dependable uniformity.

Maintenance of uniform quality is difficult in cotton where each five hundred pound bale goes as a unit from the gin to the mill. Cotton could not be as easily blended as grain.

The farm price debacle of 1920-21 hit Mississippi cotton growers hard. Oscar Bledsoe and Will Garrard stepped forward with Staplcotn's request for a $5 million loan from the War Finance Corporation, an agency of the United States government for promoting foreign trade. The War Finance Corporation set its stamp of approval on the soundness and practicality of Staplcotn's methods and plans when it agreed to the loan. Financial experts representing Southern and Eastern banks also investigated the proposed operation and gave assurances of the availability of additional funds as needed.

The effect these successful negotiations had upon Delta farmers was significant. Staplcotn was a young organization. Its performance, management and general leadership inspired the confidence for such a loan to cotton growers at a time of great crisis. It was an early demonstration that the affairs of Staplcotn affected the entire Delta economy, not just the pocketbooks of its members.

SOME DELIVERED, SOME DIDN'T

Fourteen percent of the 1,832 members who signed contracts prior to the end of the first year never delivered cotton to the Association; 19 percent delivered only the first year; 30 percent delivered more or less irregularly during the first four years, and 37 percent delivered consistently during each of the first four years.

When grouped according to the number of bales delivered in 1921, growers delivering less than 100 bales each represented 72 percent of the membership delivering, and delivered about 21 percent of the cotton received. Growers delivering between 100 and 400 bales constituted 23 percent of the membership and provided 45 percent of the cotton.

During its first year, Staplcotn employed 15 cotton classers in five different classing rooms scattered throughout downtown Greenwood. One of the classers was an Englishman, who supervised all Liverpool shipments.

Staplcotn received 157,865 bales of cotton during its first season. During that year, deductions from the proceeds of each sale totaled five percent (three percent for expenses and two percent for the Reserve Fund). After a few years, this percentage for deductions was changed and the fee agreed upon to be charged the grower was not to exceed $1.00 per bale. Several years after that, this was changed to a maximum deduction of $1.25 per bale.

At the close of the first season, instead of calling on members for additional expense money, Staplcotn refunded to them in cash nearly $300,000, an amount equivalent to exactly one-half of the original three per cent deduction.

At the February 8, 1922 board meeting, Alf Stone discussed informally the Cooperative Marketing Act which Oscar Bledsoe successfully introduced in the Mississippi legislature during his sole term there from 1920 to 1924.

REMAINING INDEPENDENT

Several statewide cotton cooperative marketing associations grew up immediately following World War 1, in response to poor economic conditions in cotton production, and became affiliated with the American Cotton Cooperative Association (ACCA). In addition, Staplcotn and a number of other large scale cooperatives were formed and maintained independently from any overhead organization. Among them was the Arkansas Farmers Union's Cotton Growers' Association, which went out of business in 1928.

Staplcotn remained independent of ACCA and entered into a separate relationship with the Federal Farm Board, disagreeing with ACCAs philosophy that the best interests of a cotton marketing co-op dictated alliance with an overhead selling agency. This policy left Staplcotn clear to develop its direct selling strategy.

During March 1922, the Association sold 17,783 bales, the largest sales for any one month of its existence, Garrard told the Board. He also noted that the Masons in Greenwood were planning to build an eight story building there, offering to build it 'big enough to house the Staple Cotton Association."

"We would need at least seven floors, 50 feet wide by 135 feet long," he continued. "They offer to provide this 49,000 square feet of space for a rental of $1000 per month." At that time, Staplcotn already had operations in five separate buildings in Greenwood "and will soon be in seven buildings with a combined floor space of 24,000 square feet and total rent of $812 the following season," Garrard said.

MORE BALEAGE A NECESSITY

Two more pressing concerns quickly sidelined the question of renting in a yet-to-be-built eight story building .The first was lack of necessary volume needed to be the significant cotton marketing force Bledsoe and Garrard had envisioned.

Garrard pointed out, "We have got less than one third of the cotton received in the Delta. There is no way for us to perfect this thing and get the power we should have in it and the price we should get except to get more baleage. If we don' t get more baleage next year, then this Association is going to fail," he said.

Bledsoe seconded Garrard's fears, predicting, "If we don't get a bigger baleage next year, the Association is going to disintegrate."

Hard-charging Alf Stone shot back, "I would hate to think that 1 had to go back to selling my own cotton again. I think this is the way all of us will feel and I don't know that I would be willing to say that unless we could do a certain thing before a certain time, that we would have to quit. I am willing to go as far as anybody when it comes to an effort to increase our baleage.

"I had a letter about six weeks ago from one of the most pessimistic men among the larger businessmen of the Delta, and he took the ground that the Delta was broke. I replied that if the Staple Cotton Association could control seventy five percent of the cotton raised in the Delta, that the Delta could get back on its feet in less than three years," he said.

Stone then touched on the second major problem plaguing the Association: record keeping that made producing an accurate balance sheet practically impossible. This was a problem the Association moved quickly to correct.

"Mr. Garrard and Mr. Bledsoe have had a peculiarly difficult problem, and they now have the thing in such shape that they will guarantee us that we will get off statements just as accurate as a bank statement," Stone assured the group.

Staplcotn's marketing contract was upheld by the Mississippi Supreme Court in the case of Brown vs. Staple Cotton Cooperative Association where ten bales of the 1922 crop had been sold outside of the Association and the farmer had defended the breach on the grounds that the contract was monopolistic in nature.

Staplcotn's initial service area was Coahoma, Quitman, Bolivar, Sunflower, Leflore, Washington, Issaquena, Sharkey, Humphreys and Holmes Counties. On August 9, 1922 the Board voted to add Tallahatchie County to the area served by Staplcotn with ten "yes" votes and J.H. Sherard casting the lone, unexplained "no" vote.

EARLY EMPLOYEES

Employment records for Staplcotn's first year list the following employees in the Greenwood Office: general manager Garrard, assistant to the manager Charles W Holmes, R. D. Portwood, William Street, auditor Francis Dement, Milton Bacon, cashier and bookkeeper L. M. Hilzin, Miss Maureen Gresham, bookkeeper M. E. Bacon, J. D. Prince, H. E. Patton and Mrs. L. P. Wright, plus unnamed stenographers, office boys, messengers and a janitor.

The Classing Department was headed by I. M. Cowie, and included T. R. Wells, Guy Hall, Edward Naylor, E.V. Jones, R. F. Morrison and ten unnamed clerks and assistants. Branch office employees in Clarksdale included manager Bryant M. Brownell, assistant Judge Kethley and Frank Pettey; in Greenville, manager Hubert Crosby, Galla Paxton and S. 0. Gibbs; in Rosedale, manager George McGee; in Yazoo City, manager Robert C. Lipscomb and William Lawson; in Cleveland, manager Samuel C. Bedwell; in Indianola, manager Eugene S. Van Cleve and E H. Griffin; in Ruleville, manager Earl R Hogan and G. B. Chatham; in Itta Bena, manager John H. Holloman; in Belzoni, manager Charles S. Moore; and in Memphis, manager R. D. Park and assistant manager 0. L. Stevens. Records also listed branch offices, but no specific individuals, in Vicksburg, Leland and Tutwiler plus 20 unnamed samplers for the branch offices.

Soon, Frank Spann was heading the marketing department. "Mr. Garrard called the shots, and Mr. Spann ran the pool," Aven Whittington recalls. "Mr. Spann and Bill Lawson (who was later transferred to Gastonia, N.C.) were the first ones."

Spann went to work for Staplcotn soon after they first organized. He died a young man but the family connection with the Association continued when Aven Whittington, the husband of Spann's daughter Hortense, was elected chairman of the Board in 1980.

POOLED COTTON ONLY

During the first three years of operations, Staplcotn offered only a pooling program to market members' cotton. All classes of like grade and staple were pooled, offered, and sold together. Pool members shared in the pool proceeds on a pro rata basis.

Pool members could receive settlement as the cotton was liquidated from the pool, or they could receive an advance of approximately 6O percent of the estimated market value as soon as the cotton was classed. This advance was then withheld from settlements as cotton was liquidated from the pool. Monthly progress payments were made as the cotton was sold, and any unsold cotton at the end of the season was carried over and sold from separate pools the following season.

Since unsold cotton usually remained, the sale of this cotton, along with the current crop pool cottons, meant sales were being made from four or more pools during the season.