5/18/78

INTRODUCTION

WAC PRODUCTION MARKETING COOPERATIVE (PMC)
Scope and Content Note: Intended to emulate Minnesota's Land O'Lakes successful pioneer work in distributing dairy products, PMC operated a small business which contracted with Honey Creek Valley Dairy Cooperative in Sauk County to fill orders for a wide variety of quality cheese. Also functioned as a propaganda arm by publicizing agricultural economists' statistics showing middlemen's profits from dairy product sales. Failed to develop into an effective marketing organization because of time constraints and competing plans for development among many dairy cooperatives. WAC felt state legislation needed to help develop dairy marketing cooperatives, although a national organization would have been more ideal marketing mechanism.

ERVIN BRUNER, CHAIRMAN OF WAC DAIRY COMMITTEE
Scope and Content Note: Young, energetic, enthusiastic, and qualified “procedural leader.”

CONSOLIDATION EFFORTS TO FORM EFFECTIVE DAIRY MARKETING COOPERATIVE
Scope and Content Note: WAC discussed marketing cooperatives with several agricultural economists and WAC's own dairy members, but felt PMC not significantly developed to warrant meetings with such marketing cooperatives as Land O'Lakes, Lake-to-Lake Dairy Cooperative (Manitowoc), or Consolidated Badger Cooperative (Shawano), both affiliated with WCAC. Political affiliations and reluctance of local cooperatives to join an umbrella cooperative hampered success of dairy coop mergers.

PMC AIDS THE CONSUMER
Scope and Content Note: Farmer-controlled dairy marketing cooperatives intended to provide farmers greater proportion of profits formerly accrued by middlemen and to pass on those savings to the consumer.

DAIRY MARKETING ISSUE BECOMES A MAJOR COMMITMENT FOR KYLE
Scope and Content Note: Various, diverse, and keen interests in WAC over dairy products marketing required Kyle to funnel much time and effort into marketing problems.

NATIONAL SUPPORT FOR DAIRY MARKETING COOPERATIVES
Scope and Content Note: Federal government unable to affect dairy marketing mechanism in early-1950's; such national organizations as Cooperative League of the USA also supported WAC's cooperative marketing efforts.

WAC FAVORS HIGH MILK PRICE SUPPORTS
Scope and Content Note: Reinforced WAC's concept that dairy marketing cooperatives benefited both farmer and consumer by redistributing some of middleman share. Individual consumers generally not interested in price levels of farm products, although several national consumer organizations and National Farmers' Union supported interests of farmer cooperatives.

GROUPS WHICH REGULARLY OPPOSE WAC
Scope and Content Note: Such specialized groups as gasoline stations, trade associations, and retail grocers threatened by competition from cooperatives, but usually remained aloof. Wisconsin Manufacturers' Association and State Chamber of Commerce never supported WAC but never openly clashed either.

NATIONAL TAX EQUALITY ASSOCIATION (NTEA) OPPOSITION TO COOPERATIVES
Scope and Content Note: Federal internal revenue code granted income tax exemptions on common-stock dividends to members of cooperatives which did nearly all business with farmers. NTEA demand for taxing of all patronage refunds, an attack on savings individual consumers made by buying cooperatively, “would have been disastrous for coops and was totally unfair.” Kyle illustrates resemblance between cooperative dividends and private business rebates, both of which are untaxed.

END OF TAPE 20, Side 2

INTRODUCTION

COOPERATIVES FIND NTEA PROPOSALS UNACCEPTABLE
Scope and Content Note: NTEA proposals called for punitive taxing of cooperatives' patronage dividends, even though rebates and discounts considered tax-free business expenses for private corporations.

NTEA CONNECTION WITH PRIVATE POWER COMPANIES
Scope and Content Note: NTEA hoped to raise rural cooperative power rates by increasing REA taxes, while private power companies sought to become viable competitors after increased farm mechanization made rural electric service a lucrative business.

REA COOPERATIVES COMBAT ECONOMIC COMPETITION
Scope and Content Note: Unlike the U.S. Farm Security Administration which folded due to post-New Deal political opposition, REA threatened instead by economic competition. REA cooperatives became less dependent on national government, increasingly using own resources to compete with private power companies.

REASON FOR NTEA FIGHT AGAINST COOPERATIVES
Scope and Content Note: NTEA, alarmed by growth of cooperatives during and after World War II, tried to “hamstring” or bankrupt the cooperatives. Opposition to cooperative gains likely in such conservative communities as Monroe (Green county), but Kyle recalls rare anti-coop sentiment among small-town businessmen.

PRIVATE POWER COMPANIES IN WISCONSIN CONTRIBUTE HEAVILY TO NTEA
Scope and Content Note: Kyle not surprised because private power companies have a “history of being politically conscious and putting their money where their thoughts were.”

ANECDOTE ABOUT BUSINESS OPPOSITION TO COOPERATIVES IN WHITEWATER
Scope and Content Note: Latent opposition stretched back to early-1940's; recalls Whitewater cooperative's difficulty in buying land from a bank whose president was also in the coal and lumber business.

COMMENTS ON U.S. REP. NOAH MASON, ILLINOIS
Scope and Content Note: Early congressional supporter of NTEA and Republican member of the House Ways and Means Committee, but not a formidable foe. Kyle speculates that support of NTEA a source of national attention and campaign financing for Mason.

COMMENTS ON U.S. SEN. JOHN WILLIAMS, DELAWARE
Scope and Content Note: Williams, a feed-dealer, initially supported NTEA but later backed off.

CONGRESSIONAL OPPOSITION TO COOPERATIVES
Scope and Content Note: One-third of the Ways and Means Committee members probably against cooperatives but no strong opposition voiced in committee hearings concerning NTEA proposals. Conservative Republican Rep. John W. Byrnes of Green Bay early “saw through this tax business” and supported cooperatives.

COOPERATIVES' SUPPORT FROM MEMBERS OF THE WISCONSIN DELEGATION
Scope and Content Note: Consistent support from congressmen Merlin Hull, Bernard Gehrmann, Harry Sauthoff, Gerald Boileau, and Gardner Withrow. Senators Alexander Wiley and Joseph McCarthy, recognizing political strength of farmers and cooperatives, neither hindered nor helped the fight against NTEA.

COMMENTS ON RED-BAITING OF COOPERATIVE LEADERS
Scope and Content Note: McCarthy picked out individual cooperators but never cooperatives in general. Kyle considers the worst example of red-baiting was that of Erich Lenz, born in Russia, led by state senator Gordon A. Bubolz of Appleton.

END OF TAPE 21, SIDE 1

INTRODUCTION

WAC PROTESTS McCARTHY'S ANTI-REA LEGISLATION
Scope and Content Note: Legislation, killed in committee, probably introduced because McCarthy influenced by utility lobbyists. McCarthy “didn't know what it was all about.”

COOPERATIVE LEAGUE OF THE U.S.A. AND THE NATIONAL RURAL ELECTRIC OOPERATIVE ASSOCIATION WATCH WAC's INTERESTS IN WASHINGTON, D.C
Scope and Content Note: League's Washington office coordinated WAC legislative program.

COMMENTS ON CITIZEN DAVE DOUGLAS
Scope and Content Note: Anti-coop propaganda movie which promoted NTEA tax proposals by depicting cooperative “abuse.”

COMMENTS ON NTEA PHONEY COOPERATIVE BUCK PROMOTION
Scope and Content Note: Campaign used to promote NTEA belief that dollar's value would increase if cooperatives paid taxes that NTEA proposed. WAC countered by collecting and burning the phoney bills and distributing their own dollar bills, made from rubber, to publicize slogan that cooperatives enabled people to stretch their dollars.

OTHER WAC ANTI-NTEA ACTIVITIES
Scope and Content Note: Radio; speeches; hearings; WAC Bulletin.

NTEA STRATEGY FROM
Scope and Content Note: Essential issue remained tax equality; no substantial red-baiting.

COMMENTS ON INTERNAL REVENUE ACT OF
Scope and Content Note: No major difficulties for cooperatives since NTEA had made no substantial inroads.

POLITICAL IMPLICATIONS OF NTEA
Scope and Content Note: No direct support or connection between NTEA and any political party.

NTEA OPPOSITION TO COOPERATIVES SINCE
Scope and Content Note: Publications with which Kyle is familiar show no evidence of recent activity.

COMMENTS ON BANKING FIRMS AND SAVINGS AND LOAN ORGANIZATIONS
Scope and Content Note: Both banks and savings and loans “only interested in preserving what privileges they have.” Savings and loan companies are membership organizations only in a nominal sense; actually run by officers.

WAC RELATIONSHIP WITH OTHER REGIONAL AND NATIONAL COOPERATIVES
Scope and Content Note: Close relationship with member regionals, e.g., Midland, Farmers' Union Central Exchange, Wisconsin Farmers' Union, both statewide organizations of the Wisconsin Rural Electric Cooperative (Wisconsin Generating Electric Cooperative and Wisconsin Retail and Public Relations Electric), and later, the Wisconsin Association of Town Mutual Insurance Companies. Group Health Insurance and Mutual Service Insurance not officially regionals but were dealt with as such. Affiliated nationally with the Cooperative League of the U.S.A. and the National Rural Electric Cooperative Association; WAC participated in triennial meetings of the International Cooperative Alliance (ICA) through the Cooperative League. League dues structure in part based on volume; WAC paid small fee as a statewide organization. League national board adhered to one man, one vote principle. Kyle was League delegate at several ICA meetings in Europe, a member of the executive committee for five years, and on the board of directors for about ten years.

COMMENTS ON THE COOPERATIVE HEALTH FEDERATION OF AMERICA
Scope and Content Note: Kyle served two two-year terms as national director (1954-1958) of CHFA, name of which later changed to Group Health Federation of America. In Wisconsin, a pioneer state for group health, the Federation encountered few problems. Elsewhere, participating doctors were often barred from staff positions by hospital governing boards. Federation successfully countered by bringing suits under Sherman Anti-Trust Act. Kyle underscores differences between these early group health efforts and the current program developed by the Nixon administration in the early-1970's through which consumer-run Health Maintenance Organizations (HMOs) receive federal subsidies.

FURTHER COMMENTS ON INTERNATIONAL COOPERATIVE ALLIANCE
Scope and Content Note: Large regional groups directly affiliated with ICA in same manner as the Coop League. ICA delegates from Russia and Czechoslovakia, obviously controlled by their governments, were a propaganda problem but never gained control of ICA. Jerry Voohris the League's most vocal and effective opponent of communist political control of ICA.

END OF TAPE 21, SIDE 2

INTRODUCTION

ICA MEETINGS PROVIDE WORTHWHILE INTERNATIONAL CONTACTS
Scope and Content Note: Kyle exposed to “very effective” cooperatives of Copenhagen, Stockholm, and Manchester when in Europe for ICA conventions. International Cooperative Insurance Committee and International Cooperative Petroleum Association grew out of contacts made during these meetings, which were otherwise basically unproductive debates between Russians and others.

GOVERNMENT CONTROL OF COOPERATIVES IN COMMUNISTIC COUNTRIES
Scope and Content Note: Lack of state control over cooperatives in United States magnified by complete state control in communist countries where cooperatives are a “branch of the government” and cooperatives in name only.

GOVERNMENT SUPPORT OF COOPERATIVES IN EUROPEAN COUNTRIES
Scope and Content Note: Well-established cooperatives readily accepted by European business and political circles but receive little government help. European governments in comparison with U.S. government exercise greater control over both private and cooperative business.

KYLE CONSIDERS SCANDINAVIAN COOPERATIVES' MARKETING STRUCTURE A MODEL FOR THE UNITED STATES
Scope and Content Note: Norway an example of country which retained competitive retail pricing but substantially increased the farmers' share of milk dollar to detriment of middlemen. Production controls partially responsible for greater market power. Kyle publicized financial advantages that similar production controls would have for the U.S. farmer.

RIVALRY BETWEEN WAC AND WCAC FOR MEMBERS
Scope and Content Note: WAC tried to “organize the unorganized.” WCAC unsuccessfully attempted to recruit some rural electric cooperatives (REAs), most of whom were already members of WAC. WAC attempt to develop dairy marketing program resulted in large membership gains among the basically unorganized dairy cooperatives. Not uncommon for cooperatives to have joint memberships in WCAC and WAC.

WCAC DEVELOPS INTO AN ORGANIZATION OF COOPERATIVE MANAGERS
Scope and Content Note: Widely circulated, valid observation that WCAC board of directors dominated by cooperative managers; tendency of larger organizations to “drift in that direction,” e.g., Midland Cooperative Wholesale also dominated by managers. WAC, avoiding manager dominance, benefited from criticism of WCAC's structure.

WAC AND WCAC RENEW MERGER TALKS
Scope and Content Note: WCAC, Midland, and some joint WAC/WCAC members developed renewed interest in merger in late-1950's or early-1960's. Both WAC and WCAC set up merger committees.

KYLE'S CHAIRMANSHIP OF THE WAC MERGER COMMITTEE
Scope and Content Note: After being elected president in 1962, Kyle became chairman of existing WAC merger committee, which had accomplished little. Merger talks stalemated again after WCAC merger committee drafted plan that abandoned WAC's traditional one member - one vote rule. Milo Swanton (WCAC's committee chairman) and Kyle had long-standing personality conflict and philosophical differences which further hampered merger efforts. Merger talks succeeded after Swanton and Kyle left their respective committees.

KYLE REPLACES WILLIAM RABE AS WAC PRESIDENT
Scope and Content Note: Rabe “never was a strong president;” inarticulate and lacked organizational skills necessary to direct WAC board meetings. Kyle, who had resigned as executive secretary to take full-time job with state of Wisconsin, a “logical choice” for presidency.

END OF TAPE 22, SIDE 1

INTRODUCTION

BOARD OF DIRECTORS' ASSESSMENT OF LAWRENCE JONES AS EXECUTIVE SECRETARY
Scope and Content Note: Kyle's election to WAC presidency reflected board's desire to have meetings run on a business-like basis; and not related to board's assessment of Jones' limitations. Age of Jones a factor and everyone knew that “Lawrence didn't have some of the characteristics that I [Kyle] had,” but manifest discontent with Jones' performance not expressed during Kyle's one-year presidency.

BOARD SELECTS GLENN ANDERSON TO REPLACE JONES AS WAC EXECUTIVE SECRETARY
Scope and Content Note: Kyle not involved in board's selection of Anderson for executive secretary position, but knew Anderson well from his group health cooperative work and believed he would do a good job. Consumer, producer, of REA factions played no role in board selection.

WAC/WCAC MERGE TO FORM WISCONSIN FEDERATION OF COOPERATIVES
Scope and Content Note: WAC and WCAC merged in 1969 to become WFC. Anderson continued to consult Kyle about merger after Kyle's term as State Securities Commissioner ended in 1967. Kyle not opposed to merger but wanted new organization to reflect WAC's interests.

MERGER A REFLECTION OF COOPERATIVE CONSOLIDATIONS IN AND
Scope and Content Note: Wisconsin only had had two state-wide cooperative associations; merger was “inevitable.” Resulted in some compromise of interests, but has worked out relatively well.

END OF TAPE 22, SIDE 2