24 AGRICULTURAL MARKETING REVOLVING FUND 
Mr. Leer. Our advance is made to the cooperative; if they make 
a contract with a commission firm to represent them in selling. 
that is their business, as we see it. 
Mr. Ayres. Mr. Legge, there are two national farmers’ organiza- 
tions handling grain, one being the Farmers’ National Grain Corpo- 
ration and the other the Grain Stabilization Corporation. Will you 
be so kind as to explain the difference between the two. or rather, the 
functions of each? 
Mr. Lecce. Taking the Farmers’ National Grain Corporation first, 
which we regard as the more important, that is composed of 26 groups 
of grain cooperatives covering practically the entire United States 
where grain 1s grown for marketing. Each of those 26 groups—and 
they usually represent a State or a region, some territorial group— 
each of them is composed of a large number of local associations 
such as local elevators at some local point in the country, and each 
of them takes stock in this central-marketing organization, based on 
the volume of business done for them. It is on a percentage basis, 
according to the size of the cooperative, where their relation to the 
central organization is on a bushelage basis. 
The Farm Board has no jurisdiction over their operations beyond 
that of helping them to organize and iron out the differences that 
have arisen and still arise between the different member groups, and 
help them to finance their operations. 
They started out with a comparatively small amount of capital. 
and they were rather heavy borrowers. 
Mr. Ayres. Of the Farm Board? 
Mr. Leger. Of the Farm Board. Their subscription to the capital 
stock was on the basis, I think, of 20 per cent being paid down and 
the balance of it to be paid over a period of four or five years. They 
are to pay for the stock in the central organization—the Farmers’ 
National Grain Corporation—in addition to which all the earnings 
of the central organization until the capital is built up to the author- 
ized amount of $10,000,000 are applied toward the payment on the 
stock in this central organization. They have a pretty good record 
up to the present time. Their operations and their financial strength 
have been growing. They are handling a constantly increasing 
quantity of grain. They have already handled directly actual sales 
of something over 60,000,000 bushels of wheat of the current crop, 
and they are financing for their members a considerable quantity 
of members’ grain still in storage. That organization is wholly 
owned by the growers. It is producer owned and controlled. as con- 
templated in the agricultural marketing act. 
] SS ARTIC Sng 
The Grain Stabilization Corporation is also set up under the terms 
of the act, as a separate corporate entity, incorporated under the 
laws of the State of Delaware, and it was organized for the express 
purpose set forth In the law, in connection with emergency opera- 
tions in times like we are going through at the present time. 
That is financed almost wholly by money borrowed from the board. 
The capitalization is held by the cooperative organizations, that is, 
the stock, but it 1s nominal, it does not represent any considerable 
volume of business. . In the operation the profits and losses accrue 
directly to this revolving fund provided for the Farm Board; while, 
on the other hand, the Farmers’ National Grain Corporation operates 
ace the sales agency for its member stock holdine grain cooperatives.