18 The Gasoline Retailer September 15, 1948 Co-op Growth in Service THE CO-OP PETROLEUM EMPIRE Station Business Shown REGINA WINNEPEG 76 In Study by Oil Groups ND 250 94 123 NEW YORK-An example of the growth of coopera- tives in the retail gasoline business is shown in the fact 38 LAUREL S.D MINNEAPOLIS WYO that groups affiliated with the National Cooperatives and 36 75 PAUL 92 the Cooperative League owned 1,425 service stations as of 13 IOWA November, 1946, and served 810,000 members at these out- NEB 186 124 WARREN lets, according to a study just published by the Petroleum INDIANAPOLIS SCOTTSBLUFF Industry Research Foundation. cola 98 The last reported volume of 8 these stations, it is noted, was 24 5 growth of co-ops has been made 82 $270,000,000. These cooperative possible by tax exemptions. NORTH groups also owned as of February, ABIZ KANSAS LOUISVILLE CHANUTE The study points out that a 1947, 1,671 miles of pipeline, 821 TENN "very incomplete" government ARK 1 producing oil wells, nine oil com- listing of consumer cooperatives, pounding plants, 11 refineries and 13 MISS ALA published in 1943, shows a total of CUSHING one grease factory. LEVELLAND 4,500 consumer cooperative groups "Outside of this group, is active at that time. Considering Refineries (12) stated, "other cooperatives Ov n this list as representing a typical only one refinery (Missouri Farm- sample of the characteristic activ- Oil Compounding Plant (9) 65 ere' Association plant at Chanute, ities of the thousands of co-op MEREAU Kan.)" It is also pointed out that groups comprising several million Oil Wells (450) the sales figure of $270,000,000 members, it is noted: Pipe Lines (1664 Miles) "does not cover the petroleum "By number of outlets handling sales of the numerous cooperative Number of Cooperative Outlets petroleum products, 60 per cent of for Petroleum Products in Each State associations not affiliated with the SOURCE Bureau of labor Statistics Directory Consumer Cooperatives all listed cooperatives sold motor Cooperative League." oils, 54.9 per cent sold gasoline Information used for making this map is partly 3 and 4 years The capacity figures and length of pipelines in this map are The study, entitled "Cooperative and 38.8 per cent sold kerosene old. Nevertheless, the map conveys a good picture of the strate- based on the most recent available information. In view of the in the Petroleum Industry, is and fuel oils to their customere. gic location of coop refineries in the heart of our farm production. constant growth of the coop petroleum business they may be published in four parts under Motor oils were the most fre- bigger today (November, 1947). separate sub-titles. These include: quently handled of all commod- Part 1-"Observations on the Co- ities. Gasoline took second place more than 15 times the initial operative Movement," by Ludwig and kerosene and fuel oils fifth cash investment. In 1944 the Sees 40% Gasoline von Mises; Part 2-"Petroleum after other commodities. $1,200 cash investment had grown Cooperatives in Action," by K. E "The importance of petroleum to assets of $90,666. In addition (Continued from Page 16) vorable toward increasing com- Ettinger; Part "The Exemption products to farm cooperatives can during the 12 years of operation, pression ratio, of Cooperatives from Federal In- be judged from figures for the the patrons of this cooperative re- tained in city traffic conditions "However, gains running as come Taxation," by Robert H. combined sales of 18 major re- ceived approximately $66,000 in with the car fitted with the high- high as 40 per cent in fuel econo- Montgomery and James O. Wynn; gional farm supply purchasing dividends or 55 times the original compression engine. my without loss in 'performance' and Part -"What the People of cooperatives published by the cash investment. Beyond this, a "Gains as high as 50 per cent are sufficient to offset a consid- Co-Opland Think of Petroleum Farm Credit Administration. In reserve of $21,288 belonging to the have been observed in tests made erable increase in the cost of Cooperatives," an opinion survey 1944 these cooperatives sold their patrons had been built up so that to compare the high-compression fuel. conducted by Berry Wall. In the members $60,876,000 worth of gas- their total savings reached the engine with the 6.5-to-1 engine second part of the study the amount of $87,198." "Recently it has been pointed oline, oil and grease, more than under city traffic conditions. actual business development in In citing another example the out that the petroleum industry 17 per cent of their total sales. "Road tests show that the high- eight states, where the operation Rapid Growth of Co-ops study points to the success of the now has manufacturing capacity compression engine is up to ac- of petroleum cooperatives is con- As an example of the growth of Drake Co-op Oil Co. in North Da- to produce about 20 per cent of centrated, is given in chart form. cepted standards of smoothness, kota, which started in 1940. Dur- its total volume of gasoline in the oil cooperatives the study refers flexibility and performance in ing the first six months of opera- 96-98 research-octane range. This Introduction by Hilts to several specific rural petroleum general. Starting is satisfactory In an introduction to the work co-ops and their financial achieve- tion, according to the report, it would be sufficient to supply with the standard six-volt startin Harry B. Hilts, secretary of the ments in a dozen years or so. earned $42,887 for patrons and gasoline for several years' pro- motor. Empire State Petroleum Associ- "The Marathon County Farmers stockholders. In addition, it paid duction of cars requiring this tion, which sponsored the study Union Oil Co. (Wisconsin) started $2,103 into the Farmers Union of Two Advantages type of fuel. in conjunction with the Illinois North Dakota educational fund. "Ignition is obtained with a gix- "But to produce still greater business in 1932. In 1944 it had Petroleum Marketers Association, 2,800 patrone. The subscribed cap- Another oil co-op, the Farmers volt, battery system using a con- quantities of the 96-98 octane fuel noted that the purpose of the un- ital in 1932 was $4,500 of which Union Oil Co. of Great Falls, ventional coil with some modifi- as the demand expanded would dertaking was to present a factual only $1,200 was paid in cash by the Mont., in 1946, the study notes, cations This experimental en- require drastic capital equipment analysis of the part played by co- stockholders. The sales leaped "closed its books ending its gine of 12.5 compression ratio has readjustments within the petro- operatives in the petroleum in- from $56,000 in 1934 to $425,000 in demonstrated two very important leum industry." twelfth year of operation. Start- dustry. 1943, an increase of over 7 1/2 times ing with deliveries of $29,000, with- principles: For that reason, the paper said, the volume in only nine years. In in 12 years sales reached $164,000. a study of a dual fuel system has Part three of the study details "1. That high-compression en- Patrons and stockholders received been proposed "in which the car- exemptions granted co-ops from the first 10 years of operation gines can be made to conform patronage dividends of almost buretor would be supplied with payment of many taxes paid by sales exceeded altogether $1,250,- with accepted standards of private business, and the study as 000. In 1941 alone, sales amounted $100,000 and interest of $7,000. In both high and low octane number smoothness and general per- a whole is calculated to substan- to $207,000. In 1943 they had dou- addition, $4,310 was paid to the gasoline; the high octane gasoline formance characteristics de- Farmers Union Educational and to be used only during the time tiate the contention often ad- bled, totaling $425,000. The 1943 manded of present-day automo- Cooperative Union of America." that the throttle is open wide vanced by oil men that the rapid earnings amounted to $18,594, bile engines. The records of the cooperative enough to require high octane "2. That large gains in fuel fuel. wholesales affiliated with the Na- 8 economy can yet be made over tional Cooperatives and the Co- "By this means the effective- current levels provided suitable operative League present a sig- ness of a given limited quantity fuel can be made available at Growth of Consumer Cooperative Association Kansas City, Mo. nificant picture of the upward of high octane gasoline could be a reasonable cost to the con- trend in cooperative expansion, it greatly extended. sumer." $6,516,327 it stated. "These associations have "Another proposal involves the NON DISTRIBUTED PROFITS Since the original experimental developed their petroleum opera- injection of a mixture of methyl six-cylinder engine was built, the Used for operation and expansion tions far in advance of others alcohol, water and tetraethyl report revealed that GM has lead which, in the past, have confined turned out several engines suit- "The practicability of these themselves to distribution only. able for commercial production proposals and the public accept- $5,274,927 "There is no way of determining "at compression ratios intermedi- ance of fuel systems of this kind their share in the total sales of ate between current production in place of established fuel sys- levels and that of the experi- tems remain to be determined. petroleum products by oil coopera- mental 12.5 compression engine." "In any case, whether or not tives selling to the ultimate con- "From experience gained with these proposals eventually receive sumer. However, their method of these engines it has been possible wide public acceptance, the com- integration indicates the potential to establish approximate relation- mercial production of engines re- development also of those associa- ship between octane rating and quiring fuel having an octane $3,675,241 fuel economy," the report contin- number above that of commercial tions which today purchase their ued. fuels now available at filling sta- petroleum from non-cooperative Two of these 8-to-1 ratios were tions requires the distribution of sources. tested because they could be oper- a suitable high octane fuel on a ated with some of the better nationwide basis. Baltimore Firm Given premium grades of gasoline sold "The problem of distributing commercially since the war, "With fuels on a nationwide basis that $2,261,471 5th Oil Safety Award these fuels," the GM researchers will permit the introduction of BALTIMORE - Sherwood said, "gains in economy as high automobiles capable of taking full Brothers, Inc., was recently pre- as 25 per cent were realized, advantage of such fuels is at once $1,485,672 "Gains in fuel economy of sented the Baltimore Safety Coun- a challenge and an opportunity from 10 to 25 per cent are pos- for the continued progressive de- cil's interplant safety award for sible at octane levels not much velopment of fuels and engines $894,160 the best safety record achieved by above those established by some such as has occurred over the any petroleum company in Balti- present premium gasolines, and past 20 years." $530,609 more in the past year. This was still greater gains can be made at higher octane levele." The National Safety Council re- the fifth time in 10 years the Balti- Turning to the immediate fu- ports unsafe cars were contrib- more oil firm has received the ture possibilities of the fuel-engine uting causes in 16 per cent of all 1940 1941 1942 1943 1944 1945 1946 award. J. W. Sherwood, president relationship, the Campbell-Caris- fatal accidents in 1947. This fig- of the firm, was presented a framed Withrow paper concluded: ure compares to 8 per cent in 1941, SOURCE CCA, 18th Annual Report and estimate certificate by officials of the in- "The gains that can be made in the last pre-war year, and 18 per CCA by distributing profits to patrons only five years after profits fuel economy must more than off- cent in 1946. Defective brakes, were earned partly financed its operation and expansion. dustrial committee of the safety set the increase in the cost of improper lights and defective tires council at a brief ceremony at the high octane fuel required in order constituted over one-half of all oil company's offices. to create a balance that is fa- defects reported last year.