Chapter 16
What the Grange Stands for in Encouraging Private Enterprise

"Except for the Granger Laws regulating monopolies and the Grange's sponsorship of cooperatives, America might well have gone the road to Communism."
-Raymond W. Miller

The farmer has always been an individualist. Not only has he been required to face and overcome the challenges of nature in his operations, but he has been forced to show a special brand of independence in his business operations to achieve a livelihood. Over the years he has been beset by business problems, often being victimized because of his lack of knowledge, his gullibility, and his lack of defense.

So it was that in the late 1860's when the Grange was conceived, and its Founders had the dream of an organization that would protect his interests, fight for his rights, and help him act with others to buy together, sell together, and work together for mutual protection and advancement, he enthusiastically became a member of the Grange.

Grange Championed Private Enterprise System

From the very beginning, through its Declaration of Purposes, the Grange championed the private or individual enterprise system. Great stress was laid on the preservation of the integrity of property rights as well as the integrity of the rights of labor, and above all, support of the profit incentive, so much a part of our American capitalistic system.

In his classic book, Can Capitalism Compete- Raymond W. Miller quotes Herbert Hoover, before he became President of the United States, in "a most significant analysis of the genius of North American freedom in developing the most highly productive economy in the world."

This is what Mr. Hoover said in defining the American Social System:

We have, in fact, a special social system of our own. We have made it ourselves from materials brought in revolt from conditions in Europe. We have lived it; we constantly improve it; we have seldom tried to define it. It abhors autocracy and does not argue with it, but fights it. It is not capitalism, or socialism, or syndicalism, nor a cross breed of them. Like most Americans, I refuse to be damned by anybody's "word-classification" of it, such as "capitalism," "Plutocracy," "proletariat" or "middle class," or any other, or to any kind of compartment that is based on the assumption of some group dominating somebody else.

The social force in which I am interested is far higher and far more precious a thing than all these. It springs from something infinitely more enduring; it springs from the one source of human progress-that each individual shall be given the chance and stimulation for development of the best within which he has been endowed in heart and mind; it is the sole source of progress; it is American individualism.

The rightfulness of our individualism can rest either on philosophic, political, economic, or spiritual grounds. It can rest on the ground of being the only safe avenue to further human progress.

-American Individualism Herbert Hoover, pp. 12-13,
Copyright, 1952 by Doubleday & Co., Inc.

Today the philosophy of Grange leaders continues to emphasize the importance and value of our private or individual enterprise system. Recent words of the National Master, Herschel D. Newsom, in dedicating the beautiful new California State Grange Headquarters in Sacramento, in June, 1966, emphatically make this point:

We must insist that not only our own government but all governments of the world, must take reasonable steps to preserve the integrity of property and job , . .

There must be progress and growth, without destruction of carefully and accurately defined property rights and employment rights. This kind of growth and progress will extend and enhance opportunity for individuals who may be incited to improve themselves as we seek always to use the very strength which this American system of reasonably regulated capitalism has given us as Americans and as members of the Grange.

This, indeed, has been the basic American and Grange philosophy which has improved and extended the opportunities of individuals in America. It is this system by which America has developed and achieved a posture that now imposes even greater responsibilities on the Grange, as well as all Americans.

We should seek as best we may to literally help to influence the pattern of increasing opportunity for human beings, of improving integrity of investment and security in personal employment in the rest of the world, so that the rest of the world may, in turn, assume its full measure of responsibility to all people.

We dare not depart from the fundamental precept of prime recognition for the dignity and the integrity, with responsibility, of the individual. Neither, however, can we ignore the fundamental principle that "the whole can never become greater than the sum of all its parts," Therefore, to whatever extent we fail to provide the stimulation for individual enterprise--carefully guarding and protecting the legitimate rights of individuals to achieve comparable growth and progress-we inevitably will diminish the growth and progress of any people, anywhere in the world.

Grange Creates, Promotes Cooperatives

In the interestingly written history of cooperatives by Martin A. Abrahamsen, Acting Administrator, Farmer Cooperative Service, U.S.D.A., Agriculture Cooperation-Pioneer to Modern, he credits the Grange with important contributions to the creation, growth, and organization of cooperative purchasing and marketing organizations. He says:

Early Granges assembled farmer-members' orders and placed them with dealers who shipped carloads of supplies direct to farmers. Price concessions were obtained from suppliers for performing these services. In the years 1871-76, amore than 20,000 local Granges, as well as some 26 state agency systems, were established. County Granges in many cases acted as business enterprises for members of the local units.

In 1874, the National Grange sent a representative to Europe to gather information about cooperation. As a result, the Grange began to sponsor the organization of business cooperatives.

An early writer on cooperation said: "The great contribution of the National Grange was the formulation and distribution in 1875, of a set of rules for the organization of cooperative stores. These rules were based on those of 28 weavers of Rochdale . . . ." (The Rochdale Equitable Pioneers Society, organized in 1844, was the first consumer cooperative in Rochdale, England.)

Many cooperative Grange stores were organized in Michigan, Maine, New York, Kansas, Texas, and California. They sold groceries and clothing as well as general farm supplies, hardware, and agricultural implements. These were more successful than the earlier Grange organizations, which sold goods below going prices or distributed savings on the basis of stockholdings . . .

An important contribution of the Grange was its demonstration that the Rochdale type of cooperative, which handled goods at prevailing prices and distributed net savings according to patronage, offered the most promising basis for sound cooperative efforts.
Over the years, and today, the Grange strongly supports marketing, purchasing, and service cooperatives.

Latest Grange legislative policy makes the strong point that if the individual family-type farm operation is to remain in existence, it will be necessary to continue the development of stronger and better cooperatives to provide the essential bargaining power which this type of operator must have in order to compete.

The Grange fights efforts to cripple cooperatives through punitive taxation or court actions and works for legislation to provide that cooperatives have the same privileges as other businesses to merge and acquire competing businesses.
It gives full support to rural electric cooperatives and to using REA facilities to make adequate telephone service available to rural people. It recommends cooperation with CUNA, international and state credit union leagues and promotes the organization of Grange credit unions throughout the country.

Saving Insurance Dollars for Members

It was but natural that in its promotion of the cooperative idea, with an organization doing for its participants what they couldn't do for themselves individually, Grange leaders looked on insurance protection as a logical service to provide members.
Early in Grange history, its leaders felt that fire insurance was costing farmers too much; and that Grange members because of devotion to family and home were a preferred risk and entitled to lower costs on the most complete and inclusive insurance coverage possible. As a result, they organized and promoted cooperative or mutual fire insurance companies. With literally hundreds of successes in that field, Grange leaders went on later to provide mutual automobile and casualty insurance, life insurance, all kinds of liability insurance for the home, farm or business, fidelity bonds, and more recently the modern package-policy such as Homeowners, Farmowners, and Commercial Multi-Peril policies.

The comprehensive protection and tremendous savings write another chapter in the outstanding service record of the Grange for its members.

Five of these Grange insurance companies have multi-state operations, and have close affiliation with the National Grange, reporting regularly to the Annual Session. Details about their operations, and of their reinsurance company, are given below. Several hundred other insurance companies serving Grange members operate within a single state, county or Pomona Grange jurisdiction.

Farmers and Traders Life Insurance Company, of Syracuse, N.Y.

The National Grange itself took the necessary specific action and indeed with effective support and participation by State Granges of New York, Pennsylvania, and Ohio, raised the required original capital in 1912 to organize its own life insurance company, first known as Farmers National Life Insurance Company. Soon after the company began business in 1914, the name was changed to the present one.

To comply with the insurance laws of New York, and because the capital requirements were beyond the reach of the Grange in those days, it was originally organized as a stock company, but with a plan to mutualize it so that it will to 100% owned by Grange members and the other policyholders for whom it provides life insurance service. This mutualization program began in 1954. It is almost completed. When realized, probably in 1967, this will be another of the long-term plans and objectives accomplished during the "First Century of Service and Evolution" of the Grange.

Although the Company was organized primarily to serve Grange and rural people, it now serves people in all walks of life. It does, however, keep a close tie with its sponsoring organization for a majority of its directors are present and past state and national Grange officers.

Today this life insurance company, proud of its 52 years of growth, and service, has assets over $66 million, offers a multiple and broad service to both urban and rural communities in 27 states and the District of Columbia, with more than $250 million of insurance in force. Its President, Matthias E. Smith, has served as an officer in Subordinate, Pomona, and New York State Granges. He follows the late and revered Alvin E. Hanson, President of the Company from March, 1961 to December, 1965.
National Grange Mutual Insurance Co., Keene, N. H.

The National Grange Mutual Insurance Co., Keene, N.H., was organized in 1923 as the "National Grange Mutual Liability Co." Sponsored by the Grange, it wrote auto insurance for Grange members. Presently its charter permits the underwriting of all lines of insurance except life insurance and annuities.

In 1923, the company was licensed in New Hampshire only and its gross premium volume was $11,231,95. Today, with a premium volume of $38,985,029.63, NGM operates in 22 states and the District of Columbia, and ranks 24th among the nation's 2,230 mutual casualty and property insurers. It has assets over $65 million, and a policyholders surplus over $19 million.

NGM purchased the assets and in-force business of the National Grange Fire Insurance Co. in 1958 and adopted its present name.

NGM's home office, with 54,000 square feet of floor space and housing over 300 employees, was opened in 1950. An addition, which will more than double this space, is currently under construction. Branch offices are maintained in Syracuse, N.Y., Rutland, Vt., and Park Forest, Ill.

From 1923 until 1963, the late R. C. Carrick, secretary-treasurer, served as NGM's executive officer. The present management includes J. C. Farmer, chairman of the board; K. P. Colby, president; H. H. Metzger, treasurer; and H. R. Lindberg, secretary and general counsel.

Grange Insurance Association, Seattle, Wash.

Organized on April 19, 1894, as the Washington Fire Relief Association, Grange Insurance Association was then to operate strictly within the state of Washington as a fraternal fire association. In June, 1936, the name of the company was changed to its present name and its charter has subsequently been amended to include Idaho, Oregon, Montana, Wyoming, Colorado, and California with the endorsement of each State Grange.

Grange Insurance Association has had a distinguished history of service to Grange members in its area. It has grown to where it now writes a full line of modern farm and casualty coverages, with a premium income in 1965 of $7.8 million and assets of over $101/4 million. Service is confined strictly to members of the Grange, and the Association works closely with the State Granges in the states in which it operates. It is organized and operated as a farmer cooperative, paying back to the insured members in the form of a revolving patronage dividend, the difference between premiums paid and losses sustained. These refunds since 1938 through 1965 total $10.4 million.

The Association owns and occupies a modern three-story office building in Seattle, and seven regional offices modernly equipped, all staffed with 250 employees.

Grange Mutual Life Company, Nampa, Idaho

Grange Mutual Life Company was created for Grange people because of the economic need which developed in the mid-thirties. W. W. Deal, then Master of the Idaho State Grange and later Chaplain of the National Grange, with the help of loyal Grange leaders and members in both Idaho and Washington, chartered this new life company to write life insurance for Grange members on a legal reserve basis.

Since that time, Grange Mutual Life has grown to a healthy $12 million in admitted assets, with $71 million of life insurance in force, and approximately $1 million in policyholders surplus. This Grange company operates in nine states: Washington, Oregon, Montana, Idaho, California, Colorado, Wyoming, Iowa, and Nebraska, and offers a full line of modern life, accident, and health insurance programs.

The Board of Directors of Grange Mutual Life is composed of nine prominent Grange members of long standing. The Grange is a dominant part of GML, and this Grange company continues to cooperate closely with the State Granges in those states in which it is licensed to do business as well as with the National Grange.

A brand new home office building was dedicated in 1961, presumed to be adequate for at least 10 to 15 years. The results of the five-year expansion program inaugurated in 1963, however, made it necessary to increase the home office space and facilities and a construction program is currently under way which will approximately double the floor space of this home office operation.

Patrons Mutual Insurance Company of Connecticut, Glastonbury, Conn.

This company has been providing insurance protection for Grange members only since its organization in 1887. Originally their writings were confined to Connecticut. The service and savings have been extended to Massachusetts, Florida, and West Virginia Grange members.

They enjoy an A-plus rating in Best Insurance Guide-the highest rating obtainable. Patrons Mutual has a comprehensive program to aid the Granges in its territory.

A communication medium is its Patrons Plugger, a publication going into each Subordinate Grange and to the official Grange family in the four-state area. The recent innovation of a Farmowners Policy, the first in New England, is designed to give the Grange farm family a package policy of protection.

Their growth throughout the years has been consistent; the result of loyal directors, personnel, agents, and all members of the Grange organization.

National Federation of Grange Mutual Insurance Companies

Organized in November, 1934, and incorporated by a special Act of the Connecticut Legislature effective July 1, 1947, this National Federation provides a clearing house for the reinsurance of risks insured by member companies.
Such member companies may be any Mutual Insurance Company which (a) confines its business to Grange members, or (b) which has been designated by the National Grange, or any State Grange as an official Grange insurance company.
Only such companies may be members of this National Federation which was set up to engage in activities to benefit and protect all member Grange insurance companies. Twenty member companies which write fire, life, and casualty insurance now belong to the Federation.