Shortly after the Civil War
, the American farmer
found himself getting ripped off
by monopolistic railroad
companies. These companies would charge a high price
to transport grain
, but would also charge a seperate
high price (a service charge
, if you will) to store the grain in their own grain elevator
s before transporting it.
Own his own, a farmer could do nothing about this. But groups of farmers were able to pool their resources to set up and run independant grain elevators of their own at a reduced cost. The railroads hated this, but they eventually succumbed to the concept, as state governments started to pass laws regulating the maximum charges for grain storage.
Since they is so cost effective and efficient for their members, such associations still exist today. The farmer's cooperative is something of a phenomenon, in that it is a working example of Socialism in America.