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Manuscripts by Subject - Agriculture - #10814

Title: Harvey Creamery Cooperative

Dates: 1928-1991

Collection Number: 10814

Quantity: .5 foot

Abstract: Consists of minutes of the Harvey, North Dakota organization.

Property Rights: The State Historical Society of North Dakota owns the property rights to this collection.

Copyrights: Copyrights to this collection remain with the donor, publisher, author, or author's heirs.  Researchers should consult the 1976 Copyright Act, Public Law 94-553, Title 17, U.S. Code or an archivist at this repository if clarification of copyright requirements is needed.

Access: This collection is open under the rules and regulations of the State Historical Society of North Dakota.

Citation:  Researchers are requested to cite the collection title, collection number, and the State Historical Society of North Dakota in all footnote and bibliographic references.
Transfer: No material was transferred from this collection.

Historical Sketch

 The Harvey Creamery Cooperative, established in 1928 and dissolved in 1991, kept a complete record of its activities in minutes of various meetings. These minutes provide a wealth of information about the creamery operations and personnel, as well as the effects on the enterprise of national and local legislative and regulatory changes and social and economic developments.

The secretary-treasurer of the creamery board of directors recorded minutes at each of the three types of meetings: regular board of directors meetings, special meetings of the board, and the annual meeting of stockholders. Regular board meetings met as frequently as necessary, depending on the agenda. During the organization period there were often weekly meetings. Once operations were well underway, the board usually met monthly, except during the summer months. Toward the end of its history, the board met at infrequent intervals.

The president of the board called special board meetings when the directors needed to consider a specific piece of business, usually the only item on the agenda. Examples of special agendas included submitting or considering a bid on a piece of equipment that had not been previously authorized or meeting with the auditor or a bank official regarding the financial status of the creamery.

Annual stockholders’ meetings combined with fellowship, especially in the early and middle years, and were carefully planned. Stockholders elected new directors as terms of office ended, heard the annual financial report from the secretary-treasurer or the creamery manager, and voted on proposals regarding the creamery’s operation that according to the by-laws required stockholders’ consent. These meetings included a meal, entertainment by local groups, and talks by invited guests, for example, the North Dakota Commissioner of Agriculture, Land O’ Lakes representatives, or representatives of dairy associations. At the first board meeting after each stockholders’ meeting the board chose its officers each year.

Getting Started

The townsite of Harvey in Wells County, North Dakota, was founded in 1892 on the Soo Line Railroad. It was incorporated in 1903 and became a city in 1906. Mr. Hajicak, who moved to Harvey from Wisconsin after World War I, opened a business that made and sold butter, bottle pop, and Eskimo pies. He erected a new building in 1923-1924 and began to haul cream from the local farms. By 1928 he was ready to retire from the creamery business.

Early in January 1928 a group of 25 prospective subscribers held a preliminary meeting to organize the cooperative and authorized J. J. Habiger to apply to the state for a charter and to write a tentative set of by-laws. The temporary officers were John F. Strauss, chairman, and K. N. Wylie, secretary. The price of each share in the coop was $100.

At the first stockholders’ meeting, January 25, 1928, the 21 attendees read, amended, and approved the by-laws and elected a board of seven directors with staggered terms, from one to three years for the first term and three year terms for all thereafter: John A. Johnson, P. J. Eglund, J. F. Strauss, George Peters, Milton Leetun, Fred Rasmussen, and John Jorgenson. The board of directors then met to elect their officers: president John F. Strauss, vice-president John Johnson, and secretary-treasurer Milton Leetun. Board officers served one year terms.

Deciding on a building for the creamery was the next step. The board considered several options: to construct a new building at an estimated cost of $16,000-18,000, including machinery, or to buy Mr. Hajicak’s creamery for $14,000. The board considered his price too high for the new enterprise, but at the March 13, 1913 meeting they agreed on terms to buy the old creamery. For $13,750 Mr. Hajicak sold the board the creamery, four lots, all the creamery machinery and equipment, and a Ford Truck. The creamery shared use of the ice house with Mr. Hajicak.

To begin operations, the board signed a contract to sell their butter to Land O’ Lakes and looked for a butter maker. At the February 25, 1928 meeting they hired Oscar Nelson at a salary of $125 a month plus ½ cent a pound for all the butter he made. The board also hired a helper, Carl Carlson, at $100 a month. The creamery planned to sell butter, milk, cream, and all dairy products, and to stay open on Saturday evenings.

Finances were the board’s constant consideration. At the February 20, 1928 board meeting, the directors decided to encourage more participation by revising the price of a share from $100 to $25. They planned the change to take place after the current shares had been collected or at the annual stockholders’ meeting in June. In order to buy a butter churn and a 300 gallon vat, pipe and sanitary fittings, they discussed a bank loan. Soon they needed additional equipment, so they compared interest rates at Harvey First National Bank and Fargo First National Bank. They chose the Fargo bank’s offer of 6 ½% interest with payments due every four months on a loan of $12,000. In addition, they bought insurance to cover the building, $4,000, and the machinery and equipment, $5,000. When the interest rate on the loan increases to 7% in October, the board had no choice but to pay it.

Each month the board set the price they would pay producers for the cream, actually butterfat. In April they paid 53 cents for grade one and 50 cents for grade two. The secretary did not indicate the quantity for each price. The price fluctuated from month to month and from year to year. In August 1928 the price for butterfat was 48 cents for grade one and 45 cents for grade two.

From time to time the board debated expanding the creamery business to include products in addition to those related to the dairy industry. As early as March 1929 they considered joining the Manfred Livestock Shipping Association but decided to wait to learn whether the Farmers Union in Harvey would organize a local association. In May the board weighed the idea of beginning a public relations campaign by putting a sign on the creamery building and having a booth at the Wells County Fair in Fessenden. During the summer they also decided to store ice cream for Harvey in the creamery at 50 cents a can handling fee. Toward the end of 1929 the board arranged to collect cream more efficiently from the various producers by setting up six centrally located stations.

THE GREAT DEPRESSION

Although the Stock Market had crashed in October 1929, the minutes do not indicate that it had any immediate effect on the Harvey creamery business.  Changes during 1930 related to establishing the new business more firmly.  Insurance coverage of the building and contents increased to $13,000, 80% of their value.  The board ordered, at Land O’Lakes’ request, 300 Christmas calendars to distribute free of charge.  In addition they contributed $5 to Harvey’s Fourth of July celebration and arranged to have a float in the parade.  In order to increase sales, the board took several steps:  The creamery added alfalfa seed to their line of products.  Because oleomargarine began to cut into butter sales, they bought newspaper ads to promote butter.  At the end of the year the board requested the city council to pass an ordinance to require that only pasteurized milk and cream could be sold in Harvey, thus insuring that the creamery would handle the milk and cream trade.  The city council took no action.

During 1930 personnel and personnel policies changed.  When the board fired Oscar Nelson, they hired a new butter maker, Rengstargf, at $100 per month plus ½ cent a pound of the butter made.  His salary was $25 a month less than Nelson’s had been.  They also hired Bratrof as helper at a $100 month but soon reduced his pay to $75 a month until business improved.  Evidently Rengstaf did not stay beyond a few weeks, and in April Land O’ Lakes recommended Mattson as creamery operator and butter maker.  The board paid him $125 a month plus ½ cent a pound of butter made.  Mattson also kept the books and made daily entries. Mattson’s helper received $40 a month, $60 less than Bratrof.  Mattson suggested that the board institute tighter controls on accounts and supplies inventory.  He resigned in September and John C. Woeste took his place at the same salary.  Faul became his helper at $50 a month plus ½ cent per pound of butterfat.  The board hired Miss Prom as bookkeeper at $45 a month; her salary increased to $50 in October.

During 1929 Land O’ Lakes formed District 40 in North Dakota consisting of six creameries: Harvey, Maddock, Martin, Drake, New Rockford, and Velva.  Land O’Lakes appointed a district field man to deal with all the creameries involved.  He advised them about various aspects of the dairy business and was the liaison between the creameries and Land O’Lakes.  Early in 1930 the Harvey creamery questioned Land O’Lakes’ payment for butter, and in January 1931 decided to check on the scoring. By this time the price of butterfat had fallen to 28 cents for grade 1 and 25 cents for grade 2.  The board wanted to compare butter payments of Land O’Lakes and a New York firm, Fox River Company, so they sent 5 tubs of butter to New York.  By late summer 1931, when the New York price was higher than the price Land O’Lakes offered, the board voted to send half their butter to New York and half to Land O’Lakes. Soon they were sending twice as much butter to New York than they were to Land O’Lakes. In less than a month men from Land O’Lakes “pleaded with the board and manager to again ship them all our butter.”
Cost cutting measures began in early 1931. The district field man suggested that the creamery discontinue cash cream stations because their cost of the cream was too high. The board cut salaries by $25 a month for the manager and $5 a month for the bookkeeper. As the Depression continued, wages and salaries decreased further. Even insurance coverage was reduced. For several years stockholders received no interest on their shares. The board had the books audited in-house instead of paying a Land O’Lakes auditor. The board even thought about asking prominent stockholders to co-sign notes already signed by the directors in order to strengthen the creamery’s credit. Milton Leetun, one of the directors, paid his own expenses as delegate to a Land O’Lakes convention.

Attempting to improve their business in 1932, the board decided to sell pasteurized milk and cream to stores and to go into the ice cream business. By July 1932 the price for butterfat had dropped to 14 cents for grade 1 and 12 cents for grade 2. The board continued to renew loans from the bank, but the creamery needed more money. Also in July, “A letter from Land O’Lakes stated that they were unable to give us a loan for refinancing the Creamery, so other means have to be made to satisfy our Creditors.” The board cut expenses by not paying the 1931 premium of $13 for wind insurance and by a “voluntary” pay reduction by several employees.

When the new president, Franklin D. Roosevelt, took office in March 1933, the Depression was worsening, and the Harvey creamery continued to have problems. Both Land O’Lakes and the New York firm’s butter prices were down. The board wrote a protest to Land O’Lakes. At the same time they moved to pay cream haulers 2 cents per pound for butterfat if they used their own trucks and took care of all expenses. Within a month they reduced the payment to 1 ½ cents a pound. New problems continued to appear. The creamery needed a new boiler, and it was bought through Land O’Lakes. By late 1933 the board sought a $12,000 government loan and arranged it six months later when creditors accepted the bank’s demands. In December 1934 creditors consented to loan arrangements and a committee of the board began the application process. St. Paul Bank for Cooperatives handled the loan. The board had to agree, for example, to check with the St. Paul Bank before they declared an annual dividend to the stockholders. The bank also wanted the creamery to restrict its business with non-members so that it did not exceed that done with members. In 1935 the board voted to divert old stock certificates for new ones in lesser denominations. Each old $100 stock certificate was divided into 10 shares at $10 each, reduced from $25 a share.

Beginning in 1935 the country saw some economic improvement, and the creamery’s situation also improved: some employees received raises; the board hired a second helper for the creamer; they repaid $4,000 bank note; and the creamery planned to sell wholesale ice cream at the county fair. When both Farmers’ Union and Land O’Lakes wanted the creamery’s turkey business, the board decided to give it to Farmers’ Union. However, it was not in effect by October 1936. Attendance at the annual stockholders’ meeting increased in 1935 after a decline during the previous years.

Although a “recession” that lasted from 1937 into 1938 set back the national economic recovery, it did not appear to affect the creamery, and the directors were able to liberalize employee policies. Beginning in 1938 the board agreed to pay for an annual banquet for directors and employees, and they instituted a vacation pay policy for the first time. The following year, they approved both payments of car expenses when employees and directors were on creamery business and used their personal vehicles and the manager’s home telephone bill because it was used mainly for creamery business. They also bought a rebuilt typewriter for the bookkeeper to use at home for creamery business. They ordered new equipment, including a truck and an automatic refrigeration unit for ice cream. Business was beginning to improve; during 1939 the creamery’s income doubled over that of 1938.

The coop did reduce some expenses during this time. Stockholders proposed to cut stock interest from 8% to 4% at the annual meeting in April 1938, and in 1939 the directors withdrew the creamery ad in the telephone directory. Expanding the creamery’s business to include meat locker cold storage was still under consideration in 1938. The board rented meat lockers for $10 annually, but they dropped the project temporarily when the public showed little interest.

During the second New Deal the Creamery had to operate under several new federal rules. By July 1937 the directors needed to learn more about the new Social Security tax of 1% to be levied on both employers and employees. The year before they had a problem with the internal Revenue Service regarding interpretation of regulations. When Congress passed the Fair Labor Standards Act in 1938, it affected all employers engaged in interstate trade, including the Harvey creamery. Initially the law provided that employees could work no longer than 44 hours a week for the regular wage and for time and a half wages for any work beyond that. Congress set the first minimum wage at 25 cents and hour. After a few years Congress reduced the maximum work week hours and increased the minimum wage.

WORLD WAR II

Entrance of the United States into World War II on 8 December 1941 involved the Harvey Cooperative Creamery in several national events. Renewal of the Selective Service Act earlier in 1941 meant that the board had to plan to replace any young male employees who were drafted into the armed services. As the country moved into full defense manufacturing, unemployment rates fell, and civilian companies increased wages and benefits to keep their employees or attract new ones. Manufacture and distribution of civilian goods declined in order to supply the armed forces and allies throughout the world. To curb inflation and to insure fair distribution of certain scarce civilian goods, the federal government established the Office of Price Administration (OPA) and the War Production Board, among others, and encouraged all Americans to save through the purchase of U.S. savings bonds or “war bonds.” After these policies went into effect, the board had to ask permission to increase wages and benefits and to engage in new construction activities or to buy certain pieces of Equipment. Several times during the war they bought savings bonds when they had surplus funds.

The government established a consumer rationing system for scarce civilian products, e.g., sugar and gasoline. Butter was also one to the rationed products, but the board secretary did not mention it in the minutes. Consumers received ration books for these items and had to surrender ration coupons when they were able to buy a rationed item such as butter. The amount that they could buy in a certain calendar period was controlled. Retailers had to turn in the ration coupons they received to the proper government office.

Throughout WW II the creamery business continued to improve, and on 14 March 1941 the Stockholders burned the mortgage. At the same time the board decided to save toward erecting a new creamery sometime in the future by setting aside 2% of gross sales for that purpose. In the meantime the board authorized repairs to the existing building and bought new, in some case different, equipment for the creamery. Repairs included new wiring, cementing the shed floor to store extra coal, roof repairs, replacing the brine machine oils, and applying a new coat of asbestos to the roof. Equipment changes included a used buttermilk drier, a used calculating machine, and a water softener, installing both a telephone and a warning system in the plant and adding a lean-to. To expand the business, stockholders agreed to invest in a meat locker plant in 1943; in June 1945 the creamery joined the North Dakota Frozen Food Association. However, three months later they sold the meat locker plant to Mr. Vernig for $16,000.

Several notations in the minutes refer to actions that the board of directors could take only after they had received permission from a particular federal agency. In 1942 food suppliers, including the creamery, were asked to increase their food production to aid the war effort, and the OPA allowed a one cent increase per quart in the price of milk. In addition there were new state regulations on milk prices in 1943. The board had to check with War Production Board before planning the purchase of materials to build a meat locker and storage building. They also had to apply for priority when they wanted to buy a new truck.

Before war wage and hour laws went into effect, creamery employees received several pay raises, including a 25% increase to all employees in March 1941 and additional increases the following year. In August 1942 the new guidelines established a minimum wage of $100 a month or back pay for lower wage workers. Faul and Woeste received pay raises, among others, in October 1942. The board hired an assistant bookkeeper to fill in for draftees at $75 month plus time and a half for overtime.  In April 1943 the creamery board established a new monthly wage schedule for all employees based on straight time, no overtime: Woeste $275, Virgil Woeste $125, Ray Zweigle $165, Art Conrad $160, Side $150,Bill $150, Mrs Rogstad $110, Lundberg $100, and new hire Fred Schnable $125 or 50 cents and hour. When Mrs Rogstad received less than she had requested, she refused it. The board finally paid her $125.00 a month with no overtime and no pay increase in 3 months.

When Woeste and his son Virgil resigned in May 1943, Art Conrad became manager and Ray Zweigle was promoted to plant foreman; their new salaries were $175 each. For the first time the board decided to grant annual vacation pay to all at the rate of 12 working days per year and 1 day sick leave with pay. In spite of employees’ wage requests, by May 1944 the directors had to follow the new wartime wage and hour law. Under this law an employee could receive a pay raise only if that person was being promoted. Thereafter the board had to seek a waiver for any other pay raise. The board asked the War Labor Board to clarify its wage and hour rules in February 1945.
In November 1943 Conrad brought in a labor contract that the board signed, but there are no details concerning it in the minutes. In August 1944 the American Federation of Labor (AFofL) signed up 7 of the 9 creamery employees, and in October the union presented a one-year contract to the board. Because employees had elected to join the union, the creamery was required under National Labor Relations Board (NLRB) rules to negotiate with the AFofL. Instead of appointing a committee to deal with the situation, the board called a special stockholders’ meeting in December. The stockholders voiced a variety of opinions. Some wanted to shut down the creamery rather than negotiate with the union, but the Land O’Lakes attorney explained that the law favored the union. The final vote directed the board to negotiate with the union and report the results at the next regular stockholders’ meeting. The next month the union representative was invited to the board meeting, but he could not attend. This is the last reference to union negotiations in the minutes.

It is interesting to observe changes in lifestyle and attitudes as they appear in the minutes. In January 1942 the board voted to end Sunday milk delivery. In April of the same year, “Calvin Schmike was asked to have his boy type 10 copies of the By-laws, so each Director may have a copy of same in their possession.” A few months later the board paid the Schmike boy $10 for his work. When the board planed the stockholders’ meeting at its February 1943 meeting, the secretary wrote, “Mr (left blank) requested that the wife of each Director be required to help serve at the (stockholder’) meeting. In June 1943 the directors decided to have the “office girls’” work week increased to 48 hours for the summer months. There is no mention of extra pay for the extra hours.

POST-WAR: MORE REGULATIONS AND PROSPERITY

The end of the war in August 1945 did not bring an end to federal regulations. As the nation began to make the transition from a war economy to a peace economy, scarcity of some products and fear of inflation continued. For example, the North Dakota Dairy Commissioner spoke at the 1946 stockholders’ meeting about the butter shortage and black market conditions, “as they exist.” When the board learned that the creamery’s boiler needed to be replaced, they asked the manager to check with the OPA on the ceiling price for the boiler. As late as 1951 the board could increase salaries only if the federal agency agreed.

Although Congress had established the Rural Electrification Administration in 1935, most North Dakota electric cooperatives were not established until after the war. At the stockholders’ meeting in April 1946 farmers were urged to sign up for REA. Preparing for the postwar period, Congress had enacted the Servicemen’s Readjustment Act or the GI Bill of Rights that provided veterans of WWII with education and training benefits as well as support to obtain loans to buy homes or establish businesses. The GI bill enabled the creamery to enroll 2 employees who were war veterans in education programs because the Veterans Administration paid almost half of their wages.

As restrictions eased and the financial state of the creamery continued to improve, the board of directors began a policy of paying an end-of-the-fiscal year bonus to employees. In addition, when the employees had to work on 4 July, they received double pay. In the early 1950s the board decided to supply male employees with uniforms and give equivalent cash amounts to female employees. The board continued to buy new equipment, as it was needed, such as a deep freeze cabinet to accommodate ½ gallons of ice cream for retail sale. The directors also bought 2 highway signs to increase the creamery’s advertising.

At the 1948 stockholders’ meeting serious discussion about a new creamery building began although construction did not begin for another 2 years. When stockholders agreed to capitalize the new creamery in 1948, the board began to cut back on expenses. In addition to the actual buildings, they wanted to buy a new site. When the board accepted a bid from Eian and Ness, the general contractor, for $52,381 for the first building, they advertised the old creamery building for sale. Construction on the second new building began in July 1951.

To pay for the new building, the board sought a loan from the St. Paul Bank for Cooperatives in 1951 that they repaid in 1954. During their 25th anniversary year the board looked into converting the heat source from coal to oil or butane gas. They also increased their butter promotion budget to $500, bought a butter printing machine and a soft cream machine to rent to the drive-in theater. That year’s bonus was 2 ½ % to all and a $25 a month bonus to the manager. They paid the same bonus in 1954 and invested a surplus $10,000 in government bonds. In 1958 they tried TV advertising for 6 months.
At a special board meeting in April 1962, the board heard that operating funds were low, so they would have to apply for a 6 months’ $20,000 loan at 6% interest. They also decided to cash $10,000 of series K government bonds. But they did pay $5 a month toward employees’ Blue Cross/blue Shield hospital insurance. They were required by the new federal minimum wages to between $1.25 and $2 an hour in early 1963, and they decided not to pay a dividend to the stockholders. To improve the creamery’s cash flow in 1962 the board announced that all accounts would be due at the time of delivery. If an account was overdue more than 30 days, there would be a 6% interest charge. To pay for many new pieces of equipment, in 1964 the board borrowed another $15,000 for 6 months at 6% interest. However, they had to work out a new repayment plan at the end of 6 months. In February of that year the auditor informed the board that the books showed a deficit of $7,459.97. The secretary provided neither a reason for the deficit nor any information in later minutes concerning how the deficit was made up. The board took some measures, though, to economize. They delayed buying life insurance for employees and decided at the end of the year to pay sick leave but not an end-of-the –year bonus.

The next year, 1965, found no improvement in the creamery’s finances. There was a fire in the creamery storage rooms in January. In February, there was a bank overdraft, and the board fired Manager Larsen and changed the combination on the safe. Then they rehired Ray Zweigle temporarily. Although Zweigle told the directors his opinions concerning the creamery’s problems, the secretary did not record them. At the March stockholders’ meeting the board announced a ‘readjustment period” and asked for support from the Harvey community. For example, the board wanted to apply for a long term loan from the First State Bank of Harvey.

WINDING DOWN

The board was having trouble keeping a manager. From the evidence it seems that they actually wanted to hire Ray Zweigle as a permanent employee and were willing to pay him more than they offered other managers, However, Zweigle owned his own business in another community and had trouble selling it. Therefore, he was available only on an interim basis.

By the last half of 1965 board meetings increasingly focused on the creamery’s problems. At different times the auditor and the Land O’Lakes representative gave the board reasons for these problems: they needed to sell more dairy products; their electric and fuel bills were too high. In early 1966 the board considered consolidating with the Maddock Creamery. In 1967 the board discussed working with either Bridgeman Creamery or Foremost Dairy, finally choosing the former. At other times they discussed adding another operation to their facility, for example, Green Spot Orange drink, Tastee Freeze, or buying the McClusky Creamer. Throughout this period the directors also extended the balances on their bank loans or refinanced them.

At the annual meeting in March 1969 the stockholders agreed that it was time to sell the creamery. They hoped that the new owner would continue to operate the creamery business. Ray Zweigle and two partners, Wayne Fossum and Lyle Weist, bought the Creamery in late 1969. Within two years they converted it to cheese manufacturing, Zweigle sold out to his partners and opened the Harvey Dairy. The original corporation was not dissolved until 1991-2.

                HARVEY CREAMERY COOPERATIVE DIRECTORS  
                                                                Compiled by J. Beltran 1.16.2001
SOURCES: Minutes and Growing With Pride;
Anderson, K                                                       McKinven, James
Anderson, Perry                                               McKinven, Matt
Block, Jacob                                                        McKinven, Robert
Dybing, Clarence                                              Melby, Arthur
Eglund, P. J.                                                        Neuharth, Erwin
Deck, Frank                                                        Nutz, Art
Faul, Edwin                                                         Ongstad, Herbert
Faul, Gideon                                                      Peters, George 
Faul, Wayne                                                       Prom, Laurence
Freeh, Edwin                                                     Prom, Leo
Frost, Alfred DeWitt                                       Putz, Bennie
Frost, Stanley                                                    Rasmussen, Fred
Frovig, O.K.                                                         Reimche, John
Goldberg, S.S.                                                   Roble, Olaf
Helgerud, H. H.                                                 Rosendahl, Peder
Jensen, O.L.                                                       Schmidt, Fred
Johnson, J.A.                                                     Schmike, Gideon
Jorgenson, John                                                               Schmike, Herbert
Leetun, Milton                                                  Schmike, Otto
Mayer, Gordon                                                 Schmitz, Eugene

Box / Folder Inventory

Box 1:
1 Minutes                                         1928-1935 
2 Minutes                                         1928-1946 
3 Minutes                                         1946-1949 
4 Minutes                                         1950-1954 
5 Audit Report                                  1965         
6 Inserts from 1958-1991 Minute book 1958-1991     
7 Minutes book                                1958-1991 

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