A descriptive history of the grain elevator bankruptcy problem in the Midwest, 1974-1983
Danekas, Kathryn Gorenz
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This thesis is a descriptive history of the grain elevator bankruptcy problem occurring particularly in the Midwest, 1974-1983. An upsurge of the bankruptcies points to the need for legislation to protect the farmers and help grain dealers to avoid declarations of bankruptcy. This review explains the historical and present grain marketing aspects, laws governing warehousemen and grain dealers (i.e., Illinois), causes and effects for the bankruptcies recorded thus far and protection measures for producers. Also reviewed are two cases of grain elevator bankruptcy. First, the James Brothers elevator (Ristine, MO) controversy involving Wayne Cryts. This was historically significant as Cryts "stole" stored soybeans from the bankrupt warehouse where the beans had been determined as property, or a distributable asset of the James Brothers elevator. This "robbery" was a peaceful rebellion by Cryts, accompanied by thousands of farmers, calling for changes in the present bankruptcy laws governing grain elevator insolvency. The second case of Gorenz Grain Company, Hampshire, IL, is a look at the factors leading up to its bankruptcy that occurred January, 1973. The subsequent five years of bankruptcy court proceedings and samples of the newspaper coverage (possibly libelous) are provided. A lack of information was found concerning the problems grain dealers must cope with. The chapter on the Gorenz case furthers understanding of this aspect. Methods of research were observation, library search, interviews, phone conversations, letters and supporting documents. The farmer's plight was found to be quite serious and a need for helpful but prompt legislation is mandatory. These elevator bankruptcy cases take years to settle, leaving the farmer dangling with loss of income (which is often needed to plant next year's crop). The lengthy proceedings cost the farmers money in legal fees, also. The comparison of leaving grain at a local grain elevator to a savings account deposit is mentioned. The rights of ownership have been violated for farmers, as they cannot be guaranteed payment or return of their deposited grain in the event of an elevator bankruptcy. Public awareness of the problem, legislation and stricter grain dealer management are things needed to lessen the effects of this economic tragedy.