Coop Head Claims Tax Move Will Fail

A move to tax co-operative associations for the refunds they pay to members was given little chance for success yesterday by Dean Stanley F. Teele of the Business School, director of the Harvard Coop.

Initiated last Friday by several corporations in Chicago, the move would force co-operatives to pay taxes on money they return to their members, just as corporations pay taxes on dividends they pay out. Teele explained that the refunds are not like dividends, but are actually "part of the price paid" for purchases by the recipient.

Replying to statements by Chicago businessmen that the tax-free refund allows co-ops to undersell them, Teele claimed that this is not true in the case of the Coop. "We meet competitive prices" of Cambridge businessmen, he said.

Teele pointed out that like movements have been started in the past, and have made no progress, since they would be hurting the large and powerful farmers' co-operatives in the Mid-West.