MANZANAR Historic Resource Study/Special History Study

MANZANAR COOPERATIVE ENTERPRISES, INC.

Operating Agreement

During 1943-45, Manzanar Cooperative Enterprises was owned, operated, and managed entirely by the evacuees under the terms of an operating agreement executed with the WRA. The operating agreement between the WRA and Manzanar Cooperative Enterprises, Inc., was executed on March 1, 1943, approximately five months after the Cooperative assumed control of the business. The operating agreement reflected the general pattern determined by the WRA for all cooperatives in the relocation centers as expressed in Administrative Instructions Nos. 26 and 27, and their supplements, and in Section 30.7 of the WRA Manual. The agreement provided:

1. The Cooperative was given a license to operate all private enterprise exclusively within the center.

2. The WRA was to make available necessary space and buildings — to be kept in repair by the WRA — for the operation of the business.

3. The WRA would render financial, legal, personnel training, and other similar services whenever such was feasible.

4. The WRA would provide assistance in establishing working relations between the Cooperative and outside business concerns for procurement of merchandise and operation of its business.

5. The Cooperative would conduct its business in accordance with WRA directives.

6. The Cooperative would select its employees through the WRA personnel section and pay them at project rates, plus clothing allowances, and would pay sick and unemployment allowances.

7. Motor vehicles would be assigned to the Cooperative from the motor pool at cost of operation.

8. The Cooperative books and records should be open at all times to appropriate WRA officials.

9. The Cooperative would provide adequate surety bonds for employees designated by the WRA.

10. The Cooperative would pay all taxes and assessments due under the laws of California and the United States.

11. No members of the Cooperative Congress should be allowed to benefit financially under the provisions of the agreement.

12. The agreement was subject to cancellation upon 30 days' notice by either party.

The operating agreement remained in force during the entire period that the Cooperative was in business at Manzanar. The only changes made were in the minor adjustment of charges for use of WRA vehicles. [62]

Facilities

As the Cooperative business expanded more facilities, supplies, and personnel were needed, including floor space, equipment, employees, materials, and supervision. At the time of its greatest need, it was not possible for the Cooperative to have the amount of floor space required. As the population in the center decreased and more space became available, however, this need diminished. Managers of the Cooperative, as well as many evacuees, hoped that a shopping center would be provided by erection of buildings in one of the center's firebreaks. This plan was never realized, however, because of labor and material shortages. Another proposal for moving several barracks to a firebreak for reconversion into a community shopping center did not materialize because of labor shortages.

Thus, the Cooperative established services in scattered locations throughout the center as space became available. At the time of its greatest expansion, the Cooperative employed 237 evacuees and rented seven barracks and six ironing rooms from the WRA. The rental rate was 28 1/2 cents per square foot per annum for barracks provided with heat, light, power, water, and rubbish removal services, while the rate for unheated warehouses was 23 1/2 cents per square foot.

Dispersal of operating units throughout the center required more supervision, travel, trucking, and duplication of equipment and personnel. For the evacuees, it meant more traveling, confusion as to where each service was located, and loss of time by not being able to perform several errands in a short trip. However, as the population of the center continued to decrease, and as the date for closing the camp approached, there was neither the need for, nor a justification of, expenditures for establishing a shopping center.

Procurement

When the Cooperative was established and took over the business of Manzanar Consumer Enterprises on October 1, 1942, it found a well-established procurement system under the direction of a purchasing agent. Contacts had been made, credit established, goods ordered, and plans developed for purchase of goods to be sold through the various branches of the business still to be established. An operating surplus of nearly $40,000 was already available and was turned over to the Cooperative by its predecessor. Procurement was centralized under the authority of the assistant general manager, who was administratively responsible as purchasing agent to the general manager and acted upon the recommendations of the department heads.

Manzanar Cooperative Enterprises became a member of the Association of California Cooperatives and the Associated Cooperatives of Northern California and joined in establishing the Federation of Center Enterprises. These actions enhanced its credit rating and purchasing contacts and enabled management to secure some goods previously unobtainable.

For some time, many items either could not be purchased on the open market or were very difficult to get in sufficient quantities. Commodities, such as potato chips, soft drinks, candy, and other confections were among the articles that were difficult to obtain.

Manzanar was a new customer in a wartime economy that had numerous shortages of material goods, and dealers generally extended preferential treatment to established accounts. Manufacturers or processors insisted that the local ration board or regional board take steps to augment their supplies of sugar or fats to make it possible to provide for the needs of Manzanar. Such actions were not taken until the Washington office finally intervened and rendered assistance. Over a period of many months, more of these items made from fats and sugar were on sale in the center's canteen, but, as in stores throughout the United States, never in such quantities to meet the demand.

A scarcity of yard goods, clothing items, and shoes also posed problems for the Cooperative at Manzanar. At first, only odd lots of shoes exempt from rationing could be handled, because the Manzanar evacuees did not have shoe ration stamps. In time, this problem eased as stamps were issued to evacuees on the same basis as civilians in the general population, and the supply. type, and quality of shoes in the center improved.

The Manzanar Cooperative was unable to send out buyers in the usual manner of mercantile establishments. At first, WRA travel restrictions on evacuees did not permit them to leave the center at all and later only with approved escort. Purchasing by mail and telephone from Manzanar did not meet the needs of either vendors or consumers. When the Federation of Center Enterprises was established, a procurement office was established in New York City. Three buyers were employed, thus enabling the Cooperative to procure many items that had been unobtainable until that time.

In 1944, the Manzanar Cooperative sent two of its officers, the general manager and the treasurer, to Chicago to attend a joint WRA Cooperative meeting. While there, the representatives contacted firms for the purchase of goods. After the representatives returned to Manzanar, a Miss Watanabe, one of their contacts who had relocated from the center, telegraphed that she had located some desired merchandise, but that the vendor wanted cash before delivery. The representatives quickly sent the sum of $2,500 to complete the purchase. Neither the goods nor the refund ever arrived at Manzanar, and there were no further contacts with the former evacuee. Thus, officials at Manzanar concluded that the money was embezzled.

Merchandising Methods

Prior to its transfer to the Cooperative, the management of the canteen consisted of evacuee men experienced in merchandising. Some of these men, and many trained by them, were carried over into the new management. Stocks and inventories had been built up to a value in excess of $46,000 at the time of the transfer from Manzanar Consumer Enterprises on October 1, 1942.

The general manager of the Cooperative, acting under the authority of the Board of Directors and the Congress of Delegates, was responsible for the determination of merchandising methods. Each of the eventual 16 operating units of the Cooperative had a department manager, assistant, and sale clerks.

As goods arrived at Manzanar, they were sent to one of the Cooperative's three warehouses located to the east of Blocks 2 and 3. As they were requisitioned, goods were delivered from the warehouses to the department managers.

The usual methods of competitive display and sales techniques were not used by the Cooperative at Manzanar, since there were no competing private enterprises and store space was not available for display purposes. Residents could not leave the center to shop in neighboring towns, although they could and did purchase goods through mail order channels. Although there was little need for advertising, evacuees were informed as to what was available in the Cooperative establishments through the Manzanar Free Press, the camp newspaper that was partially subsidized by the Cooperative.

The mark-up on goods sold by the Cooperative varied with the nature of the item and frequency of its turnover. The general mark-up for most items was between 15 and 25 percent, although it was lower on some merchandise that sold readily.

At times there was a financial loss for services such as those furnished by the shoe repair, barber, and beauty shops, because these services could not be performed at a profit for the price the community was willing or able to pay. Such losses were rectified in subsequent periods by an increase in prices for other services or by increased mark-ups in other departments, such as the canteen and general store.

As the population of the center declined in 1945, the Cooperative reduced its stocks and inventories which had reached a peak of approximately $100,000. On September 15, 1945, the stock of the canteen was transferred to a private group who agreed to operate the business for the remaining weeks of the camp's operation. Similar arrangements were made with the fish market, barber, beauty, shoe repair, and watch repair shops, photo studio, and other departments which were still in demand. Following the withdrawal of the check cashing service on September 21, checks were cashed on a restricted basis by the WRA finance office. Motion pictures were discontinued in early November 1945. The general store disposed of its stock via a clearance sale which lasted for more than a month, and the remainder was sold to vendors or jobbers. Thus, the Cooperative membership took only a small loss in liquidating its stock. The administrative offices were closed per resolution of the Congress of Delegates on November 15, and the books, records, and office were transferred to Los Angeles where the remaining business negotiations were to be concluded.

Patronage Rebates

During the period from May 24 to October 1, 1942, when Manzanar Consumer Enterprises operated the center's canteen, a total of nearly $40,000 had accumulated as undivided profits. After the Cooperative took over Consumer Enterprises on October 1, it was to determined to apply this amount toward paid up memberships to all evacuee residents of the center who were 16 years of age and over. This decision, together with future rebates to be declared, was more than sufficient to give the 7,000 adult residents at Manzanar their membership certificates. Additional rebates were declared periodically and paid in the form of cash orders and/or free services redeemable at any of the Cooperative branches. The total rebates for the three years that the Cooperative was in business amounted to more than $150,000.

Following April 1, 1945, no further rebates were declared in anticipation of liquidating Cooperative costs and losses. As of November 13, nearly $7,000 remained in the reserve fund to meet the costs of liquidation. The balance, after all liabilities were met, was to be donated at the discretion of the three trustees to a charitable or philanthropic organization.

Services

When Manzanar Cooperative Enterprises took over the business on October 1, 1942, its administrative offices were housed in one barrack in Block 1. Its services included a canteen located in one barrack in Block 8, a fish market in the ironing room of Block 8, and a general store in one barrack in Block 21. In addition, the Manzanar Free Press was subsidized, and motion picture showings were conducted for camp residents. In late 1942, an outdoor theater was constructed in the firebreak between Blocks 20 and 21 with funds provided by the Cooperative for showing of motion pictures free of charge. During October, the Cooperative established check cashing services in its administrative offices in Block 1, a barber shop in the ironing room of Block 21, a beauty parlor in the ironing room of Block 15, and a mail order service in the ironing room of Block 10.

In January 1943, a shoe repair shop and laundry services were opened in the ironing room of Block 10. Because the work involved in going to the block laundry rooms to wash clothes took more effort than some residents were capable of, or willing to undertake, the WRA had made arrangements with a commercial laundry in a neighboring town to receive work from Manzanar. Because of the inability of the commercial laundry to continue its service and the diminishing amount of work to be done, the laundry at Manzanar was closed in February 1945.

In April 1943, a photo studio was opened in the ironing room of Block 30. All types of photographs were desired by the evacuees, and commercial photographers seldom came to the camp. Cameras were not allowed in the hands of the evacuees at Manzanar except toward the end of the camp's existence. Thus, the Cooperative established a photo studio to centralize photographic services. It became necessary to pro-rate the appointments among the blocks so that all persons would have an opportunity to have photographs taken. The charges were nominal and the service provided by Toyo Miyatake, who had operated a photographic studio in Los Angeles prior to evacuation, was considered "excellent." The studio performed all the work for the school annuals as well as a considerable amount for WRA administrators.

In May 1943, an American Express Company travelers check and money order service was opened in the Cooperative's administrative office in Block 1 to meet the growing needs of those relocating from the center or going out on other types of leave. To meet the demand for artificial flowers for special occasions and sporting goods for the expanding athletic programs at Manzanar, a flower shop and a sporting goods shop were opened in Block 16 in May 1943, and a watch repair shop was established in the ironing room of Block 10. In April 1944, a sewing/dressmaking shop was opened in the ironing room of Block 32. At first, no private sewing machines or other personal equipment were allowed in the center, and the WRA did not provide sewing equipment. Later, however, evacuees were allowed to have their sewing equipment sent to them, and the WRA set up sewing machines in each block under the supervision of the block managers. These machines, however, did not take care of the instances when sewing was performed for hire. The Cooperative sewing shop did not last long, however, because seamstresses could make more money by sewing privately, and customers could save accordingly. The shop was unable to survive the competition presented by "private enterprise."

In May 1944, a gift shop was opened in one barrack in Block 16. Many arts-and-crafts items were made by evacuees in their quarters or in the shops or classes established throughout the center. Because all private enterprise was to be carried on through the Cooperative, a need arose for establishing a shop where such items could be sold at uniform prices. As a result, the gift shop was opened. Makers of articles consigned their products to the shop which established a 15 percent mark-up plus sales tax. However, many makers and buyers resented this 15 percent mark-up and the sales tax when the same or similar articles could be bought on the Manzanar "black market" minus both charges. The gift shop continued to lose money and was finally turned over to the community activities section in December 1944 and operated under a license from the Cooperative. Articles sold in the shop included getas, zoris, embroidery, needle work, sweaters, hand-made clothing, novelties, toys, furniture, water and oil prints, and pencil sketches.

A private employment services unit was opened in the administrative office in Block 1 in June 1944. From the outset, there was demand by evacuees for private employment of evacuees for personal services such as laundry, sewing, and child care. Appointed personnel also desired to employ evacuees for household duties, including cooking, child care, and other personal services. At first, no controls were exercised over this employment in terms of work hours or compensation Eventually. however, the consumer enterprises division in the Washington office issued instructions that all private employment be channeled through the Cooperative and that wages were to conform to those paid for comparable services in neighboring communities. The worker, however, would receive only the regular WRA wage and clothing allowance. The balance of the pay would be retained by the Cooperative to supplement its profits. These instructions were met with widespread opposition and non-compliance, and six months after its inauguration the plan was officially discontinued. [63]