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FUNDAMENTAL PRINCIPLES OF CO-OPERATION IN 

 AGRICULTURE. 



By G. Harold Powell. 



{Circular of College of Agriculture, Uiiii'ersity of Calif ur)iia.) 



The cooperative organization differs fundamentally from the 

 capital stock corporation conducted for profit. A capital stock 

 corporation for profit is organized to return an earning and a 

 profit on the capital used in the business. The basis of admin- 

 istration, control and the distribution of earnings is the capital 

 invested in the undertaking. In a cooperative organization, the 

 basis of control is the membership, where each votes equally irre- 

 spective of the volume of his business; though the basis of con- 

 trol is often made the product of the members, where each votes 

 in proportion to the volume of business contributed, while the 

 earnings in either case, if they occur, are returned to the member 

 m proportion to the volume of business he transacts through the 

 organization. The basis of the cooperative organization is men ; 

 of the capital stock corporation, money. Capital cannot co- 

 operate; products cannot cooperate; only men can cooperate. 

 When the degree of cooperation of a member is measured by 

 the capital or thp volume of business contributed, then the mem- 

 bers as men are not cooperating; either capital or a product is 

 the basis of cooperation through the member as the medium. 



CONFUSION IN THE USE OF THE TERM " COO PER AT ION." 



There is much confusion in the use of the term "cooperation" 

 as applied to agricultural efforts. It is commonly applied to any 

 group of farmers who associate themselves together. They may 

 organize as members of a voluntary unincorporated association 

 of individuals; or as an incorporated capital stock association to 

 handle farm crops for profit or for other purposes, or as non- 

 l^rofit corporations without capital stock. In California, for 

 example, the term is apjjlicd to both profit and non-profit corpor- 

 ations organized to handle farm products, whether organized and 

 controlled by the jjroducers themselves, or by others. In other 

 ]}arts of the country, the same uncertain use of the term is aj)- 

 ])lied to various kinds of agricultural movements. Tlic term 

 needs to l)e defined by the federal ami slate statutes. It is bc- 

 lievcfl that its use as a])])lit'd to business organizations in agri- 

 culture should be restricted 1(» incitrporated associations, societies. 

 exchanges, or agencies which are formed exclusively for the 

 benefit of the members; whose voting jiower is based on ecjuality 

 of membership; whose membership is confined exclusively to 



