384 Journal of the Department op Agricultdre. 



The Co-operative Associations formed with unlimited liability, 

 and registered under our Co-operative Acts, are, of course, entirely 

 co-operative, in that they are associations formed exclusively for the 

 benefit of the members, whose voting power is based on equality of 

 membership, whose membership is confined exclusively to producers, 

 and whose earnings are distributed on the basis of the product. This 

 cannot be said of all the limited liability co-operative associations in 

 the Union registered under the Companies Acts of the different Pro-, 

 vinces. Some of these are masquerading as co-operative associations, 

 hui are in reality conducted for the benefit of the shareholders rather 

 than for that of the producers, and cannot therefore be termed co- 

 operative . 



The true co-operative association formed with limited liability 

 differs fundamentally from the ordinary joint-stock company conducted 

 for profit, and nothing marks the difference between the two so clearly 

 as the division of profits. 



In an ordinary joint stock company a distribution of profits woiild 

 take place in direct proportion to the capital invested if it should 

 appear as the result of the year's business that there was a surplus after 

 paying all just debts, and making proper allowance for depreciation of 

 property, and also generally after an allocation of a pi'oportion of the 

 profits to the Reserve Funds. In a co-operative association witli 

 limited liability, on the other hand, such surplus is returned to the 

 member in proportion to the volume of the business transacted by him 

 with the association, after, of course, a fair rate of interest is paid for 

 tlie use of capital actually employed in the business. 



Another important point of difference between a limited liability 

 co-operative association and an ordinary joint-stock company is the 

 method of voting. In the latter the voting is conducted on a money 

 bosis, and the man with the largest monetary interests controls the 

 affairs of the company, whereas in a co-operative association the voting 

 power is based on the equality of membership, i.e. on the principle 

 of " one man one vote," and no proxies are allowed to be issued. This 

 serves as an effective safeguard against the concentration of power in 

 the hands of one man or of a few. The history of the co-operative 

 movement in Europe shows that this fundamental principle is sound. 



Tliese are two of the most important principles which distinguish 

 a co-operative association from an ordinary joint-stock company. 



The remarks which follow are applicable to both forms of co- 

 operative associations, whether formed with limited liability or un- 

 limited liability. 



The history of co-operation in Euiope and in the several other 

 countries where co-operation means so much to the farmers to-day 

 that they cannot possibly do without it, shows that, especially in the 

 beginning, great difficulties are to be contended with. One of these 

 difficulties is the strong opposition with which the co-operative move- 

 ment is confronted wherever it is commenced. The co-operative 

 association, as a rule, is calle<l upon from the very beginning to com- 

 pete with persons oi- organizations whose interests are affected by it. 

 Every conceivable form of misrepiesentation will be levelled against 

 it, and every other weapon known to competition will be utilized to 

 put it out of business. 



This opposition we have experienced to a certain extent in this 

 countrv also. 



