COOPERATIVES: EARLY PHASES 65 



had preceded it. Of the two laws, the Wisconsin statute was newer and 

 broader in concept in some ways and had wider influence, serving even- 

 tually as the basis for similar legislation to be adopted in a dozen other 

 states. It provided that any number of persons greater than five might 

 organize for cooperative purposes; that the shares of each stockholder 

 were not ordinarily to exceed one thousand dollars ; that each stockholder 

 was entitled to only one vote, which might be cast by mail ; that dividends 

 were paid in proportion to patronage; and that only associations living 

 up to these provisions might designate themselves as cooperatives. The 

 Nebraska law was mainly short and permissive, but it laid down the re- 

 quirement that earnings be distributed "in part or wholly on the basis of, 

 or in proportion to, the property bought from or sold to members, or of 

 labor performed, or other service rendered to the corporation." 1 



The farmers, to qualify for the special treatment they obtained under 

 these laws, had to satisfy the legislators of two things: first, that their 

 associations and business agencies were not monopolies; and second, that 

 the farmer's calling was unique compared with other businesses and hence 

 was in need of special legislation to survive. There was an abundance of 

 evidence on both points. It could easily be demonstrated that all efforts 

 to perfect monopolies in the major agricultural industries were sure to 

 meet with insurmountable difficulties. Open membership in the associa- 

 tions militated against monopoly. The inevitable tendency of millions 

 of small producers to increase their output with the rise of prices also 

 worked against monopoly. Lack of capital and problems of geography 

 made monopoly practically impossible. As for the second point, farming 

 was "different." Other industries enjoyed the benefit of concentrated 

 production under single management in a factory system, whereas the 

 farmer was isolated in his work. As a bargainer, the farmer was inex- 

 perienced; he was "ignorant of his fellow farmer's operations, of the 

 quality, the grade, the character of the general crop, of his foreign and 



17. Bakken and Schaars, The Economics of Cooperative Marketing, p. 272; 

 Edwin G. Nourse, The Legal Status of Agricultural Cooperation (New York, 1928), 

 pp. 46-47; Nourse, "The Growth of Cooperative Law," Cooperative Marketing 

 Journal, I (December, 1926), p. 10; Hanna, Law of Cooperative Marketing Associa- 

 tions, pp. 31-33; B. H. Hibbard, "Agricultural Cooperation," University of Wis- 

 consin Agricultural Experiment Station, Bulletin 238 (Madison, 1914) [see pages 

 23-31 for a copy of the Wisconsin law of 1911]. 



