160 COOPERATION 



The great industrial corporations likewise cooperate widely 

 with the agricultural industry. The International Harvester 

 Company, Deere and Company, the Universal Portland Cement 

 Company, and many other large concerns now conduct experi- 

 mental farms, maintain agricultural departments,, issue literature, 

 furnish speakers, and in many other ways cooperate with the 

 farmer in bettering his financial condition. 



In the same broad sense of the term cooperation, the State and 

 federal governments cooperate with the farmer, through the Experi- 

 men+ Station, Agricultural Colleges, Departments of Agriculture, 

 the Federal Bureau of Markets, and numerous other agencies. 



Cooperation; in Narrow Sense. As used in a narrower sense, 

 cooperation means that form of business organization among 

 farmers whose primary aim is savings and net profits. To carry 

 out this aim our States have very generally enacted laws providing 

 for the incorporation of farmers' cooperative associations. These 

 cooperative corporations, while all aiming at economies and 

 elimination of wastes, rather than at profits, fall into two general 

 classes: those with capital stock and those without capital stock. 

 The majority of States provide only for the capital stock type of 

 organization. A few States provide for both forms. In either 

 event, the true cooperative corporation must meet with one test, 

 namely, its " earnings" (more correctly its savings) must be dis- 

 tributed to those whose business produces these earnings, and in 

 some fair proportion to the business done. In other words, in 

 case the cooperative corporation has capital stock, only a fair 

 interest rate must be paid to stock in the form of dividends (usually 

 from 6 to 8 per cent), and the balance of the net earnings, if any, 

 to those patrons whose business produced the earnings. It has 

 been customary, in many quarters, to lay down three hard-and- 

 fast rules or " essentials" for pure cooperation, namely: (1) One 

 vote for one member regardless of the amount of stock held. This 

 is known as the one-man-one-vote rule. (2) Distribution of earn- 

 ings: dividends on capital stock limited to fair interest rate; 

 patronage dividends on basis of business done by individual. 

 This is known as the patronage dividend rule. (3) Limitations 

 on shareholding: limited to real farmers; limited as to amount any 

 one person can hold, such as, for instance, $1000 per person. If 

 these rules are construed strictly, then the United States affords 

 but very few examples of successful cooperation. In almost every 

 conspicuous case of success one or more of these elements is lacking. 

 The real test is, who shares the benefits? If the benefits (whether 



