24 Cooperation in Agriculture 



evolution in its adjustment to modern social and ecc* 

 nomic changes, and that the business of the farmer must be 

 handled collectively rather than individually if the farmer 

 is to share equitably in the increasing prosperity which 

 the better organization of all kinds of industry has brought 

 to the country. 



THE ORGANIZATION SHOULD BE COOPERATIVE IN FORM 



There are two systems under which a farmers' business 

 cooperative association may be formed. It may be in- 

 corporated as a non-profit corporation where the laws of 

 a state provide for corporations of this character; or it 

 may be formed as a corporation for pecuniary profit with 

 a limitation placed upon the rights of the stockholders 

 and the methods of distributing the surplus earnings, the 

 method of regulating the rights of the stockholders and 

 the surplus earnings being defined by the statute, or the 

 right to regulate them being conferred by the statute on 

 the corporation through the by-laws of the association. 

 If the association is formed as a corporation for pecuniary 

 profit where state laws permit, the capital stock should 

 receive but a limited rate of interest, usually not more 

 than the customary interest rate, each stockholder should 

 generally have only one vote with no proxies, or the votes 

 may be proportional to the amount of product contributed 

 by each member; no one stockholder should hold more 

 than a small percentage of the stock without the consent 

 of the corporation ; and the net proceeds of the sales of 

 products should be distributed pro rata on the products 

 contributed or on the purchases of each member. 



If formed as a corporation \vithout pecuniary profit, 



