Fundamentals in Cooperation 31 



tween the association and its members is essential to the 

 development of a stable cooperative enterprise. Unless 

 otherwise provided, the agreement should give the asso- 

 ciation the exclusive right to handle the products of its 

 members, or exclusively to supervise or execute or regulate 

 such functions for the members as it is organized to per- 

 form. The idea of the cooperative organization should 

 be broadly democratic. Each member should be allowed 

 to exercise the fullest discretion regarding the production 

 of his crops, and the handling of such questions as do not 

 conflict with the fundamental principles of the organiza- 

 tion. On the other hand, the association must know 

 definitely what it is expected to do, including the volume 

 of business it is expected to transact, and with that in 

 view, it should have an agreement with its members 

 setting forth in detail the relations and responsibilities 

 existing between each member and the organization. 

 The agreement or the provision in the by-laws should 

 provide that an assessment be levied against every mem- 

 ber in lieu of liquidated damages whenever its provisions 

 are broken. The membership agreement is the founda- 

 tion stone on which the stability of a farmers' cooperative 

 business association is reared. Without it no association 

 can hold its membership together when competing in- 

 terests become active, nor can it attain the degree of 

 stability that is essential to a business undertaking. Ex- 

 perience has shown that those associations are likely to 

 fail that depend on the honor of the members alone to 

 hold them together with no binding legal obligation in 

 addition. In some of the California citrus fruit organiza- 

 tions, the membership agreement provides that twenty- 



