70 Cooperation in Agriculture 



that is essential if the central agency is to develop the 

 most reliable and comprehensive marketing plan. 



The Organization of a Federation 



In some of the states, central agencies have been formed 

 under the laws which permit the consolidation of corpora- 

 tions formed for pecuniary profit. The laws of most of 

 the states do not provide for the consolidation of coopera- 

 tive associations into central federations which operate 

 on cooperative principles. The right to form these cen- 

 tral agencies should be incorporated in the laws of every 

 state. If the organization is formed to bring about the 

 advantages of the cooperative plan, it may operate with 

 a reasonable degree of satisfaction even under the form 

 of a stock corporation for profit. Usually, however, 

 these central agencies are formed as stock corporations 

 for pecuniary profit, and, like any other corporation of 

 this type, the stockholders are primarily interested in 

 dividends rather than in the general welfare of the farmer. 

 To illustrate, an organization has recently been formed 

 to act as an agent for individuals and for associations in 

 selling fruit and vegetables. Prominent fruit-growers 

 have become directors, under the supposition that it is 

 formed as a cooperative organization. In reality, it is 

 a stock corporation formed among the fruit-growers by 

 men whose object is to make money by handling the 

 growers' products. The majority of the stock is held by 

 the officers who organized it and who were former fruit- 

 dealers. The voting power of the stockholders is pro- 

 portional to the amount of stock held. Therefore, the 

 promoters control it. Dividends are declared and paid 



