264 Cooperation in Agriculture 



rights, as well as canals, pipe lines, pumping plants, reser- 

 voirs, and such other works as might have been constructed 

 by the parent company. The parent company would 

 then reimburse its treasury by selling shares of stock in 

 the mutual company, together with land, to settlers. 

 In this way the control of the mutual company, which 

 originally rested in the parent company, passed to the 

 settlers as soon as more than one-half of the shares had 

 been sold. 



"Other mutual companies were organized by land- 

 owners directly, who associated for the development of 

 water resources and the construction of irrigation works. 

 In such cases the systems were built a little at a time and 

 not completed for several years after the work was begun, 

 this being the result of the way funds were secured for 

 construction. Funds have been raised by subscribing 

 capital, by direct assessment of the capital stock, by small 

 loans and by bonds. In a few cases the settlers cooper- 

 ated in building works by their own labor. Bond issues 

 must be authorized by a two-thirds of, and must not 

 exceed the amount of, the subscribed capital stock. Mu- 

 tual company bonds are not as marketable as municipal 

 bonds except where the issue is large enough to justify 

 special investigation of the project by bond buyers. 

 Bonds of small mutual companies have been disposed of 

 through contractors doing the work for which the bonds 

 were issued. Banks frequently loan money to mutual 

 companies of recognized standing on corporation notes 

 and to new mutual companies, provided the notes are 

 indorsed by directors or stockholders personally able to 

 furnish the required security. Some of the most efficient 



