2O MANAGEMENT OF DAIRY PLANTS 



secured by the association. This loan may be made by a bank 

 or by individual members of the association. If the money is 

 borrowed from a bank or a loan association, such an institution 

 will naturally demand security. This is given by the members 

 of the creamery association in the form of individual notes or 

 joint notes which are held by the bank as collateral. The in- 

 terest on this loan and part of its capital are paid annually from 

 a sinking fund which is created by reserving one cent or a frac- 

 tion of a cent per pound, from the price of the butter fat de- 

 livered by each patron, or by assessing each patron a definite 

 per cent on the money he receives for butter fat delivered. 

 The amount or per cent to be paid varies in proportion to the 

 amount of indebtedness, to the total amount of butter fat re- 

 ceived by the association, and to the number of years required 

 to pay the entire indebtedness. 



A sinking fund should always be created by the cooperative 

 creamery association, whether the plant has been paid for or 

 not. It is needed to keep the plant and equipment in repair 

 and to buy new equipment. The amount accumulated for that 

 purpose should measure up to 20 per cent of the cost of building 

 and equipment and should be kept as a special account in the 

 bank. 



All money received by the association from the sale of its 

 goods belongs to the patrons of the creamery. After all oper- 

 ating expenses have been paid and the necessary amount de- 

 ducted for a sinking fund, the remaining sum should be divided 

 among the patrons in proportion to the amount of butter fat 

 delivered by each. 



Membership and Its Rights. Only patrons of the cream- 

 ery may become members of a mutual cooperative association. 

 Each patron has one vote on all matters pertaining to the 

 business. The fact that a person becomes a patron of the 

 creamery should make him a member of the association as, 

 in paying his share of the sinking fund, he is paying toward the 

 maintenance of the plant. 



Dissolution. In case of the dissolution of a cooperative 

 creamery association, each patron or former patron has the right 



