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clearly and concisely what each party is to do for the other, upon 

 what terms the transactions between the association and the indi- 

 vidual are to be carried out, the amount of business to be transacted 

 as near as possible and a forfeiture for breach of contract. In 

 handling tlie transactions between members all contracts should be 

 made the same as if no relation existed between them in the way 

 of membershij], and such contracts should be carefully drawn so 

 as not to conflict with the anti-trust laws or with the decisions of 

 the courts in relation to the restraint of trade. These contracts are 

 very essential in order that the management may know what to 

 expect, and after expenses have been incurred for the handling 

 of the business of a member he should either produce the business 

 so the profits will reimburse the association, or be compelled to 

 make such reimbursement jDersonally unless conditions which are 

 beyond his control shall arise to prevent. It is extremely important 

 that nothing shall be entered into in the way of a contract which 

 can in any way be construed as seeking to restrain trade. 



Many institutions have failed because they have anticipated their 

 profits, paying upon estimates which proved to be too large and 

 thereby exhausting the treasury. The most successful co-operative 

 institutions do business with their members upon the market prices 

 the same as they would with non-members, and, in fact, often 

 transact business for non-members. At stated intervals, or when 

 the business of a certain kind is closed up, the net benefits to 

 which the members are entitled are declared as a dividend in pro- 

 portion to the amount of business transacted with the individual 

 members. This system has many advantages which will become 

 apparent but which space will not permit of explanation here. 



In handling of produce a system of pooling and insurance should 

 be inaugurated so that the possible loss which is sure to come and 

 is expected by all business houses will be distributed over the entire 

 business, thus making what might be a heavy loss to the individual 

 member practically nothing when borne by the entire membership 

 thus co-operating to stand losses as well as to make profits. 



In marketing produce I cannot too strongly urge the introduction 

 of the packing-house system, each taking his product to the pack- 

 ing house or packing houses, which should be conveniently located 

 and provided with proper facilities, and where trained, impartial 

 packers pack every one's products to standard grades. High stand- 

 ard of quality should always be established and should be main- 

 tained at all times as to quality of product as well as to pack. 

 Trade-mark brands should be used, so that the goods may become 

 recognized in the market. A reputation is the most valuable asset 

 in trade. 



