106 AGRICULTURAL ORGANISATION 



In these early days even that very word " co-operation," 

 which constituted the fundamental principle of the move- 

 ment, was misunderstood, and is, in fact, still widely mis- 

 understood even to-day. There were, in 1901, already in 

 existence many Farmers' Trading Companies, Farmers' 

 Auction Marts, Farmers' Insurance Companies and other 

 combinations with the prefix " Farmers' " ; but although 

 some of these were genuine co-operative bodies, they were 

 mostly limited liability companies whose gains benefited 

 shareholders not themselves necessarily agriculturists or 

 interested in agriculture apart from the dividends they 

 received. When such combinations failed, or did wrong 

 things, they brought discredit on co-operation because they 

 had quite wrongly annexed that designation ; but they were 

 not really co-operative societies in the sense implied in the 

 following explanatory statement contained in a letter sent 

 to the Press by the A. O. S. : — 



The best way to form an agricultural co-operative society is to 

 register under the Industrial and Provident Societies' Act, and so 

 to frame the rules that the amount of the nominal capital is not 

 fixed ; that shares can be allotted at any time to any farmer apply- 

 ing for them ; that the interest payable upon the capital is limited 

 to a small percentage, usually 5 per cent., thus preventing the 

 concern from becoming a mere investment for capitalists ; and 

 that the bulk of the profits is divided amongst the members as a 

 bonus upon the amount of their sales through, and purchases 

 from, the society. 



Then, however hopeless the prospect of the Society's success 

 may have appeared to many persons, considerable interest 

 was attracted to it even in the first year of its existence. 

 This interest was especially stimulated by the issuing of the 

 following statement (subsequently modified in certain of its 

 details) as to the actual lines on which it was prepared to 

 carry out the fundamental principles already mentioned : — 



1. By sending down organisers to address meetings and to give 

 advice as to the proper course to be pursued in the formation of 

 local societies. 



2. By providing model rules which have been found by experi- 

 ence to be the best working rules for all similar societies. 



