130 RURAL SOCIOLOGY 



rate of interest is now between 5 and 6 per cent. Why should 

 a man who invests only his money in any business receive more 

 than the 5 or 6 per cent, that is recognized as legitimate pay- 

 ment for capital, the rate that a bank will charge? So in a 

 strictly cooperative society it is agreed that capital shall be paid 

 merely the ruling rate of interest, say 6 per cent., and that all 

 further profits shall be returned to the men who have supplied 

 the business of the cooperative society, on the basis of the amount 

 of business they have furnished. That is to say, in the coopera- 

 tive creamery, the profits will be distributed among the mem- 

 bers who have furnished milk to the creamery, in proportion 

 to the amount of milk they have furnished. The man who has 

 purchased shares will draw 6 per cent, on his capital invest- 

 ment, but the men who have been responsible for the success of 

 the exchange will receive whatever profits there are in accord- 

 ance with the amount of business they have done. 



In the next place, the cooperative society is democratic ; it is a 

 union not of shares, but a union of individuals. Instead of 

 allowing each share to have a vote, each man is given one vote. 

 The principle is this : It is believed that each member, no mat- 

 ter what his contribution to the capital of the association, has 

 as much right to vote concerning its policies as any other share- 

 holder; just as a citizen, no matter how many children he has or 

 whether he has any children at all, has a right to vote for 

 school officers. In a democracy every man has a vote ; so it is 

 in a cooperative society. One man, one vote. 



Further than this, the cooperative society recognizes that 

 there should be a limitation on the amount of capital stock any 

 man may control. Surely, in a cooperative society the capital 

 should be contributed by members approximately according to 

 the amount of business which each man expects to do with the 

 society. If a cooperative soc-iety is established with 200 shares, 

 it is quite legitimate to say that no member shall hold more 

 than one-tenth of the total number or twenty shares. This keeps 

 the shares well distributed and makes for democracy. 



Another point of importance is the transfer of shares. It is 

 ordinarily unwise to have men investing money in a cooperative 

 concern in which they are not interested. A cooperative so- 

 ciety, in the first place, should be formed of men who are inter- 



