CHAPTHR 11 



CEETAIN FUXDAMENTAL KULE8 OF COOPERATION. 



IT has been said that cooperative business is subject to the 

 same natural and municipal law as other business, and 

 that this is not a treatise intended to cover that subject; 

 but tiiere are certain of these laws which are absolutely fun- 

 damental, and yet, as experience shows, quite likely to be 

 overlooked in cooperative enterprises, and which it is therefore 

 desirable to consider here. 



Cooperative business requires an adequate capital. One 

 would suppose this truism to be universally recognized, but it 

 is not; or possibly it would be more correct to say that proper 

 estimates of the capital necessary to cooperative enterprises are 

 often not made in advance. A sum is assumed to be sufficient 

 which is not sufficient. This is the result of ignorance. The 

 promoters of cooperative enterprise among farmers are usually 

 those who have not had mercantile experience, and who do 

 not, therefore, foresee all the occasions of outlay, or the disas- 

 trous consequence of being without means to meet them. The 

 result of inadequate capital is debt with no means of payment, 

 and the end is often failure. Of course this does not always 

 happen; new efforts may be made, and the debt wiped out. 

 A cooperative business once started, and some money expended 

 upon it, can hardly be permitted to drop without trial; the 

 work begins, unforeseen and pressing necessities for expendi- 

 ture arise, and debt, more or less serious, is incurred; in any 

 business it is seldom possible, during the first year, to pay debt 

 from income; if the management is sufficiently wise and vig- 

 orous to promptly appeal to the stockholders for additional 

 capital, the moment the necessity for debt appears, all may go 

 well; but even in that case, confidence is impaired; the man- 

 agement begins to be distrusted ; new members are afraid to 

 join, and old members are disposed to drop off. But it .'seldom 



(209) 



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