222 THE FARMER AS A COOPER ATOR. 



Suppose a society organized to market the product of its mem- 

 bers; the projectors of the society induce one hundred members 

 to join them; storage and other facilities are provided to take 

 care of the product of all; connections for selling are made at 

 considerable expense; a manager is employed at a salary pro- 

 portioned to his responsibility in handling the entire output 

 of the members; the charge for selling is fixed upon the sup- 

 position that all will sell through their own agency, and, in 

 general, all the preliminary expense of selling the entire out- 

 put of the membership is incurred; if, then — as I have known 

 to be the case — three-fourths of the members compete with 

 their own business by selling through otlier agencies, one of 

 two things must happen: either those members who use the 

 agency must pay an unreasonable sum for its services, or a 

 deficit will be created, to be met, in default of actual cash on 

 hand, by an assessment on paid-up stock; in different instances 

 I have seen each method used by cooperative-marketing asso- 

 ciations. In the case of a cooperative store, the result would 

 be the same. A mere deficit in expense, however, can never 

 be serious, as it is hardly conceivable that a cooperative busi- 

 ness would be run at a loss for a long time. The worst cases 

 occur as the result of attempting business not suitable for 

 farmers to engage in, wherein employees are permitted to 

 make large purchases of material on credit or with borrov/ed 

 money, or to make sales of maimfactured products for future 

 delivery, before purchasing the raw materials. In one case 

 that has been reported to me, some stockholders in a coopera- 

 tive cannery have been driven to the verge of bankruptcy 

 by operations which, as stated to me, were about as follows: 

 an employee of a cannery desired to be, or to be retained, as 

 superintendent; not succeeding, he went among the neighbor- 

 ing farmers and organized a cooperative cannery, to be man- 

 aged by himself; indebtedness was incurred for buildings, 

 machinery, sugar, packages, and labor; the superintendent 

 was an active man, and succeeded in making very large con- 

 tracts for canned goods early in the season ; the fruit crop, 

 however, proved short, and he was compelled to pay much 

 higher prices than he expected, making, however, most of his 



