1918 



AMERICAN BEE JOURNAL 



299 



century reap the benefits of their la- 

 bors. Authors of our time, while dis- 

 carding the myths and errors of the 

 past, the chaff, have conserved the 

 good grain, and have added to that 

 the marvelous discoveries of more re- 

 cent years from Huber's and Lahg- 

 stroth's time until now. Remember 

 the best beebooks of today contain 

 the essence of the wisdom of many 

 generations of "live" beekeepers and 

 the discoveries of more than 2,000 

 years of patient toil 

 Banff, Scotland. 



Legalizing Co-operative Mar- 

 keting 



By Chilton Gano 



CO-OPERATIVE marketing, in its 

 best sense, means more than 

 the mere banding of farmers 

 together as an ordinary corporation. 

 The ordinary corporation is financed 

 by the sale of stock and must pay 

 dividends on its capital. Its earnings 

 thus go to members in proportion to 

 their stock holdings, regardless of 

 whether they actually do any busi- 

 ness with the organization or not. 

 Such a marketing company is apt to 

 get along without any friction only 

 when members actually hold amounts 

 of stock which correspond in relative 

 size to the business they do with the 

 association. That is, if Farmer 

 Smith's honey represents one-tenth 

 of the entire amount sold by the as- 

 sociation in a season, his stock in the 

 corporation should represent one- 

 tenth of its total capitalization. 



But this is highly impracticable in 

 practice, for his output this year 

 may be one-tenth of the whole, and 

 next year it may be one-twentieth. 

 Yet next year he pockets one-tenth 

 of the profits, just the same. 



In ideal co-operative organizations 

 man-power, not money-power, is 

 what counts. That is why many 

 States have passed co-operative laws 

 authorizing the incorporation of 

 new kinds of corporations which 

 either have no capital stock what- 

 ever, or if they do have cap- 

 ital stock pay only a fixed annual 

 interest on such stock instead of 

 regular dividends. The earnings of 

 such co-operative corporations are 

 then apportioned back to the mem- 

 bers in proportion to the amount of 

 business transacted with them in the 

 season. In other words, such organi- 

 zations operate at cost, and all 

 profits go back to the members. 



The California laws permit of co- 

 operative associations without any 

 capital stock whatever, and most of 

 the orange and lemon growers' asso- 

 ciations are non-capital-stock in 

 form. This form of organization is 

 probably the broadest possible in 

 principle. Members are allowed to 

 make their own by-laws covering fi- 

 nancing, voting power, conditions of 

 membership, transfer of membership, 

 etc., yet their association ranks as a 

 corporation. 



The big problem where there is no 



capital stock is how to get the 

 money to start up. In California the 

 'banks know such organizations are 

 good risks, and they usually start on 

 money borrowed on a corporation 

 note, which is gradually repaid from 

 the earnings of the organization. 



Where the banks are not favorable, 

 money to build a packing plant can 

 be secured from the members by as- 

 sessment, according to their acreage 

 or expected crop or average annual 

 crop. 



Such associations usually charge a 

 membership fee, either of a fixed 

 amount or graduated according to 

 the acreage or crop of the applicant. 



Another Type 



The California laws also permit an- 

 other form of farmers' organization, 

 which sells capital stock but pays 

 earnings in part back to the mem- 

 bers according to business transact- 

 ed. This form of co-operative or- 

 ganization is that most often appre- 

 hended by the term. They either pay 

 a fixed interest on capital stock an- 

 nually, or they pay an initial fixed 

 price to the growers on their crops 

 or product, then devote a fixed 

 amount per crop unit above this to 

 operating expenses and dividends on 

 stock, and then pay back any surplus 

 above this which may be obtained to 

 the farmers according to business 

 transacted. The California Associ- 

 ated Raisin Company is of this type, 

 paying 3 and a fraction cents to the 

 growers on delivery of raisins, tak- 

 ing so many cents per pound from 

 the selling price as their operating 

 margin, and refunding any further 

 surplus to the growers. 



Nebraska, Wiscon'sin and several 

 other States have co-operative laws 

 authorizing this form of co-opera- 

 tion, but have no non-capital-stock 

 associations. 



Some of these States very rigidly 

 define how profits shall be divided, 

 whether the members shall have one 

 vote each or vote according to acre- 

 age or other standards, etc. 



The Texas co-operative law is of 

 particular interest to honey produc- 

 ers just now because of the recent 

 success of the Texas Honey Produc- 

 ers' Association. The Texas law is 

 just a little more than a year old. In 

 simplicity and latitude given to the 

 associations for managing their own 

 affairs, it compares favorably with 

 the California law. Its principal pro- 

 visions are : 



That co-operative associations 

 shall be purely local in character, in 

 no event to extend beyond a reason- 

 able area surrounding a town, but 

 that they may federate with other 

 similar associations of other towns. 



That such associations shall be 

 non-profit , passing their profits to a 

 surplus fund or dividing their profits 

 among members in proportion to the 

 respective cash contributions to 

 working capital and patronage. 



That associations shall have prop- 

 erty of not less than $500 value, 

 which may be cash, property or 

 notes. 



That the association shall have the 



right to act as the co-operative sell- 

 ing and purchasing agents of their 

 members only, and may, for their 

 members, sell any and all agricul- 

 tural crops, and buy machinery, sup- 

 plies, insurance, and other needs. 



That the members shall not be 

 liable to the corporation or its cred- 

 itors in excess of the membership 

 shares subscribed by them, unless 

 in the by-laws the members are 

 made responsible for an additional 

 amount equal to 100 per cent of 

 membership shares owned. 



Look to the Law 



Farmers planning to sell co-oper- 

 tively should by all means take steps 

 to secure proper State legislation, 

 unless it already exists or unless 

 they can incorporate under the co- 

 operative law of another State and 

 then enter their own State as a for- 

 eign corporation. Such a round- 

 about procedure is often resorted to 

 by regular business corporations, 

 and would no doubt be practicable in 

 some instances for co-operative as- 

 sociations. However, legal techni- 

 calities might make it impossible, in 

 some States, and expert legal advice 

 should, of course, be had in every 

 case. 



The simplest way, however, in the 

 long run, would, no doubt, be to se- 

 lect the form of co-operative law de- 

 sired and assure its passage in the 

 State legislature. The growing list 

 of States which are adopting such 

 laws indicates in general that they 

 are good laws to have, and farmers 

 would ordinarily, just as a matter of 

 pride, prefer to be incorporated un- 

 der the laws of their own State. 



The writer would suggest that the 

 California law is excellent in every 

 way and a good one to copy after, 

 when in doubt. It has proved ade- 

 quate to the needs of the world's 

 greatest co-operative marketing as- 

 sociations, those of the Sunkist Or- 

 ange Growers and Sun-Maid Raisin 

 Growers — indeed, has helped to fos- 

 ter the growth of these great federa- 

 tions of farmers, with hardly a ques- 

 tion, because of its broad scope and 

 the freedom it permits them in minor 

 matters. 



Chicago. 111. 



Bee Laboratory at Ames. — The Iowa 

 State College at Ames, has recently 

 appropriated $1,200 for fitting up a 

 beekeeping laboratory in the base- 

 ment of the new science building. 

 There will be ample floor space for 

 the bee work and all modern conven- 

 iences, including hot and cold water. 

 Gas and electricity will be installed. 

 There will be four rooms in all. The 

 largest room will be used for the 

 usual laboratory purposes. One will 

 be fitted up for a wintering cellar. 

 one for a honey and wax room, and 

 the fourth will be utilized as an ex- 

 hibit room. Professor F. Eric Millen, 

 who has charge of the work at the 

 Iowa College, is rapidly extending 

 the work of his department, and new 

 quarters are necessary. 



