Fundamentals in Cooperation 25 



stock certificates are not issued and membership is evi- 

 denced by a certificate of membership. In this case, each 

 member usually has one vote or the voting power may be 

 proportional to the product contributed, the customary in- 

 terest may be paid on the capital invested in the corpora- 

 tion, arid, after operating expenses, a reserve fund suffi- 

 ciently large to meet debts and losses and a fund covering 

 depreciation are set aside, the surplus is then distributed 

 to the members in proportion to the amount of business 

 transacted through the organization, either in the pur- 

 chase of supplies, in proportion to the amount of produce 

 contributed by each, or in proportion to other service ren- 

 dered. In the non-profit corporation or in the corpora- 

 tion for profit, the stock or the membership should not be 

 transferable except under rules legally defined by the 

 corporation. 



THE MEMBERSHIP IN A FARMERS' ORGANIZATION 



A producers' organization should be composed exclu- 

 sively of farmers who are acquainted and who have con- 

 fidence in each other. If the organization includes those 

 with whom he has business relations but who are not them- 

 selves producers, it is in danger of losing its distinctive 

 cooperative features, and the duration of its existence is 

 problematical. Many farmers' associations are formed 

 through the efforts of local bankers or merchants, or by 

 outside jobbers or commission merchants. Associations 

 formed in this manner may be well organized and may be 

 successfully operated for a time if the policies and manage- 

 ment lie in the hands of the producers. In some of the 

 fruit-growing sections, a broker desiring a position as man- 



