UNITED STATES DEPARTMENT OF AGRICULTURE 



S\J^''^i^U 



I BULLETIN No. 371 



Contribution from the Office of Markets and Rural Organiza- 

 tion, CHARLES J. BRAND, Chief. 



^^^%^U 



Washington, D. C. 



May 23, 1916 



PATRONAGE DIVIDENDS IN COOPERATIVE GRAIN 



COMPANIES. 



By John R. Humphrey, Assistant in Market Business Practice, and W. H. 

 Kerr, Investigator in Market Business Practice. 



CONTENTS. 



Introduction 



Cooperative organization in relation to pat- 

 ronage dividend payments 



Accounting and business practice in relation 



to patronage dividend payments 



Desirability of standardization of ac- 

 counting records 



Diversity of conditions and methods of 

 distribution 



Page. 



Page. 

 Accounting and business practice in relation 

 to patronage dividend payments — Contd. 



Patronage dividend records 5 



Basis of distribution 5 



The patronage ledger 6 



County unit or district requirements 8 



INTRODUCTION. 



The by-laws of a great man}^ cooperative associations provide for 

 the payment of dividends to their patrons prorated in direct ratio 

 to the amount of business carried on between the organization and 

 the individual members. In a great majority of those organizations 

 these provisions have not yet been put into effect. 



The principle of patronage dividends has been understood by stu- 

 dents of cooperation from the beginning, but has only lately been 

 making itself felt among the rank and ifile of the great body of 

 intending cooperators of America. The organization of farmers' 

 elevators, having had its origin at a time when cooperation on the 

 North American continent had not been the subject of much study, 

 quite naturally sought the lines of least resistance. It is natural, 

 then, since the corporation law was well founded and in successful 



Note. — This bulletin should be of interest to farmers' cooperative grain elevators and 

 warehouses, and to members of these companies. It should be of interest to farmers and 

 others who are forming new cooperative grain elevators and warehouses. 

 33235°— Bull. 371—16 



