2 BULLETIN 371, V. S. DEPARTMEiTT OF AGEICULTUEE. 



operation, that the vast majority of these organizations were chart- 

 ered under this law. 



The central idea of these farmers was that of pure cooperation, 

 as evidenced by the insertion of cooperative clauses in the by-laws 

 of many of these companies, but the vehicle through which coopera- 

 tion was to be carried out was not provided for by law, except in a 

 few instances, and fundamentally was not intended to carry out the 

 purposes for which the farmers then sought to use it. Later, when 

 laws were passed providing for the distribution of dividends upon a 

 cooperative basis, apathy on the part of the management of the ele- 

 vators and obstacles contingent upon their organization as corpora- 

 tions delayed the readjustment of these companies to the new condi- 

 tions. The organization of a new cooperative company where co- 

 operative laws are in effect is a simple matter in comparison with 

 the readjustment of a company which has been in business for several 

 years, has accumulated a surplus, and taken on business relations of 

 a complex nature. 



It is not difficult in itself to provide a means of paying patronage 

 dividends when conditions regarding the organization of an associa- 

 tion have been prearranged for that purpose. The difficulties which 

 confront the majority of cooperative elevators at the present moment 

 are matters of organization or reorganization rather than of method. 

 Where the organization has been perfected under some modern co- 

 operative law, the adjustment to a patronage dividend basis is prac- 

 tically automatic. If there are difficulties, they are encountered in 

 providing a method of distribution which shall be at the same time 

 economical and efficient. 



It is in the older organizations, founded under the corporation law, 

 that the greater difficulties arise. The cooperative laws of the State 

 under whose jurisdiction the elevator is operated, usually provide the 

 conditions under which new organizations may be formed and old 

 ones converted to the provisions of the cooperation statute. 



COOPERATIVE ORGANIZATION IN RELATION TO PATRONAGE 

 DIVIDEND PAYMENTS. 



In discussing the relation of cooperative elevator organization to 

 patronage dividend paj^ments, elevator companies may be grouped 

 under several heads or classes. Treating these progressively from 

 the earlier types to the more complex later organizations, we should 

 first consider the single community elevator company organized as a 

 corporation. It should be understood that the method of adaptation 

 to the i^atronage dividend basis applies only to such elevators as are 

 properly under the jurisdiction of a cooperative law. 



In the case of old organizations, it may be stated generally that it 

 is safe to reorganize a corporate company under conditions which will 



