4 BULLETIN 371, U. S. DEPARTMENT OF AGEICULTUEE. 



Under the fifth division may be considered the companies which 

 are similar to those operating imder division four where all the 

 profits are retained in the locals, or pooled in the general treasury 

 to be prorated according to the business of the patrons, but with 

 this difference — that the companies themselves do not enter upon 

 any business except that properly belonging to primary elevators. 

 In order to secure the benefits of trading on the board of trade a 

 company organized explicitly for that purpose might be employed. 

 All the stock in such a corporation could then be owned either by 

 the several stockholders of the primary elevator company or by the 

 elevator company itself if so authorized under the law. 



The profits accruing to such a company in the first place could 

 be distributed to the individual stockholders, or in the second case 

 could be paid into the general treasury of the primary elevator com- 

 pany and there prorated to the several locals according to the amount 

 of business each had transacted. Under present conditions of the 

 market any plan of organization which attempts the distribution 

 of patronage dividends which in any way embrace profits accruing 

 to the organization on the boards of trade doubtless would meet 

 with opposition. 



ACCOUNTING AND BUSINESS PRACTICE IN RELATION TO 

 PATRONAGE DIVIDEND PAYMENTS. 



Business methods employed to effect the complete distribution of 

 profits derived from the transaction of business in cooperative com- 

 panies and societies are at present in the experimental state. The 

 newness of the application of thoroughgoing cooperative methods 

 has not given time for an extended study of those business and ac- 

 counting requisites necessary for the scientific operation of the 

 business. In privately operated elevators the same need has not 

 been felt for accurate records and improved business methods as has 

 arisen since cooperative methods of transacting the business of agri- 

 cultural marketing organizations became general. Because each 

 member of a cooperative organization is in fact an interested partner, 

 and to some extent feels a personal responsibility for the success of 

 the association, it has become imperative in such societies or com- 

 panies that their methods of operation and systems of accounts be 

 clear, comprehensive, and at the ssime time easily understood. 



DESIRABILITY OF STANDARDIZATION OF ACCOUNTING RECORDS. 



Progress in cooperative methods of handling grain has been so 

 rapid that in many cases the business has outgrown the methods 

 which were borrowed from other lines of operation. Systems of 

 accounts and plans of operation have been tried which often were 

 not suited to the needs of the business. For every reason it would 

 seem the j)art of wisdom for leaders in the movement to work to- 



