8 BULLETIN 3*71^ U. S. DEPARTMENT OF AGEICULTUEE. 



pro rata share of the entire net profit, thus equalizing the rate of 

 l^ayment per bushel to each patron? The solution of this question 

 rests upon the point of view which the cooperators maintain in rela- 

 tion to the purposes of cooperation. If they look upon the subject 

 from a broacl standpoint and consider themselves as members of the 

 county organization first and of their local organization last, then 

 they will feel that the rate of dividend payments should be equalized 

 according to the transactions of the organization as a county unit. 

 On the other hand, if the organization is not so closely united in 

 sentiment nor in actuality, but is rather a group of organizations 

 banded together for the mutual benefit of the separate elevators and 

 not for an equal rate of benefit to the patrons, each patron will de- 

 pend upon the prosperity of his local for the rate of return per 

 bushel on his grain. His other transactions Avith the company would 

 be on the same principle. 



COUNTY UNIT OR DISTRICT REQUIREMENTS. 



For accounting purposes the methods of doing business in the 

 fourth and fifth classes of companies which operate elevators or 

 warehouses exclusively would fall under three heads, two of which 

 are operative under the county-unit plan. These may be defined as 

 follows: Groups of elevators where the profits are determined for 

 each elevator ; groups of elevators where the profits are pooled in the 

 treasury of the general organization; and groups of elevators ship- 

 ping to a terminal elevator belonging to the company, where the 

 grain is held for future sale and Avhere grain from various elevators 

 is mixed in the process of selling, thus losing the carload identity 

 of the different original shipments.^ Under the third group two 

 divisions may be found. The first, wherein the various elevators 

 ship all their grain to the terminal warehouse, and the second com- 

 prising those which ship partially to the terminal warehouse and 

 sell the remainder of their output independently to outside parties. 



Accounting methods suitable for the first two groups would be 

 l^ractically identical with those used under the county-unit plan 

 except that the idea Avould have to be extended in accordance with 

 the increased number of elevators participating. In considering 

 the third group, there is the possibility of a. difference of opinion 

 OA^er the basis of distribution, as previously cited — whether it should 

 be upon an equal pro rata division of the net profits, considering 

 the profits as belonging to the entire organization, or whether each 

 elevator should receive back its pro rata share of the whole net 



■^ The Farmers' Union operates terminal warehouses at various points in the Canadian 

 Northwest which would fall under this plan. 



