70 BUIiLETIlSr 1106, U. S. DEPARTMENT OF AGRICULTURE. 



and grade during such period or periods as the board of directors from time 

 to time may determine. 



Note. — It is important that an a^-erage price should be paid 

 for products of the same grade shipped during a specified period. 

 In this way Inequalities and dissatisfaction are avoided, and the 

 association is better able to serve the interests of the entire mem- 

 bership. 



Article XVII.^ — Cooperative Purchase of Supplies. 



Section 1. All merchandise purchased by the association for any member 

 shall be paid for in cash by the member ordering such supplies at the time 

 the order is placed. 



Note. — Without such a provision an organization purchasing sup- 

 plies for its members may find that some of the members will 

 refuse to take supplies ordered or else will not pay promptly. 

 A cooperative organization should extend credit to no one unless 

 it is amply secured. 



Sec. 2. If local dealers handle the supplies desired, they shall be given 

 an opportunity to bid on the order before it is placed with an outside agency. 



Note. — In the cooperative plan of buying farm supplies the local 

 dealer' should be given consideration and an opportunity to submit 

 terms and prices. 



Article XVIII.^ — Savings and Damages. 



Section 1. After the season's expenses are paid and a proper sum set aside 

 to cover the depreciation of the association's property and provision is made 

 for a reserve fund to be fixed by the board of directors, the balance of the 

 season's returns on products sold shall be divided among members and non- 

 member patrons, if any, in proportion to the value of their products sold 

 through the association, and the balance of the season's savings on supplies 

 purchased shall be divided in like manner. In the case of a nonmember pa- 

 tron, any part of such sums of money may be applied, with his consent, to 

 the payment of membership fees and dues for him ; and, if so applied, when 

 such fees and dues are fully paid a membership certificate shall be issued to 

 him. When any nonmember offers his products and the association accepts 

 them for sale, such offer and acceptance shall be deemed an application for 

 membership, if the nonmember agrees that it shall be so considered. 



Sec. 2. Any member who fails or refuses to deliver his fruits and vege- 

 tables to the association in accordance with the contract entered into by him 



with the association shall pay to the association the sum of 



for each of not delivered by him to compensate 



the association for its expenditures in providing and maintainig for him the 

 machinery, equipment, facilities, "personal services, and information necessary 

 to market his crop. And in addition thereto, he shall be liable to the associa- 

 tion for all damages suffered by it as a result of the breach of the contract. 

 All contracts entered into by the association with members for the delivery 

 of produce contemplate the delivery of such produce and not the payment of 

 compensation in lieu thereof. 



Note. — Many organizations have failed because members were 

 bound only by a " gentleman's agreement," which is totally inade- 

 quate for a stable and enduring organization. The laws of the 

 State should be studied to ascertain the status of a provision of 

 this kind. 



