28 BULLETIN 394^ U. S. DEPARTMElsrT OP AGEICULTTJRE. 



than on business efficiency. This type of promotion is usually fol- 

 lowed by a policy which soon brings the business to a disastrous end. 



(3) Favorable environTnent. — In several communities in which 

 successful coopei-ative stores were found, investigation revealed that 

 there had previously existed some natural bond of union, which in 

 itself was an important factor in determining the welfare of the 

 business. Of these may be mentioned predominating nationality, 

 common occupation, church affiliation, and fraternal organization. 

 The existence of such communities may be taken as a good omen 

 for the success of any kind of business organization on the coopera- 

 tive plan. 



(4) Adequate legal safeguards. — A cooperative association, even 

 more than a corporation, requires a legal standing which will secure 

 safety. Every cooperative association is intended to be a sort of 

 public-service institution, and, as such, it should have the legal safe- 

 guards which some States have provided by recently passed cooper- 

 ative laws. In one of these laws, a survey of the locality is strongly 

 recommended before an organization is effected. The same law re- 

 quires financial statements to be sent twice a year to an official 

 charged with the duty of protecting members of cooperative asso- 

 ciations. 



The causes of failure, it is evident, are largely the opposite of those 

 conditions which make for success. The converse of the foregoing 

 four* conditions of success would be: (1) Lack of leadership; (2) 

 poor management; (3) unfavorable environment; and (4) lack of 

 proper legal safeguards. 



(1) Lack of leadership . — Frequently an outside leader comes into 

 the community and through his enthusiasm arouses the people to 

 a condition in which they are ready to enter upon the establishment 

 of a cooperative store. Then, after seeing the enterprise started, 

 he goes to other communities and leaves the association to work out 

 its own salvation. In many such communities the organization dies 

 from lack of interest as soon as the promoting spirit is gone. In 

 other cases, the leadership in a community may be of such an un- 

 practical character as to lead the association into attempting some- 

 thing which is actually impossible of realization. In such cases, also, 

 disaster is sure to follow. 



(2) Poor management. — Let the management be ever so efficient, 

 an association may still fall short of success if unpractical leaders 

 force it into attempting the impossible. But even if it be presup- 

 posed that the business is adapted to the needs of the community, 

 and every other condition favorable, it may still fail entirely through 

 bad management. Among the outstanding shortcomings of the in- 

 efficient manager have been noticed reckless buying, excessive exten- 



