COOPERATIVF ORGANIZATION BY-LAWS. 23 



(b) One-half of the balance, if any, shall be set aside as a surplus fund to increase 

 the working capital or to finance future improvements until such fund shall equal 

 at least [25] per cent of the paid-up capital. 



(c) The remainder, if any, shall be divided so that the distribution to nonmembers, 

 if any, shall be at one-half the rate paid to members and that part of such remainder 

 derived from sales of products shall be divided in proportion to the amount [or value] 

 of the products of members and nonmembers sold and that part of such remainder 

 derived from purchases of supplies shall be divided in Like manner. 



Sec. 2. [Same as section 2 for Article XVIII for nonstock organizations.] 



Note.— Some of the States have laws which provide specifically the manner of apportioning the 

 earnings, and it is therefore important to ascertain the requirements of the law in the State where the 

 association is being incorporated in order that this article may be drawn in conformity therewith. In 

 States where it is permissible to pay patronage dividends to nonmembers, some organizations have 

 adopted the plan of paying patronage dividends to nonmembers at one-half the rate to members and 

 crediting this to the account of the nonmember as payment on a share of stock. When this amount 

 equals the value of a share the nonmember becomes a member. 



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