COOPERATIVE PURCHASING AND MARKETING ORGANIZATIONS. 65 



may be so invested, and some also provide for the authority to invest. 

 The most common form is to limit the amount that may be thus 

 invested to 25 per cent of its capital, and also to provide that it must 

 be decided by a majority or a two-thirds vote of the members. 



VOTING POWER. 



One of the underlying principles of cooperation is that the members 

 of an organization shall have equal voting power in the meetings. 

 Twenty-three of the cooperative laws provide that each member 

 shall have one vote, regardless of the amount of stock he holds. Two 

 laws specify that each association shall set forth in its articles of 

 incorporation or by-laws the rules to be followed in this matter. 



Seventeen laws touch on the question of proxy voting, and voting 

 by mail; seven provide for voting by mail if the votes so cast are 

 accompanied by a written copy of the question voted on; five leave 

 the questions of proxy voting and voting by mail for each association 

 to stipulate in its by-laws; two permit both voting by mail and by 

 proxy; one provides for voting by mail but forbids proxy voting; 

 one forbids proxy voting but states that an association may provide 

 in its by-laws for voting by mail; and one forbids proxy voting and 

 does not mention voting by mail. 



DISTRIBUTION OF PROFITS. 



It is in the matter of distributing profits that so many organiza- 

 tions fall short of being cooperative. The cooperative laws vary 

 considerably in their provisions with regard to this important point. 

 Some laws merely state that the profits shall be distributed to those 

 entitled to them, as provided in the by-laws, while other laws go into 

 detail as to the manner of dividing the profits. The matter of dis- 

 tributing the profits is considered under four heads — the payment of 

 interest on capital stock, the setting aside of a reserve fund, the pro- 

 visions for an educational fund, and the distribution of profits in the 

 form of patronage dividends. 



Eleven laws leave the question of stock dividend or interest on 

 money invested in shares of stock, to be decided by each association, 

 and inserted in the by-laws; four laws do not mention this at all; 

 six laws provide that the stock dividend shall not exceed 6 per cent, 

 but four of the six grant the associations the privilege of changing 

 this if they so desire; two laws give 8 per cent as the maximum 

 rate; two laws place the maximum at 10 per cent, subject to revision 

 by the associations; one places the maximum at 5 per cent, and one 

 at 5 or 6 per cent. 



Nine laws provide that the setting aside of a reserve fund shall be 

 done in the manner stipulated by the by-laws; ten do not mention 

 85964°— Bull. 547—17 5 



