2 BULLETIN 860, TJ. S. DEPARTMENT OF AGRICULTURE. 



special cooperative laws and the laws governing corporations in each 

 of the several States. 



The success of any organization, whether cooperative or for private 

 profit, will be found to rest upon: (1) Social or economic need; (2) 

 a sound organization plan; and (3) efficient management. The lack 

 of any one of these fundamentals impairs the whole. 



A cooperative elevator company, like any other business organi- 

 zation, must rest first upon some substantial economic need. An 

 organization may come into existence by means of propaganda and 

 enthusiasm engendered to serve a political, fraternal, or idealistic 

 purpose, but unless some substantial benefit or service is secured to 

 the community such organization eventually must fail. The value 

 to the community of any enterprise or undertaking is measured in 

 direct proportion to the need therefor. 



The plan of organization must be sound. This means that some- 

 thing more is necessary than mere statements of the high purposes 

 and aim of the association. It means a definite and practicable 

 plan of action, a plan which anticipates so far as it is possible to 

 anticipate the practical problems and difficulties to be met in actual 

 operations. 



A cooperative enterprise in order to be successful must be con- 

 ducted under efficient management and in accordance with a well- 

 defined business policy. There has been too much tendency in the 

 past to employ as managers men who are merely industrious and 

 honest and who may not have that keen, discriminating judgment 

 and tactful address so necessary in managerial positions. 



FORMS OF ORGANIZATION. 



In the United States three distinct forms of farmers' elevator 

 organizations are found, namely, (1) joint stock companies and un- 

 incorporated societies; (2) ordinary private corporations of the 

 capital-stock form; and (3) cooperative associations incorporated 

 under special cooperative law. 



JOINT STOCK COMPANIES. 



The advantages of the joint stock company form of organization 

 consist mainly in — 



(1) The ease of effecting organization, no formal procedure being 

 necessary. 



(2) The saving of fees connected with incorporating. 



(3) Exemption from certain taxes affecting corporations. 



(4) Relief from the necessity of filing numerous corporate reports 

 sometimes required of corporations. 



The joint stock company is adapted principally to small and com- 

 pact organizations which desire to utilize some of the features of 



