ORGANIZATION" OF COOPEKATIVE GRAIN ELEVATOR COMPANIES. 5 



member but providing different classes of stock with shares of vary- 

 ing par value. Some of the desirable cooperative features which are 

 not especially authorized by the laws under which an organization is 

 incorporated and which might not be valid as a by-law provision 

 alone, may possibly be secured by means of a contract arrangement 

 made at the time of issuing the stock certificate. Any and all by-law 

 provisions in regard to which there is any doubt should be made the 

 subject of a special contract by having them printed upon the stock 

 certificates. This will also have the effect of giving notice of the 

 restrictions to possible purchasers. 



MAKING PRELIMINARY SURVEY. 



Before the organization of a cooperative elevator company is at- 

 tempted or advised, a careful and unprejudiced survey of local con- 

 ditions should be made in order to determine the economic need for 

 the organization and to secure information that will be of assistance 

 when the work of actual organization is undertaken later. 



LOCAL CONDITIONS. 



First it will be desirable to study the conditions under which 

 grain is generally marketed in the particular local community in 

 which organization is contemplated. Whether or not that com- 

 munity normally is devoted to feeding or to shipping is of im- 

 portance in this connection. The fact that marketing facilities are 

 grossly inadequate one year does not necessarily indicate that other 

 and additional facilities can be supported advantageously during a 

 series of years. A fair comparison should be made between prices 

 paid by local dealers and prices obtaining in the principal terminal 

 markets, with due reference to freight and other charges deductible 

 therefrom. It must not be imagined, however, that every daily 

 newspaper can at all times be relied upon to report terminal values 

 fully and accurately. It frequently occurs that even if such values 

 are quoted accurately, there are coexisting conditions under which 

 the prices are not available to the local buyer, and therefore are not 

 applicable to current purchases in the country. In making a study 

 of local marketing conditions it will be desirable to secure the 

 services and advice of some practical grain man. If available, 

 the advice of managers of successful neighboring associations will 

 be especially valuable. 



Information regarding the amount of grain shipped from any 

 station during a period of several years should be obtained from 

 local representatives of railroads, from the general offices of such 

 railroads, or from State commissioners or bodies having charge of 

 transportation matters within the State. Having determined the 

 average volume of grain shipped from a certain station annually, 

 its division among already existing agencies and dealers should be 



