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



Sec. 3. Extension of credit. — The business of this Association shall so far as 

 possible be conducted on a cash basis. All accounts due and unpaid at the end 

 of thirty days shall bear interest at the rate of — per cent from the date of 

 sale and all sales tickets or bills of sale shall so state. 



Sec 4. Collective buying. — All merchandise purchased through the Associa- 

 tion, other than that regularly carried in stock, shall be paid for in cash by 

 the members ordering such supplies at the time of ordering the same, or the 

 money may be deposited -with a bank which has been approved by the Board 

 of Directors, at the time of ordering. 



Note. — Without such protection an organization purchasing supplies for its mem- 

 bers may find that some of the members will refuse to take supplies ordered or will 

 not pay promptly. 



Sec 5. Withholding dividends. — The Board of Directors may withhold the 

 payment of a dividend on stock when in their judgment the condition of the 

 business requires it, but no patronage refunds shall be paid during the period so 

 withheld. 



Sec 6. Withholding patronage refunds. — The Board of Directors may with- 

 hold the payment of patronage refunds when in their judgment the condition 

 of the business requires it. In every such case, however, each member shall 

 be credited upon the patronage refund register or similar record with the 

 amounts so withheld, and these funds shall not be confused with the surplus 

 provided for under division ( a ) of section 1, Article VIII. 



Note. — Withholding the dividends and refunds provided for in sections 5 and 6 

 furnishes working capital during the time in which the surplus is being accumulated 

 gradually by the appropriation of 10 per cent of the annual net earnings. When the 

 financial condition of the company will permit, the dividends or refunds of prior 

 years may be paid. By this method the surplus is not accumulated at the expense 

 of those who patronize the company during its first years of existence. 



Sec. 7. Emergency capital. — At the time of uniting with this Association or 

 at any time thereafter, when called upon by the Board of Directors, each 

 member shall deliver to the Association his negotiable promissory note, payable 

 on demand, to the order of the Association. Such note shall be for the sum 



of [twenty-five dollars] plus per acre additional for each acre of crops 



to be grown by the members whose products are to be marketed through the 

 Association. These notes shall be the property of the Association for the pur- 

 pose of being pledged by the Board of Directors as collateral security for any 

 loan that may be necessary in the conduct of the business of the Association. 

 Any member's note shall be available in the settlement of any damage to the 

 Association that may result from the failure of said member to make good 

 his contracts. 



Xote. — This section is intended to supply capital which is needed only for short 

 periods, as, for instance, during crop-moving time and other periods when emer- 

 gency capital is required. Organizations which have a surplus for such purpose 

 may not find it necessary to include this section in their By-Laws. If any member 

 knows that the Association holds his note, which may be sold to settle any damage 

 caused by his breach of contract, it will probably cause him to comply more care- 

 fully with the terms of that contract. 



Sec 8. Speculation. — Neither the Manager nor any other agent or employee 

 of this Association shall during the period of his term of office or employment 

 be permitted to deal or trade in futures or options in grain or other commodi- 

 ties or stocks in his own name or in the name of any <>th< r person or in the 

 name of this Association except as it may be necessary to hedge actual pui*- 

 chases or holdings of grain or sales of stored grain and then only with the 

 knowledge and consent of the Board of Directors. This Association shall so 

 far as it is practicable avoid any and all speculation in grain, and shall not at 

 any one time accumulate by purchase or contract an amount which in the aggre- 



