CHAPTER IV 



DEMOCRATIC ORGANIZATION OF THE COOPERATIVE 

 EXCHANGE 



The series of organizations which taken as a whole is 

 known as the "exchange" is rather complicated, and there 

 are prevalent many erroneous ideas about its composition 

 and activities. Even in California many who have not had 

 occasion to acquaint themselves with its real nature and 

 purposes regard the exchange as the orange trust instead 

 of what it is, a democratic group of cooperators. The ex- 

 change system is composed of three principal constituent 

 factors : the local association, the district exchange and the 

 central exchange. While the powers and functions of these 

 factors often seem to the outside observer to overlap and 

 conflict, in practice the system works with entire smooth- 

 ness. Perhaps as goodja parallel to the exchange structure 

 as can be found is exhibited by the labor organizations. 

 One typical form of the latter is characterized by the local 

 union, the national union and the American Federation of 

 Labor. In each case there is much local authority and rela- 

 tively little central control. However, in the labor organiza- 

 tions there seems to be a tendency toward centralization, 

 but in the exchange system the central exchange has no 

 absolute authority; it is the servant and not the master. 



Turning now to a study of the local packing association 

 which forms the foundation stone of the exchange structure 

 we find that the most satisfactory legal form which an asso- 

 ciation can assume is the cooperative, non-capital stock, 

 non-profit form of organization which the laws of Cali- 



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