6o COOPERATIVE MARKETING 



fornia permit.^ There is no need of discussing the diffi- 

 culties and dangers rendered possible by the transfer of 

 shares to hostile interests when a cooperative organization 

 attempts to conduct business while organized as an ordinary 

 share corporation. The insurmountable objection, as well 

 expressed by Powell/ is that ownership of shares gives 

 the legal right to sell those shares, and since a cooperative 

 society by definition is a group of people who work to- 

 gether, the society should be able to exclude those who 

 would be unable to cooperate because of inherently con- 

 flicting interests. For present purposes it is sufficient to 

 note that the California law leaves the matter of member- 

 ship, voting and expenses to the discretion of each coopera- 

 tive association. It also permits cooperation with other 

 corporations to be practiced. 



A group of growers, therefore, decide to associate them- 

 selves in the packing and ttiarketing of their fruit. They 

 apply for a non-profit charter of incorporation which sets 

 forth the general features of the enterprise.^ In brief, the 



^It should be noted that most packing associations were organized 

 before the enactment of the law permitting non-capital stock, non- 

 profit agricultural organizations. Though wishing to pack and ship 

 on the cooperative principle they had to organize as ordinary joint 

 stock corporations. However, some associations have gone over to 

 the non-profit form, and others are contemplating doing so. Since 

 the tendency seems clearly in that direction, and since the non-profit 

 form of organization shows citrus marketing at its best, that form 

 has been adopted for detailed study. The California law authorizing 

 non-profit cooperative associations was enacted in 1909 and may be 

 found in State of California: Civil Code, James F. Deering, Editor, 

 San Francisco, Bancroft-Whitney Co., 1915, p. 341 ff., articles 353 N- 

 353 S. 



2 Powell : "Cooperation in Agriculture," pp. 42-44. 



3 The articles of incorporation and the by-laws of the associations 

 composing the exchange system are quite similar, though of two 

 different types. One type is the stock corporation which, however, 

 specifies cooperative non-profit procedure as one of its principles; 

 the other type is the non-profit organization. In methods the two 



