PROBLEMS OF COOPERATIVE MARKETING ASSOCIATIONS 23 



unanimity of opinion. The late G. Harold Powell, one of the best- 

 known leaders in the cooperative movement of this country, has 

 made the following statement on this point : 



I think a contract should be long-term, just as long as possible, but I think 

 that every contract ought to have a cancellation privilege by which the men 

 who are dissatisfied, who feel that the organization is not working correctly, 

 should be permitted to get out. The dissatisfied man in a cooperative organi- 

 zation is better on the outside than inside, and any contract which holds men 

 together against their will in a cooperative organization, in my judgment, is 

 unsound. 5 



The general policy among fruit and vegetable associations, in 

 contrast with associations that market some other products, is to 

 permit members to cancel their contracts during a specified 15 or 30 

 days of each year. This period is usually placed some time after the 

 close of the marketing season, that the association may not be de- 

 prived of tonnage it has planned to market, and that temporary 

 discontent that may arise while the crop is being moved may have 

 an opportunity to be forgotten. 



Where an association has assumed long-time obligations such as 

 for construction of plants or warehouses, argument may be made 

 for the long-time, noncancelable contract. If such a contract is 

 adopted, the members should go into the organization with a clear 

 understanding of their obligations and the purposes of the organi- 

 zation. Care should be taken in the selection of directors, officers, 

 and managers in all cases, but with a long-time contract unusual 

 efforts should be made to safeguard the interests of the members. 



The enforcement of membership contracts is always a vexing 

 question, although the fruit and vegetable organizations have had 

 less difficulty in this respect than some associations that handle other 

 products. Although the disregard of flagrant violations of crop 

 contracts may have a demoralizing effect on the membership, whole- 

 sale prosecutions may react equally unfavorably and prove costly 

 to the organization. Every crop contract should contain a clause pro- 

 viding for liquidated damages, and generally these provisions should 

 be enforced strictly. If the number of contract violations becomes 

 unusually large, however, it is time to take stock of the fundamental 

 causes leading to contract violations. As a general rule, it indicates 

 either a lack of cooperative spirit among the members, or a lack of 

 efficient service on the part of the association. Both of these factors 

 are fundamental to the success of the organization, and no contract, 

 however stringent, will compensate for failure in this respect. 



BY-LAWS 



The by-laws of fruit and vegetable organizations are similar to 

 those of organizations handling other types of products. They state 

 the objects of the organization; conditions of membership; elate of 

 the annual meeting; the number, method of election, and duties of 

 directors and officers. The special rules to be observed in the opera- 

 tion of the organization are stated, and any other provisions are in- 

 cluded that are necessary to safeguard both the rights of the members 

 and their association. 



5 Address to members of the staff of the United States Department of Agriculture, 1921. 



