41 



The financial plans for organizing and operating cooperative loose- 

 leaf tobacco auctions need to be carefully developed in order to 

 assure continued operations. At a minimum, any plan should take into 

 consideration (1) organizational expenses, (2) investment in permanent 

 facilities, (3) operating expenses, and (4) reserve requirements. 



As a general rule, members should share in the association's capital 

 requirements in proportion to their patronage. The revolving fund 

 method of financing should be considered by auction warehouse associa- 

 tions attempting to limit capital contributions to those from current 

 patrons. Contributions are computed on the basis of patronage. This 

 type of financing assures that ownership of cooperative facilities is 

 retained in control of members. It also helps maintain membership 

 loyalty and support. 



