DIVIDENDS IN COOPERATIVE GRAIN COMPANIES. 9 
profit, this to be distributed among its patrons. Independent sales 
fall outside the discussion of proration of general profits, because 
the profits from these accrue entirely to the elevator making the 
sale. If profits are pooled and the expenses of all the elevators 
varticipating are also shared on a common basis, the method of 
finding the rate for the division of the profits is merely a matter 
of dividing the profits by the number of bushels of grain handled 
by the entire group of elevators. If, on the other hand, the varying 
rates of expense incidental to operation in the different elevators 
and the various advantages in selling which have occurred during 
the year are taken into consideration, the division of profits then 
becomes much more complicated. 
By compiling:a formula which takes into consideration all the 
factors which go to make up the rate of profit, the amount of profit 
for each elevator can be determined, and this will allow a distribu- 
tion of profits on varying rates to the patrons of the different ele- 
vators in accordance with the economic advantage of each separate 
station. 
For purposes of illustration it will be assumed that in a certain 
organization there are five elevators, each operating on a different 
rate of expense, all shipping to the central organization, which, act- 
ing as their agent, disposes of the grain through its terminal ware- 
house. In such a case each elevator must keep its own books, so that 
it will know the amount of expense incurred and the number of 
bushels handled. At the end of the year, when the central organiza- 
tion has determined the total amount: of profit, settlements will be 
made with the various locals according to the following table,t from 
which it will be seen that the average cost of operation per bushel 
is $0.03. 
Share of | Individual 
Bushels Elevator | profit for expense 
handled. | expense. each ele- per 
vator. bushel. 
le yait ORE Ate str reiterate ee 590 | $25 $40 $0. 05 
ISLATRUOE IBS coach ee eee ae eee le 500 30 35 . 06 
lea OMm Org ere ee aa 1, 200 40 116 . 0333 
TB LDRTEIIOIE ID eo HE a 2, 400 40 272 . 0167 
leer bane ae eee ee a. ee 600 21 57 . 035 
5, 200 | 156 5205 | eee ae cee 
The figures in this table are determined by the use of a formula 
which is derived from the combination of various items which 
must be taken into consideration when transacting the business 
under this arrangement. Before setting down the formula, the 
+ These figures are not taken from any firm, but are used merely for illustration. 
