20 BULLETIN 860, U. S. DEPARTMENT OF AGRICULTURE. 
Sec. 3. Extension of credit. — The business of this Association shall so far as 
possible be conducted on a cash basis. All accounts due and unpaid at the end 
of thirty days shall bear interest at the rate of — per cent from the date of 
sale and all sales tickets or bills of sale shall so state. 
Sec. 4. Collective buying. — All merchandise purchased through the Associa- 
tion, other than that regularly carried in. stock, shall be paid for in cash by 
the members ordering such supplies at the time of ordering the same, or the 
money may be deposited with a bank which has been approved by the Board 
of Directors, at the time of ordering. 
Note. — Without such protection an organization purchasing supplies for its mem- 
bers may find that some of the members will refuse to take supplies ordered or will 
not pay promptly. 
Sec. 5. Withholding dividends. — The Board of Directors may withhold the 
payment of a dividend on stock when in their judgment the condition of the 
business requires it, but no patronage refunds shall be paid during the period so 
withheld. 
Sec. 6. Withholding patronage refunds. — The Board of Directors may with- 
hold the payment of patronage refunds when in their judgment the condition 
of the business requires it. In every such case, however, each member shall 
be credited upon the patronage refund register or similar record with the 
amounts so withheld, and these funds shall not be confused with the surplus 
provided for under division (a) of section 1, Article VIII. 
Note. — Withholding the dividends and refunds provided for in sections 5 and 6 
furnishes working capital during the time in which the surplus is being accumulated 
gradually by the appropriation of 10 per cent of the annual net earnings. When the 
financial condition of the company will permit, the dividends or refunds of prior 
years may be paid. By this method the surplus is not accumulated at the expense 
of those who patronize the company during its first years of existence. 
Sec. 7. Emergency capital. — At the time of uniting with this Association or 
at any time thereafter, when called upon by the Board of Directors, each 
member shall deliver to the Association his negotiable promissory note, payable 
on demand, to the order of the Association. Such note shall be for the sum 
of [twenty-five dollars] plus per acre additional for each acre of crops 
to be grown by the members whose products are to be marketed through the 
Association. These notes shall be the property of the Association for the pur- 
pose of being pledged by the Board of Directors as collateral security for any 
loan that may be necessary in the conduct of the business of the Association. 
Any member's note shall be available in the settlement of any damage to the 
Association that may result from the failure of said member to make good 
his contracts. 
Note. — This section is intended to supply capital which is needed only for short 
periods, as, for instance, during crop-moving time and other periods when emer- 
gency capital is required. Organizations which have a surplus for such purpose 
may not find it necessary to include this section in their By-Laws. If any member 
knows that the Association holds his note, which may be sold to settle any damage 
caused by his breach of contract, it will probably cause him to comply more care- 
fully with the terms of that contract. 
Sec 8. Speculation. — Neither the Manager nor any other agent or employee 
of this Association shall during the period of his term of office or employment 
be permitted to deal or trade in futures or options in grain or other commodi- 
ties or stocks in his own name or in the name of any other person or in the 
name of this Association except as it may be necessary to hedge actual pur- 
chases or holdings of grain or' sales of stored grain and then only with the 
knowledge and consent of the Board of Directors. This Association shall so 
far as it is practicable avoid any and all speculation in grain, and shall not at 
any one time accumulate by purchase or contract an amount which in the aggre- 
