COOPERATIVE CITRUS-FRUIT MARKETING AGENCY. 45 
orchard of each member on a percentage basis. Each member, if he 
so desires, is represented in each pool by the same percentage of his 
total fruit as is delivered by other members. On the other hand, 
he is under the same obligations as other members to deliver this 
fixed percentage to each or any pool if the board of directors deter- 
mine that this is for the best interests of the group. The fruit of 
each member passes through exactly the same grading and packing 
processes as that of all others and, in accordance with the grade of 
fruit which he delivers, each member receives exactly the same price 
as all others shipping in the same pool. All proceeds are distributed 
solely on the basis of the business transacted by the members through 
the association, with such modifications as arise from variations in 
grade and the percentage of fruit delivered to the various pools. 
The rights and obligations of the members, therefore, are equal, in 
so far as the benefits derived from the association are concerned. 
In actual practice, however, it is inevitable that some members will 
be more active than others in the management of the association 
and have more influence in the direction of its affairs. Moreover, the 
responsibilities of the members are not always equal. It has been 
common, for example, for the directors of an association to indorse 
its notes. Although no cases have been pointed out where directors 
were obliged to pay such notes, nevertheless a burden is thus imposed 
upon a few men for the benefit of the community as a whole. 
LIMITATION OF MEMBERSHIP. 
The limitation of membership to actual producers is a cardinal 
principle of the exchange system. In some instances, through the 
withdrawal or death of a member, a portion of the stock of an associ- 
ation may be held by a nonproducer. Such a condition is usually 
only temporary. Inasmuch as no dividends are paid it is not to the 
interest of a nonproducer to hold the stock; consequently such stock 
sooner or later passes into the hands of a producer. The by-laws 
of most associations provide that a stockholder who is not a pa- 
tron shall have no voice in the management of the association. In 
other words, nonproducer stockholders are not considered bona fide 
members. 
At the same time, no producer in the territory covered by the asso- 
ciation is denied admission to membership for personal reasons. A 
prospective member is judged by his orchard. A man growing lemons 
exclusively would not, of course, be admitted to an association han- 
dling only oranges, nor would he desire membership in such an asso- 
ciation. An applicant may be denied membership because his orchard 
is outside of the territory of the association, or his fruit may be more 
conveniently handled by another association; or, in rare instances, 
because his orchard is in poor condition and the fruit which he 
produces distinctly inferior. 
However, nonproducers in the persons of corporations, partnerships, 
or individuals operating packing houses and engaged in the business 
of packing citrus fruit may be members of the central or district 
exchanges. Practically, this does not affect the cooperative manage- 
ment of the exchanges. In effect, the affiliated growers have extended 
the services of their marketing agencies to a few noncooperat ive 
concerns. The policy, however, is unsound in principle; and if the 
number of such commercial companies were considerably enlarged it 
would be dangerous in practice. 
