10 BULLETIX 937, U. S. DEPARTMENT OF AGEICrLTVEE. 
Section 20 of the act to incorporate the Saskatchewan Coopera- 
tive Elevator Co., Ltd.. stipulates the manner of apportioning earn- 
ings. In substance it provides that after expense of operation and 
certain charges have been paid, including the payment of install- 
ments and interest of loans due the Government, out of the remain- 
ing earnings may be paid a dividend not to exceed 10 per cent upon 
the paid-up cajDital : 50 per cent of the balance, if any, may then be 
distributed in several different ways : 
(1) It may be paid to the shareholders in the form of a patronage 
dividend, proportionate to the volume of business which each has 
brought to the company. Under this method the earnings of the 
company are considered as a whole, no account being taken of the 
variable net profits accruing from the different locals. 
(2) It may be paid to the supporters of the locals on the basis of 
the aggregate relative net financial results of the respective locals. 
This method recognizes the differences in operating cost at the differ- 
ent locals and j)rovides a means whereby the supporters of less profit- 
able locals may be precluded from sharing fully in the profits of locals 
which have been better sujDported. 
(3) It may be paid partly according to each of the above-described 
methods. In this case the supporters of a particular local may share 
less fully in the earnings which are peculiar to that local than they 
would under method 2. 
(4) It may be applied on the unpaid portion of shares : that is, a 
certain amount may be placed to the credit of the shareholders for 
each share held but not fully paid up. thereby lessening the unpaid 
portion and increasing the paid-up capital stock of the company. 
The remaining 50 per cent of the balance may be set apart as a 
reserve under what has been designated in the act of incorporation 
as " the elevator reserve account." 
While patronage dividends may be paid the members of the Sas- 
katchewan Cooperative Elevator Co. to the extent of 50 per cent of 
the net profits remaining after certain other payments have been met, 
including a dividend on capital stock, no such patronage dividends 
have ever been paid. Under a rule of the Winnipeg Grain Exchange 
forbidding rebates, the payment of patronage dividends has been re- 
garded as a form of rebates subjecting the member to suspension, and 
this is one reason that patronage dividends have not been paid. There 
is some sentiment for patronage dividends, but so far the directors 
of the company have felt the need of all earnings which have accrued 
and have employed them in the further expansion of the business. 
T^p to the present time the Saskatchewan Cooperative Elevator 
Co. has confined its activities to the handling of grain exclusively and 
has not engaged in handling supplies of any kind. 
