COOPERATIVE PURCHASING AND MARKETING ORGANIZATIONS. 55 
which the manufactured product brings, less the manufacturing, 
selling, and miscellaneous costs. For example, when two payments 
a month are made, the farmer will receive a check on the first of the 
month for his deliveries covering the period from the 1st to the 15th 
of the previous month, while on the 15th, payment will be made for 
deliveries from the 16th to the 30th of the previous month. In this 
way from two to four weeks elapse between the last delivery of the 
period and the time the settlement is made. This plan is followed 
by most of the country creameries and cheese factories in the United 
States, and there seems to be no objection on the part of the farmer 
to waiting from 15 to 30 days for his " cream check". » 
This system of making payments has met with such success among 
the cooperative plants that some privately owned factories have 
adopted the same plan. In some communities, however, cooperative 
creameries have been compelled to pay cash in order to compete 
successfully with privately owned plants that pay cash. In such 
cases it becomes necessary for the cooperative organization to secure 
funds from outside sources, or to create a surplus with which to cover 
the amount of the patron's products yet unsold for which the patron 
has been paid. 
The amounts borrowed as shown by Table V, were required for 
meeting the general running expenses of the business, purchase of 
supplies, in some cases for the addition of new machinery and repairs, 
and in other instances for advances to members. 
Of 35 creameries reporting on the security given for loans, 14 used 
company notes, and it was necessary for 14 others to have the per- 
sonal indorsement of the directors; 2 obtained funds without any 
collateral security; 3 gave mortgages on the plant and equipment, 
and 2, which had cheese in storage, obtained funds on warehouse 
receipts. This report does not take into account sums borrowed for 
the construction of the factory and initial equipment. At the outset, 
where loans for these purposes are secured, members have paid in 
capital stock or membership fees sufficient to furnish a basis of credit 
for the amounts required, which usually are obtained from banks. 
In some instances machinery companies extend credit for the equip- 
ment. 
Interest. — Thirty-two creameries report interest rates as follows: 
13 
6 
8 
7 
8 
7-8 
1 
8 
2 
10 
The rates charged vary in different localities and depend upon the 
season, length of loan, and credit rating of the organization. 
Length of loan. — Seven organizations use borrowed money during 
three months, and six require it from two to three months for advances 
to members in the summer, when deliveries of milk are heavy. 
