56 BULLETIN 547, U. S. DEPARTMENT OF AGRICULTURE. 
Seventeen report using borrowed funds from 3 to 10 months, while 
three are working throughout the year on borrowed capital. 
Conclusion. 1 — One great difficulty with the average cooperative 
creamery is that no provision is made for replacement of plant and 
machinery, and such repairs, replacements, and improvements as 
are made are charged against the deliveries of the members until 
paid, in as large amounts as the business will stand. This is also 
true in purchasing creamery supplies, such as tubs and salt. The 
returns of a few months' shipments, amounting to several hundred 
dollars, will pay for supplies which are used for a period of a year or 
more. • The supplies which are used throughout the year should be 
prorated in such a manner that each member contributes to the cost 
of these supplies in proportion to his year's business with the organi- 
zation. 
Provision should be made by which a small amount is withheld 
from the returns, to be placed in a fund from which supplies, repairs, 
and improvements can be paid. This fund should also be charged 
with reserves for depreciation on plant and machinery. By using 
this method funds are available which make it possible to take advan- 
tage of cash discounts in buying supplies, and the cost of repairs 
and improvements can be adjusted equitably. In the setting up of 
a reserve for depreciation on the plant and equipment, replacements 
can be made without special assessments, and money is available 
to make suoh replacements when necessary. 
It is surprising to find that but a small number of the farmers' 
creameries and cheese factories keep accurate accounting records, as 
heretofore attention has been centered in the manufacturing end of 
the enterprise. There is great need for an improvement in the 
accounting and general business management of these organizations. 
To show the true state of the business, expert audits are needed. The 
present unsatisfactory condition is recognized by bankers, and has 
affected the financial standing of the average farmers' creamery or 
cheese factory. 
FRUIT AND PRODUCE ASSOCIATIONS. 
Fruit and produce marketing organizations which pool the mem- 
bers' products generally require considerable sums of money in order 
to meet early marketing expenses and make advances to the growers, 
since in most cases several weeks elapse between the delivery of the 
members' product and the returns from the market. It is necessary 
for the growers to have funds with which to meet picking and pack- 
ing expenses. Owing to the fact that independent buyers are willing 
to pay for the fruit upon delivery, the cooperative organizations at 
the outset have made as liberal advances to the members as possible. 
Various plans have been devised by which the association can secure 
funds from outside sources, since hi many cases it is impracticable 
