COOPERATIVE PURCHASING AND MARKETING ORGANIZATIONS. 7 
some localities these plants have been able to compete successfully 
with the farmers' organizations, with the result that some coopera- 
tive creameries have been forced to discontinue operations. 
While the farmers' creameries have not had as systematic compe- 
tition as the farmers' elevators, there have been other handicaps to 
their success. In some cases factories have been established before 
the supply of raw material was large enough to make their operation 
economical. The farmers have in some instances been the victims 
of professional promoters. The benefits of a creamery to a commu- 
nity were set forth in such a way that the farmers were led to expect 
success when it was impossible. Often the promoters received a 
contract for the creamery equipment for which the farmers paid an 
exorbitant price. Many creameries have been established in this 
manner in communities where the number of cows was far too small 
to make their operation profitable. When such conditions have 
existed it is not surprising that the cooperative spirit in some of 
these communities has waned, and that many of the plants which 
were established have failed. 
The farmers' creameries as a general rule are operated in accord- 
ance with cooperative principles to a greater extent than are the 
farmers' elevators. This is accounted for by the differences in the 
two fines of business. In the gram business the^ production is sea- 
sonal and the market is fluctuating; the farmers also are accus- 
tomed to receive their money at the time of delivery of the gram. 
The production of dairy products is not as seasonal as grain pro- 
duction, and the changes in the market are usually less evident. 
Patrons of creameries hi many places are accustomed to receiving 
the money for milk or cream once a month. It is therefore a common 
practice among cooperative creameries to deduct the expenses of 
operation, set aside whatever is needed as a reserve, and divide the 
net proceeds of the business among tne patrons each month in 
accordance with the amount of butter fat delivered by each. Many 
of the farmers' creameries, therefore, are truly cooperative in every 
sense of the word. Some cooperative creameries set aside a suffi- 
cient amount to pay interest on capital invested, while others pay 
no interest on the capital. Many of the creameries are nonstock 
organizations; the necessary capital for building and equipping 
tne plant is borrowed, and the money is paid back by a small monthly 
assessment on the business transacted. In a few cases a creamery 
has retired its capital stock by purchasing it from the holders with 
the surplus funds obtained by levying a small monthly assessment 
on the raw material delivered to the factory. 
Not all the farmers' creameries are as near a strictly cooperative 
type as those described. Some farmers' creameries pay cash for the 
raw material as it is delivered. Such plants are not able to operate 
