COOPERATIVE PURCHASING AND MARKETING ORGANIZATIONS. 3 
but a number of difficulties were soon encountered and failure re- 
sulted in many instances. This brought about a decline in the 
movement, so that by 1880 The Grange was practically extinct. 
Since then, however, it has been revived gradually, so that at present 
there are a large number of Granges in existence. 
Other organizations of farmers were established about the same 
time as The Grange, or during its decline. Among the organizations 
which were established during this period were the National Farmers'' 
Alliance and Industrial Union, the Northwestern National Farmers' 
Alliance, the National Agricultural Wheel, and the Brothers of 
Freedom. 
PRESENT FORMS AND TENDENCIES. 
The farmers' purchasing and marketing organizations of the 
present time may be divided into noncooperative capital stock com- 
panies and cooperative organizations. The term " noncooperative 
capital stock company" is used because an organization may be 
formed with capital stock and still be cooperative. The noncooper- 
ative capital stock company is an organization which distributes 
its profits according to -the capital invested, by means of dividends 
on capital stock. In a company of this kind there is no limit to the 
proportion of the capital stock one person may own and the stock- 
holders have as many votes as the number of shares they hold. 
This makes the capital stock the ruling factor in the organization. 
In a truly cooperative organization the financial interest of each 
member is limited, each member has the same voting power, and the 
savings x are distributed by paying a fair rate of interest on the 
capital invested, and by distributing any further savings in the form 
of a patronage dividend, proportioned on the amount of business 
transacted with the organization. Many of the truly cooperative 
organizations of this country are formed on the capital stock plan, 
but unlike the ordinary capital stock company there is a limit to 
the number of shares each may own, the voting powers of all the 
members are the same, and the stock dividend is limited to a fair 
rate of interest. Nonstock organizations needing capital usually 
charge a membership fee or else borrow the necessary money. 
It is important to distinguish between stock and nonstock forms 
of organization because of the bearing which section 6 of the Clayton 
Act, amending the United States antitrust laws, has on this point. 2 
It is unfortunate that so many of our farmers' organizations are 
not formed on a strictly cooperative basis, as this fact undoubtedly 
has hindered the growth and development of the work of such 
associations. Among the reasons that can be given for the present 
1 In a strictly cooperative organization the gains made in the business are referred to as savings rather 
than profits. 
2 See page 77. 
