68 BULLETIN 1266, U. S. DEPARTMENT OF AGRICULTURE. 
stances two or three local associations in the same territory own and 
operate a warehouse together. The association with a warehouse 
may have some advantages if care is taken to order goods direct 
from the ships, the prices, of course, being slightly cheaper from 
ship than from stock. The members can call for their feed supplies 
when needed. The local association with a warehouse usually has 
capital in a local bank. The local association without a warehouse 
usually requires no capital. Goods are distributed directly from car 
on track to members, and they pay for the goods in sufficient time to 
enable their association to make proper remittance to the central 
association. 
The central association distributes its feed supplies through the 
local association to members at prevailing current prices. At the 
end of the fiscal year the surplus earnings (after reserve funds are 
provided for) are returned to the local associations in proportion to 
their purchases. The central association controls the price at which 
the goods are distributed. 
Finance. — No initial membership fee is required. The central as- 
sociations are nonstock associations. To provide for their credit each 
local association must pledge its guaranty to a sum usually equiva- 
lent to 2 kroner (53.6 cents at par of exchange) per cow, with a mini- 
mum of 500 kroner ($134) for each local association. The contract 
agreement, which the individual members sign in each local asso- 
ciation, authorizes its board of directors to underwrite this guar- 
anty certificate, for which amount the members in the local asso- 
ciation assume joint liability. This guaranty certificate is then for- 
warded to the central association to be used by it in providing neces- 
sary funds to carry on its operations. This guaranty money may be 
demanded for payment to cover any deficits contracted by the cen- 
tral association; but beyond this the individual members are not 
financially liable to the central association, except that the members 
of the local association are jointly liable for the payment of all 
goods delivered to the local association. 
A large reserve fund is gradually accumulated by the central asso- 
ciation from its net earnings. According to its by-laws, the Jutland 
Peninsula Association must retain at least 25 per cent of its yearly 
net earnings for reserve funds, while some of the other associations 
retain as high as 50 per cent. The reserve funds are used for 
operating capital, with an interest rate of 5 per cent. In case of 
withdrawal at the end of the membership period, one-third to two- 
thirds of the local associations' share of the reserve fund is paid off. 
Besides the reserve funds, large sums are yearly written off the 
central association's property and equipment, which appear on 
their books at a fraction of their value. 
Membership. — Membership in the central association is made up 
chiefly of local feed-purchasing associations; but in some cases co- 
operative creamery associations, consumers' stores, and other associa- 
tions which supply their members with feeds may be members. 
The local association is pledged to take its entire supply of feed- 
stuffs from the central association for a period of five years. If 
a local association desires to withdraw its membership, it must give 
six mouths' notice before the close of the five-year period, other- 
wise the membership is automatically renewed. The individual 
members under written agreement to the central association are 
