38 BULLETIN 1266, U. S. DEPARTMENT OF AGRICULTURE. 
The cooperative bacon factory associations are nonstock associa- 
tions. The necessary fixed and' operating capital is provided by a 
loan, which is guaranteed by the members of the association. So 
far as the creditor is concerned, the members are jointly and sever- 
ally liable for this loan and for any other obligations incurred by 
the association. Within the association this guarantee sum is divided 
among the different districts (sogn) in proportion to the number 
of hogs pledged. TYliile the membership in a cooperative creamery 
is local and each member is personally known by other members, 
the cooperative bacon factory association comprises a much larger 
territory. It was found that the farmers in each district were will- 
ing to enter into a joint guarantee with farmers in their local dis- 
trict, but were not willing to enter into a similar joint agreement 
with strangers in other sections of the territory. So it was neces- 
sary to divide the territory into local districts and to make the 
farmers in each district jointly liable for the district's share. How- 
ever, within each district this liability may again be proportioned 
among the members according to the number of hogs delivered or 
pledged. 
The membership's contract agreement holds for a definite period, 
usually 5. 7. or 10 years, and comprises two features: (1) Each 
member is pledged to deliver to the cooperative factory all hogs 
he produces, except those used for home butchering, breeding stock. 
and small pigs sold before 3 months old. In violation of this pledge 
he pays a penalty of 10 to 25 kroner ($2.68 to $6.70 at par) per hog; 
(2) members become joint guarantors for the loans which are exe- 
cuted by the association. 
After providing for the amortization and reserve funds, the sur- 
plus is returned to the members in proportion to the slaughtered 
weight of hogs delivered during the year. The plant is owned by 
the current members. The property is valued at the beginning of 
each period and each member is credited with his share of the asso- 
ciation's assets in proportion to the weight of hogs delivered during 
the last period. If a member withdraws at the end of the 10-year 
period, he or his heirs may be refunded at least two-thirds of the 
amount of his share. If a farmer turns his operations over to a new 
person, he may arrange to transfer his delivery agreement to the 
new person: but this does not release him from the guarantee obli- 
gation tor the 10-year period, until the new party has been properly 
recognized by the board of directors. 
MANAGEMENT. 
(t< /// ml rru < ting. — The members meet annually in a general meet- 
ing, when tin' financial statement is laid before them as well as other 
business concerning the association. Each member has one vote. 
Ordinary business matters are decided by majority vote in the gen- 
eral meeting. Changes in laws, or questions of the discontinuation 
of the factory, require, two-thirds to three-fifths majority. 
Board of din ctOTB. — The general supervision and management of 
the factory is handled by a hoard of directors which generally con- 
sists of 7 to Is members elected for two or three years. Three meth- 
od.- are practiced in the election of the board members: (1) They are 
elected by the members at the general meeting: (2) the membership 
