LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 91 
part of the overhead expenses. (Comp. Stats. 1921, par. 5608.) Under this 
exception, the difference between a nonniember and a member is not of such 
significance or the authority conferred of such scope as to have any material 
effect upon the general purposes or character of the corporation as a mutual 
association. As applied to corporations organized under the 1917 act, we have 
no reason to doubt that the classification created by the proviso might properly 
be upheld. (American Sugar Refining Co. v. Louisiana, 179 U. S. 89, 21 S. Ct. 43, 
45 L. Ed. 102; Warehouse Co. v. Tobacco Growers, 276 U. S. 71, 48 S. Ct. 291, 72 
L. Ed. 473. ) A corporation organized under the act of 1919, however, has capital 
stock, which, up to a certain amount, may be subscribed for by any person, firm 
or corporation ; is allowed to do business for others ; to make profits and declare 
dividends, not exceeding 8 per cent per annum ; and to apportion the 
remainder of its earnings among its members ratably upon the amount of 
products sold by them to the corporation. Such a corporation is in no sense 
a mutual association. Like its individual competitor, it does business with 
the general public for the sole purpose of making money. Its members need 
not even be cotton growers. They may be — all or any of them — bankers or 
merchants or capitalists having no interest in the business differing in any 
respect from that of the members of an ordinary corporaton. The differences 
relied upon to justify the classification are, for that purpose, without substance. 
The provision for paying a portion of the profits to members or, if so de- 
termined, to nonmembers, based upon the amounts of their sales to or pur- 
chases from the corporation, is a device which, without special statutory au- 
thority, may be and often is resorted to by ordinary corporations for the 
purpose of securing business. As a basis for the classification attempted, it 
lacks both relevancy and substance. 
The Supreme Court held the exception in the Oklahoma statute in 
question unconstitutional. The reason was that the court found 
the method of doing business, which the cooperative gin in question 
was authorized to follow by the statute under which it was organ- 
ized, was so similar to that which was followed by commercial gins 
that there was no sound difference between the two. The court 
said : " Like its individual competitor, it does business with the 
general public for the sole purpose of making money." It is sub- 
mitted that this language reveals the real reason why the court held 
the exception to the Oklahoma statute unconstitutional. The court 
distinctly pointed out that cooperative corporations formed under 
the 1917 act, under which members and nonmembers must be treated 
alike, and which function on a nonprofit basis, were so different 
from commercial concerns as to entitle them to a distinct classifica- 
tion; and if the so-called cooperative corporation involved had been 
formed under the 1917 act, the court indicates it would have held the 
exception to the Oklahoma statute constitutional. Obviously, there 
is a broad distinction between the cooperative type of business and 
the commercial type of business. In fact, the terms in question are 
antonyms. 
This case should not be regarded as bringing into question any of 
the cooperative statutes. It involved a licensing act which authorized 
a commission to deny a license to any applicant therefor other than 
a cooperative; and the court was of the opinion that the manner of 
operation of the particular " cooperative " gin in question was not 
sufficiently different from that of a private gin to justify the grant- 
ing of a license to the " cooperative " gin without a showing of public 
necessity therefor. The cooperative statutes, generally speaking, do 
not prevent private parties from going into business. 
In other fields than agriculture there are many interesting ex- 
amples of classification. For instance, a statute of Minnesota that 
fixes the closing hours for barber shops was upheld although the 
