2 BULLETIN 559, U. S. DEPARTMENT OF AGRICULTURE. 
A sound and adequate system of accounts is a prerequisite to good 
management in every organization, and the adoption of a uniform > 
system applicable to the industry as a whole facilitates the inter- 
change of ideas and affords comparisons and collections of data which 
make for greater efficiency, saner competition, and sounder methods 
throughout the entire busmess. An accounting system to be uniformly - 
applicable to both large and small units must be flexible enough to | 
satisfy the needs of all and yet simple enough to appeal to those 
organizations which do not employ technical bookkeepers. The 
system presented in this bulletin offers the results of careful study — 
and practical experiment in creameries operating under widely vary- 
ing conditions. It is designed to meet the increasing need of country 
creameries which are demanding an efficient and practical method of 
accounting. 
TYPES OF CREAMERY ORGANIZATION. 
The types of organization found among creameries vary as widely 
as do those of other marketing associations. Various influences have 
prevailed to bring about these differences, among which may be — 
cited the preferences of individual outside organizers, the desire of 
farmers for a free expression of cooperative theory, limitations 
caused by local competitive or trade conditions, and -the legal forms 
of organization prescribed by State laws. None of these factors, 
however, have operated to determine any form of organization on a 
broad scale. Rather, they have brought about variations in the © 
types of individual creameries, even where these have been situated 
in close proximity to one another. Forms of organization to some — 
extent influence the business relations of creameries to their patrons 
and thus have a bearing upon the methods of keeping creamery 
accounts. 
Among cooperative creameries, namely, those paying limited 
stock dividends and distributmg the balance of their net earnings 
in the form of patronage dividends, the most favored form of organi- 
zation is the stock corporation, with by-law stipulations limiting 
the ownership of shares by any one member to a prescribed number 
and distributing the voting power on the basis of membership rather 
than on ownership of stock. In organizations of this type one vote 
is ailotted to each member. A few creameries are nonincorporated 
associations, and still others, although incorporated, have no capital 
stock and in some cases have even no stipulated form of membership. 
As a general rule the plan of organization of any association whose 
operations require the ownership of properties should provide that 
all capital be subscribed in specific, definite amounts, through the 
purchase either of shares of capital stock or memberships of stipu- 
lated value. This defines clearly the relative financial interest of 
.) 
