UNITED STATES DEPARTMENT OF AGRICULTURE 
% BULLETIN No. 541 
Contribution from Bureau of Markets 
CHARLES J. BRAND, Chief 
Washington, D. C. 
March 23, 1918 
COOPERATIVE ORGANIZATION BY-LAWS. 
By C. E. Bassett, Specialist in Cooperative Organization, and 0. B. Jesness, 
Assistant in Cooperative Organization. 
CONTENTS. 
Page. 
Importance of by-laws 1 
Adaptation of by-laws to local needs 2 
Importance and advantages of incorporation. 2 
Section 6 of the Clayton amendment 3 
Dealing with nonmembers 5 
Differences between the nonstock and stock 
form of organization 6 
Financing and perpetuating nonstock organi- 
zations 7 
Section 6 and existing organizations 10 
Section 6 organizations and State incorpora- 
tion laws 12 
Page. 
Section 6 and the State antitrust laws 12 
Adopting the by-laws 12 
Caution that the department's views of law 
are not conclusive 13 
Suggested form of by-laws for a cooperative 
nonprofit marketing association, formed 
-without capital stock 14 
Suggested form of by-laws for a cooperative 
marketing association formed with capital 
stock 22 
IMPORTANCE OF BY-LAWS. 
The founders of every cooperative association should have a 
definite plan of action mapped out before the organization actively 
engages in business, as the lack of such a plan has resulted in the 
failure of many cooperative enterprises. The importance of the by- 
laws of a cooperative association is readily comprehended when it 
is realized that the purpose of the by-laws is to serve as a working 
plan for the organization. The relation of the by-laws to the organ- 
ization resembles the relation of the specifications for a building to 
the finished structure. The blue prints furnish the builder with a 
graphic representation of the work to be done and this is supple- 
mented by the necessary descriptive material, so that he knows before 
the building operations are commenced what each room is to be 
like and how the entire structure will appear when finished. Satis- 
factory results are not obtained when the plans furnished the builder 
are incomplete or inaccurate. A person about to erect a building 
does not obtain a photograph of a structure, the appearance of which 
pleases him, and expect the workmen to be able to build one like it 
with no other guide than this photograph. Organizations on the 
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