COOPERATIVE ORGANIZATION BY-LAWS. 7 
stated that truly cooperative organizations having capital stock now 
generally allow each member one vote only, regardless of the number 
of shares he may own. 
FINANCING AND PERPETUATING NONSTOCK ORGANIZATIONS. 
One advantage of the stock form of organization is that the sale 
of the shares provides the required capital. A nonstock organiza- 
tion must provide whatever capital it requires in some other way. 
Where only a nominal sum is necessary, this may be secured by means 
of a membership fee. If any considerable amount is required, that 
method may not prove feasible, because a large membership fee 
may make it difficult to secure members. Where a greater amount 
of capital than can be obtained from membership fees is required, 
it will have to be borrowed either from the members of the associa- 
tion or from an . outsider. When it is desired to secure all of the 
capital from the members, the organization can make it a member- 
ship requirement for each member to loan the association a certain 
amount, or it may rely on loans being made voluntarily by members. 
One advantage of requiring all members to participate in such loans 
is that it creates a vital interest among them in the success of their 
organization, as they become directly concerned in its financial 
affairs . Moreover, reliance upon loans made voluntarily by the 
members necessarily introduces an element of uncertainty. This 
would be diminished or removed if each member assumed a fixed 
obligation to contribute his share of capital when called on. Where 
the money is borrowed outside of the membership, some security for 
the loans is usually required. In such case a joint note of the mem- 
bers or individual notes of the members may furnish the necessary 
security. The latter method is preferable, because it limits the 
liability of each person to the amount of his note. 
When a supply of money is required for only a short period, as 
during crop-moving times, the plan of having each member give the 
association a negotiable, promissory, demand note for a certain sum 
and then using the notes as collateral in obtaining loans, has been 
employed with success. These notes may be used for three years, 
and at the end of that period, when the member's patronage of the 
association may have increased or diminished, new notes may be 
taken for a respectively larger or smaller amount and the old notes 
may be canceled. This is simply a method whereby the member 
loans a small portion of his credit to the association and does not 
actually pay out any money, unless the association should be unable 
to repay the loans thus secured. If the amounts of the notes are 
based on the amount of business likely to be transacted with the 
organization, each member will loan his credit in proportion to the 
use he expects to make of the organization. Obviously these notes 
