8 BULLETIN 541, U. S. DEPARTMENT OF AGRICULTURE. 
are not necessary in the ease of organizations which are in a position 
to secure funds needed for short periods from other sources. 
Whenever an organization borrows, provision must be made for 
paying interest and principal. In the case of short-time loans 
required to finance the organization during the marketing season, 
payment may be made from commissions deducted from the 
proceeds of sales of the products. Thus, in some lines of business 
considerable money is required during the rush season in order to 
make advances to the farmers for their products, as the association 
does not get the returns from the sale of the products until later. An 
organization operating on a safe margin should not experience any 
difficulty in meeting such obligations. 
Similarly when loans are obtained to finance the erection of build- 
ings, or the purchase of property, provisions for repayment should be 
made. Needs of this kind, however, can best be met in ways entirely 
different from those employed in supplying money for short periods. 
A method of obtaining money for such permanent purposes not 
infrequently followed by cooperative associations is to levy assess- 
ments on the members in proportion to the business done for them by 
the organization. Thus, in the case of a creamery organization, 
which borrowed the money necessary for building and equipping the 
plant, a special levy of 1 cent for each pound of butter fat handled 
was made in order to provide the money needed to repay the loan. 
In case of a cooperative organization which secures from its own 
members the funds for making permanent improvements, it is some- 
times argued that it is unnecessary to provide for repayment. There 
are strong reasons, however, for the association specifically to assume 
an obligation to return every contribution of this character. The 
membership of an association will gradually change, so that an 
organization which secured its capital from its original members, 
sometimes finds that many of the old members have dropped out and 
that new members, who have not contributed to the original expense 
of the association, have come in to take their places. On this account, 
unless some provision is made for the repayment of money obtained 
from the members, the time may come when all the members who 
have contributed will have withdrawn. Adequate provision, of 
course, should be made annually for depreciation in the value of the 
property. 
Loans may be secured from members with the understanding that 
they will be repaid upon withdrawal from the association, or that they 
will be repaid at some stated time, or in installments. 
One objection to allowing such loans to run until a member with- 
draws from the organization, is that there may be a number of with- 
drawals during one year and none during another year. Under these 
circumstances it is difficult to forecast how much money will be 
