COOPERATIVE ORGANIZATION BY-LAWS. 11 
Clayton Act, will have to change their form of organization and the 
manner of conducting their business, if they desire to obtain the 
benefits of the exemption provided by that section. No hard and 
fast rules for making this change can be laid down, as the exact pro- 
cedure depends largely on the laws of the State in which the organi- 
zation is incorporated. The first step should be to ascertain whether 
or not the State laws provide for the incorporation of organizations 
formed in accordance with section 6. If so, the details of the manner 
of changing from the existing form should be ascertained. The by- 
laws, of course, will have to be changed to comply with the new form 
of organization. It is likely that in most instances the old organi- 
zation will be dissolved and a new organization formed. If so, a new 
set of by-laws can readily be adopted. 
The questions arising in connection with the transferring of the 
property from the old association to the new organization are likely 
to prove perplexing in many cases, especially where the old organi- 
zation is formed on the capital-stock plan. There are various ways 
of adjusting this matter, and the best method will depend on the 
character of the organization and local conditions. A plan which 
may be followed where the value of each share of stock in the old 
organization is small and the shares are uniformly distributed among 
the members is to issue paid-up memberships in the new organization 
in exchange for the shares in the old and in this way eliminate the 
capital stock. Thus, if the value of a share in the old organization 
is $10 and each member has one share, the membership fee in the 
new organization can be placed at $10. If the value of a share in the 
old organization is $25 and the annual fee in the new association is 
placed at $5, each shareholder may be credited on his annual dues 
for five years. The difficulty lies in the fact that the shares of stock 
usually are not uniformly distributed. Thus, one member may have 
only 1 share and another member have 20 shares. In such a case 
the method outlined would prove impracticable. Should the mem- 
bership in the new organization be considerably larger than the old, 
it may be possible with the receipts from the membership fees of new 
members to purchase from the old members the extra shares, at their 
actual cash value, and cancel them. 
Where the property holdings are extensive and the capital stock is 
large, some other method of transferring the property is likely to prove 
more feasible. In some cases it may be found advisable not to dis- 
solve the old organization, but to let that corporation continue as 
the owner of the property. The new organization can then lease the 
property from the old association, paying sufficient rental to provide 
for depreciation and a fair rate of interest on the investment. If so 
desired, the old association can be dissolved and the new association 
can purchase the property, when authorized as necessary for the 
conduct of its operations, paying for it on the installment plan. 
