LEGAL PHASES OF COOPERATIVE ASSOCIATIONS. 65 
them and his own experience construct a business plan. When- 
ever a manager loses the confidence of the members, he should be 
replaced with a manager who possesses that confidence. The 
duties of a manager differ with the different forms of organization 
and kinds of business. Therefore the duties here outlined must 
be considered as suggestive. Each association should redraft this 
provision to suit its purposes. Organizations like creameries and 
cheese factories may find it advisable to insert an article relating 
to the duties of the butter maker or cheese maker, as in such 
organizations the duties of the manager usually are more limited. 
Article X. — Membership Fee and Finance. 
Section 1. Each member shall pay in advance to the association a member- 
ship fee' of ($5). 
Sec 2. At the time of uniting with the association or at any time thereafter 
when called upon by the board of directors each member shall loan an amount 
to be fixed by the board, not less than ($10) nor more than ($100), in cash to 
the association to be used in building warehouses or other necessary buildings 
and the lease or purchase of lands therefor or in securing necessary equipment. 
Sec 3. Such loans shall draw interest at the rate of (6) per cent per annum. 
Sec 4. Such loans shall be repaid from a special fund created by levying a 
percentage assessment on the produce sold and supplies bought through the 
association, the amount of such percentage to be fixed by the board of directors, 
which amount shall be sufficient to pay (one-fifth) of the entire loan and the 
interest thereon in each year. 
Sec. 5. At the end of each fiscal year each member shall receive a certificate 
showing the amount of money which he has contributed that year to the special 
loan fund. During the life of the association, or until this by-law is changed, 
the special assessments shall continue and the holder of such certificates issued 
in previous fiscal years, out of the proceeds arising therefrom, shall be paid the 
amounts due thereon. 
Note. — This article suggests a method which nonstock organiza- 
tions may employ to secure the capital necessary to build ware- 
houses or purchase equipment. Organizations which require only a 
small outlay for equipment can provide the necessary capital 
through the membership fee. 
Article XI. — Emergency Capital. 
Section 1. At the time of uniting with the association, or any time thereafter 
when called upon by the board of directors, each member, in consideration of 
the maintenance and operation of the association, shall give a negotiable 
promissory note, payable on demand to the order of the association. Such 
note shall be for the sum of ($25) and an additional ($1) for each acre of 
land farmed by the member, the products of which are to be marketed through 
the association. But in no case shall this note be for less than ($35). 
Sec 2. Such note shall be the property of the association for the purpose of 
being pledged by the board of directors as collateral security for any loan that 
may be necessary in the, conduct of the association's business and also for the 
purpose of securing the payment of any debt or claim due by the member to 
the association. And such note shall retain its negotiable character without 
reference to the date of its negotiation. 
Note. — This article is intended to supply capital which is needed 
only for short periods; for example, during the harvesting and 
shipping period and other periods when a temporary supply of 
money is required. The exact legal status of notes of this charac- 
ter in the State where they are to be employed should be ascer- 
tained. 
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