70 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 
and grade during such period or periods as the board of directors from time 
to time may determine. 
Note.—It is important that an average price should be paid 
for products of the same grade shipped during a specified period. 
In this way inequalities and dissatisfaction are avoided, and the 
association is better able to serve the interests of the entire mem- 
bership. 
ARTICLE XVII.—COOPERATIVE PURCHASE OF SUPPLIES. 
Section 1. All merchandise purchased by the association for any member 
shall be paid for in cash by the member ordering such supplies at the time 
the order is placed. 
Notre.—Without such a provision an organization purchasing sup- 
plies for its members may find that some of the members will 
refuse to take supplies ordered or else will not pay promptly. 
A cooperative organization should extend credit to no one unless 
. it is amply secured. 
SEc. 2. Iflocal dealers handle the supplies desired, they shall be given 
an opportunity to bid on the order before it is placed with an outside agency. 
NoTte.—In the cooperative plan of buying farm supplies the local 
dealer should be given consideration and an opportunity to submit 
terms and prices. 
ARTICLE XVIII.—SAVINGS AND DAMAGES. 
Section 1. After the season’s expenses are paid and a proper sum set aside 
to cover the depreciation of the association’s property and provision is made 
for a reserve fund to be fixed by the board of directors, the balance of the 
season’s returns on products sold shall be divided among members and non- 
member patrons, if any, in proportion to the value of their products sold 
through the association, and the balance of the season’s savings on supplies: 
purchased shall be divided in like manner. In the case of a nonmember pa- 
tron, any part of such sums of money may be applied, with his consent, to: 
the payment of membership fees and dues for him; and, if So applied, when 
such fees and dues are fully paid a membership certificate shall be issued to 
‘him. When any nonmember offers his products and the association accepts 
them for sale, such offer and acceptance shall be deemed an application for 
membership, if the nonmember agrees that it shall be so considered. 
Sec. 2. Any member who fails or refuses to deliver his fruits and vege- 
tables to the association in accordance with the contract entered into by him 
with the association shall pay to the association the sum of______--__----_---~-- 
PQOTPOR GNA e pre es oe 3) ae ET Mista’ RPG US not delivered by him to compensate: 
the association for its expenditures in providing and maintainig for him the 
machinery, equipment, facilities, personal services, and information necessary 
to market his crop. And in addition thereto, he shall be liable to the associa- 
tion for all damages suffered by it as a result of the breach of the contract. 
All contracts entered into by the association with members for the delivery 
of produce contemplate the delivery of such produce and not the payment of 
compensation in lieu thereof. 
Notre.—Many organizations have failed because members were 
bound only by a “ gentleman’s agreement,” which is totally inade- 
quate for a stable and enduring organization. The laws of the 
State should be studied to ascertain the status of a provision of 
this kind. 
