LEGAL PHASES OF. COOPERATIVE ASSOCIATIONS. 71 
ARTICLE XIX.—ACCOUNTS AND AUDITING. 
Section 1. This association shall install a standard system of accounts and 
provide other accounting appurtenances that may be necessary to conduct the 
business in a safe and orderly manner. 
Notr.—The Bureau of Agricultural Economics has devised sys- 
tems of accounts for several types of cooperative business, such as 
grain elevators, fruit organizations, creameries, live-stock shipping 
associations, and stores. Information in regard to systems of ac- 
counts may be obtained by writing to the Bureau of Agricultural 
Economics, U. S. Department of Agriculture. 
Sec. 2. The books and business of the association shall be audited quarterly 
by the auditors selected from the membership. A complete annual audit shall 
be made by a competent accountant previous to the date of each annual meet- 
ing, at which meeting his report shall be presented in full. Special audits 
shall be made upon order of the board of directors or upon a majority. vote 
of the members at any regular or called meeting. 
Sec. 3. This association shall endeavor to cooperate with other farmers’ 
cooperative associations in this locality in securing the services of a competent 
accountant for its annual audit. 
NoTeE.—While small associations may not feel the need of such 
a Strict system of investigating their accounts, it will pay to have 
this work done often and thoroughly. If the business of the as- 
sociation is being conducted carelessly, frequent audits will make 
this fact known, and better methods may be adopted before any 
great loss occurs. An audit by an expert accountant gives the 
members confidence in the business methods of the manager and 
directors. 
ARTICLE XX.—AMENDMENTS. 
SEcTION 1. These by-laws may be amended at any meeting by a two-thirds 
vote in the affirmative of the members present, provided that notice of the pro- 
posed amendment is included in the call for said meeting. 
ASSOCIATIONS FORMED WITH CAPITAL STOCK. 
Organizations which are formed with capital stock should replace 
Articles III and X of the suggested by-laws for organizations with- 
out capital stock with the following articles: 
ARTICLE III.—MEMBERSHIP. 
SecTIoNn 1. Any (bona fide) grower of farm products in any territory tribu- 
tary to the shipping points of this association may become a member of the 
association by agreeing to comply with the requirements of these by-laws and 
purchasing at least one share of capital stock of the association. 
Note.—See note following Article III of the by-laws for or- 
ganizations without capital stock. 
ARTICLE X.—CAPITAL STOCK. 
Section 1. The capital stock of this association shall be $5,000 divided into 
500 shares of $10 each. 
Sec. 2. No member shall hold more than 10 per cent of the capital stock of 
the association. 
