28 BULLETIN 394, U. S. DEPARTMENT OF AGRICULTURE. 
than on business efficiency. This type of promotion is usually fol- 
lowed by a policy which soon brings the business to a disastrous end. 
(3) Favorable environment. — In several communities in which 
successful cooperative stores were found, investigation revealed that 
there had previously existed some natural bond of union, which in 
itself was an important factor in determining the welfare of the 
business. Of these may be mentioned predominating nationality, 
common occupation, church affiliation, and fraternal organization. 
The existence of such communities may be taken as a good omen 
for the success of any kind of business organization on the coopera- 
tive plan. 
(4) Adequate legal safeguards. — A cooperative association, even 
more than a corporation, requires a legal standing which will secure 
safety. Every cooperative association is intended to be a sort of 
public-service institution, and, as such, it should have the legal safe- 
guards which some States have provided by recently passed cooper- 
ative laws. In one of these laws, a survey of the locality is strongly 
recommended before an organization is effected. The same law re- 
quires financial statements to be sent twice a year to an official 
charged with the duty of protecting members of cooperative asso- 
ciations. 
The causes of failure, it is evident, are largely the opposite of those 
conditions which make for success. The converse of the foregoing- 
four conditions of success would be: (1) Lack of leadership; (2) 
poor management; (3) unfavorable environment: and (4) lack of 
proper legal safeguards. 
(1) Lack of leadership. — Frequently an outside leader comes into 
the community and through his enthusiasm arouses the people to 
a condition in which they are ready to enter upon the establishment 
of a cooperative store. Then, after seeing the enterprise started, 
he goes to other communities and leaves the association to work out 
its own salvation. In many such communities the organization dies 
from lack of interest as soon as the promoting spirit is gone. In 
other cases, the leadership in a community may be of such an un- 
practical character as to lead the association into attempting some- 
thing which is actually impossible of realization. In such cases, also, 
disaster is sure to follow. 
(2) Poor management. — Let the management be ever so efficient, 
an association may still fall short of success if unpractical leaders 
force it into attempting the impossible. But even if it be presup- 
posed that the business is adapted to the needs of the community, 
and every other condition favorable, it may still fail entirely through 
bad management. Among the outstanding shortcomings of the in- 
efficient manager have been noticed reckless buying, excessive exten- 
