16 BULLETIN 394, XT. S. DEPARTMENT OF AGRICULTURE. 
and nonmembers. The opposite case is illustrated by the experience 
of one of the most successful stores, which in 26 years has missed 
paying a dividend but once. It reported 100 per cent active mem- 
bers and a large nonmembership trade. 
It must be admitted that in general the results in net profits are 
somewhat discouraging. Only 11 stores out of 60, or 18 j per cent, 
were able to show a net profit of 5 per cent or over. 
If we conclude, as we are forced to do, by the supplementary notes 
found in the questionnaires, that the 30 stores for which the net 
profits could not be calculated would make a still poorer showing, 
we are convinced that much greater caution should be exercised 
before starting cooperative stores. 
ACCOUNTING, REPORTS, AND AUDITING. 
One of the principal objects of this survey was to ascertain the 
business practice of existing cooperative stores and to study their sys- 
tems of accounting and auditing. Questions 93 to 150 in the ques- 
tionnaire show the different points which were studied with great 
care. In addition to recording the answers to these questions, the 
investigator aimed to see as much of the accounting and office system 
as time and conditions would permit. As has been stated, the survey 
made evident that the business practice, including the system of 
records, is probably the weakest point in the management of coop- 
erative stores. Investigations by the Office of Markets and Rural 
Organization have shown this to be true of nearly all other coopera- 
tive enterprises. 1 
This weakness is due to lack of training on the part of the managers 
themselves, to inability to pay the salary required by trained ac- 
countants, and to the general failure on the part of the membership 
of cooperative associations to realize the importance of a clear and 
constant record of the state of their business. 
To the question, " Is the accounting system satisfactory ? " 20 
managers answered in the affirmative, 16 answered " Fair," 9 an- 
swered in the negative. The investigator's " remarks " show that the 
closer examination which he made of the systems led him to believe 
that a very small proportion of the stores visited had what could 
reasonably be called a satisfactory system of accounting. In fact, in 
almost 50 per cent of the. cases, the results of the attempts to get 
answers to questions relating to the status of the business showed 
that the managers themselves had no definite records from which 
they were able to give a satisfactory statement of the condition of 
the business. 
1 Bassett, C. E., Moomaw, Clarence W., and Kerr, W. EL, Cooperative Marketing, and 
Financing of Marketing Associations. In U. S. Dept. of Agriculture Yearbook 1914, pp. 
185-210. Kerr, W. H., and Nahstoll, G. A., Cooperative Organization Business Methods, 
V. S. Dept. of Agr. Bulletin 178, 1915, p. 20. 
