The Monticellonian., 1915-09-09
| ONLY MEN CAN COOPERATE
Much Confusion in Use of Term "Co- Operation" as Applied to Agri-
 cultural Efforts.
(By G. HAROLD PowELI)

!
 fers fundamentally from the capital
 stock corporation conducted for profit.
 A capital stock corporation for profit
 is organized to return an earning and
 profit on the capital used in the business. The basis of administration, control and the distribution of earn | ings is the capital invested in the un- | dertaking. In a cooperative organi- | zation. the basis of control Is the
 membership, where each votes equal | iy irrespective of the volume of his | business; though the basis of control is often made the product of the
 members. where each votes in pro portion to the volume of business
 contributed. while the earnings in
 either case, if they occur. are re- turned to the member Tn proportion to the volume of business he trans
 acts through the organization. The
 basis of the cooperative organization
 is men: of the capital stock corpora.
 tion, money. Capital cannot cooper
 ate; products cannot cooperate;
 only men can cooperate. When the degree of cooperation Of a member
 is measured by the capital or the vol
 ume of business contributed. then the members as men are not co-operat- ing: either capital or product Is the basis of cooperation through the mem Der as the medium.
 There is much confusion in the use of the term 'co-operation" as applied to agricultural efforts. It is common ly applied to any group of farmers who associate themselves together. They may organize as members of voluntary unincorporated association of individuals; or as an incorporated capital stock association to handle farm crops for profit or for other pur- poses, or as nonprofit corporations without capital stock. In California, for example, the term is applied to both profit and nonprofit corporations organized to handle farm products, whether organized and controlled by the producers themselves, or by oth- CTS. In other parts of the country, the same uncertain use of the term is applied to various kinds of agrieui- tural movements. The term needs to be defined by the federal and state statutes It is believed that it's use as applied to business organizations in agriculture should be restricted to incorporated associations, societies, exchanges, or agencies which are formed exclusively for the benefit of the members; whose voting power is based on equality of membership; whose membership is confined exclu- sively to active producers, the mem bership ceasing to exist when the pro dueer withdraws from the organiza- tion, and whose earnings are distrib- uted by each member, after a fair rate of interest is paid for the use of capital actually employed in the busi- ness, if any, and other overhead charges are deducted A cooperative organization. therefore, is not cor poration in which the capital is con- tributed primarily in order that it may earn profit; nor one composed of producers and nonprodueers; nor one in which the producers product is handled by corporation for the bene- fit of the stockholders rather than for that of the members; nor one in which the membership is not under the control of the organization; nor one in which the membership do not actually control the organization. It is an association of farmers who unite in an effort to handle their common interests through an agency which is controlled by them. on the principle of an industrial democracy. and ex- clusively for their benefit
 A cooperative association may be incorporated as a capital stock cor poration or as nonprofit corpora tion without capital stock. If formed as capital stock corporation it may still be legally cooperative if the laws under which it is formed permit the members to manage it's affairs along cooperative lines, or if the statute provides the method of voting, the method of transferring stock, the limitation of membership and the dis tribution of earnings according to CO., operative principles. There has been little effort by the states to enact laws that will permit the organiza- tion of purely cooperative associa- tions of farmers. It is therefore i'm possible in most states for an asso- citation to be formed that can operate securely along cooperative principles, though as a matter of fact many asso- Ciati0OS SD fOrr1pd do by tba pCDSant of the stockholders. actually operate CO., operatively.