Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-08-18

The Rochdale idea is prin-
cipally that of q buying club, in
which several families pool their
money to buy at wholesale,
thereby saving the profit they
otherwise would pay to q re-
taller.
| The movement has grown,
though. so that most retail Cos
ops have their own wholesale
Setups.
While the Washington area
co-opS buy many standard
brands locally, they also deal
through the Baltimore ware
house of Potomac Co-operators,
Inc. of which they are part
owners.
Eastern Co-operatives, Inc.
provides similar services on 9
wider regional basis, and Ma
tional Co-operatives, Inc. does
SO on q country wide scale
particularly in contracting with
national standard brand manu-
! facturers to produce grade
labeled goods under the co-or
name.
The coop movement is partic-
ularly strong in England and
the Scandinavian countries
where the organizations own not
only wholesale establishments
but manufacturing plants.
The movement is not so strong
in the United States. but there
are a few coop organizations
at the manufacturing level.
Customers Become Members.
AS organized today, retail CO.
ops are corporations in which
customers can become members
by buying stock-priced at $40
a share in this area.
Unlike the usual corporation
in which stockholders get a vote
with every share Of stock. coop
members get only one vote on
the democratic theory Of lone
member, one vote"
Also, a limit is put on the
number of shares any one men,
Der may own-$1 900 in Green
belt and Rochdale of Virginia.
This is to prevent any single
member from having so much
money invested that he could
control policy of the coop by
threatening to withdraw his
holdings.
Operational control of the
coop is vested in a Board of Di-
rectors elected by the members
The board, in turn. hires the
store managers. who hire the
rest of the employees.
AS they shop, patrons keep
sales slips and turn them in at
the end of the organizations
fiscal year.
How Excess Is Anocated.
If the coop is healthy enough
it does the following things with
the money left over after all thu
years bills are paid:
Allocates part to reserve
pays fixed dividend on thu
stock Is per cent for Rochdal,
of Virginia and Greenbelt). pay
income taxes and then divides
the rest (which would be profit
to a privately-owned corpora
tom among its patrons in pro-
portion to their purchases owe
the year as a patronage re-
fund.-"
A / per cent patronage refunt
on $1,000 of purchases, fol
example. would amount to $40
Last year Greenbelt paid 1.9 PEI
cent-a total of $1,000. u
Members may take the refunc
in cash if they own over {
stated amount of stock $3.50 il
the Virginia coop and $40 II
Greenbelt) or apply it to tn,
purchase of more stock up Il
the maximum limit.
Non-members must apply tn,
refund toward the purchase o.
stock, thereby becoming mem
bers.
Both Greenbelt and Virgins
maintain reserves to buy UP the
stock of anybody who wants tt
withdraw or is leaving the area
It is the patronage refund
which is attacked by enemies oil
co-ops. who argue that they dc
not pay taxes.
Co-ops do pay taxes-income
social security, unemployment
and all others which apply to
retail businesses.
They pay no profit taxes, the
co-ops point out, because they
have no profits.
They declare that "any BUSH
ness that chooses to contract to
return part of it's receipts to Gus
toners, as the coop does, can
do so; and it will not be taxed on
the receipts it does not keep"
1