• TABLE OF CONTENTS
HIDE
 Title Page
 Co-operative marketing law
 Chartering cooperative corpora...
 Articles of incorporation
 Application for charter for joint...
 Application for charter for non-stock...
 Suggested constitution and by-laws...
 Suggested constitution and by-laws...
 Can cooperative marketing do it...
 More about cooperative marketi...
 Organizing farmers for busines...
 Cooperation for various busine...
 Rural credits in foreign count...
 Intermediate credit for the...
 The agricultural partnership
 What cooperatives are doing in...
 Index














Group Title: Bulletin New Series
Title: Co-operative marketing laws of Florida
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00014603/00001
 Material Information
Title: Co-operative marketing laws of Florida
Series Title: Bulletin New Series
Physical Description: 62 p. : ; 22 cm.
Language: English
Creator: Florida -- Dept. of Agriculture
Publisher: State of Florida, Dept. of Agriculture
Place of Publication: Tallahassee Fla
Publication Date: 1934
 Subjects
Subject: Cooperative marketing of farm produce -- Law and legislation -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
General Note: "Dec. 1934."
General Note: Cover title.
General Note: Includes index.
 Record Information
Bibliographic ID: UF00014603
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: ltqf - AAA7078
ltuf - AKD9620
oclc - 28552218
alephbibnum - 001962943

Table of Contents
    Title Page
        Page 1
        Page 2
    Co-operative marketing law
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    Chartering cooperative corporations
        Page 20
    Articles of incorporation
        Page 21
    Application for charter for joint stock association
        Page 22
    Application for charter for non-stock association
        Page 23
    Suggested constitution and by-laws of capitalized cooperative association
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
    Suggested constitution and by-laws of non-capitalized cooperative association
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
    Can cooperative marketing do it all?
        Page 35
        Page 36
        Page 37
    More about cooperative marketing
        Page 38
        Page 39
        Page 40
        Page 41
    Organizing farmers for business
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
    Cooperation for various business
        Page 48
        Page 49
    Rural credits in foreign countries
        Page 50
        Page 51
        Page 52
    Intermediate credit for the farmer
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
    The agricultural partnership
        Page 60
    What cooperatives are doing in other states
        Page 61
        Page 62
    Index
        Page 63
Full Text





Bulletin No. 76s


10-
F7e
DI!


- - 7 i~.J t=:' -
I t" " rs
76


New Series


~ir~[r~i~ili~


(o-operative Mtarketing


T'aws of 7ltoriba



















STATE OF FLORIDA
DEPARTMENT OF AGRICULTURE
NATHAN MAYO, Commissioner
Tallahassee


Dec. 1934









CO-OPERATIVE MARKETING

LAWS OF FLORIDA

AN Act to Amend Chapter 9300, Acts of the Legisla-
ture of 1923, Entitled "An Act to Encourage the
Co-operative Marketing of Farm Products
and to Authorize the Incorporation of
Co-operative Marketing Associations."

Be It Enacted by the Legislature of the State of Florida:

Section 1. That Chapter 9300 of the Acts of the Legisla- Amendment
of Act of
ture of 1923, entitled "An Act to Encourage the Co-opera- 923 relating
tive Marketing of Farm Products and to Authorize the In- tveo-mPrekt-
corporation of Co-operative Marketing Associations' be and n of Frm
the same is hereby amended to read as follows:
Policy
"Section 2. Declaration of Policy.-In order to promote, declared.
foster and encourage the intelligent and orderly market-
ing of agricultural products through cooperation; and to
eliminate speculation and waste; and to make the distribu-
tion of agricultural products between producer and con-
sumer as direct as can be efficiently done; and to stabilize
the marketing of agricultural products, this Act is passed."
Section 2. Definitions.-As used in this Act.

(a) The term "agricultural products" shall include horti- Definition of
terms as
cultural, viticultural, forestry, dairy, live stock, poultry, used in
bee and any farm products; this Act.

(b) The term "member" shall include actual members of
associations without capital stock and holders of common
stock in associations organized with capital stock;

(c) The term "association" means any corporation organ-
ized under this Act or any corporation formed under any
general or special Act of this or any other State as a coopera-
tive association, organized for the mutual benefit of its
members either as producers of agricultural products of
agricultural products, or both, and in which the return on







4 CO-OPERATIVE MARKETING LAWS

Chap. 1675 the stock or membership capital is limited to an amount
191 not to exceed eight per centum (8%) per annum, and in
which during the fiscal year thereof the value of business
done with non-members shall not exceed the business done
with members during the same period.

(d) The term "person" shall include individuals, firms,
partnerships, corporations and associations.

(e) Associations organized hereunder shall be deemed
"non-profit," inasmuch as they are not organized to make
profit for themselves, as such, or for their members, as
such, but only for their members as producers.

(f) For the purpose of brevity and convenience, this Act
may be indexed, referred to and cited as "The Agricultural
Cooperative Act."

hree or Section 3. Who May Organize.-Three or more persons
nore persons engaged in the production of any agricultural products, or
organize three or more associations, may form a non-profit coopera-
tive association under the provisions of this Act.
Purpose of Section 4. Purposes.-An Association may be organized
organizing
association. under this Act for the purpose of engaging in any coopera-
tive activity in connection with the producing, marketing
or selling of agricultural products; or with the growing,
harvesting, preserving, drying, processing, canning, pack-
ing, grading, storing, warehousing, handling, shipping, or
utilizing such products; or the manufacturing or market-
ing of the by-products thereof; or in connection with any
of the activities mentioned herein, the manufacturing, sell-
ing or supplying of machinery, equipment or supplies; or in
the financing of any of the above enumerated activities;
or in performing or furnishing business or educational ser-
vices, on a cooperative basis for those engaged in agricul-
ture as bona fide producers of agricultural products or in
any one or more of the activities specified herein.
Preliminary Section 5. Preliminary Investigation.-Every group of
urged. persons contemplating the organization of an association
under this Act is urged to communicate with the State
Marketing Commissioner, who will inform it whatever a








6 CO-OPERATIVE MARKETING LAWS

Chap. 14675 obligation the proceeds of which are advanced or used in
191 the first instance for carrying on any cooperative activity
authorized in this Act and with authority to dispose of
same with or without endorsement. An association organiz-
ed under this Act and exercising any of the powers provided
in this paragraph shall not engage in the business of bank-
ing;

May deal (e) To purchase or otherwise acquire, to hold, own and
with capital
stock of exercise all rights of ownership in, and to sell, transfer,
rations. pledge or guarantee the payment of dividends or interest on,
or the retirement or redemption of, shares, of capital stock,
bonds or other obligations of any corporation or association,
engaged in any directly or indirectly related activity, or in
the producing, picking, hauling, packing, shipping, hand-
ling, warehousing, financing, canning, preserving, process-
ing, manufacturing, utilizing, marketing or selling of any
of the products handled by the association, or any by-prod-
ucts thereof.

To establish (f) To establish reserves and to invest the funds thereof
fund. in bonds, or in such other property as may be provided in the
by-laws;

To ownt (g) To buy, hold and exercise all privileges of ownership
over such real or personal property, as may be necessary
or convenient for the conduct and operation of any of the
business of the association, or incidental thereto;

To sell (h) To sell, convey and transfer all of the assets of the
assets of
association association; provided, such sale shall be consented to by not
requires less than two-thirds of its members or by the holders of
consent of
two-thirds not less than two-thirds of its common stock, which consent
of members shall be given either in writing, or by vote as a special meet-
ing of its members or stockholders called for that purpose.

Patents and (j) To do each and everything necessary, suitable or
trade-marks.
rade-arks marks and copyrights;
Incidental (j) To do each ond everything necessary, suitable or
proper for the accomplishment of any one of the purposes,
or the attainment of any one or more of the objects herein
enumerated, or conducive to or expedient for the interest








CO-OPERATIVE MARKETING LAWS


survey of the marketing conditions affecting the commo- Chap. 14675
dities to be handled by the proposed association indicates 1
regarding probable success.

Section 6. Powers.-Except as the same may be limited flowers of
in its article of incorporation, each association organized association.
under this Act shall have the following powers:
. Marketing,
(a) To engage in any activity in connection with the pro- canning, etc.
during, marketing, selling, preserving, growing, harvesting, of farm
drying, processing, manufacturing, canning, packing, grad-
ing, warehousing, storing, handling or utilizing of agricul-
tural products or in the manufacturing or marketing of the
by-products thereof; or in any activities in connection with
he manufacturing, purchasing, hiring or using supplies,
machinery or equipment; or in the financing of any of the
above enumerated activities, or in performing business or
educational services, on a cooperative basis, for those en-
gaged in agriculture as bona fide producers of agricultural
products; or in any one or more of the activities specified
herein;
May
(b) To borrow money from any source without limitation borrow
as to amount of corporate indebtedness or liability, with money.
authority to give any kind or form of obligation or security
herefor.

(c) To act as the agent or representative of any person asagent.
r persons in any of the above mentioned activities;
May make
(d) To make loans or advances to members and to their loans to
members or
members, to non-member patrons, and to non-member pa- non-mem-
;rons of members, with authority to accept therefore any bers.
ind, form or type of obligation with or without security;
o purchase, endorse, discount, sell or guarantee the pay-
nent of any note, draft, bill of exchange, indenture, bill of
ale, mortgage or other obligation, the proceeds of which
ave been advanced or used in the first instance for any
)f the purposes provided for herein; to discount for or pur-
;hase from any association organized under the laws of any
tate, with or without its endorsement, any note, draft,
ill of exchange, indenture, bill of sale, mortgage or other


5







CO-OPERATIVE MARKETING LAWS 7

or benefit of the association, and to contract accordingly; Chap. 14675
and in addition, to exercise and possess all powers, rights 1931
and privileges necessary or incidental to the purposes for
which the association is organized or to the activities in
which it is engaged, and any other rights, powers and pri-
vileges granted by the laws of this State to corporations for
profit, except such as are inconsistent with the express pro-
visions of this Act; and to do any such thing anywhere;

(k) No association organized under this Act, during any Restriction
as to mem-
fiscal year thereof, shall deal in products, handle machinery, ber and non-
equipment, or supplies or perform services for and on be- members.
half of non-members to an amount greater in value than
such as are dealt in, handled or performed by it for and on
behalf of members during the same period.

.Section 7. Members.-(a) Under the terms and condi- Membership.
tions prescribed in the by-laws adopted by it, an association
may admit as members, or issue common stock only to per-
sons engaged in the production of agricultural products and
to associations as herein defined.

(b) An association organized hereunder may become a
member or stockholder of any other association or corpora-
tion.
Articles of
Section 8. Articles of Incorporation.-Each association Incorporation
organized under this Act shall prepare and file articles of necessary
information
incorporation setting forth: to be
shown on.
(a) The name of the association, which may or may not
include the word cooperative or any abreviation thereof;

(b) The purpose for which it is formed;

(c) The place where its principal office within the State
will be located;

(d) The term for which it is to exist, not exceeding fifty
(50) years;
(e) The minimum number of directors thereof, which Minimum
number of
nust not be less than three (3) and may be any number in directors,
Excess thereof; the method by which the number of directors three.







8 CO-OPERATIVE MARKETING LAWS

Chap. 14675 may be increased or decreased; the term of office of such
1931
directors, and the names and addresses of those who are to
serve as incorporating directors for the first term or until
the election and qualification of their successors;
Organization (f) If organized without capital stock, whether the prop-
capital erty rights and interest of each member shall be equal or
stock. unequal; if unequal, the general rule or rules applicable to
all members by which the property rights and interest, re-
spectively, of each member may and shall be determined and
fixed; and provisions for the admission of new members,
who shall be entitled to share in the property of the associa-
tion with the old members, in accordance with such gen-
eral rule or rules. This provision or paragraph of the articles
of incorporation shall not be altered, amended or repealed,
except by the written consent or vote of three-fourths of
the members;

Organization (g) If organized with capital stock, the amount of such
with capital
stock. stock and the number of shares into which the capital stock
is to be divided, whether all or part of the same shall have a
par value, and if so, the par value thereof, whether all or
part of the same shall have no par value, and if there is to
be more than one class of stock created, a description of
the different classes, the number of shares in each class,
and the relative rights, interests and preferences each class
shall represent.

(h) In addition to the foregoing, the articles of incorpor-
ation of any association incorporated hereunder may con-
tain any provision consistent with law with respect to man-
agement, regulation, government, financing, indebtedness,
membership, the establishment of voting districts and the
election of delegates for representative purposes, the is-
suance, retirement and transfer of its stock, if formed with
capital stock, or any provisions relative to the way or man-
ner in which it shall operate or with respect to its members,
officers or directors and any other provisions relating to
Articles to its affairs.
be subscribed
to by in- The articles shall be subscribed by the incorporators and
corporators
and acknow- acknowledged by one of them, if individuals, or by the presi-
oenge of em. dent or any vice-president of one of them, if corporations,








CO-OPERATIVE MARKETING LAWS 9

before an officer authorized by law to take and certify ack- Chap. 14675
nowledgments of deeds and conveyances, and shall be filed 1931
in the office of the Secretary of State accompanied by a fee
of ten dollars ($10.00) which shall be the only fee required
therefore, and thereupon the association shall be and consti-
tute a body corporate under the provisions of this Act, and
a copy of said articles of incorporation certified by the Sec-
retary of State shall be received in all the courts of this
State and other places, as prima facie evidence of the facts
contained therein and of the due incorporation of such asso-
ciation.

Section 9. Amendments to Articles of Incorporation.- Amendments
The Articles of Incorporation may be altered or amended at of Incorpora-
any regular meeting or any special meeting called for the tion.
purpose. An amendment must first be approved by two-
thirds of the directors and then adopted by a vote represent-
ing two-thirds of all the members of the association. There-
upon the association shall make under its corporate seal
and the hands of its president or vice president and secre-
tary or assistant secretary, a certificate accordingly, and
the president or vice-president shall duly execute and ack-
owledge such certificate before an officer authorized by
aw to take and certify acknowledgments of deeds, and such
certificatee so executed and acknowledged shall be filed in
;he office of the Secretary of State; and upon so filing the
;ame, the articles of incorporation of such association shall
)e deemed to be amended accordingly; provided, however, a
-ee of only five dollars ($5.00) shall be required therefore
)y the Secretary of State.
Section 10. By-Laws.-Each association incorporated un- By-laws of
each associa-
ler this Act shall adopt for its government and manage- tion, how
nent, a code of by-laws not inconsistent with the powers adopted.
,ranted by this Act. A majority vote of the members or
;tockholders or their written assent, is necessary to adopt
:uch by-laws. The by-laws may be altered or amended in the
nanner provided for therein. Each association, under its by-
aws, may provide for any or all of the following matters:
(a) The time, place, and manner of calling and conduct- Time and
place of
ng its meetings, which meetings and meetings of its direc- meetings.
prs, may be held either within or without the State.









'cha 47 10 CO-OPERATIVE MARKETING LAWS
1931
(b) The number of stockholders or members constituting
Number of
stockholders. a quorum.

rights. (c) The right of members or stockholders to vote by
proxy or by mail or both; and the conditions, manner, form
and effects of such votes.
iQuoruors (d) The number of directors constituting a quorum.
Directors, (e) The qualifications, compensation and duties and term
compensa-
tion, etc. of office of directors and officers; time of their election and
the mode and manner of giving notice thereof.

violation of (f) Penalties for violations of the by-laws.
by-laws,
:Membership
fershp (g) The amount of entrance, organization and member-
ship fees, if any; the manner and method of collection of
the same; and the purposes for which they may be used.
Annual (h) The amount which each member or stockholder shall
payments.
payments. be required to pay annually or from time to time, if at all,
to carry on the business of the association; the charge, if
any, to be paid by each member or stockholder for services
rendered by the association to him and the time of payment
and the manner of collection; and the form of marketing
contract between the association and its members or stock-
holders, which marketing contract shall be binding upon
every member or stockholder, unless otherwise agreed upon
in writing.
(1) The number and qualification of members or stock-
holders of the association and the conditions precedent to
membership or ownership of common stock; the method
time, and manner of permitting members to withdraw or
the holders of common stock to transfer their stock; th
manner of assignment and transfer of the interest of mem-
bers and of the shares of common stock; the conditions upo
which and time when membership of any member shal
cease; the automatic suspension of the rights of a membe
when he ceases to be eligible to membership in the associa
tion; the mode, manner, and effect of the expulsion of
member; whether a member upon withdrawal, death or ex-
pulsion shall have any interest in the property of the asso
ciation, if organized without capital stock; the manner o
determining the value of the property interest or the shares








CO-OPERATIVE MARKETING LAWS


of common stock of retiring or expelled members, which Chap. 14675
interest or stock may be conslusively appraised by the board 1
of directors of the association and purchased by the asso-
ciation at such value within one year after the date of such
retirement or expulsion.
General and
Section 11.General and Special Meetings; How Called.- special
In its bylaws each association shall provide for one or more oetinged.
regular meetings annually. The board of directors shall
have the right to call a special meeting at any time, and
ten per cent of the members or stockholders may file a
petition stating the specific business to be brought before
the association and demand a special meeting at any time.
Such meeting must thereupon be called by the directors.
Notice of all special meetings, together with a statement
of the purpose thereof, shall be mailed to each member at
least ten days prior to the meeting; provided, however, that
the bylaws may require instead that such notice may be
given by publication in a newspaper of general circulation,
published at the principal place of business of the associa-
tion.

Section 12. Directors; Election.-(A) The affairs of Election of
the association shall be managed by a board of not less
than three directors, to be elected by the members or stock-
holders, with such qualifications as may be provided for
in the articles of incorporation or the by-laws. The by-laws
may provide that the territory in which the association
has members shall be divided into districts and that the
directors shall be nominated according to such district,
either directly or by district delegates elected by the mem-
bers in that district. In such case the bylaws shall specify
the number of directors to be nominated by each district,
the manner and method of reapportioning the directors and
of redistricting the territory covered by the association. The
bylaws may provide that primary elections shall be held
in each district to nominate the directors apportioned to
such districts and the result of all such primary elections
may be ratified by the next regular meeting of the associa-
tion or may be considered final as to the association. The
by-laws may provide that one or more directors may be
nominated by the Commissioner of Agriculture or by the
other directors nominated by the members or their dele-


11








CO-OPERATIVE MARKETING LAWS


chap. 14675 gates. Such directors shall represent primarily the interest
191 of the general public in such associations. Such directors
shall not number more than one-third of the entire num-
ber of directors.
Compensa- (B) An association may provide a fair remuneration for
tion of
officers and the time actually spent by its officers and directors in the
directors. service and for the service of the members of its executive
committee. No director, during the term of his office, shall
be a party to a contract for profit with the association dif-
fering in any way from the business relations accorded reg-
ular members or holders of common stock of the association
or others, or differing from terms generally current in that
district.

Executive (C) The by-laws may provide for an executive commit-
committee. tee to be elected by the board of directors from within or
without the membership of the board and may allot to such
committee all the functions and powers of the board of di-
rectors, subject to the general direction and control of the
board.
Vacancies, (D) When a vacancy on the board of directors occurs
other than by expiration of term, the remaining members of
the board, by a majority vote, shall fill the vacancy, unless
the bylaws provide for the nomination of directors by dis-
tricts. In such case the board of directors shall call a special
meeting of the members or stockholders in the respective
district to nominate a person qualified to fill the vacancy.
Directors Section 13. Election of Officers.-The directors shall
to elect
officers. elect from their number a president and one or more vice-
presidents. They shall also elect a secretary, a treasurer,
and such other officers as may be provided for in the by-
laws, none of whom need be directors or members of the as-
sociation. The office of secretary and treasurer may be
combined into one office designated as secretary-treasurer,
or both functions and titles may be united in one person.
The treasurer may be a bank or any depository, and as such,
shall not be considered as an officer, but as a function of
the board of directors, and in such case the secretary shall
perform the usual accounting duties of the treasurer except-
ing that the funds shall be deposited only as and where au-
thorized by the board of directors.


12








CO-OPERATIVE MARKETING LAWS


Section 14. Stock. Membership Certificate. When Is-
sued. Voting. Liability. Limitations on Transfer and
Ownership.-When a member of an association organized
without capital stock has paid his membership fee in full he
shall receive a certificate of membership. An association
may issue its shares of stock having no par value from time
to time for such consideration as may be fixed by the board
of directors. No association shall issue stock until it has
been fully paid for. Promissory notes may be accepted by
the association as full or partial payment for such stock.
The association shall hold the stock as security for the pay-
ment of the note; but such retention as security shall not
affect the right-of any stockholder to vote unless such notes
are past due.
No member shall be liable for the debts of the association
to an amount exceeding the sum remaining unpaid on his
membership fee or his subscription to capital stock, includ-
ing any unpaid balance on any promissory notes given in
payment thereof.
No stockholder of an association organized hereunder, ex-
cept an association organized under this Act or an associa-
tion as defined in this Act, shall own more than one-third of
the outstanding common stock of the association; and an as-
sociation in its bylaws may limit the amount of common
stock which one member may own to an amount less than
)ne-third of the outstanding common stock. The association
shall limits its dividends on stock, both common and prefer-
:ed, to any amount not greater than eight (8%) percentum
)er annum on the par value thereof, or if such capital stock
s without par value, then upon the actual cash value of the
considerationn received by the association therefore. The as-
lociation by the vote of its directors, may establish and ac-
-umulate reserves out of earnings, including a permanent
surplus fund as an addition to capital. Net income in ex-
:ess of additions to reserves and surpluses so established,
hall be distributed to the members of the association on the
)asis of patronage. Any distribution of reserves and sur-
luses at any time shall be made to members at the time
uch distribution is ordered on the basis of patronage.
Any receipts or dividends from subsidiary corporations or
rom stock or other securities owned by the association shall
e included in the ordinary receipts of the association.


1931
Chap. 14675

Stock
membership
certificate.









Liability of
members.




Stock limit
for each
member.










Dividends
on stock.








Subsidiary
corporation.


13








CO-OPERATIVE MARKETING LAWS


ca. 14675 No member in any association without capital stock shall
1931 be entitled to more than one vote; but the bylaws may pro-
vide that such members or the holders of common stock in
One vote an association with capital stock, may vote upon any or all
for each
mfmber. questions on a patronage basis.
Preferred Preferred stock may be sold to any person, member or
non-member, and may be redeemable or retireable by the as-
sociation on such terms and conditions as may be provided
for in the articles of incorporation, and printed on the stock
certificates. The bylaws, except as otherwise provided for
in this Act, shall prohibit the transfer of the common stock
of the association to persons not engaged in the production
of agricultural products and such restrictions shall be print-
ed upon every certificate of stock subject thereto.

Reval of Section 15. Removal of Officer or Director.-Any mem-
officers or ber may bring charges against an officer or director by fil-
lirectors. ing them in writing with the secretary of the association,
together with a petition signed by ten per cent of the mem-
bers, requesting the removal of the officer or director in
question. The removal shall be voted upon at the next regu-
lar or special meeting of the association, and by a vote of a
majority of the members, the association may remove the
officer or director and fill the vacancy. The director or of-
ficer against whom such charges have been brought shall be
informed in writing of the charges previous to the meeting
and shall have an opportunity at the meeting to be heard in
person or by counsel and to present witnesses; and the per-
son or persons bringing the charges against him shall have
the same opportunity.

Election of In case the bylaws provide for election of directors by dis
directors by
districts by tricts with primary elections in each district then the peti-
tion for removal of a director must be signed by twenty per
cent of the members residing in the district from which he
was elected. The board of directors must call a special meet-
ing of the members residing in that district to consider the
removal of the director. By a vote of the majority of the
members of that district, the director in question shall be
Referendum removed from office.
upon demand
one-third
board of Section 16. Referendum.-Upon demand of one-third ol
directors. the entire board of directors made immediately and so re


14








CO-OPERATIVE MARKETING LAWS


corded at the same meeting at which the original motion chap. 14675
was passed any matter that has been approved or passed by 1931
the board must be referred to the entire membership or the
stockholders for decision at the next special or regular
meeting; provided, however, that a special meeting may be
called for the purpose.
Section 17. Marketing Contract.-The association and Marketing
its members may make and execute marketing contracts re- iact s
quiring the members to sell, for any period of time, all or members.
any specified part of their agricultural products or specified
commodities exclusively to or through the association or any
agencies designated by the association. The contracts may
provide that the association may sell or resell the products
of its members with or without taking title thereto; and pay
to its members the resale price, after deducting all neces-
sary selling, overhead and other costs and expenses, includ-
ing interest or dividends on stock, not exceeding eight per
cent per annum, and reserves for retiring the stock, if any;
and other proper reserved; and any other proper deductions.
Section 18. Remedies for Breach of Contract.-(A) The Remedies
for breach
bylaws and the marketing contract may fix, as liquidated f contract.
damages, specific sums to be paid by the member or stock-
holder of the association upon the breach by him of any
provisions of the marketing contract regarding the sale or
delivery or withholding of products; and may further pro-
vide that the member will pay all costs, premiums for bonds,
expenses and fees in case any action is brought upon the
contract by the association; and any such provisions shall
be valid and enforceable in the courts of this State.
Injunction
(B) In the event of any such breach or threatened breach to prevent
f such marketing contract by a member, the association fure
hall be entitled to an injunction to prevent the further
)reach of the contract and to a decree of specific perform-
ince thereof. Pending the adjudication of such an action
md upon filing a verified complaint showing the breach or
threatenedd breach, and upon filing a sufficient bond, the as-
sociation shall be entitled to a temporary restraining order
and preliminary injunction against the member.
Laws in con.
Section 19. Conflicting Laws Not to Apply.-Any provi- flict with
ions of laws which are in conflict with this Act shall not be taplicable.


15








16 CO-OPERATIVE MARKETING LAWS
Chap. 14675
1931 construed as applying to the associations herein provided
for.
imitations
)n use of
erm of Section 20. Limitations of Use of Term "Co-operative."
'Coopera- -No person, firm, corporation or association, hereafter or-
-ive."'
ganized or doing business in this State, shall be entitled to
use the word "cooperative" as part of its corporate or other
business name or title unless it has complied with the pro-
visions of this Act.
Elimination
of term co- Any person, firm, corporation or association now organ-
operative
from name ized and existing or doing business in this State, and em-
of firms
ow umsng it. bodying the word "cooperative" as part of its corporate or
other business name or title, and which is not organized in
compliance with the provisions of this Act, shall within six
months from the date at which this Act goes into effect,
eliminate the the word "cooperative" from its said corporate
or other business name or title.
Association
may have Section 21. Interest in Other Corporations or Associa-
interest
in other tions.-An association may organize, form, operate, own,
corporations control, have an interest in, own stock of, or be a member
or associa-
tions. of any other association or corporation, with or without
capital stock, and engaged in planting, growing, producing,
preserving, drying, processing, canning, packing, storing,
warehousing, handling, shipping, utilizing, manufacturing,
or selling of agricultural products, or by-prouducts thereof;
or in performing business or educational services; or in the
financing of any of the above enumerated activities.

Warehousing If such corporations are warehousing corporations, they
receipts, etc may issue legal warehouse receipts to the associations
against the commodities delivered by it, or to any other
person and such legal warehouse receipts shall be considered
as adequate collateral to the extent of the usual and current
value of the commodity represented thereby. In case such
warehouse is licensed, or licensed and bonded under the laws
of this or any other state or the United States, its ware-
house receipt delivered to the association on commodities
of the association or its members, or delivered by the associ-
ation or its members, shall not be challenged or discriminat-
ed against because of ownership or control wholly or in part,
by the association.








CO-OPERATIVE MARKETING LAWS


Section 22. Contracts and Agreements With Other As-
sociations.-Any association may, upon resolution adopted
by its board of directors, enter into all necessary and prop-
er contracts and agreements and make all necessary and
proper stipulations, agreements and contracts, and arrange-
ments with any other cooperative corporation, association or
associations, formed in this or in any other State, for the
cooperative and more economical carrying on of its busi-
ness or any part or parts thereof. Any two or more asso-
ciations may, by agreement between them, unite in employ-
ing and using or may separately employ and use the same
personnel, methods, means, and agencies for carrying on and
conducting their respective businesses.

Section 23. Associations Heretofore Organized May Adopt
the Provisions of This Act.-Any corporation or association
organized under previously existing statutes, may, by a ma-
jority vote of its stockholders or members, be brought under
the provisions of this Act by limiting its membership and
adopting the other restrictions as provided herein. It shall
make out in duplicate a statement signed and sworn to by
its directors to the effect that the corporation or associa-
tion has, by a majority vote of its stockholders or members,
decided to accept the benefits and be bound by the provi-
sions of this Act and has authorized all changes accordingly.
Articles of incorporation shall be filed as required in Sec-
tion 9 of this Act, except that they shall be signed by the
members of the then board of directors. The filing fee shall
be the same as for filing an amendment to articles of incor-
poration.

Section 24. Associations Not in Restraint of Trade.-No
association as defined in this Act while engaged in any of
the activities specified herein shall be deemed to be a con-
spiracy, or a combination in unlawful restraint of trade, or
an illegal monopoly, or an attempt to lessen competition or to
fix prices arbitraily; nor shall the marketing contracts and
agreements between the association and its members, or
any agreements authorized in this Act, be considered illegal
as such, or in unlawful restraint of trade, or part of a con-
spiracy or combination to accomplish an improper or illegal
purpose.


Chap. 14671
1931

Association
may con-
tract with
other
associations.









Existing
associations
may adopt
provisions
of this Act.















Associations
under act
not in re-
straint of
trade.


17








CO-OPERATIVE MARKETING LAWS


hap. 1465 Section 25. Rights and Remedies Apply to Similar Asso-
1931 ciations of Other States.-Any cooperative association with
or without capital stock as defined in this Act heretofore or
associations hereafter organized under the laws of another state shall be
ateright allowed to carry on any proper activities, operations and
sopeates in functions in this State upon the filing with the Secretary
is state.
of State of a certified copy of its articles of incorporation
and the paymentof a filing fee of Ten Dollars ($10.00) in
lieu of all franchise or license or corporation taxes as re-
quired of associations organized hereunder and all contracts
which could be made by any association organized here-
under, made by or with such associations shall be legal and
valid and enforceable in this state with all of the remedies
set forth in this Act.
uo war-
into to Section 26. Quo Warranto to Test Validity of Incorpora-
st validity tion.-The right of an association claiming to be organized
incorpora-
on. and incorporated and carrying on its business under this
Act to do and to continue its business, may be inquired
into by quo warrant at the suit of the Attorney-General,
but not otherwise.
dissolution
ssocia- Section 27. Dissolution.-Any association incorporated
method under or adopting the provisions of this Act may be dis-
rescribed. solved and its affairs wound up voluntarily by a petition
signed by two-thirds of the members or by the holders of
two-thirds of the common stock, either in person or by
their agent, which petition shall be presented to the Circuit
Judge, who shall direct notice thereof to be published for
such time as he may judge expedient. After the expiration
of the time of such notice, the Circuit Judge may decree
a dissolution and make all necessary orders and decrees for
the winding up of its affairs, including the application of
its assets toward the satisfaction of the claims of creditors
so far as may be and the distribution of any moneys then
remaining among its members in proportion to their respec-
tive property interests.

association Any such association shall continue to be a body corpor-
I exist for ate for a term of two years after the date of the decree or
years after
solution dissolution for the purpose of prosecuting and defending
defend
its, etc. suits and settling its affairs, and the president and directors
at the time of its dissolution, and the survivors of them, or


18







CO-OPERATIVE MARKETING LAWS


such other person or persons as may be appointed by the Chap31467
Circuit Judge, shall be trustees of such association for that _
purpose during said term with full power in its name to
settle its affairs, collect all sums due it, sell and convey its
property, pay its debts as far as ma,' be, and distribute
any moneys or property then remaining among those entitl-
ed thereto.

Section 28. Constitutionally.-If any section of this Act
shall be declared unconstitutional for any reason, the re-
mainder of this Act shall not be effected thereby.

Section 29. Application of General Corporation Laws.- fieeia i
The provisions of the laws of this State with respect to cor- corporation
portions for profit and all powers and rights thereunder
shall apply to associations organized hereunder, except
where such provisions are in conflict with or inconsistent
with the express provisions of this Act.
Repeal of
Section 30. Repeals. Laws Effected.-All laws or parts conflicting
of laws in conflict with the provisions of this Act are here- laws.
by repealed: Provided, however, that the provisions of
this Act shall not be construed to effect, limit or in any-
wise interfere with the rights, powers or privileges of any
corporation or association which may have been organized
and which now exists, or of any corporation or association
which may be hereafter organized under Chapter 5958 o
the Acts of 1909 and amendments thereto.

Section 31. This Act shall take effect immediately upon
its passage and approval by the Governor or upon its be-
coming a law without such approval.


Approved June 10, 1931.


19







CO-OPERATIVE MARKETING LAWS


CHARTERING COOPERATIVE CORPORATIONS


To Incorporators of Cooperative Associations:

Requests often come to this office asking for blank forms
to be used in applying for charters for cooperative associa-
tions. There is no one blank form that will meet the require-
ments of every kind of association coming under this head.
The suggestions herein offered are intended as guides
only, and not as finished forms of application.
The first one gives the Articles with sub-headings indi-
cating the subject matter that should be included in each
application. This form is sufficient if filled out accurately
-conforming with the purpose and methods of operation of
the association.
The joint stock corporation and the non-stock corpora-
tion differ only in the matter of securing money for opera-
tion, and the rights of the members-they may or may not
be the same.
Where stock is sold, stockholders own the association;
where membership is sold, those paying the membership
fee, or meet other requirements, own the association. Even
in the case of joint stock cooperative associations there is
no necessity for applying for the right to sell stock under
the Blue Sky Law, as it exempts non-profit corporations.
The law specifies that there shall be at least three incorpor-
ators; there may be as many more as desired. See Section
9 of laws.
The only reason for having two places for the incorpora-
tor to sign is that the first should be filled in with a type-
writer and the signature should be written with a pen.


20







CO-OPERATIVE MARKETING LAWS


Form No. 1

ARTICLE OF INCORPORATION

of


We, the undersigned, associate ourselves together for
the purpose of forming a non-profit cooperative association,
without capital stock, under Chapter 9300, Acts of 1923, as
amended by Chapter 14675, Acts of 1931, known as THE


AGRICULTURAL COOPERATIVE ACT.

ARTICLE I.

The name of this corporation shall be:

ARTICLE II.

The purpose:

ARTICLE III.

The principal place of business shall be:

ARTICLE IV.

The term of existence of this corporation
period of fifty years.

ARTICLE V.


shall be for a


The property rights and interest of each member of this
association shall be:


21








22 CO-OPERATIVE MARKETING LAWS


Form No. 2

APPLICATION FOR CHARTER FOR JOINT STOCK
COOPERATIVE ASSOCIATION

To the Governor and Secretary of State of the State of Florida:

The following named persons, whose postoffice address is as fol-
lows, to-wit:
NAME POSTOFFICE

--------------------------------------------------- ----------------------------------------- -------


have proposed to organize a joint stock cooperative association under
Chapter 9300 Laws of Florida, Acts of 1923, as amended by the Act
of June 10, 1931, and hereby declare that if granted a charter for
such cooperative association that the business of said association
shall and will be conducted under the provisions of said Chapter
9300, Laws of Florida, Acts of 1923, as amended by the Act of June
10th, 1931.
The name of association is to be-------- ----------- ----
Purpose of Organizing Association.-This Association is to be
organized under this Act for the purpose of engaging in any cooper-
ative activity in connection with the producing, marketing and selling
of agricultural products; or with the growing, harvesting, preserving,
drying, processing, canning, packing, grading, storing, warehousing,
handling, shipping, and utilizing such products; and the manufacturing
and marketing of the by-products thereof; and in connection with any
of the activities mentioned herein, the manufacturing, selling and
supplying of machinery, equipment and supplies; and in the financing
)f any of the above enumerated activities; and in performing or
furnishing business and educational services, on a cooperative basis
for those engaged in agriculture as bona fide producers of agricul-
tural products or in any one or more of the activities specified herein.
The principal place of business shall be ------._ -------
and it shall continue in operation for the period of fifty years, or
until dissolved by law or by the written consent of two-thirds of
the members.
The incorporators shall constitute the Board of Directors for a
period of one year from date of incorporation.
The capital stock shall be $ ------ divided into shares of
$ ___- each.
Number of directors ---------------------------
Wherefore, it is prayed that Letters Patent be granted to those
incorporators in pursuance of the provisions of said Chapter 9300,
Laws of Florida, Acts of 1923, as amended by the Act of June 10, 1931.
Signed and sealed at _---------------. this------- day of-----
A. D. 19 .-.------ ---------------- ----- (Seal)
-----------.-------------------- (Seal)
__.................--------------- (Seal)
.-.----------------- ------------ (Seal)
----------------- ---------------- (Seal)









CO-OPERATIVE MARKETING LAWS 23

Form No. 3
APPLICATION FOR CHARTER FOR NON- STOCK
COOPERATIVE ASSOCIATION

To the Governor and Secretary of State of the State of Florida:
The following named persons, whose postoffice address is as fol-
lows, to-wit:
NAME POSTOFFICE
L---------------------------------------- - - - - - - - - - - - - - - - - - - - - -

L---------------------------------------- - - - - - - - - - - - - - - - - - - - - -

have proposed to organize a cooperative association under Chapter
9300. Laws of Florida, Acts of 19'3, as amended by the Act of 1931,
and hereby declare that if granted a charter for such cooperative
association that the business of said association shall and will be
conducted under the provisions of said Chapter 9300, Laws of Flor-
ida, Acts of 1923, as amended by the Act of 1931. That said organiz-
ers file herewith a statement setting forth the purposes for which
such cooperative association is organized, and declaring the manner
and method which will be pursued in the conduct of the business of
such cooperative association.
The name of association is to be -
Purpose of Organizing Association.-This Association is to be
organized under this Act for the purpose of engaging in any cooper-
ative activity in connection with the producing, marketing and selling
of agricultural products; or with the growing, harvesting, preserving,
drying, processing, canning, packing, grading, storing, warehousing,
handling, shipping, and utilizing such products; and the manufacturing
and marketing of the by-products thereof; and in connection with any
of the activities mentioned herein, the manufacturing, selling and
supplying of machinery, equipment and supplies; and in the financing
of any of the above enumerated activities; and in performing or
furnishing business and educational services, on a cooperative basis
for those engaged in agriculture as bona fide producers of agricul-
tural products or in any one or more of the activities specified herein.
The principal place of business shall be --------------------------
It shall continue in operation for the period of fifty years, or
until dissolved by law or by the written consent of two-thirds of
the members.
The rights and interests of the members of this association shall
be such as are set forth in the by-laws, copy of which are filed here-
with.
The incorporators shall constitute the Board of Directors for a
period of one year from date of incorporation.
Wherefore, it is prayed that Letters Patent be granted to those
incorporators in pursuance of the provisions of said Chapter 9300,
Laws of Florida, Acts of 1923, as amended by the Act of June 10, 1931.
Signed and sealed at--- this------- day of '(l--,
A. D. 19 --.... (Seal)
(Seal)
....-----............----------..- (Seal)
--------_---- (Seal)
------------ (Seal)








CO-OPERATIVE MARKETING LAWS


SUGGESTED CONSTITUTION AND BY-LAWS OF
CAPITALIZED COOPERATIVE ASSOCIATION


ARTICLE I.

CONSTITUTION

NAME
Section 1. This Association shall be known as ---
PURPOSE
Sec. 2. The purpose of this Association shall be to make
sales and purchases for its stockholders by cooperative
methods, and aid in every way possible in grading, stand-
ardizing, packing and shipping farm products. It shall make
contracts by which it shall do the exclusive marketing of
all products included in said contracts and render proper
accounting therefore.
LOCATION
Sec. 3. The principal office of this Association shall be
at ------ -----
Sec. 4. This Association shall be composed of its officers
and stockholders, viz: President, Vice-President, Secretary-
Treasurer, Board of Directors of five members and the
Stockholders.
ELECTION
Sec. 5. At each annual meeting the stockholders shall
elect a Board of Directors of five members and a Secretary-
Treasurer. The Board of Directors shall elect from its own
members a President and Vice President. The Board of
Directors shall have power to elect a Business Manager at
any time.
OFFICERS
Sec. 6. The President shall preside over all meetings of
the stockholders and of the Board of Directors and issue all
calls for special meetings. In his absence the Vice President
shall preside, with the same powers. In the absence of both
the quorum present shall elect a presiding officer pro tem.
A quorum shall consist of two-thirds of the stockholders at
a stockholders meeting and of three-fifths at a meeting of
the Board of Directors.


24







CO-OPERATIVE MARKETING LAWS


Sec. 7. The Secretary-Treasurer shall keep a complete
record of all meetings of the stockholders and Board of
Directors; a full and complete accounting of the finances
of the Association. He shall sign with the President all
legal documents and with the Business Manager all checks
authorized by the Board of Directors to be paid out by the
Business Manager. His books shall be audited under the di-
rection of the Board of Directors as often as they deem fit.
He shall make full reports to the stockholders at each an-
nual meeting and to the Board of Directors whenever asked
to do so in official meeting.

Sec. 8. The Business Manager shall have full control of
the force working under his direction and supervision. His
duties shall be such as may be set out from time to time by
the Board of Directors. He shall do the marketing of all
products handled by the Association, instruct in grading,
packing and shipping, and furnish market information to
the members in such manner as may be prescribed. He
may or may not be a stockholder in the Association.

Sec. 9. The Board of Directors shall have general manage-
ment and supervision of the corporate business. The Board
shall elect a Business Manager, prescribe his duties and
fix compensation. He shall be bonded in a surety company
to cover all funds which he is supposed to handle. The Board
of Directors shall also require surety bond of the Secretary-
Treasurer to cover all funds for which he is responsible.
It shall have the books of the Business Manager and Sec-
retary-Treasurer audited as often as deemed necessary, and
must have them audited just prior to each annual meeting
of the stockholders, with an itemized statement of all re-
ceipts and expenditures since the last report. These shall be
read at each annual meeting and may be demanded at any
call meeting. The Board of Directors shall have power to
remove from position any officer and employee and fill all
vacancies, except the employees directly under the Business
Manager, who shall have full power to employ and dis-
charge any employees under him. These shall be designated
by the Board of Directors in writing and filed with the Sec-
retary-Treasurer. The Board of Directors shall determine
.the salary of the Business Manager.


25








CO-OPERATIVE MARKETING LAWS


ARTICLE II.

BY-LAWS

Section 1. The capital stock of this Association shall be
$ ..____ divided into shares of $ ----- each; no mem-
ber shall hold more than -- .----..-- shares. Each shareholder
shall be entitled to one vote regardless of number of shares
owned. All stock shall be common.

Sec. 2. The stockholders at each annual meeting shall
elect a Board of Directors. They may nominate other offi-
cers which may be elected by the Board of Directors. (Sec-
tion 13 of the law requires that the President and Vice-
President shall be elected by the Directors.) The meeting
of the Association shall be held at such time and place as
designated by the President, except the annual meeting,
which shall be held at the principal office of the Associ
tion. All officers shall be elected by ballot. No proxies shall
be allowed.

Sec. 3. Six days notice shall be given in writing by the
President to the stockholders before each called meeting.

Sec. 4. Any officer or member of the Board of Directors
shall be subject to recall at any time by a majority vote
of all stockholders of the Association.

Sec. 5. A special meeting may be called at any time by
the President on legal notice, and shall be called on petition
of a majority of the Board of Directors or of five per cent
c- the stockholders.

Sec. 6. The compensation of all officers shall be fixed by
the stockholders at the regular annual meeting-(the Busi-
ness Manager is not an officer).

Sec. 7. The Board of Directors shall have power to set
aside, out of any money belonging to the Association, as an
emergency fund not to exceed ten per cent of the capital
stock.


26








CO-OPERATIVE MARKETING LAWS


MEMBERSHIP
Sec. 8. All members, other than the charter members,
shall be voted in on application filed with the Secretary-
Treasurer. A two-thirds vote shall decide in all cases of ad-
mission of new members and the vote shall be by ballot.
Admission can be made at regular or called meetings. A
stock certificate shall be issued to each member on payment
therefore; said certificate to have printed thereon that it is
not transferable except to persons engaged in the produc-
tion of the things handled by the Association, and then
only when the Board of Directors unanimously agrees to
the transfer.
Sec. 9. If a member be other than a natural person (as
provided in section 6 "e" and section 7 "c" of the law) such
member may be represented by anyone duly authorized in
writing.
FINANCING
Sec. 10. The expenses of operating this Association shall
be met by a percentage on returns for produce sold or
bought by the Association, or by a price per package, the
amount of such charges to be fixed by the Board of Direct-
ors from time to time as deemed expedient. Payments for
produce shall be made to the shippers on receipt by the
Association of returns for the sale of the produce. In mak-
ing sales all produce of the same grade shall be pooled and
all shippers of the same grade shall receive the same price.
Sec. 11. After the season's expenses are paid and the
reserve agreed on provided, the remainder of the funds
shall be provided among the stockholders in proportion to
the value of their several shipments and purchases made
through the Association during the last preceding season;
provided that no claims are held against the members for
breach of marketing contract, when, and in such case, all
claims must first be settled when full payments are made.
WITHDRAWALS
Sec. 12. For cause deemed sufficient by unanimous vote
of the Board of Directors the marketing privilege may be
withdrawn from a stockholder, when, and in such case, the
said offending stockholder shall be considered as expelled
and his equity in the Association shall be adjusted as in case


27








CO-OPERATIVE MARKETING LAWS


of a withdrawing stockholder. When a stockholder sees prop-
er to withdraw from the Association he can dispose of his
stock only by unanimous consent of the Board of Directors
by open vote and recorded in the minutes of the meeting at
which such action was taken. In case the withdrawing mem-
ber fails to find a buyer satisfactory to the Board of Direc-
tors the Board of Directors shall provide for the purchase of
said stock at the price paid when issued to the holder in the
following manner: A charge shall be added to the regular
charges on all shipments and the added charges shall consti-
tute a sinking fund with which to purchase the stock of the
retiring stockholder. The amount of the said charges shall
be determined by the Board of Directors and no time limit
shall be set for the date on which said stock shall be paid
for, the date of payment shall be at such time as the re-
serve herewith provided shall equal the value of the stock
of the retiring member. By a vote of a majority of the
stockholders the Association may provide in similar manner
for the retirement of all stock outstanding and the Associa-
tion cease to be a joint stock Association.
Sec. 13. All stockholders shall be paid eight per cent on
the par value of the stock held.
MARKETING CONTRACTS
Sec. 14. This Association shall have the power to enter
into marketing contracts with its stockholders, requiring
them to sell through the Association for any length of time,
not exceeding ten years, all or any specified part of their
products or commodities, or through facilities or agencies
created by the Association. New members may have their
stock issued by having the Association retain the refunds
due on shipments made by the Association for the member.
This agreement to be mutual by vote of the Association.
The Board of Directors may promulgate such rules and
regulations as they deem proper relating to fines and penal-
ties for breach of marketing contract.
AMENDMENTS
Sec. 15. This Constitution and By-laws may be amended
by a two-thirds vote at any regular or called meeting of the
membership; provided all amendments conform to the "Co-
operative Marketing Act" of 1923, as amended by the Act
of 1931, under which this Association is chartered.


28








CO-OPERATIVE MARKETING LAWS


SUGGESTED CONSTITUTION AND BY-LAWS OF
NON-CAPITALIZED COOPERATIVE ASSOCIATION


NAME

Section 1. This association shall be known as the
._--__---.--- -...-------.. i; incorporated under the "Cooperative
Marketing Act" of the State of Florida, 1923.
LOCATION
Sec. 2. The principal office of the Association shall be
in the town of-- ----------

PURPOSE

Sec. 3. The purpose of this Association shall be to market
all kinds of farm products for its members; to promote,
foster and encourage the intelligent and orderly market-
ing of agricultural products by cooperate methods; to direct
the proper grading and standardization of products and
make as direct sales as possible from the producer to the
consumer; to advertise advantageously and buy coopera-
tively.

OFFICERS
Sec. 4. The Association shall consist of its officers and
members.

Sec. 5. The officers shall be a President, Vice-President,
Secretary, Treasurere and a Board of Directors of five
members.

Sec. 6. The duties of the various officers shall be those
commonly exercised by such officers of corporations and
such other duties as may be prescribed by the By-Laws.
The President shall preside at all meetings of the Associa-
tion and of the Board of Directors and perform such other
duties as the Board of Directors may prescribe from time
to time. The Vice-President shall perform all the duties
of the President in the absence of the President. The Board


29








CO-OPERATIVE MARKETING LAWS


of Directors shall elect from their own members* a Presi-
dent and Vice-President. They shall also elect a Business
Manager who does not have to be an officer or a member;
they shall have power to bond, determine compensation and
discharge him. The compensation of members of the Board
of Directors shall be determined by the members at their
annual meetings.
Sec. 7. The Secretary-Treasurer shall keep a complete
record of all meetings of the Association and of the Board
of Directors. His books shall be audited under the super-
vision of the Board of Directors as often as they may deem
it advisable, but must be audited in time for report at each
annual meeting of the Association. He shall make a full
financial statement giving the number of members, amount
of funds collected and sources from whence derived, the
amount of expenditures and purposes for which expended,
and balance sheets showing the financial status of the
Association. He shall sign as (Secretary-Treasurer) all
checks, and with the President, all notes, deeds and other
instruments on behalf of the Association, previously ap-
proved by the business manager; serve all notices required
by law and these By-Laws; receive and disburse all funds
other than those designated by the Board of Directors to
be received and disbursed by the Business Manager.
Sec. 8. Due notice of not less than ten days shall be given
all members before each regular or called meeting by the
Secretary, and the same shall apply to all meetings of the
Board of Directors. Ten per cent of the members may file
a petition with the Secretary, giving reasons for a called
meeting and such meetings must be called by the President,
or the next in authority in case he cannot act.
Sec. 9. A quorum shall consist of a majority of all mem-
bers in a meeting of the Association, and the same shall
apply to meetings of the Board of Directors.
Sec. 10. All officers shall hold for one year and vacan-
cies in the Board of Directors shall be filled by the remain-

*NOTE.-This is required by the law. Should the members de-
sire to exercise the prerogative of electing the officers it can be put
in the By-Laws that the President and Vice-President shall be nomi-
nated by the Association at the annual meetings.


30







CO-OPERATIVE MARKETING LAWS


ing members at a special meeting called for that purpose;
should the President vacate his office the Vice-President
shall succeed him.

Sec. 11. The Board of Directors shall elect a Business
Manager who may or may not be an officer or member of
the Association. The Manager shall employ and discharge
all employees under his direction; shall secure information
as to crop and market conditions and furnish same to mem-
bers on request; shall instruct in grading, packing and
shipping products. He shall have entire charge of the mark-
eting of all goods delivered by members of the Association,
subject to the action of the Board of Directors and the
By-Laws and rules of the Association.
MEMBERSHIP

Sec. 12. All members, other than the charter members,
shall be voted in on application filed with the Secretary-
Treasurere. A two-thirds vote shall decide in all cases of
admission of new members and the vote shall be by ballot.
Admissions can be made at regular or called meetings. The
Secretary-Treasurere shall issue a certificate of member-
ship to all members when admitted; said certificate to have
printed therein that it is not transferable except to persons
engaged in the production of the things handled by the
Association, and then only when the members of the Board
cf Directors unanimously agree to the transfer.
Sec. 13. All members must be producers of the products
handled or contemplated to be handled by the Association,
including lessees and tenants of land, the lessors and land-
lords who receive as rent a part of the crop raised on rent-
ed premisese. If a member be other than a natural person
such member may be represented by anyone duly authorized
in writing.

Sec. 14. Each member of the Association shall have
one vote and only one; providing all claims and dues
against said member have been fully paid. No proxies
shall be allowed.
Sec. 15. Any member may withdraw from the Associa-
tion between the first day of December and the first day


31








CO-OPERATIVE MARKETING LAWS


of the following April, but all claims of whatsoever nature
must first be settled.

Sec. 16. All members shall abide by the By-Laws and
rules of the Association; but any member feeling that he
has a grievance or cause for complaint may appeal to the
Board of Directors, or to the members at any regular or
called meeting. No member shall be suspended or expell-
ed from the Association without first being heard in his
own defense, either by the Board of Directors or by the
members in regular or called meeting.

Sec. 17. Each member shall have a number or mark
which shall be permanently stamped on every package or
container shipped by the Association. Any loss occasioned
by improper packing or grading shall be charged to the
member whose mark is found on said package or container.

FINANCING
Sec. 18. The expenses of operating this Association
shall be met by a percentage on returns for produce sold
or bought by the Association, or by a price per package,
the amount of such charges to be fixed by the Board of
Directors from time to time as they deem expedient. Pay-
ments for produce shall be made to the shippers on the
receipt by the Association of returns for the sale of the
produce. In making sales all produce of the same grade
shall be pooled and all shippers of the same grade shall
receive the same price.

Sec. 19. At the time of uniting with the Association,
and at the end of each succeeding three years after the
incorporation of the Association, each member shall give
a promissory note, payable on demand of the Association.
This note shall be for the sum of Twenty-five Dollars
($25.00) and an additional One Dollar ($1.00) for each
acre of crops to be planted and crops therefrom marketed
through the Association, then owned by the member.
When a new note is given the old one shall be cancelled
and returned to the maker. These notes shall be the prop-
erty of the Association and shall be used by the Board
of Directors as collateral security with which to borrow


32







CO-OPERATIVE MARKETING LAWS


needed money for the Association's business. When ever
these notes are deposited as security for a loan, all of
the members shall individually share the liability in pro-
portion to the face value of their respective notes. Each
member shall pay an annual membership fee of One Dollar
($1.00) at a date to be determined by the Board of Direc-
tors. The capital and credit thus obtained shall be used as
directed by the members in regular or called sessions.

Sec. 20. After the season's expenses are paid and the
proper sum set aside as a reserve, the remainder of the
funds shall be divided as follows:

(1) One-half shall be set aside as a surplus fund, until
it equals the sum of the notes provided for in Section 19;
when the Secretary-Treasurer shall be authorized to with-
draw all such notes from banks, or otherwise in keeping
and substituting a bank balance therefore, canceling said
notes and returning to the makers.

(2) The remainder shall be divided among the mem-
bers, in proportion to the value of their shipments and
purchases made through the Association during that sea-
son, provided, that when any member has failed during
the season to live up to his agreements, by failing to ship
exclusively through the Association, or by any other breach
of his contract, and provided further that the said failure
on his part has resulted in a loss or damage to the Associa-
tion, then the said defaulting member shall forfeit to the
Association such share of his equity in the refund then
due as shall reimburse the Association for the loss or dam-
age thus sustained, in lieu of liquidated damages; or the
Association may proceed to collect from said defaulting
member said damages out of any other of his funds or prop-
erty interest in the Association.

EQUITY OF WITHDRAWING MEMBER
Sec. 21. The cause for suspension or expulsion of mem-
bers shall be determined by the Board of Directors. They
shall also determine the method of procedure in each case.
In the case of the withdrawal or expulsion of a member the
Board of Directors shall equitably appraise his property


35








CO-OPERATIVE MARKETING LAWS


interests in the Association and shall fix the amount there-
of in money, and for the purpose of paying off the amount
of such appraisal to such withdrawing or expelled member,
the Board of Directors shall collect an additional assessment
or charge on the products of its members handled by the
Association equal to the regular selling charges, and such
assessment or as much thereof as may be necessary, shall
be applied to transferring the interests of expelled or re-
tiring member to those remaining in the Association, said
additional assessments to begin at the date of the expulsion
or withdrawal.

MARKETING CONTRACT

Sec. 22. This Association shall have power to make mark-
eting contracts with its members requiring them to sell
through the Association for any length of time, not exceed-
ing ten years, all or any specified part of their products or
commodities, or through facilities or agencies created by the
Association. Said contract may be a part of the member-
ship agreement or separate therefrom as may be determined
by the Association. The Board of Directors may also promul-
gate such regulations as they see fit relating to fines and
penalties imposed on members for breach of marketing
contract.

CONFORMITY WITH CHARTER

Sec. 23. All business of this Association shall be in ac-
cordance with the "Cooperative Marketing Act" of 1923,
under which this Association is chartered.

Sec. 24. This Constitution and By-Laws may be amended
by two-thirds vote at any regular or called meeting of the
entire membership.


34








CO-OPERATIVE MARKETING LAWS


CAN COOPERATIVE MARKETING DO IT ALL?
By NATHAN MAYO, Commissioner of Agriculture

Can the American farmer obtain through cooperative
marketing his much-needed "relief?"
How far will orderly selling by producing groups go in
stabilizing markets?
Can Florida producers hope to hold up profitable prices
permanently by clearing houses and similar organizations?
These questions may well be considered in the light of
recent developments in cooperative marketing circles out-
side of Florida.

In California, where cooperatives have had some years
of success, it now appears that trouble is at hand. Grow-
ers of peaches, raisins, prunes and some other crops are
loaded down by surplus production and are said to be fac-
ing ruinous prices. After several seasons of prosperity
resulting from collective action in the sale of their products,
these California.folks are now said to be feeling the weight
of their own heavy crops which cannot be sold except at
loss. They are reported to be considering heroic measures,
such as allowing a large part of the present year's crop to
go to waste in order to reduce this surplus to the level of a
profitable instead of unprofitable supply.

Up in Canada where they grow vast quantities of wheat,
the growers formed a pool ,and operated it successfully for
a number of years. For a while it worked well. Undoubted-
ly it steadied the price of wheat and did much to prevent
sags and gluts in the market. Like the California organi-
zations, it brought cheer and confidence to the producers.
Farmers everywhere were looking at these cooperatives
with pride and hopefulness. 1But now we have the report
that the wheat pool is in trouble. More than seventy-five
million bushels of wheat, on hand as a "cary-over" from
last year, was added to this year's large crop, and the two
combined proved too much for the market to 'stand. Low


35








CO-OPERATIVE MARKETING LAWS


prices, asserted to be lower than the cost of production, re-
sulted, and Canadian and American wheat growers are
now figuring their losses.

This experience of our friends in California and Canada
is not a new one for cooperatives. The rice growers and
tobacco growers of the south have had similar troubles.
Both flourished a while until over-production piled up its
excess baggage too heavy for them to carry.

In the case of Florida, it may be pointed out that we do
not produce crops that can be kept from one season to the
next, as with wheat or tobacco or raisins or cotton. It is
true that Florida's chief products are citrus fruits and
vegetables, which are perishables and cannot well be car-
ried over. But this fact by no means removes the peril of
the surplus. In reality, it only emphasizes this peril since
it practically compels the marketing of these perishables
as soon as they are harvested. A Florida cooperative with
an excess of oranges or of vegetables, unlike a cooperative
handling cotton or wheat, would be forced to dispose of
this surplus at the same time it was selling the normal
amount demanded by the trade. We would not have the
chance that a wheat pool might have, viz., to unload the
"carry over" at a profit should the year into which it was
carried prove a year of low yields. Again, with the Florida
citrus grower there would be the added difficulty of con-
trolling annual production, since the citrus crop is not plan-
ned or planted for each separate year, but for all the years
the groves live and bear.

What lesson can we get from these troubles?

Just this: COOPERATIVE MARKETING CANNOT
SUCCESSFULLY HANDLE A SURPLUS SO LARGE AS
TO EXCEED ALL DEMAND.

We must consider the fact that one invariable result of
successful collective selling by farmers has always been
a marked increase in production. Cooperatives that direct
the marketing of seventy-five per cent or more of any crop
can and have always, under normal conditions, sold that


36








CO-OPERATIVE MARKETING LAWS 37

crop at a price satisfactory to themselves. This far they
can serve most helpfully the cause of agriculture. But no
cooperative yet brought forth has mastered the vexing
problem of EXCESS or SURPLUS. It is one of the trage-
dies of agricultural life that the very agency which has
profitably sold a crop of normal size has been the agency
which, without intent to do it, has stimulated the production
of succeeding crops which were of abnormal size and had
to be sold at low prices. There we have the sad spectacle
of farm organizations defeating their own ends and thwart-
ing the very purpose for which they were founded.
What can be done about it? The thing that MUST be
done, if cooperative marketing shall function, is to CON-
trol NOT ONLY MARKETING, BUT AHEAD OF IT, CON-
TROL PRODUCTION.
Whether this can readily be done'is the BIG QUESTION
LOOMING UP BEFORE COOPERATIVES. It will have
to be solved or all of our efforts to help ourselves through
organizations will in the end fail. This will apply here in
Florida just as it did in California. We had as well face
facts. The cooperatives we are to have in our State will
give us some IMMEDIATE RELIEF and will prove a bless-
ing. But unless our growers by common consent can con-
trol production they will not long be able to control prices.








CO-OPERATIVE MARKETING LAWS


MORE ABOUT COOPERATIVE MARKETING
-Its Possibilities and Impossibilities-
By NATHAN MAYO, Commissioner of Agriculture

Heretofore in this publication we discussed the topic
"CAN COOPERATIVE MARKETING DO IT ALL." In this
paper we pointed out some of the troubles which come to
cooperatives, calling special attention to the menace of sur-
plus production-an unhappy aftermath of many coopera-
tive enterprises in the past.

Nothing in this article was designed to "throw cold water"
upon cooperative effort, in Florida or elsewhere, despite the
fact that a very few of our friends seem to have so con-
strued it. We are in no sense opposed to this movement-
we are in the true sense very much in favor of it. But we
still stand upon our position taken in the article referred
to: WE KNOW THAT COOPERATIVE MARKETING IS
NOT A PERFECT PANACEA FOR THE TROUBLES OF
FARMING. IT HAS NOT ALWAYS WORKED SUCCESS-
FULLY, PARTICULARLY IN THE HANDLING OF THE
SURPLUS WHICH IS LIKELY TO FOLLOW IN ITS
WAKE. Here let us quote from C. A. Cobb, editor of the
SOUTHERN RURALIST, who says in an editorial under the
date of January 1st:

"The best cooperation can do in marketing is to put over
an outstanding job of selling the products entrusted to it.
And when this is well done, over-production with all its
train of evils is not only invited but is inevitable, WITHOUT
SOME MEASURE OF CONTROL. This is what has hap-
pened in California, where cooperation in this country had
its birth. If you doubt this, write the raisin growers and
the prune growers and any of the rest. Cooperation is no
answer to tariff discrimination against agriculture; it is
no answer to labor restriction in the interest of higher
wages for industrial workers. Cooperation is no answer to
the burden placed upon agriculture through the govern-
mental guaranteed income of industry."


38








CO-OPERATIVE MARKETING LAWS 39

SOME THINGS A COOPERATIVE CANNOT DO

It cannot perform miracles.
It cannot distribute large crops to the market at as high
prices as small ones.
It cannot entirely eliminate the middleman.
Controlling only a part of the crop, it cannot dominate
markets
It cannot change human nature or make a good farmer
out of a poor one.
It cannot sell all the produce of all its members all the
time for a profit (neither can this be done by independent
marketing.)
It cannot monopolize supply or prevent all competition.
It cannot succeed if a majority of its members are dis-
loyal.
It cannot wave a magic wand and remove all the diffi-
culties in production and distribution.
It cannot change sorry culls No. 3's to A grade or No.
l's.
It cannot make the weatherman cooperate even if farm-
ers limit the acreage.

THINGS A COOPERATIVE CAN DO

It can standardize and help stabilize production.
It can advertise and widen distribution and develop new
markets.
1t can improve grade, pack and containers.

It can help to improve distribution between existing
markets.
It can buy collectively.
It can finance marketing operations.








CO-OPERATIVE MARKETING LAWS


It can maintain favorable relations with the trade by
conforming to the highest ethics in business.

It can hire men who believe in cooperation and fire men
who don't.
It can be a democratic instead of an autocratic move-
ment.
It can employ skilled salesmanship.
It can assemble the commodities and resources of its
members.
It can employ expert graders and packers.
It can eliminate competition between local organizations.

It can decrease wasteful practices.
It can more easily secure shipping point inspection.
It can collect claims, improve quality, form pools.
It can help to avoid gluts and famines.
It can .make cheaper credit possible.
It can make for cooperative production.
It can make for cooperation in preparation for market.
It can eliminate a large percentage of the middlemen
dealing in farm crops.
It can get the grower a quality price when he grows r
quality product.

BUSINESS DONE BY COOPERATIVES IN 1927

With the limitations and difficulties of cooperatives
marketing ever in mind, Florida producers may well press
ahead to the work of building their organizations. With
the experience of hundreds of farm business enterprises
to guide them, our people have the best possible chance
to construct and guide their own associations so as to be-
come permanently successful.
It is heartening to consider the size of the business


40








CO-OPERATIVE MARKETING LAWS .41

transacted by farmers' associations in the United States.
A report issued by the Bureau of Agricultural Economic
at Washington, D. C., gives us the following very interest-
ing figures relative to the 11,400 cooperative associations
listed in the nation:
Grain Associations ------- $ 680,000,000
Dairy Associations ------ -------- 620,000,000
Live Stock Associations ---- -- 320,000,00
Fruit and Vegetable Associations 300,000,000
Cotton Associations --------- 97,000,000
Poultry and Egg Associations ------- 40,000,000
Nut Associations -- ----- ------- 14,600,000
Tobacco Associations ---------- 22,000,000
Wool Associations ---- -------------- 7,000,000
Miscellaneous ---- --- ------- 200,000,000--

Grand Total Business for Year 1927 --..$2,300,600,000

This huge total of business indicates the tremendous
strides the American farmer has made toward the proper
management of his own business affairs. Here in Florida
we are just beginning. Our citrus, poultry, dairy, truck
and general farming groups are in need of sound organi-
zation, intelligently directed. The efforts already made
toward this end would seem to lend a hopeful outlook to
the future. Collective action, directed by intelligence and
made vital by loyalty, can, and we believe will take our
producers far along the highway of progress.








CO-OPERATIVE MARKETING LAWS


ORGANIZING FARMERS FOR BUSINESS

By T. J. BROOKS, Assistant Commissioner of Agriculture

The farmer is a manufacturer: The soil, atmosphere,
sunshine and showers are the material to which he applies
his skill, and from nature's laboratory is poured annually
into the channels of trade the materials from which is fed
and clothed the teeming millions of the earth.

The farmer is a business man: The selling of his sur-
plus is the great paramount source of the world's com-
merce and trade. He furnishes 600,000,000 tons of food
annually to feed the nations of the earth.

The farmer is a consumer of the materials turned out
by the great urban industries. He interchanges his prod-
ucts with those of other lands till all the nations of earth
are linked together into one stupendous whole.

History is a voice forever sounding across the centuries
the interpretations of man. Opinions alter, manners change,
creeds rise and fall, but the law of cause and effect is
written on the tablets of eternity.

To trace the law of cause and effect in the past for fu-
ture guidance is a task of civilization. Present conditions
are the composite reflection of the operation of this law.
Present tendencies are prophetic, and to properly interpret
is to be forearmed and empowered to direct the course of
history.

The farmer of today is going through a period of transi-
tion, economically, industrially and financially. How to ad-
just his methods, habits, and business to the changing or-
der is one of the difficult problems of the day which he
alone can solve.

The consumer furnishes the demand for production. He
pays for:


42







CO-OPERATIVE MARKETING LAWS 43

(1) Cost of production.
(2) Cost of distribution.
(3) Profits of production.
(4) Profits of distribution.
(5) Waste of production.
(6) Waste of distribution.

The ability to consume is gauged by the power to earn.
When so much of the consumer's earning power goes to de-
fray the expense of waste his consuming power is curtailed
and the market he can furnish the producer is lessened. It
behooves both the producer and consumer to eliminate waste.

The best statistics obtainable inform us that production
and distribution are about equal factors in establishing the
retail price to the ultimate consumer. We know that this
can be greatly cheapened by the producer assuming a larg-
er share in the task of distribution along lines demonstrat-
ed to be practical, efficient and economical by the larger
distributing concerns of the leading nations of the world.

There are two general divisions of business methods:

(1) Individual.
(2) Collective.

The individual method has been followed almost univer-
sally from the very earliest to very recent times. The de-
velopment of modern machinery, the corporation and the
trust has eliminated this method in the larger affairs of the
business world. There is no individual distribution by those
who hire for wages. They do not own the things they pro-
duce. The distribution is undertaken by the firm or com-
pany owning the output. The workers in a shoe factory
think not of marketing the shoes they produce. This is
done by the factory owners; not as individuals either but
by distributors under the direction of the owners.

The same is true of the manufacture of machinery, furn-
iture, vehicles, mining, etc. A railroad has service to sell
but the ones who perform the individual service on the road







CO-OPERATIVE MARKETING LAWS


or trains are not the ones who set the price. This is the
work of the corporate body endowed by law with the pow-
ers of personal entity.
When farming is done on the bonanza scale the same
process of marketing is followed: The individual worker
sells nothing but his service; the corporation sells for all
the workers and pays a stipulated wage to them.

When the ownership and operation is on the small scale
the business is at a serious disadvantage in competing with
the larger business, both in power to handle a distributing
system and in economy of operation. This brings the farm-
er of tomorrow face to face with the alternative of collect-
ive marketing among the small farmers or gradually re-
treat before the corporation farmer. The corporation has
superseded the individual in all other lines. Even though
corporation farming is outlawed it will not do away with
the need of collective distribution.

We need only to study the cooperative movement, as it is
now progressing on both sides of the sea, to see its possi-
bilities and understand the details of its principles. What
we do is mostly a matter of choice but the consequences of
what we choose to do are meted out to us with cold preci-
sion as destiny swings the pendulum of time.

CORPORATE BUSINESS
There are three methods of conducting corporate busi-
ness :

1. The ordinary joint-stock method;
2. The co-partnership or profit-sharing method;
3. The cooperative method.

Let us take them up in the order named and study the
essential qualities of each. The process of securing a char-
ter is the same in all three kinds.

The first was originally the only kind organized. This
class has but one purpose: the welfare of the stockholder.
All net profits are considered the rightful property of the


44







CO-OPERATIVE MARKETING LAWS


stockholders. The voting power is lodged in the shares.
The shareholders may vote for the board of directors or
other officers. The voting power may belong exclusively
to the holders of common stock or may extend to the pre-
ferred stock. It may have both preferred and common
or all may be common. It may have a voting board which
has all the voting powers. In either case the profits go to
the stockholders. Most of our industrial corporations are
of this kind. The defense of this type of corporation is that
those who assume the risk of failure and have their money
invested are due whatever returns the business may net.

The second class of corporations-the profit-sharing-
goes one step further and allows a certain percent of the
profits to go to the employes in addition to their wages,
the bonus to be pro rata, based on the salary or wages of
each. This is calculated to tie the employes to the company
and encourage the "spirit of the shop" till strikes will be a
thing of the past. This plan is calculated to make the em-
ployes feel that they are getting a square deal and they will
have no desire to destroy the business that gives employ-
ment and gives them all that the profits will justify. This
plan is coming in favor with quite a few large employers.

The third kind of cooperative corporation goes still one
step further and includes the three absolutely essential fac-
tors in the operation of any business: the stockholder, the
employee and the customer. Neither is more important than
the other and neither should have all the benefits of suc-
cess. In the distribution of profits the cooperative corpora-
tion limits the profits that go to the stockholder just as
profits are limited to a bond holder. After paying expenses
the stockholder is a preferred creditor up to the rate which
is established as the rate. Next comes the employes and
customers. The employes get a certain percent pro rata,
based on the earnings of each. The remainder goes back
to those furnishing the business. If it is a mercantile busi-
ness the refund goes to the purchaser of goods in proportion
to value of purchases by members. Outside customers get
one-half the rebate of members, which may be credits till
they amount to a share, and then a share may be issued.
If it is a selling association commissions are charged to cov-


45







CO-OPERATIVE MARKETING LAWS


er expenses and a reserve; when this has reached a speci-
fied standard the profits are returned to those furnishing
the shipments, to each according to the profits yielded by
his shipment.

In the control it is usually one man who votes regardless
of the number of shares owned. In a few instances the
members vote according to the volume of business furnished
-so much business counting a vote. The same principles
apply whether the articles handled are eggs, poultry, live
stock, dairy products, fruit, vegetables, wheat, cotton or
what not. Farmers' Exchanges never deal in futures sub-
ject to settlement by forfeiture of margins.

Below we give in definite form the difference between the
relationship that exists between the stockholders, the em-
ployes, and the public when applied to the ordinary corpora-
tion and that relationship when applied to the genuinely co-
operative corporation.

NON-COOPERATIVE CORPORATIONS

There are five fundamental characteristics of non-coop-
erative corporations:

1. Organized and operated for profit to the promoters
and stockholders.

2. Grant each share a vote, or limit all voting to a re-
stricted class of stockholders-such as Common Stock, Vot-
ing Board or Board of Trust, etc.

3. Place no limit on number of shares an individual or
other corporation may own.

4. Place no restrictions on transfer of stock.

5. Distribute all net prfoits as dividends on capital is-
sued, whether the stock was paid for in cash-at par or be-
low par-in service or given away; or the profits may be
capitalized.


46








CO-OPERATIVE MARKETING LAWS


COOPERATIVE CORPORATIONS

There are five fundamental principles of cooperative
corporations:

1. Ownership of association by the producers of the com-
modity handled, if agricultural.

2. Return on capital invested restricted to specified
rate of interest.

3. All net profits returned to members in proportion to
patronage.

4. One member one vote regardless of the number of
shares owned.

5. Option must be given the Association on all shares
offered for sale and all transfers must be approved by the
Association.

There is a policy often pursued that gives the cooperative
concern an additional competing power but which is not an
essential requirement in cooperation: I refer to the policy
of retiring all outstanding stock from a sinking fund pro-
vided from the profits, as the business will justify. The
California Fruit Growers' Exchange did this and many oth-
er concerns following cooperative methods. This eliminated
all drain from the treasury for interest on money invested,
which is quite an item in old line business. Many are orga-
nized without capital stock.

COPYING THE ECONOMICS OF BIG BUSINESS
All examples of successful cooperative business exempli-
fy the possibility of conducting the distributive end of
farming on the same principles that are followed by the
big industrial corporations and trusts without the monop-
olistic extortions for the benefit of a few stockholding ex-
ploiters.


47








48 CO-OPERATIVE MARKETING LAWS



COOPERATION FOR VARIOUS PURPOSES
By T. J. BROOKS, Assistant Commissioner of Agriculture

Cooperation has had many interpretations. It may be
exemplified in Productive, Commercial, Financial and
Social Life. Cooperative undertakings may be based on
ideas of material profit only or on ideas of altruism or
on a combination of the two.

Social innovations are to be found in every age of the
world. However diverse the systems and theories put for-
ward or vaguely expressed, the idea of associated effort
runs through them all. Whether expressed by ancient
philosophers, as in Plato's "Republic," or by modern think-
ers as in Bacon's "Nova Atlantis;" by Moore's "Utopia;"
by Harrington's "Oceana;" by Campanella's "City of the
Sun." Making experiments in accordance with theories
have been frequent during the last half century. Most of
these experiments have come to grief. Impractical theories
may be so because they are unreasonable or run counter to
the public attitude of mind. A scheme may be plausible,
reasonable, worked out logically-planned on the assump-
tion that the human family will act rationally-yet fail be-
cause human beings so often utterly fail to act rationally.
The plan is impractical, though just and reasonable, if it
will not coincide with human conduct as influenced by
heredity and environment. The Essenes were communists
and held all things in common. Christ was of this tribe.
The Apostles seem to have followed this plan in their early
collaborations. Examples of this kind of cooperative effort
have not proven virile, permanent or capable of large
growth.

Adam Smith, Malthus, Ricardo and Spencer worked out
the theory of competition from the economic and individu-
alistic standpoint. Robert Owen, "the father of coopera-
tion," gave experimental expression to a means of escape
from the evils of competition by means of association on
mutual terms industrially. Dissatisfaction with existing








CO-OPERATIVE MARKETING LAWS


conditions has provoked various schools of thought which
involved radical changes in the social structure.

General economics treats of man's temporal well-being;
of production, distribution, consumption and agencies con-
trolling each. Pure economics is the science of value, price,
exchange and markets. National economics has to do with
governmental policies and operations. Dynamic economics
is prophetic as it deals with economic tendencies as con-
trasted with conditions. Rural economics relates to the pro-
duction, distribution and use of agricultural wealth and the
forces of rural life. Urban economics covers the field of
urban concerns problems of organized society, as it exists
and in its potentialities. Political economics generalizes all
branches, with special reference to the influence of gov-
ernment on industry and society.

Social science or sociology treats of the origin, history
and evolution of society; of ethnological forces, progress
of civilization and laws controlling human intercourse; the
development of government, marriage, law, custom, land-
tenure, caste and privilege; of domestic and international
social phenomena.

Cooperation is a phenomenon of social development. It
may come from (1) mobilization of a religious sect brought
about by persecution from without; (2) a fraternity; (3)
a revolt against economic conditions; or, (4) constructive
efforts to escape unsatisfactory economic conditions.

We see the first exemplification in the religious colony;
the second in the numerous fraternities with which we are
all familiar; the third group is seen in the labor unions,
such as Knights of Labor, the American Federation of La-
bor, the miners' unions, etc., and the Farmers' Alliance, the
Grange, the Farmers' Union, etc.; the fourth group is ex-
emplified in the cooperative enterprises for purposes of pro-
duction, distribution and finance.


49








CO-OPERATIVE MARKETING LAWS


RURAL CREDITS IN FOREIGN COUNTRIES
By T. J. BROOKS, Assistant Commissoner of Agriculture

EUROPEAN BANKING SYSTEM

I. Commercial.
Governmental.
Private.

II. Cooperative and non-cooperative credit systems.

1. Land loans.

Landschaft: German.

Is merely a syndicate of land-owning borrowers;
supervised and regulated by the government but
operated by the members; makes long-time loans on
mortgages; all land mortgages pooled and bonds is-
sued on them; bonds sold on open market; loans re-
paid by amortization; both limited and unlimited
liability, with the former tendency; the Landschaft,
as are all other European cooperative associations,
exempt from taxation; loans to members only.

2. Credit Foncier: French.

A non-cooperative, centralized institution, patterned
to a large extent after the Landschaft; government
appoints principal officers as well as supervising and
regulating same; debentures issued on collection of
mortgages; short-time loans and long-time loans
made, the latter being repaid by amortization; loans
repaid at the option of the borrower and equal
amount of debentures recalled; limited liability.

3. Credit Agricole: French.
Created by the government in 1899; its organization
consists of the regional banks and the member so-


50







CO-OPERATIVE MARKETING LAWS 51

cities; membership subscribes capital and Bank of
France furnishes free five times this amount, which
is lent back to the members on long-time land loans.

4. Direct government loans: Danish.

Government of Denmark furnishes $9 to every $1 of
the farmer's; England bought the big estates in Ire-
land in order to sell them back to the small holders;
New Zealand also.

III. Personal credit.

1. Rural.

Raiffeisen: German.

Local, independent, rural, cooperative, credit associa-
tion; funds for loans come mainly from deposits; the
security is mostly character, less often, other collat-
eral; loans averages $100; use of same must be meri-
torious; management is gratuitous; operates in a
restricted area; has marked social merits.

2. Schulze-Delitzsch: German.

This type of bank is agricultural; has shares the
same as commercial banks and intended for short-
time personal credit to farmers.

3. Credit Agricole: French.
Short-time loans made on personal credit without the
amortization feature.

IV. Metropolitan.

1. Schulze-Delitzsch: German.
Same as Raiffeisen except: absolute business man-
agement; is an urban bank-cooperative; has capital
stock; declares dividends; has paid officials; its







52 CO-OPERATIVE MARKETING LAWS

credit is either a loan or a discount on a trade bill of
exchange; loans are either straight loans or credit
limits within which a borrower may draw.

2. Credit Foncier: French.
Makes loans to municipalities, corporations, and
workers, in certain industrial pursuits.







CO-OPERATIVE MARKETING LAWS


INTERMEDIATE CREDIT FOR THE FARMER

A Pamphlet Containing Questions and Answers on Intermediate
Credit as Provided for in the Agricultural Credits Act of 1923
and Easential Facts Showing the Need for It.


Prepared by the
U. S. DEPARTMENT OF AGRICULTURE



What is the Agricultural Credits Act of 1923?

It is an act to provide intermediate credit for the farm-
er. It enables the farmer to borrow for production and
marketing purposes, for periods running from six months
to three years, depending upon the purpose for which the
credit is used. It establishes 12 intermediate credit banks.

What is meant by intermediate credit?

Intermediate credit, as the phrase is commonly used,
means credit granted to farmers for terms longer than
those covered by ordinary bank loans, but shorter than
those for which farm mortgage loans are usually made.
It is based on personal and collateral security; that is to say,
on the character and standing of the borrower, and on com-
modities or other personal property pledged to guarantee
repayment of the money loaned. Farm credit other than
mortgage credit, and running for terms of from six months
to two or three years, is properly spoken of as intermediate
credit.

What has been the source of intermediate credit in the past?

There has been no regular source of intermediate credit
in the past. Our banking system has grown up primarily to
serve industry and trade and has not been well adapted t
the needs of agriculture. Farmers have consequently been
obliged to seek intermediate credit by the makeshift plan
of renewing short-term loans from bankers or merchants.


53







CO-OPERATIVE MARKETING LAWS


Why does the farmer need intermediate credit more than
other producers?

Compared with that of business men, the turnover of
the farmer is slow. Business men frequently turn their
stock two or three times a year. Loans of short maturity
therefore are suited to business needs. But crop growers,
with few exceptions, have only one turnover a year. Loans
obtained by them in the spring as a rule can not be repaid
conveniently until crops are marketed. Even credit obtain-
ed later in the season may be needed longer than six months
if the crop is to be marketed in an orderly way. Livestock
producers have a yet longer turnover than grain growers.
Farmers need longer-term credit than business men owing
to the nature of their work.

How are the Federal intermediate credit banks organized?

One such bank serves each Federal land-bank district.
They are located in the same cities as the Federal lan
banks, and have the same officers and directors. They
operate under the supervision of the Federal Farm Loan
Board, just as do the Federal land banks.

What is the amount and source of the capital for the new
banks?

Each intermediate credit bank is entitled to capital from
the National Treasury up to $5,000,000. The Secretary of
the Treasury is authorized and directed by the agricultural
credits act to subscribe the capital as it is called for by the
directors of the intermediate credit banks, with the ap-
proval of the Farm Loan Board. Only $1,000,000 each was
asked for by the banks when they were organized. Several
of them have since called for additional amounts.

Does this mean that the total amount of loans and discounts
which the 12 banks may make can not exceed $60,-
000,000?

No. Each bank may issue collateral trust debentures,
or short-term bonds, based on discounted or purchased


54








CO-OPERATIVE MARKETING LAWS


farmers' notes and other agricultural paper. Such deben-
tures may be sold up to an amount not exceeding ten times
the bank's paid-in capital and surplus. Proceeds of deben-
tures sales are available for making loans. On the basis of
the present total authorized capital of the 12 banks, their
maximum loaning power is $660,000,000.

How do the intermediate credit banks operate?

They discount farmers' credit paper for banks and other
financing institutions and for cooperative associations. This
means that these institutions may indorse and turn over
their credit paper to the intermediate credit bank and ob-
tain the money tied up in the loan for the further extension
of credit to their patrons. The intermediate credit banks
also make loans direct to cooperative associations of agri-
cultural producers on the security of warehouse receipts or
mortgages on live stock.

For what term may these banks make discounts or ad-
vances?

The minimum term is six months and the maximum
term three years. For the present the Federal Farm Loan
Board has limited the term of discount to nine months.
Borrowers, whether these be farmers' organizations or
banks, have the assurance, however, that renewals will be
made where the need exists and the security warrants.
Loans made by intermediate credit banks are not based on
deposits which may be suddenly withdrawn, but on funds
obtained from the sale of securities with a definite maturity.

At what rate are discounts and advances made by the in-
termediate credit banks?

Interest or discount rates charged may not exceed by
more than 1 per cent the rate paid on the last debentures
sold. An issue of debentures was recently sold at 41/2 per
cent. Intermediate credit banks, therefore, can not now
charge more than 51/ per cent. No credit paper may be
discounted for, or purchased from, any bank or other insti-
tution if the rate charged by that institution to individual


55








CO-OPERATIVE MARKETING LAWS


borrowers is more than 11/2 per cent above the discount
rate. At present, therefore, the intermediate credit banks
can not discount any paper carrying an interest charge to
the farmer of more than 7 per cent.

Can an individual farmer borrow direct from the inter-
mediate credit banks?

No. If the banks should loan to the farmer direct, th<
cost of setting up machinery for this purpose would make
interest rates too high. The banks serve wide districts and
would find direct dealings with the individuals too expen-
sive.

Must farmers necessarily obtain credit from the intermedi-
ate credit bank through local banks or other existing
institutions?
No. In most States they can form agricultural credit
corporations of their own to discount paper with the inter-
mediate credit banks. Such corporations must have a capital
of at least $10,000. Intermediate credit banks help in form-
ing such corporations. Some of them have prepared sug-
gested articles of incorporation intended to comply with
State laws in their districts.

Can persons other than farmers form agricultural credit
corporations to obtain discounts from the new banks?

Yes. Bankers or business men who wish to help the farm-
ers to obtain cheaper credit can form such corporations. In
fact, any group can do so. Bankers in some cases may
find it desirable to conduct such credit corporations in con-
nection with their banks. Several of the kind have been
organized.

Is it the intention of the Agricultural Credits Act of 1923
that credit accommodation should be provided by new
local agencies rather than by existing banks or other
institutions?
The evident intent of the law is that existing credit ma-
chinery shall be used as far as possible. It is desirable or


56







CO-OPERATIVE MARKETING LAWS


advisable to form new credit agencies only where the pres-
ent ones are inadequate or do not take advantage of the
new discount facilities. Improvement o f existing credit
agencies, rather than their destruction, is the object of the
law.

Are these intermediate credit banks now in operation?

Yes. They were chartered and organized shortly after
the enactment of the law, and have been in operation sev-
eral months.

On what products stored and controlled by cooperative
marketing associations may direct advances be obtain-
ed from these new banks?

The Federal Farm Loan Board has already approved the
following commodities, when properly stored, as security
for loans: Grain, cotton, wool, tobacco, peanuts, broom
corn, beans (including soy beans), rice alfalfa and red top
clover seeds, hay, nuts, dried prunes, dried raisins, and
canned fruits and vegetables. Other commodities will be
added to the list when the board has determined whether
or not in its opinion they can be stored so that warehouse
receipts based on them will be good collateral.

Is the service of the new banks to be measured solely by
the discounts and advances actually extended?
No. They are also valuable in that credit made available
by them encourages private financial institutions to extend
loans. Farmers' cooperative associations have often found
commercial banks willing to give credit on very reasonable
terms as soon as advances have been promised and approv-
ed by the intermediate credit banks. An association that has
been deemed a safe risk by an intermediate credit bank
has thereafter a better standing with private financiers.

How can additional information concerning the operation
of these banks be obtained?
Information about loans and discounts, or the organiza-
tion of agricultural credit corporations where such are need-


57







CO-OPERATIVE MARKETING LAWS


ed, can be obtained from the intermediate credit bank in
the district concerned.

Does the Agricultural Credits Act of 1923 contain any other
provisions for the improvement of intermediate credit
to the farmer besides those dealing with the intermedi-
ate credit banks?

Yes. There are four other important provisions:
1. The Federal reserve act is amended by increasing the
maximum term for which the reserve banks may discount
agricultural and live-stock paper from six months to nine
months.

2. The definition of agricultural paper is broadened to
include loans to cooperate marketing associations for grad-
ing, processing, packing, preparing for market, or market-
ing of any agricultural products handled for members.

3. The capital needed to make a State bank eligible
for admission to the Federal reserve system is reduced to
60 per cent of the amount required for national banks
in cities of corresponding size to that in which the State
bank is located. It is provided, however, that the State
bank must agree to increase its capital within a reason-
able time to the amount required of the national bank.
Country banks that take advantage of this provision will
greatly add to their ability to aid agriculture.

4. Privately financed and managed national agricul-
tural credit corporations may be organized under Federal
charter. Such corporations must have a capital of at least
$250,000 and will be supervised by the Comptroller of the
Currency. Existing live-stock loan companies may reincor-
porate under the law.

Where are the intermediate credit banks located, and what
States are served by each of them?
The Federal land bank and intermediate credit bank
districts, group of States comprising each district, and
location of each pair of banks are as follows:


58









CO-OPERATIVE MARKETING LAWS


Location of
SS Federal Land Bank
ESTATES and
SFederal Intermediate
d o Credit Bank


Maine, Massachusetts, Vermont, New
Hamsphire, Rhode Island, Connecticut,
New Jersey, and New York.

Pennsylvania, West Virginia, Maryland,
Deleware, Virginia, and District of Co-
lumbia.

North Carolina, South Carolina, Georgia,
and Florida.

Indiana, Ohio, Kentucky, and Tennessee.

Louisiana, Mississippi, and Alabama.

Illinois, Missouri, and Arkansas.

North Dakota, Minnesota, Wisconsin, and
Michigan.

Wyoming, Nebraska, South Dakota, and
Iowa.

New Mexico, Kansas, Colorado, and Okla-
homa.

Texas.

California, Nevada, Utah, and Arizona.

Idaho, Washington, Montana, and Ore-
gon.


Springfield, Mass.



Baltimore, Md.



Columbia, S. C.


Louisville, Ky.

New Orleans, La.

St. Lou s, Ieo.

St. Paul, Minn.


Omaha, Nebr.


Wichita, Kans.


Houstoun, Tex.

Berkley, Calif.

Spokane, Wash.


1



2



3


4

5

6

8


8


9


10

11

12


I I


59








CO-OPERATIVE MARKETING LAWS


THE AGRICULTURAL PARTNERSHIP

Perhaps the most important change in the farm situa-
tion between 1932 and 1934 was that during that period
the farmers of America organized collectively to deal with
their collective interests.

Cotton growers signed 1,026,514 adjustment contracts in
1933; their signatures represented 73 percent of the total
cotton acreage.

Wheat growers signed more than 550,000 adjustment
contracts for the 1933-34 crop; their signatures represent-
ed 77 percent of the total area sown to wheat.

Tobacco growers signed approximately 275,000 adjust-
ment contracts for the 1934 crop; their signatures repre-
sented 95 percent of the tobacco acreage of the country.

Corn-hog farmers signed 1,000,000 contracts to be ef-
fective in 1934; their signatures represented more than 75
percent of the hogs in the country.

ECONOMIC DEMOCRACY IN THE CONTROL
ASSOCIATIONS
In many other countries where control of production has
been undertaken as a result of the depression, control has
been imposed from above. In the United States, production
has been adjusted by democratic procedure.

The county production control associations formed by the
signers of adjustment contracts are local expressions of eco-
nomic democracy. It is through these associations that col-
lective action can be taken to make farm output fit avail-
able markets. It is through these associations that farm
opinion can be formulated as to what markets should be
made available to the American farmer, and what methods
should be followed in adjusting production to them.
The cash gains from this collective action are not its
only benefits. The farmer who has had the experience of


60







CO-OPERATIVE MARKETING LAWS


crop control programs no longer thinks solely in terms of
his individual farm. He thinks in terms of the national out-
put of certain crops. His part in that output remains, and
should remain, his first interest, but he now recognizes
that his part is a part, inseparably related to a larger whole.
That recognition is vitally important.

Furthermore, the definition of parity price as a rela-
tion between city-made and farm-grown commodities causes
the farmer to think of his own welfare as definitely related
to the welfare of the nonagricultural producers who with
him make up the American economic community. That sense
of community greatly widens the farmer's horizon; he is
becoming accustomed to assist in the formulation of nation-
al economic polices.



WHAT COOPERATIVES ARE DOING
IN OTHER STATES

The Terrebonne Cooperative Association of Houma, La.,
and the Lafourche Truck Growers Cooperative Association
of Lockport, La., with a combined tonnage of well over
1,000 cars of potatoes and other vegetables, recently affili-
ated with the National Fruit and Vegetable Exchange. To
handle the increased tonnage of these new members, the
National is establishing two new sales offices, one at Houma
and one at Lockport.


LIVESTOCK COOPS BEGAN BIG BUSINESS IN 1923

Beginning with 1923, the sale of livestock by cooperative
agencies operating on the terminal markets has been a big-
business activity. In that year 23 farmer-owned organiza-
tions sold nearly 10,000,000 animals for their patrons. In ad-
dition, more than 100,000 animals were purchased to fill
orders. Last year 40 cooperative sales agencies sold more
than 13,100,000 animals for livestock producers. In addition,
enough more animals were sold for traders or purchased


61







62 CO-OPERATIVE MARKETING LAWS "

on order to give a grand total of animals handled during
the year of 14,000,000, the largest number ever handled
through terminal market cooperative sales agencies. The
40 organizations accountable for the record-breaking fig-
ure operated upon 33 different markets, reaching from
Jersey City to San Francisco and from St. Paul, Minn., to
Fort Worth, Tex. The total business transacted by these
agencies, as measured in dollars, was in excess of $138,000,-
000.


OHIO EQUITY NETTED $2,487 LAST YEAR

The Ohio Equity Exchange Company, of Lima, Ohio, end-
ed the fiscal year January 31, 1934, with a net earnings
of $2,487, according to information furnished the Coopera-
tive Division, Farm Credit Administration. A total of $1,990
in patronage dividends was pro-rated to the associations
and individuals affiliated with the Exchange.
The year's business included 205,825 bushels of oats,
332,865 bushels of wheat, and 273,069 bushels of corn. The
Exchange handled also 284 cars of coal, as well as a good
volume of business in lubricating oils, fertilizer, twine,
clover seed, and other commodities.
During the past eight years a total of $16,733 has been
pro-rated to patrons by the central organization on a total
business of $6,324,818.
The Ohio Equity Exchange Company was originally org-
anized November, 1918, as the Ohio Central Equity Ex-
change Company. The present company was formed in
1926, and acts as a sales agency for local farmers' 'equity
exchanges in the Lima district.


A net gain of 185 members during 1933, bringing the
total membership up to 1,963, is reported by the 0. K. Co-
operative Milk Association of Oklahoma City. The associa-
tion has members in 13 counties and sells through 10 special
distributors, besides scores of local stores. Last year it
handled 1,939,893 pounds of butter, valued at $538,962.











INDEX


Co-operative Marketing Law ------ 3

Chartering Cooperative Corporations.. --------- 20

Articles of Incorporation --------21

Application for Charter for Joint Stock Association 22

Application for Charter for Non-Stock Association ---- 23

Suggested Constitution and By-laws of Capitalized

Cooperative Association -------- 24

Suggested Constitution and By-laws of Non-Capital-
ized Cooperative Association -- 29

Can Cooperative Marketing Do It All ----- 35

More About Cooperative Marketing -- 38

Organizing Farmers for Business ----- 42

Cooperation for Various Business -- 48

Rural Credits in Foreign Countries -- -----------50

Intermediate Credit for the Farmer -- ----------53

The Agricultural Partnership --------60

What Cooperatives are Doing in Other States -- 61




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