usiness.
Second, the cooperative association is organized to secure more
efficient service rather than to exact profits. This is a point upon
which there is much misunderstanding upon the part of those starting
cooperative enterprises and which requires further explanation. Third,
the earnings or savings of the association (commonly thought of as
"profits") are distributed among the members or patrons of the
association _pro rata_ according to the volume of the business which
they have transacted with the association, so that although its control
is democratic its benefits accrue according to the amount of financial
interest involved. There are certain other principles of business
procedure which have been found essential to the successful operation of
different kinds of cooperative associations, but these three--individual
voting, service rather than profits, and pro-rating the earnings--are
fundamental to all truly cooperative associations, and it is to this
combination of business methods to which the term cooperation has now
come to be applied in a technical sense.
Exclusive of associations formed for cooperation in the general sense of
the term, i.e., for various purposes of farm operation as mentioned
above, farmers' cooperative associations may be divided into three
general groups: for buying, for selling, and for finance.
Cooperative buying has been most successfully developed by industrial
workers in towns and cities and is commonly known as "consumers'
cooperation." Starting with a few poverty-stricken workers who pooled
their meager savings so that they could buy at wholesale and share in
the profits of the retailer, the Rochdale system has grown until the
wholesale cooperative societies of England and Scotland are probably the
largest general merchandising corporations in the world, doing a
business of approximately a billion dollars a year.
Cooperative buying of farm supplies, fertilizers, machinery, spraying
materials, feeds, binder twine, etc., is one of the first forms of
cooperative effort ordinarily undertaken by farmers' associations, and
is carried on by numerous methods. In most cases the services rendered
in the business management of such buying is at first largely on a
voluntary basis or is but poorly paid. Only in a few sections of the
country has the cooperative buying of agricultural supplies assumed a
permanent or stable form of organization, and in those cases it is very
frequently a d
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