hands of the purchaser at the earliest possible moment; this the owner of the money secured by it will insist upon at all hazards, and it will ordinarily be done regardless of any promises to growers.

Perhaps the main object of the cooperative fruit associations of California has been to relieve the selling pressure during the first month or two of each season, by providing means whereby growers can obtain reasonable advances for a short time, upon their product, while still retaining control of its sale. It is considered that since the crop requires the entire year for its consumption, during which time it will necessarily be "carried" by some one, it will be to the grower's interest to avoid a forced sale of the entire crop during the first month or two, by "carrying" some portion of it himself, not, however, in a speculative spirit, or with any special expectation of more than the proper slight advance to offs t interest and shrinkage, which a dealer would expect.

This, however, the grower can not do, if he loads up his product with advances approaching its market value; when he does that his product will have to move; the inducements. which commission houses sometimes offer of very large advances, as against comparatively small advances attainable through a cooperative society, are in reality no advantage to the grower; in almost every instance when his circumstances require him to immediately realize nearly the full value of his crop, he will do better to sell outright to some person able to hold it if he desires.

Dried fruit, nuts, raisins, etc., in a fruit warehouse in California, in charge of experienced men who are responsible for its condition, is security for fifty per cent of its current value, and would now probably be so considered by most California banks, for a short loan, with the understanding that no renewal was to be asked, but the fruit sold before the maturity of the advance upon it; this would probably be all that a banker would advance, and it should be all that any cooperative society should advance. Holding any product which you can sell, and the proceeds of which you need, is speculation, and he who speculates on borrowed money is

lost. The cooperative societies of California were organized as selling agencies; if they acquire the habit of seeking to "corner" the markets, and do it on borrowed money, they are doomed. Hence, while advances to a certain extent are necessary and proper, cooperative societies should use caution; if the pressure for advances is quite general, and tends to approach half the value of the product or more, push sales a little harder. Have no fear of "weakening the market; the market is already weakened when the owners of a product are compelled to borrow money on it; a cooperative marketing society will be tested by its efficiency as a selling agency rather than by its effectiveness in obtaining loans on products held for an advance.

SIMPLICITY OF OBJECT. It is perhaps unnecessary to add to what has been said before on this topic. At present cooperation is not competent, in this country at least, to deal with complex mercantile or manufacturing operations. If success is achieved, it will be due to the public-spirited efforts of one or two persons, and not to the inherent force of the cooperative body. A creamery, a fruit drier, a selling or purchasing agency, and similar enterprises may be expected to succeed in communities requiring them.

There are some other matters essential to success, which may perhaps be more appropriately considered under the heading of the next chapter, but on the whole a cooperative enterprise designed to accomplish a simple and desirable end, with adequate capital and free from debt, ought to succeed.

F

CHAPTER V.

ELEMENTS OF DANGER IN COOPERATION.

AILURE in the main to be governed by the rules sug

gested in the last chapter, or carelessness in the matters

of organization, are of course elements of danger, but in this chapter I shall have reference to matters which, although seriously important, are yet not absolutely fundamental; matters in which such errors as may occur may be corrected without reconstruction of the entire business.

NEGLECT OF STOCKHOLDERS.-This has been already alluded to, but it can hardly be made too prominent. The stockholders are the owners of the business, and if they do not carefully watch it, who will? I have never myself seen serious trouble from this cause in neighborhood associations which have been started on a sound financial basis, and whose members are necessarily well acquainted with each other, but in more extensive marketing associations, whose operation extends over considerable areas, and perhaps an entire state, the inattention of stockholders is a serious difficulty. The tendency of farmers in such cases is to regard "the company" as a mysterious entity, existing somehow and somewhere, to which they have perhaps "contributed" grudgingly something, and whose operations are calculated to help them in some way without thought or effort on their part. The notion of the corporation as a business enterprise of which they are part owners, which expects the support of their business, and for whose financial success they are in part responsible, can hardly be said to exist among farmers. Perhaps this point may be treated more profitably by considering the infirmities which are the cause of it.

IGNORANCE. This is the foundation of most trouble, and certainly of the non-support of cooperative societies by their own stockholders. The ignorance of most farmers in regard

to business transactions outside the immediate operations of the farm is astonishing. The merchant is perhaps as ignorant of farming operations as the farmer is of trade, but he has no need to be otherwise, as he deals only with completed products, and need not concern himself with the processes of production—although to be sure he is a better merchant if he does understand them-but the farmer who must bear all the risk of production is vitally interested in the mercantile conditions and operations affecting the distribution of his product. I can best illustrate my meaning by an example. The fruit-growers of California are engaged in a very risky business; their product, if sold fresh, is perishable; if sold dried, is semi-perishable; they are thousands of miles from market, and, on nearly all their products, are exposed to competition from other districts or other countries having cheaper labor and cheaper transportation to the great markets; their business requires far more capital than ordinary farming, and their investments require careful attention and constant increase for years before yielding any returns whatever; they are probably the most intelligent body of agriculturists in the world, and yet up to the beginning of cooperative work in that state it is doubtful if there were a dozen of their number who could give any intelligent account of the processes by which their product reached the table of the consumer, the necessary expense of those processes, or of the character and extent of the competition to which they are exposed. The mixed farmer of Ohio, or the wheat-grower of Minnesota, has not the same need of this knowledge; his goods are staple and the markets are at hand; if one crop proves unprofitable he can the next year change to another crop; but to the specialist, cultivating orchards under the circumstances prevailing in California, this mercantile knowledge is vital, as hundreds who entered upon the business without it have learned to their sorrow.

SUSPICION. This is the child of ignorance, and invariably attends it; and it is born not only of ignorance, but of experience. The ignorant man is the natural prey of the designing man, and having been often deceived is constantly expecting

deception. A man ignorant of business processes has no means of distinguishing the projects of the schemer or the enthusiast from the sensible proposals of the sound business man, and as the former always promise more largely, he is more likely to be attracted by them, and to be continually disappointed. It is surprising to meet persons so generally intelligent as many farmers are, and yet so completely ignorant regarding many business transactions which concern them, and consequently so suspicious of those proposing improved methods.

INFIRM WILL-This seems to me the greatest infirmity of human nature. It seems to be possible for bright talkers of strong will power to persuade most men to act contrary to what would be their cool judgment. It is my observation that when cooperative societies are formed the majority of the members are obtained only after the most earnest canvassing by a small number of enthusiasts; I have personally assisted in the formation of a large number of cooperative societies, and perhaps have induced as many persons as any one ever induced to sign their names to the stockholders' lists of such enterprises, and I can remember hardly an instance where any one not of the number of the original promoters gave his signature without serious and exhausting arguments; I have always been a hard worker, but have never done any work so exhausting as canvassing for membership in a cooperative society; of the hundreds whom I have induced to join such societies, I do not believe that one third could have been secured except as the result of this earnest canvassing; nor do I believe that there were more than one in three who could not be persuaded after having joined the society to compete with it by doing their business elsewhere.

The experience of the California Fruit Union, with which I was never connected, is a fair sample of this. Sometime in "the eighties" the growing output of fresh fruit in California had outstripped the then existing shipping and marketing arrangements, and the growers were making no money. In this state of affairs, as the result of many large meetings, and amidst much popular enthusiasm, the "California Fruit