COOPERATIVE AGRICULTURE IN FLORIDA 23

bers as a cash patronage dividend based on the amount
of business each has done with his association.

 26. Q. HOW WOULD A PURCHASING ASSOCIA-
 TION OPERATE UNDER THIS PLAN?
 A. Supplies are sold to members at cost plus a
safe and substantial margin, but usually at prevailing
prices. Periodically, savings above operating costs and
necessary retains for capital and reserves are returned
to members in proportion to their purchases. Price cut-
ting at the time supplies are delivered disturbs business
and has led to disastrous price wars. Selling at regular
market price enables associations to return larger pa-
tronage refunds.

 27. Q. DO COOPERATIVES EXTEND CREDIT TO
 MEMBERS?
 A. "All business for cash" was one principle of
the early cooperatives. Time has proved the soundness
of this rule. Cooperatives should treat all members alike
and if credit is given one, others will demand it. Few
cooperatives can operate on a 100 percent cash basis,
yet many are so careful in handling accounts that they
have practically no loss. Supply cooperatives have a
serious problem, for example, when they deliver fuel
oil to the farms or when a hired hand hauls out a load
of feed. Cash payments, if required, would work a hard-
ship on the patrons. Directors often instruct the manager
to extend credit in such cases, but to require payment
for the last purchase before making another credit sale
to those particular patrons. In that way, accounts are
prevented from getting out of control.

 28. Q. DO COOPERATIVES PAY INTEREST ON
 CAPITAL STOCK?
 A. Many of them pay reasonable interest on the
capital stock invested by members or others. This rate
may not exceed 8 percent per annum under the Florida