DEPARTMENT OF AGRICULTURE


 services it purchases for them. The patronage re-
 fund is a means of returning these accumulated un-
 der and over payments to the rightful owners. "Re-
 fund' describes this operation better than "dividend"
 or "rebate."
PROFIT Is a term often applied to the net margins
 accumulated in a cooperative. Non-profit associa-
 tions naturally do not make profits for themselves,
 but they make profit for the farmers by increasing
 the net returns from produce processed and mar-
 keted and reducing the net cost of farm supplies
 purchased.
REVOLVING CAPITAL A method of increasing
 capital by leaving patronage refunds or retains in
 the cooperative and issuing evidences of indebted-
 ness to members for a certain number of years or
 until a certain amount of capital is acquired, after
 which each year's current margins are used in re-
 tiring patrons' equities in the order in which they
 accrued.
REVOLVING FUND CERTIFICATES -The usual form
 used by cooperatives to evidence indebtedness to
 members in a non-stock cooperative for working
 capital furnished by such members.
STOCK Common stock, preferred stock, certificates
 of equity-each refer to investment in the coopera-
 tive's capital structure. Common stock usually car-
 ries the voting right while other evidences of invest-
 ment do not.
 ANOTHER DEFINITION OF A COOPERATIVE
 A cooperative corporation is one in which the mem-
bers receive the returns from shipments or purchases on
the basis of the amount sold or purchased through the
organization. Stockholders' dividends are limited to a
certain percent on the stock a legal rate of interest
only. Therefore, a cooperative is designated a "non-
profit" organization.