F

ORTY-TWO associations in

1950, the latest year data were available, had 59,291 members, or an average of 1,412 an association. The range was from 130 to 3,000. The number having memberships within certain ranges are shown in the tabulation on this page. Approximately 90 percent of the members were patrons.

exemption from payment of Federal income taxes. Each patron, of course, must take into account his respective share of the patronage refunds or distributions from the cooperative when preparing his individual tax return.

These associations pay various other taxes generally assessed against similar lines of business. Data obtained on 40 associations for their 1951-52 fiscal year showed they paid total ad valorem taxes of $11,465 and social security taxes and workmen's compensation insurance of $10,081.

Membership Requirements

Farmers become members of local associations by signing applications and receiving approval of the boards of directors. The association at Panola also charges a $1 membership fee and that at Belzoni requires ownership of a $1 share of common stock.

Membership in the local farm bureau is not required but most associations encourage their members to join it. None of the cooperatives contribute any of their annual net margins to the local farm bureaus.

In all associations except those with capital stock, each member has only one vote. None use membership contracts. or agreements in their purchasing or marketing operations. Bylaws of practically all associations provide that a member loses his membership privileges when he quits farming, ceases to

patronize the association for 1 year, or violates its bylaws.

Members provide capital for their cooperatives largely by leaving their patronage refunds in the business in the form of patrons equities. About half have sold some certificates of indebtedness to members in recent years. Twenty-five were operating on a revolving fund capital system. The capital structure of the cooperatives will be discussed in a later section of this bulletin on page 125.

Annual Meetings

Forty associations reported their average attendance at annual meetings in 1950 was 160 members while 32 associations in 1952 reported an average of 86, or only 11 and 6 percent of the members, respectively. Attendance varied from year to year in the same association due to weather, conflicting meetings, and other factors.

The number with various attendances are shown in this tabulation.

Most managers stated that some incentive was needed, in addition to the business meeting, to get a good attendance, but three said they had not found a sure way of getting out a crowd. A majority said that some type of food-a dinner or picnic was needed, and several indicated both food and entertainment was necessary. Two favored door prizes; another said more competition in election of directors; another favored a joint meeting with the farm bureau; and several mentioned that good speakers and entertainment were necessary.

The Hinds County association, which staged a fish fry one year, had an attendance of 700. Last year about 300 attended when a supper and entertainment made up part of the program. The cooperative paid the local junior college for serving the meal. The crowd consisted mainly of the men and their wives as only the most interested were invited. The Webster County association, which had an attendance of 400 in 1951, reported that they had a dinner at noon served by the home economics departemnt of the local high school. The cooperative paid them for the food plus $75.

an executive committee of 5 members.

Managers

Managers of the 40 reporting associations ranged from 26 to 66 years in age in 1952. One was in his twenties, 10 were in their thirties, 18 were in their forties, 8 were in their fifties, and 3 were in their sixties.

Length of time the managers had been in their present position ranged from 6 months to 17 years. Fourteen had less than 5 years, 15 had from 5 to 9 years, and 11 had 10 years or more. Only a few reported any management experience in other cooperatives.

Previous business experience of the managers varied greatly as indicated by the following tabulation.

One has

One association using a graduated system paid the manager a base salary plus 50 percent of the first $1,000 of net margins and 10 percent of the remaining amount of net margins. Another paid a base salary plus 10 percent of the first $10,000 of net margins, and 3 percent of the remaining net margins. Only dividends and revolving equities received in cash from M. F. C. were included in this computation. A third association paid a base salary plus 10 percent of the first $2,000 of net margins, 15 percent of the second $2,000, 20 percent of the third $2,000, and 25 percent of the remaining net margins. Dividends on stock received from M. F. C. were excluded in this compilation. The fourth association paid a base salary plus 10 percent of all net margins in excess of $5,000. One association reported that it started. out the manager of its new branch

station on a commission of 0.5 of 1 percent of cash sales.

All except three associations, therefore, used the patronage refunds and dividends on stock received from M. F. C. as well as local operating margins in computing the managers' share. One excluded both, another included only dividends on stock and old equities received in cash from M. F. C., and the third included only patronage refunds received. Only one association placed a maximum on the amount which the manager could earn in salary and commissions during the year.

The general trend has been to raise the base salary and lower the rate of commissions as the associations become larger and more successful. In the early days some managers received as much as 50 percent of the net margins as commissions. In addition to a small base salary, a number of those now receiving 5 or 10 percent originally started out on a 20 or 25 percent basis.

Most managers did not object to this trend because they preferred a relatively good salary with some incentive provisions rather than a system which might result in greater fluctuations in pay. Practically all who received a portion of the net margins liked the plan and reported few complaints about it from members.

Several managers on straight salaries indicated that they would favor receiving a small percentage of the net margins. They believe that such a system would encourage managers to increase volume and to operate the business more efficiently.

Operating statements of the two groups of associations employing managers on salaries and on salaries plus commissions will be analyzed and discussed in a later section of this bulletin on pages 98-103.

Employees

In addition to the managers, the 42 member associations in 1950, the latest year data were available, had 98 full-time employees engaged in management and office work and 100 full-time employees working in warehouses and various services. These associations employed approximately 12 additional

employees and 100 warehouse employees on a temporary basis during the peak seasons of the year.

None of these employees in 25 cooperatives were related to the manager or the board of directors. Thirteen associations reported that each had one relative employed who frequently did bookkeeping on either a full-time or part-time basis.

Operating statements of 39 associations for 1951-52 showed they spent an average of $4,798 for fulltime assistants and bookkeepers and 37 reported an average expenditure of $2,140 as wages to other employees. This totaled $6,938 per association, or 2.33 percent of supply purchasing volume. (See table 33 in a later section of this bulletin, page 95.) Detailed information was not obtained on the rates or amounts paid for various full-time jobs, but it appeared that the first assistant to managers received an average salary of about $2,400 a year; the bookkeeper about $1,800; and a warehouse laborer about $1,500 a year.