ation. One half of the remainder of the profits has to be paid as a
uniform dividend upon the amount of purchases of shareholders and upon the
wages and salaries of the employees, while the other half has to be paid to
the nonshareholders on the amount of their purchases.

In case of productive associations, such as co-operative creameries, or
elevators, dividends have to be paid on raw materials delivered. In case
an association is both a selling and productive enterprise, the
dividends may be divided on both goods purchased and material delivered.
All concerns which do not comply with the provisions of the above law
are prohibited to use the term "co-operative" as a part of their
corporate name or the designation of their business.

According to the Nebraska law, Senate File No. 88,

the words "co-operative company, corporation, or association" are
defined to mean a company, corporation, or association which
authorizes the distribution of its earnings in part or wholly on
the basis of, or in proportion to, the amount of property bought
from or sold to members, or of labor performed, or other service
rendered to the corporation. A co-operative concern has the power
"to regulate and limit the right of stockholders to transfer their
stock, and to make by-laws for the management of its affairs, and
to provide thereon the term and limitation of stock ownership, and
for the distribution of its earnings."

The California law, Civil Code, Secs. 653M to 653S, provides for
organization of agricultural, viticultural, and horticultural
co-operative associations which shall not have a capital stock and shall
not be working for profit. Each such association shall determine by its
by-laws the amount of membership fee, the number and qualifications of
members, conditions of voting, the methods of business, and the division
of earnings.

There is no question that every state must have special legislation for
co-operative associations quite distinct from that relating to private
business concerns. A co-operative association must have the legal power to
regulate and limit the right of shareholders to transfer their shares, to
make by-laws for the management of business, to limit the share ownership,
to decide on the proportion and method of distribution of its surplus
earnings. It must limit dividends on shares to the prevailing rate of
interest and provide a certain percentage for a