Co-operation is a child of necessity. It cannot be created by outside suggestion or mere preaching. When there is a need and conditions are favorable the co-operative movement comes into being. Unquestionably the need for co-operation is greater in the rural districts than in the cities, and yet the rural conditions in many respects make the development of co-operation more difficult. The main obstacles, according to the rural co-operators themselves, consist in the lack of business connections and markets, in the absence of knowledge of efficient business methods, and in credit difficulties. It is hard to find an able and trustworthy business manager for a co-operative store in a village.
Notwithstanding all difficulties, the co-operative movement among farmers and especially among immigrant settlers has lately begun to grow with extreme rapidity. For instance, in 1917 in the state of Wisconsin there were agricultural co-operative associations in the following numbers: 380 creameries, 718 cheese factories, 98 feed and produce associations, and 124 live-stock concerns.[20]
One of the first difficulties in the way of establishing a co-operative association is its incorporation proceeding. Most of the states up to this time have had no special laws covering co-operative associations. In such cases they have to be incorporated under the laws relating to private companies or those covering charity and public-welfare associations.
A number of states have enacted laws for the promotion and protection of co-operation among farmers. The Wisconsin law, Chapter 368, Laws of 1911, makes provision for the establishment of organizations conducting business on the co-operative plan. No member is allowed to own shares of a greater par value than one thousand dollars. No member is entitled to more than one vote. Dividends on the paid-up shares are allowed to be no more than 6 per cent per annum; 10 per cent on the net profits has to be set aside as a reserve fund. When this has accumulated up to 30 per cent of the paid-up shares, 5 per cent goes to the educational fund to be used for teaching co-operation. 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.