PLANS FOR CO-OPERATIVE.

The Directors of the Co-operative Society have prepared a plan for the incorporation of the Society, and for a transfer of the property and of the control of the Society to this corporation when created. The action is taken in pursuance of a vote taken at the last annual meeting on November 20, 1901.

In this vote the three important points are (1) the direction that the stock of the corporation shall be vested in a stable body of stockholders; (2) the express exception from the privileges of future ticket-holders of "the power of direct management of the affairs of the company;" (3) the provision that the plan when proposed shall be passed on by the members of the Society voting by Australian ballot.

In accordance with this vote, the Directors recommend that the Society apply for a charter under the statutes of Massachusetts. If the recommendation be adopted, the stock will be issued by the present Board of Directors to five stockholders; the present organization will thereupon cease to exist. Certain conditions are specified for acceptance of stock: That the stockholders shall make no personal profit; and they shall provide for the addition each year to the capital stock of a portion of the profits and for the distribution of the rest of the profits to the ticket-holders of the Society. The transfers are to be only to members of the Faculties, as it is proposed to constitute the first stockholders the five members of the Faculty who are now permanent directors, Professors Johnson, Mallory, Gardiner, Westengard, and Mr. H. R. Meyer. When these stockholders receive their stock, they will be legally in complete control of the assets of the business of the Society except in so far as their power is limited by the conditions on the certificate of stock.

Since they must assume all the liabilities of stockholders under the state law, it seems necessary that they should have a correspondingly ample control. They will adopt a set of By-Laws which contain in substance the provision of the present Constitution and By-Laws. Copies of them may be seen at the office of the Society.

The important changes follow:

1. There are no meetings of the whole Society, as in the past. But it is provided that on request of fifty ticket holders or by vote of the directors, a special meeting of the stockholders shall be called.

2. The directors are chosen as before. A treasurer, however, is required by the state law; accordingly he is added to the board, making eleven instead of ten members. The powers and duties of the directors are not altered.

3. The members of the old Society become participating ticket-holders of the new company. Their rights and privileges remain the same, except that they no longer elect officers. On the other hand, they are relieved from all financial responsibility for the liabilities and debts for which they are now probably liable.

4. The division of profits, the regulation as to the sales, the appointment and duties of the superintendent, etc., are not altered

5. The president and directors are to report each year on the state of the business.

The objects of these changes may be summed up as follows:

1. The assets and control of the Society are put in the hands of a permanent body of stockholders, who will be members of the Faculties.

2. These stockholders will depute the management to the directors constituted like the present board, but to be appointed by the stockholders instead of by the members.

3. The control of the Society is therefore taken away from the present members. They will have, however, the same rights excepts as to election of officers, and they will be relieved from financial responsibility.

The reasons which make the change advantageous are: First, the legal status of the Society and its members are at present uncertain, though it is probable that each member is personally responsible for all debts and liabilities. A difficulty has actually arisen in the making of leases. Under the present loose organization, the officers have been obliged to assume responsibility by signing some of the leases. This vague responsibility becomes more serious with the enlarged business. In the second place, experience has proved that the members do not wish to take active share in the management. The attendance at annual meetings, it is believed, has never within the eighteen years been more than 50 out of 2,000 to 2,500. These two difficulties taken together are serious. Thirty men by combining could have controlled any one of those annual meetings and elected the officers except those who held over. If the plan proposed is accepted all danger of sudden and ill considered change is removed and the responsibility of members and of officers is defined.

The stockholders, all members of the Faculty, will practically hold their stock in trust for the benefit of members.

Finally, it may be pointed out that this change does not effect the real purpose of the Society--to save members the profit of middlemen. This saving will be as effectively carried out under the incorporation as in the past.

This plan for incorporation is to be voted on by the members of the Society, in Dane Hall, Cambridge, and at the Boston store, on May 29, between the hours of 11 a.m. and 4 p.m. A detailed statement of the plan will be mailed to all members at the beginning of next week.