Late in the year federal action was instituted against Harrison Parker in Chicago.  The entire business of the so-called cooperative was disclosed to the courts.  It was found that 81,000 people had invested fifteen millions in this gigantic fraud.  Here in New York there were many hundreds, if not several thousands, of men and women who lost large sums of money in the ensuing bankruptcy.  These people were taken in by the dramatic appeal to their selfish interests.  The Chicago organization showed them photographs of the “massive buildings” in Chicago in which it was doing business, spoke glibly of its banking and insurance departments, and then promised them a share in the spoils if they would pay $75 for their certificates which were worth only $25 or $50 at their face value.

That so many people could be duped by these “get-rich-quick” methods is an indication of the amazing lack of cooperative understanding which prevails in the United States.  It is a part of the purpose of this Bulletin to correct the misunderstanding which prevails because of the fraudulent use of the word cooperation.  In the case of a suspected false cooperative, test it by the Rochdale principles.  If it fails to measure up to them take the matter up directly with the State authorities or the Cooperative League of America.

HOW TO START A COOPERATIVE ENTERPRISE IN NEW YORK STATE

In starting a cooperative enterprise two things must be considered:  first, the kind of business to go into and, second, the method of organization.  Any group desiring to engage in a cooperative venture should first of all, through a committee and by consultation with experts, determine what type of enterprise will serve them most effectively.  Where competition is unusually keen and profit margins are low, cooperation is less likely to be of service than where the opposite is the case.  Whatever enterprise is started men experienced in that business should be consulted as to the location of the business, the stock and equipment needed, the operating capital necessary, etc.

Preliminary organization should likewise be handled by a committee which might estimate the number of persons who would become members, the service each could contribute to the society, etc.  Meetings should be held to educate the group in both cooperation and the special need of the undertaking.  For this purpose many educational bulletins may be obtained from the Cooperative League of America and other reliable sources.

Actual organization of the society consists of incorporation, election of officers, the adoption of by-laws, and the immediate adoption of a sound system of bookkeeping.  No action undertaken before incorporation has any legal effect on an incorporated body, so early incorporation is desirable.  The New York State law requires that all firms using the word “cooperation” incorporate under one of the three state cooperative