Two years ago the State authorities were called upon to investigate a
cooperative that was about to fail. Several members made the claim that
the officers had defaulted with property of the association. An
accountant was called in to examine the books. After considerable
coaxing the secretary-treasurer unearthed them and turned them over.
They consisted of an old black bag full of all the bills, vouchers and
other scrap paper for the previous six months! Those were his books. He
had sold the store without taking an inventory. When an inventory was
finally made it was found that some of the stock had not turned over for
a year. On one top shelf two hundred pepper shakers full of pepper
stretched half the length of the room. Full value had been paid for this
dead stock and several hundred dollars to boot for "good will." From the
cooperative standpoint the most dangerous thing was that half the
directors had become disgruntled and, though remaining on the Board,
refused to attend meetings. A quorum could not be obtained and for
months the president and treasurer had run the business without
reference to directors or stockholders. The cooperative society failed
and every cent of the four thousand dollars of the cooperators was lost.

Another cooperative store, this time in the Bronx, was taken over by the
manager within one year. Upon inquiry its directors proudly exhibited
its books. It was a beautiful set costing, they said, nearly
seventy-five dollars. The store had started in November. For November
and the first three days of December everything was kept in good shape.
But during the entire next year not an entry had been made. The
directors had the books, but the manager had the store. The stockholders
lost all their capital.

A thriving business was being done by still another cooperative store in
New York. At the outset the directors had voted to bond the manager. But