Consumers' cooperatives


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The pamphlet8 in the Social Action Series, of
which this is the fifth number, are edited by

the Social Action Department of the National

Catholic Welfare Conference. They represent
an effort to present to the general public, and

especially to Catholics, a discussion of current

economic facts, institutions and proposals in the

United States in their relation to Catholic social

teaching, particularly as expounded in Pope
Pius XI’s Encyclical “Forty Years After—Re-
constructing the Social Order” (Quadragesimo

Anno). In the spirit of that Encyclical they are

urged upon and recommended to individuals,
study clubs, discussion groups and school classes.



Consumers' Cooperatives

By

REV. EDGAR SCHMIEDELER, O.S.B., Ph.D.
Directory Rural Life Bureau,

National Catholic Welfare Conference

Social Action Series

Ho. 5

OUR SUNDAY VISITOR LIBRARY

HUNTINGTON, INDIANA

New York
THE PAU LIST PRESS

401 West 59th Street

I



Nihil Obstat:

Imprimatur

:

Arthur J. Scanlan, S.T.D.,
Censor Librorum.

Patrick Cardinal Hayes,
Archbishop of New York.

New York
, March 5, 1937.

PRINTED AND PUBLISHED IN THE U. S. A. BY

THE PAULIST PRESS, NEW YORK, N. Y.



FOREWORD

Father Schmiedeler presents an inter-
esting and able account of consumers’
cooperation.

Consumers’ cooperation is advocated

in Pius XI’s Encyclical, “Reconstructing

the Social Order,” only by implication;
but it has been a constituent part of the

program of Catholic Social Action for a
generation.

As the main lines of social change, the
Encyclical advocates the growth, with

governmental help, of employers’ asso-

ciations and labor unions, and of other
organizations in agriculture, trade and
the professions, into a guild order. In a
guild, people organize around their work.
They do so to direct economic life co-
operatively for their own and the general
welfare, with the help of government.

The consumers’ cooperative movement,
on the other hand, advocates organiza-

tion around the consuming of goods.
Consumers’ organizations stand in a sec-

ond line of importance. However, they
are of great value now and permanently,
both to prevent profiteering and to train
people in cooperative endeavor.

Social Action Department,

National Catholic Welfare Conference.





CONSUMERS' COOPERATIVES

By Rev. Edgar Schmiedeler, O.S.B., Ph.D.,
Director, Rural Life Bureau, National Catholic Welfare Conference

ONE of the most serious evils in our economic sys-tem today is excessive profit-taking. One of the
most effective means of combating this evil is to be
found in the organization of consumers’ cooperatives.

Because of their indubitable power for remedying this

evil, and because of other unquestioned values which

flow from them, these cooperatives are deserving of

most careful study and attention.
It should not be surprising to find authoritative pro-

nouncements of Catholic churchmen on so useful and

practical a remedy for our economic and social ills. Per-

haps the most general and all-embracing among such
pronouncements is the following, taken from The Bish-
ops’ Program of Social Reconstruction (1919)

:

“More important and more effective than any gov-
ernment regulation of prices would be the establish-
ment of cooperative stores. The enormous toll taken
from industry by the various classes of middlemen is
now fully realized. The astonishing difference between
the price received by the producer and that paid by the
consumer has become a scandal of our industrial sys-
tem. The obvious and direct means of reducing this
discrepancy and abolishing unnecessary middlemen is
the operation of retail and wholesale mercantile con-
cerns under the ownership and management of the con-

— 5 —



6 CONSUMERS’ COOPERATIVES

sumers. This is no Utopian scheme. It has been suc-

cessfully carried out in England and Scotland through
the Rochdale system. Very few serious efforts of this
kind have been made in this country because our people
have not felt the need of these cooperative enterprises

as keenly as the European working classes, and because
we have been too impatient and too individualistic to
make the necessary sacrifices and to be content with
moderate benefits and gradual progress. Nevertheless,

our superior energy, initiative and commercial capac-

ity will enable us, once we set about the task earnestly,
even to surpass what has been done in England and
Scotland.

“In addition to reducing the cost of living, the co-

operative stores would train our working people and
consumers generally in habits of saving, in careful ex-

penditure, in business methods, and in the capacity for
cooperation. When the working classes have learned to
make the sacrifices and to exercise the patience required
by the ownership and operation of cooperative stores,
they will be equipped to undertake a great variety of

tasks and projects which benefit the community imme-
diately and all its constituent members ultimately. They
will then realize the folly of excessive selfishness and
senseless individualism. Until they have acquired this

knowledge, training and capacity, desirable extensions
of governmental action in industry will not be attended

by a normal amount of success. No machinery of gov-
ernment can operate automatically, and no official and
bureaucratic administration of such machinery can
ever be a substitute for intelligent interest and coopera-
tion by the individuals of the community.”



CONSUMERS’ COOPERATIVES 7

It would be a simple matter to add other statements

favorable to cooperatives from a veritable array of

Catholic authorities. A few more will be given toward
the end of this booklet. For the present we will turn
our attention instead to considerations such as the

meaning and classification of cooperatives, and extent

of their growth, the principles underlying them, and

their peculiar economic and social values.

Meaning and Classification of Cooperatives

It is not an altogether simple matter to define a co-

operative. To be sure, it is easy to say that “to co-
operate means to work together.” But such a definition
is too simple. It does not really show the distinctive
features of what has come to be known today as co-
operative enterprise.

Stating that, technically cooperation has been de-

fined as “that joint economic action which seeks to ob-
tain for a relatively weak group, all or part of the profit
and interest which in the ordinary capitalist enterprise
are taken by a small and different group,” Rev. F. Base-
nach, S.J., Loyola College, Madras, British India, goes

on to say that characteristic of the cooperative system

is the issue of profits. “In the cooperative form of or-
ganization,” he says, “the profits go to the members,
either under their aspect of cooperative producers who
have pooled their individual capital and labor, or with-
out regard to the capital invested, it goes to the mem-
bers according to the products they have used. The
first form is known as Producers’ Cooperation

;
the sec-

ond, as Consumers’ Cooperation.” And he adds, re-
ferring to the consumer, that “the aims of cooperation



8 CONSUMERS’ COOPERATIVES

are undeniably revolutionary in this sense that they

tend to undermine the foundations of the present capi-

talistic system. The object is to restore all the profits,
which capital has long regarded as its due, to the con-

sumers
;
hence the first promise of cooperation is to re-

duce the burden placed on the consumer by capital.”

In the June, 1936, issue of The Catholic World we
gave the following generic definition of cooperation:

“A cooperative society or organization is a group of
people who band themselves together to produce some-
thing, to sell something, to buy something for them-
selves, or to pool their financial resources for credit or

loan purposes.”

When a group of individuals band themselves to-
gether to produce something we have what is known as
a producers’ cooperative. In this country there are but

very few of these cooperatives. When a group bands
together for the purpose of selling something, the re-

sult is a marketing cooperative. This type of co-op is
relatively common among American farmers. When
a group of individuals unite to pool their resources for
loan purposes, the result is a credit cooperative. Final-

ly, if a number of people unite for buying or purchasing
purposes, we have what is known as a consumers’ co-
operative. It is this type that we are chiefly interested
in here.

Perhaps the following definition of “consumption”

taken from a recent issue of the Scholastic will show a
bit more specifically what is implied by the term “con-
sumers’ cooperative” : “Consumption is the use of any
goods or services for the satisfaction of human needs.
It is not only the eating of food or the burning of coal



CONSUMERS’ COOPERATIVES 9

that we can see disappear before our eyes, but it is the
wearing of clothes, living in houses, running machines,

going to school, getting our hair cut, calling in the doc-

tor, traveling in an automobile, going to the movies,

turning on the radio, mailing a letter, or doing anything

whatever that calls for the work of others or uses up
ever so slowly

, the accumulated ‘capital goods’ of the hu-

man race. Every one of us, from birth to the cemetery,
is a consumer one hundred per cent of the time. We
may or may not be producers, for, like the bees, we have
queens, workers, and drones ; but we are all of us con-
sumers. And just because this is true, every one has an
interest, whether he knows it or not, in what he buys
and uses and in how it is handed out to him. . . .”

It is well to observe that not infrequently one finds

several types of cooperatives combined in one and the

same group. Thus, the members of the Gary (Negro)
consumers’ cooperative have also organized a credit

union. To cite another example, the noted marketing
cooperative, Land O’Lakes Creameries in the North-
west, does much purchasing of feed, machinery, and the
like, for its members. In this latter capacity it is a con-
sumers’ rather than a marketing cooperative.

How Co-ops Develop

Not all cooperatives follow the same line of develop-
ment. But not infrequently they originate and develop
in some such way as the following : A group of friends
or neighbors get together to discuss the possibility of

making some of their ordinary purchases together.
They form what might be called a buying club. The
most common article of consumption is selected and the



10 CONSUMERS’ COOPERATIVES

organization is built around it. Other services, close to

the people as consumers, are gradually added. As the
membership grows, mass purchasing power leads to
wholesale buying on a constantly increasing scale.

When several such groups in a certain territory have
carried on successfully for a while, they may decide to
join together in a federation of cooperatives to perform

larger functions. They may even develop their own
wholesale business. In turn, several such wholesaling

concerns may move on to importing, to warehousing,
and to manufacturing. The final step comes when the
control of raw materials—plantations, fields, forests,
or other original source of supply—is added. Certain
European countries have for some time extended their
business through the stages of economic organization

from the ownership of raw material sources to the
final retailing of products to the consumer.

As a rule development is gradual. Advancement is
only made as fast as experience and competence in ad-
ministrative ability admit. Nor do all cooperatives
develop to the full stature spoken of in the foregoing.

There is almost untold variety. Some are, and remain,
no more than little neighborhood groups

;
others extend

over large regions. Some make only occasional pur-
chases; others are a continuing or full time business,

handling a considerable variety of goods. Some pro-
vide a delivery service for their members

;
others do not.

It is not uncommon, for example, for a group of farm-
ers to buy a carload of some commodity—let us say, coal
or fertilizer, or perhaps salt for their live stock—and
then have the individual farmers come to a railroad sid-
ing and pick up their portion of the produce. Natural-



CONSUMERS’ COOPERATIVES 11

ly, such a system eliminates the expense of both ware-

housing and delivery service.

To state that development is gradual is not neces-
sarily to say that it is slow. In many instances growth
is quite rapid. A few simple instances will show this.
There is, for example, the consumers’ cooperative at

Flint, Michigan. Organized in 1933, by eight families,

and having an initial capital of $22, it had grown by
the end of 1935 to 260 families and was doing a business
of $3,000 a month.

Another example is that of the so-called Consumers’
Cooperative Services, organized as a buying club in

Chicago by nine persons in 1932. It has since grown
into a very successful co-op, doing a monthly business
of $35,000.

The Negro cooperative at Gary, begun under most
unfavorable circumstances by a small group in 1932,
had by 1935 grown to 371 members, employed seven
people, and made sales totaling $34,055.26 for that year.
The goal for 1936 was a $50,000 business, and future
plans call for branch stores at Gary, East Chicago, and
Indiana Harbor, and for a bakery and a dairy.

Co-ops in the United States

In the United States, cooperation is relatively new.
At any rate, genuinely successful cooperatives on a con-
siderable scale are a much more recent development here
than they are in Europe. More particularly is this true
of consumers’ cooperatives. In fact, it is safe to say
that only with the depression did genuine consumers’
cooperatives really take hold in this country. Since
that time, however, their growth has been reasonably



12 CONSUMERS’ COOPERATIVES

promising and encouraging. Sixteen cities recently re-
ported rapid developments in consumers’ cooperatives

during the past three years. Informal buying clubs

have become quite common.
All in all, cooperation has gone ahead much more

rapidly in rural districts than in cities. According to

a recent news release of the Cooperative League, farm
supply cooperatives increased their annual business

$65,000,000 during the last twelve months, setting a
new high in cooperative business with a total volume of
$315,000,000 for the 1935-36 season. Statistics recent-

ly compiled by the Farm Credit Administration showed
a rise of more than 25 per cent in total purchases and
the formation of 106 new associations during the year.

The business of 2,200 farmer cooperatives engaged
primarily in purchasing amounted to $247,000,000,
while additional cooperative purchasing business of

$68,000,000 was reported by 2,360 cooperative market-
ing associations which also engage in cooperative pur-
chasing. The cooperatives operate in 45 states and
handle feed, seed, fertilizer, petroleum products, gro-

ceries, general merchandise, farm implements and
building materials.

The tremendous increase in the cooperative pur-
chase of farm supplies boosts the total to well over one-
eighth of the national supply business. Savings of mil-

lions of dollars are made possible by the distribution of
farm supplies on a non-profit basis.

In 1934 over $30,000,000 worth of petroleum prod-
ucts were sold by gas and oil cooperatives. These hap-
pen to be almost entirely rural co-ops. Other examples
could easily be added. It is estimated that, in spite of



CONSUMERS’ COOPERATIVES 13

their youthfulness, the membership of consumers’ co-
operatives in the United States today stands at about

2,000,000, and that the sum total non-profit business
being done by these groups amounts to approximately

$1,000,000 a day.

Growth in Europe

In Europe, as has already been intimated, consum-

ers’ and other cooperatives are much more highly de-
veloped. Outstanding examples of countries that have

many and successful cooperatives are England, Den-
mark, Norway, Sweden, Finland, and Belgium.

Cooperative buying and selling in Belgium, for in-

stance, is carried on on a large scale by the well-known
organization of the Catholic peasants, the Boerenbond
Beige. Particularly since about 1925 has the business

of the consumers’ cooperatives increased strikingly.

Already in 1932 there were in operation 529 stores.
Their sales amounted to more than fifty-three and one-
half million francs.

In Sweden a third of the 6,200,000 population, or
568,000 families, are members of 4,144 cooperative
stores which comprise the bulk of the Swedish cooper-
atives. Retail cooperatives are there supplemented by
consumer-owned cooperative factories which do an an-
nual business of $45,000,000.

In England there is the so-called Cooperative Whole-
sale Society—commonly referred to as the C. W. S.

—

and its affiliated retail societies, cooperative factories,
the C. W. S. Bank, insurance societies and other serv-
ices. The activities of the C. W. S. reach all parts of
the British Empire. Its assets are listed at $550,000,-



14 CONSUMERS’ COOPERATIVES

000. It is the largest tea blender in the world, manu-
factures a thousand tons of soap a week, $4,000,000

worth of furniture annually, owns clothes factories, and
manufactures more than 150 other commodities. Com-
menting on it, Jacob Baker, the Chairman of the Presi-
dent’s Commission sent to Europe the past summer to
study cooperatives, said : “This is by far the biggest or-

ganization of its kind I have ever seen.” Apparently

it compares very favorably in size with our larger in-

dustrial or commercial enterprises in the United States.

England is considered the pioneer in the field of co-
operation. The story has often been told of the humble
group of weavers at Rochdale, who managed to scrape
together $140 and with it launched the co-op that has
become famed throughout the world. From that meager
beginning of less than a hundred years ago, consumers’
cooperatives have grown into England’s biggest busi-
ness, as witnessed in the English Cooperative Wholesale

Society, mentioned in the foregoing. It is “the biggest

organization of its kind.” It extends throughout the

vast British Empire, owning tea plantations in India
and Ceylon, palm and olive plantations in Africa, even
owning the very ships that transport these raw mate-
rials to their own manufacturing plants.

World-wide Growth

The January, 1936, issue of The Monthly Labor Re-
view, a publication issued by United States Bureau of
Labor Statistics, gave a summarized description of co-
operative movements throughout the world. The facts
presented were mainly for the year 1934. They show
a rather striking development. At that time there were



CONSUMERS’ COOPERATIVES 15

in 45 countries 465,000 cooperative associations with a

total membership of over 139,000,000 persons. More
than half of the 465,000 cooperative associations were

classified as agricultural, about one-fifth were credit

organizations, one-twelfth were consumers’ societies,

and the remainder were producers’, housing, and all

other kinds of cooperatives. If gross membership is
considered, about three-fifths of the total of 139,000,000

persons were members of consumers’ societies, about
one-fifth, of agricultural cooperatives, about one-four-

teenth, of credit societies, and the remainder were in
other types of cooperatives. A retail business of more
than 12 billion dollars for the year 1934 was carried on
by consumers’ societies in 21 countries. In each of five
countries the co-op retail stores did a combined busi-
ness of over 100 million dollars. It should hardly be

surprising therefore, that competitive, capitalistic en-

terprise is beginning to show some uneasiness and dis-
pleasure at this growth.

Kinds of Consumers' Cooperatives

As suggested by the definition of “consumption,”
there are a great many different kinds of consumers’ co-
operatives, all of them supplying certain goods or serv-
ices of which the members stand in need. For example,
there are cooperative gas and oil stations. There are
associations operating retail stores, restaurants, bak-

eries. There are others carrying on cooperative hous-
ing projects. There are cooperative power lines for
electrification, cooperative recreation projects, mutual
associations for insurance or for telephone service, for

medical aid and even for burial service. And by no



16 CONSUMERS’ COOPERATIVES

means does this exhaust the list. New fields are being
opened constantly.

A few examples should do more than perhaps any-
thing else to show the diversity of types, and also to
indicate some of their functions.

Here is a very simple instance. A pastor organized
a cooperative coal purchasing program, requesting all

his parishioners to buy their coal together. The cur-
rent retail price was paid by all. The difference be-
tween the wholesale price for the entire quantity bought

and the retail price paid by the individual parishioners
for their particular shares was sufficient to cover the
expense of the entire coal supply for the parish church

and school building.
The Survey, in its November, 1935, midmonthly

issue, describes in its pages a rather novel cooperative

venture, a cooperative hospital located at Elk City,
Oklahoma. Some 1,800 families in Elk City and the sur-
rounding territory own and control the hospital, and
through it get the medical, surgical, and dental care
they need. Each family membership entails ownership
of at least one $50 share of stock, which may be paid in
installments. This stock provides the capital for the

eighty-bed institution. Operating costs and payments
to the physicians are met by monthly charges of $1 or
$2 a family, according to which of two plans a family
chooses. In return the family is entitled to medical and
surgical care without further costs, except for a few
specified charges.

The Oklahoma Board of Medical Examiners has at-
tacked the project as “unethical,” and has urged that
the license of Dr. Michael Shadid, founder and director,



CONSUMERS’ COOPERATIVES 17

be revoked. The latter has secured a temporary re-
straining order. He charges a conspiracy to destroy
the hospital, stating that, “because the individuals be-

hind this prosecution feel that if this experiment is al-

lowed to succeed, other cooperative hospitals will be

established and their personal income will be reduced,

and because of their alarm at the success of the hos-

pital referred to, they have decided to destroy the ex-

periment by revocation of the license of this petitioner.”

There should be little question of the outcome of the

legal battle if the members of the cooperative are con-
sulted in the matter.

In Japan such cooperative hospitals are now to be
found in considerable numbers. One report states that
there are more than sixty of them.

Not dissimilar to co-op hospitals are medical aid co-
operatives. These are now found in some numbers in
Canadian municipalities. The arrangement calls for a
definite annual contribution toward a fund on the part
of families of a community. Out of this fund a stated
salary is paid a doctor who is considered the group’s
physician and is expected to care for the medical needs
of all the members.

Dr. James P. Warbasse, President of the Cooper-
ative League, has this to say on the subject: “The co-
operative method really begins when a group of 150 to
500 families unite to employ a physician full time. The
number of people necessary and the costs depend upon
their ability to pay. In the country, or in a small town,
200 families, representing 800 people, may put in an
average of $20 per family. That is at the rate of $5
per person. This gives $4,000 a year. Physicians are



18 CONSUMERS’ COOPERATIVES

entering into this arrangement for salaries varying

from $3,000 to $7,000. It is best that the annual costs
per member be graded according to family income. If
a group is divided into three classes of families, one
group would pay $40 a year, one $20, and one $10

—

making an average of $20. A plan which should be equit-
able would be to make the average cost $10 for one indi-
vidual, $15 for man and wife, and $2 for each child or
dependent. Thus, in a group of 200 married couples,
of 380 children, and of 24 single adults, the income
would be $4,000.”

Co-op Principles

Underlying all these consumer cooperative endeav-
ors are certain very definite principles that must be fol-
lowed if the enterprises are to be genuine, if they are

to prove thoroughly sound and successful. The prin-
ciples are, in general, those that have become known as
the Rochdale principles, that is, those followed by the
group of cooperative pioneers at Rochdale, England. A
consideration of these should do not a little to bring out

the chief differences between the cooperative and the
usual competitive or capitalistic enterprise. It should

also help to clarify further the precise meaning as well
as the functions of cooperation.

1. First of all there is the question of control of

management. Under cooperation there is democratic
control. Capital is secured through the sale of shares to
members, and every shareholder, no matter how few or
how many shares he may have, has a right to one, and
only one, vote in the management of the common enter-
prise. Under capitalism it is different. As organized to-



CONSUMERS’ COOPERATIVES 19

day, capitalism practically separates control from own-

ership. Through such devices as non-voting stock, wide

distribution of small numbers of shares which cannot

be voted because of distance of travel, and such like,

the great majority of share owners are denied an effec-

tive voice in the management of the enterprise. Con-
trol is exerted by the few. And this control can, and
often does, become despotic, autocratic. As the Rev.
Charles Aziere, O.S.B., recently stated : “With 200 larg-

est corporations controlling 22 per cent of the total

wealth of the country, and owning as much as the other
300,000 odd corporations combined, under such separa-

tion of control that the interests of the consumer, the

laborer, and the owners themselves are all subservient
to the interests of the management group ; and where
because of the dominant position in the economic field
the price structure and credit structure are set by the
same interested group, there one finds dominance from
the top down through every phase of activity such as
would in political science be called despotism, but in eco-
nomic science is still called capitalism.”

Genuine cooperative principles demand democratic
control. They insist on ownership of property again
connoting control of the use of property, something
which it did from time immemorial, but has not been
doing under modern large-scale capitalism.

2. A fixed rate of interest is paid on shares, or on
the investment in capital stock, and earnings are dis-
tributed to the members in proportion to their patron-
age. In other words, the members of the cooperative
get four, five, or at most, six per cent interest on their
shares, and then from the funds that are left over after



20 CONSUMERS’ COOPERATIVES

all expenses of conducting the co-op’s business have

been taken care of, they receive earnings according to

the value of the purchases they have made. For ex-
ample, a member who spends $500 a year at a cooper-
ative store, gets five times as much out of the surplus
savings as the member who only spends $100. Under
the capitalistic system, it is different. Earnings there

go to the owners in proportion to the amount of their
investment.

3. In the interests of expediency, sales or services

made by the society are charged at competitive prices.
Thereby disastrous price wars with competitors are
avoided. Any profits that result from the undertaking
are simply considered overcharges and, as already indi-

cated, are returned to the patrons of the business. While
this is the general rule, there are notable exceptions.

Swedish cooperatives, for instance, have openly fought

monopolies through the device of price-cutting. They
have refused to charge their exorbitant competitive
prices.

4. Not all the earnings or savings are distributed.
A certain amount are customarily set aside as a reserve
fund for protection against possible loss. Very com-
monly a certain percentage is set aside for education.
Every worth-while cooperative emphasizes educational
work or training in cooperation through circulars, pam-
phlets, lectures, study clubs, and the like. They con-
sider this essential to a soundly progressive cooperative

movement. Certain amounts of the surplus savings
may be used for still other purposes, such as recreation,
art, health, insurance—provided, of course, the mem-
bers wish it and give their approval.



CONSUMERS’ COOPERATIVES 21

Values of Cooperatives

There are both economic and social values in co-

operation. As the writer has stated elsewhere {The
Catholic World, June, 1936), he is convinced that co-

operation gives not a little promise of eliminating the

more glaring abuses, such as waste and the gouging of
the consumer, that characterize our present system.

More particularly will this be true as cooperation moves
from the consumers’ field back into production. Prices
will then tend more and more to be in harmony with
actual cost rather than with monopoly manipulation,

watered stock, or eagerness for pyramided profits. The
cooperative owners or members have every reason to
see to it that their business is run efficiently, for each

has a stake in it. At the same time they have no reason
to bid up prices, for they are both buyers and sellers.
Hence, in a cooperative society one would hardly expect
to find such a thing as middlemen taking 300 per cent
on the retail sales of milk products as is done, for in-

stance, in New York. There would be little point to
such procedure in a cooperative society.

There is no question that cooperatives can influence
prices. There are not a few cases on record in which
they have lowered exorbitant prices. One instance that
has attracted particular attention is that of a number
of cooperative burial associations in Minnesota. In

1930 an organization called the Minnesota Valley Burial
Association was formed. Each member of the organi-
zation contributed five dollars to be used as the original

capital, for a reserve fund, and to help those who could
not pay for a funeral. When this cooperative organiza-
tion began, the cost of a funeral in the state averaged



22 CONSUMERS’ COOPERATIVES

between $500 and $700. Shortly afterwards the aver-

age price dropped to $212. This organization found

that it could duplicate with $300 the funeral that pre-

viously cost $780. In 1932 nine cooperative funeral as-

sociations in Minnesota buried 231 people at an average

cost of $186 each. This was about half the average
rate in other places.

Among the best organized cooperatives in this coun-
try are the oil and gas co-ops. These, too, have brought
about notable reductions in prices. Cooperative buy-

ing of petroleum products has resulted in some in-
stances in reducing the margin between the tank-car
price and the tank-wagon price by 7 or 8 cents a gallon.
In addition, many cooperative oil associations have
made patronage refunds of 10 to 15 per cent, and even
more.

Sometimes the savings made by cooperatives are ob-
scured by the fact that competitive dealers reduce their
prices. It is no secret that there is need for much such
reduction of prices in this country. It is a bit strange,

for instance, that in London, a city far removed from
its wheat supply, the price of bread should be lower
than in Omaha, located in the immediate neighborhood
of our immense wheat fields.

Referring to the social values of cooperatives, a re-

port of St. Francis Xavier University, a Catholic insti-
tution in Nova Scotia which has done outstanding work
in fostering co-ops, has the following to say, among
other things : “One of the chief values of the cooperative
movement lies in the opportunity it gives the average
citizen to function as a conscious agent in shaping his

economic life and welfare. He works with others for a



CONSUMERS’ COOPERATIVES 23

common end and mutual good. Day by day he learns
that by cooperating with others he serves himself best.

He respects leadership because he sees how it must de-
velop. He acquires stature as a citizen in political and
economic relations with his fellow man.”

To be given some voice in the direction of affairs is
good for the individual. He acquires an added value, a
healthy importance, one might say, in his own eyes. He
develops a sense of responsibility, of self-respect and of

self-reliance, that should prove beneficial both to him-

self and to society. Cooperation gives to the individual
such a voice in affairs. It takes from those who have
been economically underprivileged their feeling of help-

lessness and brings to them a realization that something
can be done about it.

Cooperation also inculcates a spirit of self-sacrifice

and teamwork. It begets a spirit of neighborly helpful-
ness, for it is organized on the basis of mutual aid. It
offers excellent opportunities for the fulfillment of the

commandment, “Bear ye one another’s burdens and so
shall ye fulfill the law of Christ.” It provides an en-
vironment that encourages the control of such socially
harmful tendencies of man as greed, avarice, pride,
gluttony, and selfishness.

Before concluding, a caution or two may be in place.
There is, first of all, the consideration that a cooperative
system will not automatically and inevitably lead to
good results. Vigilance is necessary. The unsocial
tendencies of man must be effectively held in check.
Continued effort is required if a cooperative program
is to be kept in harmony with the laws of justice and
charity.



24 CONSUMERS’ COOPERATIVES

A second point is this: Cooperation should not be
presented merely as an economic program. The Most
Rev. Edwin V. O’Hara gives the following two rea-
sons for this: First, it would “raise extravagant ex-
pectations of material gains from this source” ; second,
it would “tend to becloud the vast social, cultural, and
moral benefits of cooperation—benefits which would
justify cooperation apart from more material gains.”

Finally, the mistake must not be made of looking
upon consumers’ cooperatives as the one cure-all of our
economic ills. To work for the extension of a cooper-
ative society, for instance, but at the same time to neg-
lect the development of strong labor organizations,

would be no less than foolhardy.

With these cautions in mind, the Catholic may well
give serious attention to the formation of consumers’

cooperatives. Indeed, he should do so. There is need
for action. The abuses in our economic system clamor
for correction. Consumers’ cooperatives furnish one

effective means for correcting them. We should not
hesitate to make the most of them.

Bibliography

There has been a veritable flood of literature on

consumers’ cooperatives during the past year and more.

Among recent volumes are the following

:

Sweden: The Middle Way, by Marquis W. Childs;
Yale University Press. Tells the story of Sweden’s co-

operatives.

Denmark—The Cooperative Way, by Frederic C.
Howe; The Cooperative League, New York City. Con-
tains a mine of information on the political and cul-



CONSUMERS’ COOPERATIVES 25

tural, as well as the economic, life of Denmark, one of
the world’s leading cooperative countries.

Cooperation, by Fred Hall and W. P. Watkins ; Co-
operative Union, Ltd., Holyoake House, Manchester,

England. A survey of the history, principles, and or-
ganization of the cooperative movement in Great Brit-
ain and Ireland.

Cooperative Life and Business, by Harriet Bunn and
Ethel Mabie Falk ; E. M. Hale and Company. A small
textbook prepared for use in Wisconsin schools.

The Decline and Rise of the Consumer, by Horace
M. Kallen; D. Appleton-Century Company. A philo-
sophical interpretation of consumer economy. Some
historical interpretations questionable.

The Cooperative League Year Book, 1936, edited by
V. S. Alanne and Cecil Crows ; The Cooperative League.
A compilation of material on the present status of con-
sumers’ cooperatives in the United States.

Cooperative Democracy, by James P. Warbasse;
Harper and Brothers. Popular type, third revised edi-
tion.

Consumer Cooperation in America, by Bertram B.
Fowler; Vanguard Press. Pictures present status of
U. S. cooperatives.



26 CONSUMERS’ COOPERATIVES

NATIONAL CATHOLIC WELFARE CONFERENCE
STUDY OUTLINE

I

1. What is the general content of the statement of the Bishops
of this country on cooperatives?

2. Cite individual Catholic authorities on cooperation.

3. Do you know of any Catholics who approve the cooperative
idea? If so, what reasons do they give for their attitude?

4. Distinguish: consumers’ cooperatives; producers’ coopera-

tives; marketing cooperatives; credit cooperatives.

5. Explain in detail the term “consumption.”

II

1. Show how co-ops develop.
2. Are cooperatives as strong in the United States as they are

in Europe?
3. Give statistics showing the growth of consumers’ coopera-

tives in rural America.

4. In which countries of Europe has cooperation experienced
the greatest growth?

5. Give main facts regarding the Cooperative Wholesale Society
of England.

6. Cite statistics on recent world-wide growth of cooperatives.

III

1. Describe the cooperative hospital at Elk City, Okla.
2. Give other examples of consumers’ cooperatives.

3. State and explain the main principles on consumers’ co-
operation.

IV

1. Indicate some of the social and economic values of co-
operation.

2. What are some of the dangers that must be guarded against
if cooperation is to prove genuinely successful?

3. Name some of the best books in the English language deal-
ing with cooperation.



CONSUMERS’ COOPERATIVES 27

APPENDIX
STATEMENTS BY CATHOLICS ON COOPERATION

Rt. Rev. Msgr. John A. Ryan, D.Z?., LL.Z).,

m “Social Reconstruction"

:

“The cooperative idea can be applied to every part of the

industrial field. There can be cooperative associations of farm-

ers for the selling of their products, enabling them through the
elimination of a great number of unnecessary middlemen to get
a greater proportion of the price that is paid by the ultimate

consumer. There can be cooperative associations of consumers

in cities, to buy directly from these cooperative selling associa-
tions of the farmers. There can be cooperative associations of

producers, and entire or partial ownership of the factory by the

cooperative stores. There are scarcely any bounds that may
be set to the field to be occupied by the cooperative idea; but it
is an idea that will become operative very slowly. There are
serious difficulties in the way; there is a great deal of individ-
ualism that has to be subordinated to the common good ; there is
need for a great deal of patience. But we know from the history
of cooperation in Europe, especially in Great Britain, that the

thing can be done, and can be done by ordinary people, because
the men in England, Scotland and Wales who own the co-
operative stores that have been a tremendous success are ordi-
nary wage-earners. They have provided the capital and the
directive ability necessary to carry on the retail stores, the
wholesale stores, the factories and steamships, and tea planta-
tions and wheat fields. What they have done can be done in
other countries and in other departments of the industry” (page
179 ).

Rev. Joseph Husslein, S.J., in “The World Problem"

:

“The system of cooperative banking has struck deep root
and will continue in its prosperous development. Everyone is
familiar with the success of the Raiffeisen credit associations.

“Almost equally successful, in many places, have been the
cooperative stores

;
it is estimated variously that between one-



28 CONSUMERS’ COOPERATIVES

third and one-fourth of the entire population of Great Britain
had already participated in these enterprises before the out-
break of the war. The total cooperative sales in that country
for the year 1913 considerably exceeded $600,000,000 and there
were thousands of cooperative stores in Great Britain alone.

The same system had likewise developed in Ireland (page 215).
“The cooperative bank and the cooperative store have met

with undeniable success. They have long ago passed the period
of trial and experiment and fully answer the purpose for which
they were established. The question of main importance is the
extension of the cooperative principle to the field of production.

Its most complex and difficult application is found in the co-
operative ownership and management of industrial enterprises”
(page 222).

Rev. R. A . McGowan, in “Property, Organization,
Government Action”

:

“Every American farmer should be a member of as many co-
operative marketing organizations, clubs and services as are
necessary for him to market his varied crop at a fair price.
This seems basic. A farmer cannot be both expert farmer and
expert salesman. A still more cogent fact is that, expert sales-
man or not, a lone farmer bringing his produce to market meets
a highly organized and strong commercial marketing ring.
There is no equality between him and the buyers, the sale that
results is an unequal contract, the farmer does not get equal

value in money or goods for his crop, he is mulcted, bilked and
cheated all the time. Cooperative marketing organization is a

means of obtaining justice. The strength and knowledge of the
united farmers can give them expert ability in marketing and
can bring them closer to equality with the buyers.

“Every farmer should belong to a credit union in his parish
or neighbodhood, for much the same reason that he should be-
long to a marketing cooperative. The farmer needs cheap and
sure credit. Alone he has neither the strength nor the knowl-

edge to get it from the commercial organizations. United with
other farmers he can, by united savings and united control, give
to himself the credit he needs. . . .

“In the circumstances of American life all cooperatives



CONSUMERS' COOPERATIVES 29

ought to be either on a national scale or, when regional or local,
they ought to be closely federated. The goods and money mar-
kets are national markets and the organization must equal the

market” (page 7).

Rev. M. M. Coady
,
Ph.D., in “A University Promotes
Cooperation”

:

“We in Antigonish are putting forth every effort to have the
people engage in group action in the four possible fields open

to them.

“(a) The Consumers’ Cooperative Society, or the so-called
Cooperative Store, is gaining great ground. Already eighteen

such societies are functioning in eastern Nova Scotia alone, and
some of them are among the most successful on the North
American Continent.”

Rev. Edgar Schmiedeler, O.S.B., Ph.D., S.T.L., Director, Rural
Life Bureau, National Catholic Welfare Conference:

“It is but to state a truism to say that the Catholic Church
favors the cooperative idea. Her remarkable guilds of the
Middle Ages were essentially cooperative—organizations seek-
ing to apply in a practical way in everyday life the injunction
of the Savior: ‘Bear ye one another’s burdens, and so ye shall
fulfill the law of Christ.’

“The student of history knows what became of the guilds.
He knows, too, that no adequate substitute was ever put in their
place. But the Church, in spite of the destruction of her work,
has not abandoned the cooperative idea. Incessantly she speaks
for its return in a practical form in modern society. Her lead-
ers urge its acceptance in the fields of production and consump-
tion, and in the fields of finance and marketing. Catholic higher
schools teach cooperation in their economic courses. This is true

in Europe as well as in the United States. Catholic priests have
helped in their immediate vicinities to foster cooperative activi-
ties. This, it should be observed, is far more so the case in
Europe than in this country. Catholic publications have lent
their pages to the promotion of the cooperative idea. An out-
standing example of this in the United States is the Central
Blatt and Social Justice”



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'

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The members of The Paulist Press Association receive

two pamphlets a month, including new pamphlet publications

of The Paulist Press. Membership is two dollars the year.





SUGGESTIONS FOR STUDY CLUBS OR
COMMITTEES ON INDUSTRIAL

QUESTIONS
1. The Study club is not a group to listen to lectures. It is for

joint discussion. It is small—ten or twelve to twenty or so
—so as to permit general discussion.

2. There is a discussion leader.

3. The group may consist of persons of various occupations
and interests or of special groups, such as organization
leaders, employers, professional -persons, clerical workers,
manual workers, etc. A number of small study groups
established within each organization is desirable.

4. Meetings are once a week or once every two weeks or once
a month.

5. Every member should have at least the text and the outline.
6. The discussion, as a rule, follows the outline point by point.

The section of the text to be discussed should be read before
the meeting by each member.

7. Use questions at the end of the meeting to recapitulate.
8. Reports or papers called for by any outline should be brief.

9. The purposes are:
(a) So its members will know the teaching of the Church

on economic life.

(b) So they can speak at Catholic meetings.
(c) So they can be leaders in the activity of Catholic or-

ganizations.
(d) So they can apply the teachings in their work and

civic life.

(e) So they can guide the economic organization to which
they belong.

(f) So that they will be better Catholics.

10.

If the group is an offshoot or a part of another organization
they should report their conclusions to the parent organiza-
tion, because one of the chief purposes of the club or com-
mittee is to pass on their information, point of view and
enthusiasm to the Catholics of their community and to
make the club’s work definitely a part of the parent organ-
ization’s work.

For further information and assistance
,
write:

National Catholic Welfare Conference,

Social Action Department

1312 Massachusetts Avenue NW., Washington, D. C.



SOCIAL ACTION SERIES
All Pamphlets Contain N. C. W. C. Study

Club Outlines

No. 1—New Guilds: A Conversation
By Rev. R. A. McGowan

No. 2—Rugged Individualism
By Rev. John F. Cronin, S.S., Ph.D.

No. 3—The Wages and Hours of American Labor
By Rev. Francis J. Haas, Ph.D., LL.D.

No. 4—What Laws Must We Have?
By Elizabeth Morrissy, Ph.D.

No. 5—Consumers' Cooperatives
By Rev. Edgar Schmiedeler, O.S.B., Ph.D.

No. 6—The American Labor Movement
By Rev. Francis J. Haas, Ph.D., LL.D.

Other Titles in Preparation

THE MEDIAEVAL GUILD—THE RISE OF CAPITALISM—ECO-
NOMIC DICTATORSHIP—STEPS TOWARD THE GUILD TODAY
—GOVERNMENT IN ECONOMIC LIFE—THE CONSTITUTION

—

CREDIT UNIONS AND COOPERATIVE BANKING—AVOIDING
FASCISM AND COMMUNISM—PRICES—MONEY AND CREDIT
—WOMEN IN INDUSTRY—NEGRO LABOR—AMERICAN FARM
LABOR—THE OFFICE WORKER—TAXES—MACHINES AND

MEN—ECONOMIC LIFE AND CATHOLIC ACTION
5 cents each, $3.50 the 100, $30.00 the 1,000

(Carriage Extra)

THE PAULIST PRESS
401 West 59th Street New York, N. Y.

51