F*--^ ■,|)RKiNG Men ■iLCo-OPERATORS ^j4r rH.D '.iiTj'irii >v THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES the the lone lese NOTE. In 20 yoara (1802-1881) the Salos have amounted to £225,000,000 and the Profits to about £1 8,000,000 saved far working men by workinft man. The annual Profits nnw are over £2,00,0,000. WORKING Men Co-operators : tSJlrat tlj25 hahe trone, anti tolrat tljsj are iroittg. AN ACCO0NT OF THE ARTISANS CO-O PEKATIVE MOVESIENT IN OREAT BRITAIN, WITH INFORMATION HOW TO PROMOTE itl AETHUE H. DYKE ^CLAND,^M.A., rd of Christ Church, and Senior Bursa ; Member of the Central Co-operative AND BENJAMIN JONES, Stude^xt and Steward of Christ Church, and Senior Bursar of Balliol College, Oxfoid; Member of the Central Co-operative Board ; Honorary Secretary of the Southern Section of the Central Co-operative Board, " The habit of providence and the habit of asBOciation may he said to be the two pillars of civilisation. . . C!o-operation is founded on these two principles, and thus it is a civilising influence of the highest kind. . . Providence is its li'sson, and association its school."— Da. Lightkoot, Bishop of Dubhah. "In the spread of the Co-operative movement I have a great deal of hope."— M188 OcTAViA Hill. CASSELL & COMPANY, Limited: LONDON, PARIS dk NEW YORK. [all RIGHTS RESERVED.] 1884. TABLE OF CONTENTS. CHAPTER I. INTRODUCTORY. PAGE 1. The Purpose of the Book — 2. The Aims of Co-operation — 3. Statistics of Artisans' Co-operation : (a) The Retail Stores ; (b) The Wholesale Societies ; (c) The Productive Societies — 4. Lassalle on Co-operation — 5. Some Advantages of Co-operiition —6. The Evils of Debt— 7. Two General Advantages : (a) Edu- cational ; (b) Industrial— 8. Three Questions asked as to (a) the Shopkeepers; (b) The very Poor; (c) Attraction of Co- operators in'o Private Trade — 9. The Co-operative Movement and the Future 9 CHAPTER II. HISTORICAL OUTLINE. Period I.— 1824-18i4.— Before the Foundation of the Rochdale Pioneers Period II.— 1844-1864.— From the Foundation oT the Rochdale Pioneers to the Foundation of the English Wholesale Society . Period III.— 1861-1884. -From tlie Foundation of the Wholesale Society to the present lime. This period is sub-divided: (1) 18G4-1869 — before the National Congresses begin ; (2) 18i;9-1884— from the beginning of National Congresses to the present time 21 CHAPTER III. THE DISTRIBUTIVE SOCIETY OR STORE. I. iNTRODrcTORY. — What is meant by being a Member of E Store... 32 II. Beginninq op the Store— Prelimixahy Arrangements. — Sevi n Matters to be considered : — 1. Advice from the Co- operative Orsanisations— 2. The Rules — 3. Registration of the Society — 4. Public Meeting — 5. Collection of Money — 6. Con- ditions to be made about the Money collected — 7. Arrange- ments for paying Dividends in proxjortion to Purchases ... 33 III. Appointment of Committee, and Starting of the Store. — 1. General Meeting — 2. The Shop— 3. The Store-keeper — 4. Fitting up the Shop — 5. The Shop Window- -6. Purchase of Goods — 7. Relation of the Store to the Wholessale and Pro- ductive Societies — 8. Amount of Stocks to keep — 9. What Prices are to be charged — 10. Relation of the Store to the Shopkeepers — 11. Wliat Profit to expect — 12. Delivery of Goods — 13. Amount of Purchases \irits ; >- CL) Cottage Building ; (m) Penny Banks— 2. Branches— 3. oc Surplus Capital — 4 Deposits and Loans— 5. Educational De- "^ partment — 6. Social and Recreational Gatherings— 7. Cou- ^ versation Rooms— 8. Relation of the Society to the Central — Organisations 66 VII. Summing-up of Important Matters.— 1. Causes of Success and Failure — 2. Essential Points — 3. Statistics 72 ^- Note.- Co-operative Stores in Agricultural Villages and County CT) Towns 74 ^ CHAPTER IV. -—I THE CO-OPERATIVE WHOLESALE SOCIETIES. C3 1. Origin of the Enarlish Society — 2. Fiiilnres — 3. Method of doing l""-! Bi.siuess — 4. Progress — 5. Selling and Buying Branches— 6. '^ Selling Departments — 7. Manui'acturiug Branches — 8. Shipping — 9. Banking — 10. Internal Management — 11. Losses — 12. Reserve Fun's and Depreciation— 13. The Rules— 14. Miscel- laueous — 15. The Scottish Society— 16. Branches and Depots — ^ 17. Internal Management — 18. The Rules— 19. Losses— 20. ~ Miscellaneous 78 rri ' ' CHAPTER V. CO-OPERATIVE PRODUCTION. 1. Introductory- 2. Viewsof Political Economists en : (a) Profits; (6) Interest; (c) Earnings of Maiuigement ; (cl) Co-operative Production — 3. Industrial Partnerships — 4. Joint-Stock Com- panies — 5. Various Forms of Co-operative Production — 6. The Co-operators' Views — 7. Federalism — 8. Individualism — 9. The Federalist speaks — 10. The Individualist speiiks — 11. The Question a practical one — 12. Statistics — 13. Failure and Success— 14. The Future of Co-operative Production 85 CHAPTER VI. ORGANISATION AND PROPAGANDA. 1. First Organisation — 2. Early Conferences — 3. National Con- gresses — 4. Subjects discussed at Coniiresses — 5. The Co- operative Union— 6. Objects of the Union— 7. Members of the Union -8. Finances— 9. > onstitutiou and Business of Coni^n ss —10. The Central Co-operative Board— 11. The United lioaid ai)8ouy vi CONTENTS. PAOK —12. Tlie Office Committee-*13. The Staff— 14. The Sectional Boards— 15. Conferen'-e Districts and their Oreanisation — 16. Conferences— 17. Publications— 18. The Guild of Co-opi-rators 19. Political Action hy Co-operators 108 CHAPTER VII. EDUCATIONAL WORK. 1. Introrluctovj' — 2. What has been Done in the Past — 3. The Question not one of Sentiment — 4. A Practical Way — 5. Co- operative Libraries- 6. Systematic Teaching by I'niversity Men— 7. The Education of the Citizen— 8. The Method of Teaching — 9. Conclusion 116 CHAPTER VIII. MISCELLANEOUS. 1. The Co-operative Newspaper — 2. The Co-operative Insurance Company — 3. Co-operative Bankin°:— 4. Co-operative Cottage Building— 5. Civil Service Co-operation— 6. The Trade Unions and Co-operation — 7. Co-operation Abroad — 8. Co-operation and Agriculture ... 126 CHAPTER IX. Advantages of Co-operation — Conclusion 131 Appendix.— List of Conference Districts of the Co-operative Union 134 Index 135 MAPS AKD DIAGRAMS. Maps of the Sections and Districts of the Co-operative Union Op'posite Title Page. -Maps of existing Registered Societies started before l!ij4 23 Diagrams of Comparative Position of Retail Stores in 1882 76 Diagram Showing Average Sizes of a Society in each Section of the Union 77 Diagram Showing Contributions to the Co-operative Union ... 113 P E E F A C E. This book has been written partly in the hope that it may perhaps be useful to some who, not knowing much about the Co-operative Movement, wish for a short and simple account of it, and partly to meet the needs of certain classes which are being started among Co-operators for the systematic study of Co-operation, its aims, its work, and its principles. A cheap ele- mentary text-book for use by both teachers and pupils seemed to be much needed. For fuller and further information on the many subjects here dealt with, reference must be made to the various publications of the Co-operative Union. We are indebted to many books and many men for our information, and for our own education in Co- operative work ; but we have made no attempt in this book to mention the names of the Co-operators who have been of most service to the movement, partly for want of space, but partly because if the best known names only were mentioned a great injustice would be done to others, who, though less known, have done woik which has been invaluable. Some names of outsiders have been mentioned, but, as a rule, names of Co-operators have been given only in the foot-notes, and here solely with a view of enabling easier reference by those unacquainted with Co-operative literatui'e to the writings which we may happen to quote from or mention. viii PREFACE. The fact that one of the writers, Mr. Benjamin Jones, has been closely connected with the Co-opera- tive movement in the English Wholesale Society for eighteen years, and at the Central Board for ten years, as well as the fact that much information has been willingly supplied to us by many Co-operators in England and Scotland, for which we return our heartiest acknowledgments, may give the reader some assurance that the statements made in this book are fairly trustworthy. We are aware that many experienced Co-operators may find shortcomings or omissions in this little book, but, notwithstanding this, we venture to hope that it may be found useful for its purpose, which is purely practical, and not controversial. We have tried to give the facts fairly, and to indicate generally what ai-e the aims of those many Co-operators who, without believing in any complete cures or panaceas for the trouble and poverty of the world, yet, knowing what Co-operation leas done, know also what it might do. Co-operative work has two sides to it: there is the business work, and there is the social and educational work. The object of this book will have been fulfilled if we can, in however small a degi-ee, encourage Co- operators, and especially young Co-operators, to believe that Co-operation cannot be permanently suc- cessful if either side of the work is developed by Societies to the exclusion of the other ; and not only to believe this, but to put their belief into practice as individual members of their own Societies. It should be distinctly understood that though both writers are members of the Central Co-operative Board, no one, except themselves, is to be held re- sponsible for any opinions expressed. Corrections or swjyestions will he gladly received hji either of the writers: A. H. D, A eland, Christ Church, Oxford; or B. Jones, Trwell Cottage, Auck- land Hill, Lower Norwood, S. E. Working Men Co-operators. CHAPTER I. INTRODUCTION. " The power of association to lift the masses of the people in every country to a fuller and higher citizenship— to give them a steadily increasing influence not only on the conditions of their own lives, but on national ati'airs and on national life— is the most obvious as well as the most important phenomenon of this last half of the nineteenth century in which we are living." 1. The Purpose of the Book. — The main purpose of this small hand-book will have been fulfilled if it stimulates any young Co-opei-ators who have life still before them to a fuller sense both of their responsibility and of their power. Every individual member of a Co-operative Society can influence that society in the right direction if he will, and it is upon individual members much more than upon committee-men -and other leaders that progress depends. A further purpose will be served if this book leads some who have not much acquaintance with working men's Co-operation to study the matter more fully in books or in " real life," and themselves to assist the work in one or other of the many ways which may be open to them. 2. The Aims of Co-operators. — We have no wish to urge Co-operation as the only remedy for all social evils, or to give it more importance than it really deserves. We desire to give a simple account of what exists, with its advantages, and its shortcomings ; and while we record its successes we do not wish to pass over its failures. The general purpose of the societies of which we here give an account is, that the business and the work done shall be done not in the interest of, nor in order to enrich, one individual, or a few, but in the interest of the gen(>ral body of those who 10 W'ORKiN(^ MEN- CO-OPERATORS. • [crap. are concei'iied, both as workers and as consumers of the ordinary necessaries of Ijfe. The idea is, wo doubt, but imperfectly realised, as yet. But tlie' principle of equitable association for the general good is one which is being carried out and will be carried out in England more fully than lieretofore in a variety of ways. That the -community should have a personal interest in, and a.'personal knowledge of, the manage- ment of its own affaii's, whether in -the State, in local government, jn its own daily work, or in the supply of its own daily needs,, is a good thing. That men should be kept in the dark, that they should have no personal intei'est in that which rjiost \dtally concerns their lives either as citizens or as "private individuals, is not a good thing. None know better than Co- operators themselves how much more real good niight be done by the Co-operative movement, if its members Avere more fully alive lo its many advantages, and its many possibilities, than many of them are. But, in spite of its shortcomings, it may be safely said that there is more in the matter than may strike the eye of an outsider at the first glance. 3. Statistics of Artisans' Co-operation. — It has been truly said, " The name Co-operative has been used in so many and such vague senses that it has come to mean little or pothing beyond some novel form of association." We deal in this book with what the working men of Great Britain have done, and not with other kinds of Co-operation. The artisans' societies of Great Britain are com- bined in a Co-operative Union (see Chap. VI.), which has been slowly built up by the societies. As, how- ever, not all the societies are in the Union (though the great majority are), it will be desirable to include in tlie statistics given in this book all the known societies, whether in the Union or not. The Societies may be divided into three kinds : — (a) About 1,200 Distributive Societies, or Retail Stores, with 640,000 members and .£(5,000,000 share capital, the sales of which annually are about I.] INTRODUCTION.:- It £1.8,000,000. These .stores are for the supply of groceries, bread, meat, coal, drapery? «fec. The method of dealing 6f nearly all of them is that inown by the name of the Rochdale system. Goods are sold for ready money only ; the ordinary market prices of the disti'ict are charged : the profits f (which arise mainly from ready money dealing,. and the concentration of business under one management) 'are ascertained at the end of every quarter, and divided in proportion to the purchases of each ni«-uiber at .the yate of, on an average, from Is. 6d. to 2s. 6d. in the .£, so- that if a member spends 1 2s. a " week only at the stores, a dividend for the year of £3 might be assigned, to him. All members of the societies must become share- holders to a mininnxm amount, fixed in many cases at £1, and from this limit varying to <£o, which they may do in established societies generally (without paying down at first more than Is.) by letting their dividends accumulate. One member may havfe £200 in a stoi-e, but not more. Interest at the rate of 5 per cent, is usually given on all shares accumulated or deposited in the society. The societies thus become large savings banks. (h) Two Wholesale Societies, one in England and one in Scotland, which are federations of the stores, and whose managing committees are elected by the stores. These gi-eat societies have buyers in various parts of the world, and sujtply the needs of those stores which deal with them. The sales of the English society are about 4^ millions annually, and of the Scotch society about 1^ millions, so that these two societies supply about one-third of the goods purchased by the stores. (c) About 22 Manufacturing or Productive • ♦ For the definition of the word profits as used by economists see page 87. That which Co-operators call profit in a retail store of course exceeds the absolutely necessary profit (interest on capital and earninf^s of management) of the concern by the dilYcreuce between cost price plus expenses and ordinary retail price. This difTereuce, wliich is the dividtnd. Co-operators wisely try to i,iive in the store, and do not deduct from the price of the goods. 12 Working men co-operators [chap. Societies and 5 federal Corn Mills. The Corn Mills do a business of about £1,300,000 a year, and the other Productive Societies a business of about £220,000 a year. * The total business done by these working men's societies in the last 20 years has been about 250 millions, and the net profits upon this business have been about 20 millions, nearly the whole of which has gone into the pockets of the working classes. The average dividend on the capital employed has been at the rate of about 29 per cent., the average dividend on the sales has been at the rate of about Is. 6d. in the £. Table of Co-opeeatite Societies. Aunual Sales. 1197 Retail Societies £18,000,000 2 Wholesale 6,000,000 5 Federal Com Mills .. .. 1,300,000 22 Productive (Mauuf acturiiig) . . 220,000 1226 25,520,000 4. Lassalle said, twenty years ago : — " So soon as the Co-operative stores more and more embrace the whole working class, it ivill be sen as a nccessanj conscqiience that ivarjes, owing to the cheapness of the necessaries of life (the result of the Co-operative stores), tvill fall in precise proportion.^' We do not wish to deny this, but rather would wish all Co-operators to face the matter fully. But it may be observed that twenty years have passed, and it may be said without hesitation that the great majority of English working men are not more ready now than they were then to accept Lassalle's recom- mendation (by way of cure for all difficulties) that the working classes should become their own employers by means of money advanced by tlie State. Mean- time, in these twenty years Co-o])eration has done something which is of practical use to the working classes, and when the time Lassalle speaks of comes, * Three Civil Service Supply Associations are members of the Union for the reasons cx))lained at p. 121). Thoy.do a business of about 2^ millions, but their tigures are not iuiUudcd in any statistics given in this book. I.] INTRODUCTION. 13 Co-oper;itoi's, if tlioy :ire true to tliciusi'lvcs, may liusc raised the level of the intelligence, prudence, and capacity of the whole working class sufficiently to prevent that fall of wages of which he speaks. 5. Some Advantages of Co-operation. — It is certain that through Co oj>e ration the lives of thou- sands of men and women have been made happier, and that many fathers and mothers have been enabled to bring up large families in a way wliich would have been otherwise impossible. But more has been done than this, for we do not belong to that " portion of the British public" which, as Mr. Ruskin says, "considers it a meiit to have large families with or withotit the means of supporting them," or "who talk," as Mr. Matthew Arnold says, " of our large English families in quite a solemn strain, as if they had something in itself quite beautiful, elevating, and meritorious in them." We shall try, hereafter, to indicate some of the most important benetits that have been brought about by Co-operation. But even if it had only instituted the practice of paying ready money, this in itself would be a great deal. 6. The Evils of Debt.— Many people hardly realise how fatal an evil is the credit system. Many speak very lightly of debt who have a horror of drink, but it has been said with truth, " the credit system of this country is only second in its de- moralising influence to the drinking customs of the people."* The i)hilanthropy which does not really like the independence or the self-respect of the well-fed and well-clothed and self-reliant working man, will not be anxious to forward Co operation. But the true benevolence which does not wish to wait till sutiering arises, and then to step down and help it, but would rather prevent the sutiering if it could, will make war upon the demon of debt, which has slowly and gradually crushed many a working man and woman, and wi 1 by every direct and indirect means in its power further a movement so full of benefit to * Joseph Coweu, Congre&« Report, 1873, p. 4. 14 WORKING MEN CO-OPEBATORS. [chap. working people. Though it is essentially and neces- sarily a working man's movement, and must be managed by working men, yet wealthy people will find on inquiry that there are various cases in which, with tact and perseverance, help of a most valuable kind has been given which has not hindered real progress. Unfortunately in some cases, especially in the country, those who should from their position and independence have known better, have hindered the growth of what, if they could but have looked at it fairly, was calculated in the highest degree to add to the welfare of the great majority of those living round them. University men may be useful in several ways, but especially in connection with the educational work of societies. In the south of England, and in London, well-to-do people, who have friends among working men, may well try to help on the movement. Co-opei'ators have not usually been suspicious of or hostile to such help when offered with tact, and in a fi'iendly spirit. 7. Two General Advantages. — Two of the more general advantages of the movement will be men- tioned here. Some other advantages will perhaps be found out by those who read through this book. (a) The Educational Advantages. — The word educational is here used in its widest sense. A large number of men throughout England — a small group of men at least in every society — are being trained lq habits of business, forethought, tolerance, and self-restraint ; are learning to trust the right men, and to distrust plausible or self-seeking men ; are discovering the power and value of united action and organisation. A very large number of working men have gained, through their interest in the practical and varied business of their society, through their meetings in Conferences and Congresses, through their publications and newspapers, a great deal of moral and intellectual power. They have encouraged one another to aim at a high standard of morality in business, and, with I.] INTRODUCTION. ].-> some shortcomings, have to a great extent succeeded. They have learnt what a power, not only for com- mercial purposes, union among themselves may be. Both from a social and from a political point of view (using the word in a non-party sense) the work of artisans' Co-operation has been of great educational value to England. (6) The Artisans' Co-operative Movement has a very important relation to the industrial Organisa- tion of England. — The members of the stores become small capitalists, and with further experience and education it is probable that important results, not hitherto contemplated, may arise from the use of their combined capital. This matter cannot be better put than in the words of the late Professor Jevons, who is speaking here of Co-operative stores : — "Indirectly," he saj^s, "Co-operative associations have con- siderable bearing on trade questions because they offer the most ready and engaging mode of investment for small sums of capital. Half the bitterness of trade union disputes arises from the anti- capitalist feelings of the workman who believes that he is by the nature of tilings cut off from the possession of capital, and even looks upon it as contrary to the esprit de corps of his order to own capital. Nothing can tend more to break down this most mistaken and lamentable feeling than the insidious way in which capital accumulates in a well-managed co-operative society. Almost without knowing it, the workman finds himself a small capitalist, and when the balance has once begun visibly to grow, it is strange if the love of accumulation is not at length excited. The balance not only grows, but its growth excites the more interest because the owner as a customer, a member, or even a committeeman, assists in its growth, and may take part in the management of the affair. A savings bank deposit pays very low interest, and that interest is perfectly fixed. The depositor is entu-ely passive, and is in respect of it a powerless dependent of the State. But savings deposited in almost any fonn of co-operative company tend to excite the instincts of the capitalist, and to acquaint the owner with a new ^-iew of the labour question."* 8. Three questions are often asked in connection with the working man's Co-operative movement. (rt) What about the Shopkeepers ? — Shops managed by able men, with the advantages of single management and plenty of capital, have been found to be extremely capable of looking after themselves, • Jevons, "The State in Relation to Labour," page 140. 10 WORKING MEX CO-OPERATORS. [chap. especially when based on the ready-money piinci})le ; though working men who know what a well-managed store can do for them will not lightly pass it by for any shop. But petty shops started with insufficient capital, with no business experience, and with no means of getting at the wholesale markets ; shops which must make working men sutfer either in the charges for, or in the quality of their goods, and which hold many of them in bondage through the baneful credit system, are the cause of the most serious loss to the working classes. It will often happen that twenty such shops are doing a busine.ss which five persons could easily manage. Are the working people, who, least of any class can afford it, to be obliged to pay out of their own pockets for the livelihood of fifteen unnecessary distributors \* In no part of our organisation has the laisser /aire system more completely broken down than here. Truly does Professor Walker say: — " The curse of the poor is their povertj'." Being, as they are, at a disadvantage, "in quantity, quality, and price in whatever they purchase, they are unable to get even as much proportionately for their little as the rich for their larger means. The tendency of purely economical forces is to widen the differences existing in the constitution of industrial society, and to subject every person or slass, who may from any cause be put at disadvantage, to a con- otantly increasing burden, "f It is to lessen this burden that Co-operation strives. Those who know what the evils of drink are, fight against the increase of public-houses ; those who realise what the evils of debt are, and who wish to help the poor, should fight against these evils and try to exterminate them. {h) Is it a Scheme which is applicable to the very Poor ? — The answer from some of the poorest in * It has been calculated that there are in London twenty-five shops for every ten that are really needed, even if every house- holder required all his shops to be within one-third of a mile of his house, and a public-house to be within one-sixth of a mile. ("Economy of Cooperation," E. V. Neale.) t E. A. Walker, "Pol. Econ.," p. 276. I.] INTRODUCTION. 17 our great towns, and in our agricultural villages, is most distinctly — Yes. It is much more want of information and education, or want of help from those who could help in the matter, which prevents some of the very poor from forming stores, or joining tliem, rathe-r than any want in the system itself. They can join the store and pay off their debts gradually out of the money which it saves for them. The poorer they are, the more they need help. The store helps them to save in spite of themselves. For those who wish to understand the artisans' Co-operative store must once and for all knock on the head the idea that it is a place where people can " buy marmalade and Worcester sauce at a cheap I'ate." Members do not buy their goods cheaper. They pay what they have usually been accustomed to pay, and the profits are saved for them. The store has been a splendid instru- • ment for encouraging saving for this reason. A great number of people have not the strength of mind to save in petty driblets out of small earnings. The store shows that people " can save without laying anything by, and accumulate money without paying anything out of their pockets, and save without living in any way poorer or meaner than they did, and without dejjriving themselves of a single article they have the means of purchasing. This is the moral, social, and salutaiy discovery which Co-operative societies have made."* In these days perhaps more than ever before we realise as a nation with shame the glaring contrast in England between heaped-up wealth and abject misery. But all panaceas and proposed cures are useless unless you can help people to be provident. " Leave them recklessly improvident, and no amount of increased expenditure will do anything beyond increasing the mass of helpless poverty. Undoubtedly a material improvement may be a necessary condition of moral improvement, but it is essential to prove that any proposed measures are likely to go along * Holyoake, "History of Co-operation," vol. ii., page 194. B 18 WORKING MEN CO-OPERATORS. [chap. with an elevation in the standard of prudence, for otherwise they are doomed to inevitable failure. So far as any pi'oposed reform acts as a premium upon improvidence, it must be of ruinous tendency far beyond the remedial efficacy. The great problem, in the old phrase, is not simply to help, but to help people to help themselves." (c) Do men who have taken a leading part in Co-operation, when they find an opening for going off into private enterprise and private trade seize upon it and throw over their Co-operative views? — No statistics can be quoted on a matter of this kind, and the Co-operator's view might be considered biassed. There can hardly be a doubt, however, that the work of Co-operation has interested many a capable man so thoroughly that, whatever his occupation might be, he would not abandon its principles or their advocacy. An unbiassed observer has said, " The Co-operative faith is rather felt than clearly expressed, but it is earnestly held by shrewd practical men. They believe that the cruel force of competition by which so much of men's energy is wasted in the endeavour to overreach one another can be restrained by that spirit of brotherly trust and openness which, though undeveloped, is yet latent in man's nature."* Co- operators are but ordinary men, and Co-operation appeals to their self-interest as well as to their social in- stincts. But the belief here stated, if once firmly held, even in an imperfect form, is not easily abandoned. 9. The Co-operative Movement and the Future. — And now with reference to the Co-operative movement itself at the present time, what lies before it ? Co-operators have in the last few years developed and successfully organised a considerable machinery of societies, departments, branches, wholesale com- mittees, sectional boards, district organisations. And it is said by some Co-operators that there is now a tendency to sit down and be comfortable, to rest and be tliankful, and contemplate their successes. It is, * Marshall, "Economics of Industry," p. 218. I.] INTnODUCTION. 19 no doubt, fatally easy to trust to macliiuery and insti- tutions, and there are great dangers in centralisation. The Committees of the Stores, the Committees of the Wholesale Societies, the Central Board will be exactly what the members make them. Any belief that the mere existence of machinery and organisation will make a movement or a State progress is a dangerous belief. It is likely, then, that if Co-operators really hold that Co-operation is "organised self-help," they will be careful not to let the work of self-help at all grow less by reason of the organisation. They will try to let the force of a sound public opinion and the best thought of all the individual selves be brought into play to help on progress. They will realise that whether with reference to the State or to their own organisation, and certainly as regards resolutions at congresses and conferences, it is a very great delusion to think that " things will get done because laws are passed to do them." They will say, " Fewer resolutions, more men. Let no man leave things to officials, but think things out for himself, and when he sees clearly let him .speak boldly." They will see the truth of J. S. JNIill's words as clearly as ever — " There is no fear that Co-opera- tion will spread faster than Co-operators improve. It is not an easy thing. If it had been, people would not have waited until this period for it. It cannot advance further than the minds and morals of the people engaged in it, nor faster than honest and com- petent men and women can be found to manage its concerns." They will feel the need of work in behalf of their own class, and still more, of those who are less well otf than themselves, more than ever. " The greater our prosperity," they will say, "of which so many boasts are made, the greater our responsibility for trying to remedy the evils of our time. The more wealthy we get, the more certainly should we employ part of our wealth for the good of others, unless we are prepared 20 WORKING MEN CO-OPERATORS. [chap. to preach to the rich what they ought to do, and then, with ghxring inconsistency, not practise what we preach ourselves." There is plenty to work for, plenty to fight for, with the object of leaving things a little better than we have found them. If Co- operators act up to their principles of straightforward dealing, a high standard in commercial transactions, justice, and unselfishness ; if they try to get rid of self-seeking and laziness, they will retain the " respect and sympathy of the community," which are of such real importance to the working class.* For they can show that the streams of charitable gifts which have been poured out have often made things worse, but this has made things better ; they know that while the gift of the franchise has not always appeared to educate men, this at least helps to educate men in a real sense. They believe in advance- ment neither by privilege, name, nor wealth, but only by merit ; and yet they do not want to ]iull down or to set class against class, but rather to build up, and to promote that sympathy and friendship between class and class which is of such vital importance to the national welfare. And they will find plenty of encouragement.f There are many ways of working * A favourable public opinion, which shows respect for labour and sympathy with the working class, is felt now to be "a strictly economical force." "Can it be doubtful that the respect and sympathy of the community must strengthen the wages class in their unceasiag struggle for economical advantages, must give weight and force to all their reasonable demands, must make them more resolute and patient in resisting encro.-iclnneut, must add to the confidence with which each individual lalxiiirir will rely on the good faith of those who are joined with liini in liis cause, and make it harder for any weak or doubtfid comrade to succumb in the contest." (Walker, "Pol. Econ.," p. 282.) t See remarks by Mr. Gladstone in the House of Commons in 1864 : — "For my own part, I am not ashamed to say that if ten years ago anybody had prophesied to me the success of the Co- operative system as illustr.ated in the towns in the north — if I had been told that labouring m(!n would so associate together for their mutual advantage, I should have regarded the prediction as absurd. There is, in my opinion, no greater social marvel than the manner in which these societies flourish, combined with a consideration of the soundness of the basis on which they are built." n.] HISTORY (1S24—18S4). 21 for one another, and this Co-operative way is one. And as it is with the healthier side of service for the State, so it is with Co-operative work. That service which is honestly done, without sordid aims, for the benefit of the community, must be full of power both to strengthen men and to ennoble them. CHAPTER II. HISTOEY (1824 — 1884.) The period of Co-operative history,* which will be reviewed in the following brief outline, may be divided into three parts, each part containing about twenty years. I. 1824 — 1844. About twenty years preceding the foundation of the Rochdale Pioneers. II. 1844 — 1864. Froni the beginning of the Rochdale Pioneers to the foundation of the English Wholesale Society. III. 1864—1884. From the foundation of the English Wholesale Society to the present time. This last portion may be subdivided into — (1) The period (1864—1869) before the National Co-operative Congresses begin. (2) The period (1869 — 1884) from the beginning of the National Co-operative Congx'esses to the present time. I. 1824— 1844.— The Twenty Years preceding the Foundation of the Rochdale Pioneers. — It is not unimjjortant to observe, in connection with the history of progress which is here to be traced, that in 1824 the Combination Acts controlling the combinations of masters or workmen, and all Acts limiting the free travelling about of workmen were repealed. Much more important liberating or enabling legislation was necessary before working men were to * See "Progress of the Working Class, 1832—1867," Ludlow and Lloyd Joues; and "Hist, of Co-operation," Holyoake. 22 WORKING MEN CO-OPERATORS. [chap. be fully free to act or unite for their own good, but this was an important instalment. In the early part of this century undoubtedly the high price of food turned the attention of working people to the subject of economy in their supplies. In the accompanying map will be seen the names of some ancient Co-operative stores founded at this time. Robert Owen, too, though a master and a manu- facturer, helped to sow the idea which working men were to make fruitful. The higher motives which have influenced Co-operators since, influenced him ; and though he said in later life, " Joint stock retailing is not the social system which we contemplate," yet among his many schemes this of Co-operative shop- keeping was one. And as the result of his teaching on the "formation of character," and on " community of property," have arisen efforts in behalf of national education and of combined trading and industrial action by working men which have been of the highest value. Between 1825 and 1830 an immense quantity of so-called Co-operative periodical literature of a short- lived kind was published ; and in these and later years, many Co-operative stores were started in England and Scotland. But the idea which was to attract working men, and provide a firm foundation of capital, had not yet arisen. In the stores of this period, as a rule, the profit was divided in proportion to the capital invested ; or, in some cases, all share- holders took equal shares of the profits. Such concerns had no special attraction for artisans or for the public, nor could they furnish any guarantee against fraudulent dealing. The profits went to the capitalist, not to the consumer. It has been said that in 1830 more than 200 stores were in existence, and in this, and in one or two succeeding years. Co-operative congresses were held. Botli Co-o})erative mills and Co-operative stores have survived from these and earlier years to the present time. (For some of these se(! map opposite). Many of the stores perished soon after their birth, or dwindled away, and from the 11.] HISTORY {1824-1884). 23 Existing Registered Cooperative Societies established before 1844. Shewing date established and date when the Profits were first divided on the Sales. Explanation.— DPD lucnns date wlion prodts wAre llret tlividid aci'Dvdiiii,' lo members' pur- cliasus. N H meaus nut liiuiwn. .tsr LennoTtown has only pai'liaUy di- vided profits ou sales. PDE means profits divided equally No. on ri^l Mai). 0« Name. /^^Irv- ^ 1 1K« 2 1829: S lt*l 4 IKilj 5 IH43 6 1W2 7,1S40 8 INSS; 9 18« 10 1810 llLl83n| 12,1812 IS, 1828 11,18211 15 1836 I'i 1777 17|l8^n 18 1842 19; 1839 20 1801 21 18)2 22 1795 23 1801 24 1 1838 18401 Arbroath Kurfar E I' ,. W P ,. WE Falkland Kri'iichie „ Bread Kettle .. Tillicoultry l{;innockburn LennoxtoHD BridKeton Larkhall Glasgow 8R Hovan .. Darvel .. (ialashielB Uawiek.. Wliitbv Corn . Middleton T Hull A U Mill. ,, sr; „ Almondbury Heinvorth Kirkheaton Nethertim Ripponden Meltuani M Huddersfleld B Stockport G M Foleshill LL.. SSU Sheerness E . . ' Devonport V M foal 24 WORKING MEN CO-OPERATORS [chap. time of the Eeform Bill of 1832, to 1844, Co-operative teaching was, as before, largely interwoven with socialistic and communistic itleas. At the close of this period Chartism also began to occupy the attention of many Avorking men. II. 1844— 1864.— From the Starting of the Rochdale Pioneers to the Beginning of the English Wholesale Society. — In 1844 the well-known twenty- eight Rochdale Pioneers, having diligently collected by instalments X28, began their store on the principle of dividing profits on the amount of j)urchases, and making all purchasing members shareholders, with a fixed interest on their capital Rochdale was not the first store that paid dividend on purchases. But a new impetus came from Rochdale, and from that time till now this principle, upon which the success of Co-operators has been based, has been guarded by them as their foundation-stone. A multitude of diffi- culties still stood in the way of progress, and it is with the clearing away of these difficulties that Co- operative history is largely concerned. It should be observed that in the very years in which the small Rochdale Society was beginning, working people were making themselves heard and felt in the State, and legislation was making their lives more free and their power for self-help greater. In 1844 was passed one of the most impoi-tant Factory Acts, to be followed in 1847 by "the famous Ten Hours Act." In 1846 the development of amalgamated Trades societies was made possible, and legal pi'otection was given to the great friendly societies, and to some extent to Co-operative societies. In 1846 the Corn Laws were repealed. It was at the time of the great revolutionary epoch, 1848 — 49 that Co-operation began to march with giant strides. With shortened hours of labour, with cheaj^ food, with encouragement to co-operate for self-help without the old fears of fraud or failure, there was something to woilc for. * * See " Lecture on tlio History and Objects of Co-oi3eration," T. Hughes, i^ublishcd by the Ccutral Board n.] HISTORY {1SU-1SS4). 25 It was at this time tliat the woll-lcnown body called the Christian Socialists, some of whom are with us still, began to give such invaluable help to Co-operators, and performed services, through their legal knowledge, and their genuine sympathy with the cause, which Co-operators will not forget. With their help several societies were started. "The Christian Socialists were an entirely new force of public opinion on the side of Co-o])eration." The help and support given at this time by Mr. J. S. Mill, Mr. Slaney and Mr. Henley, and somewhat later by Mr. Sotheron Estcourt, were also of great value. As a result of the joint efforts of those interested in Co-operative progress, in 1852 was passed the Indus- trial and Provident Societies Act, the " Magna Charta " of Co-operators, " probably the most im])or- tant enabling Act of the whole period, as the Ten Hours Act is the most important protecting one." It was estimated that at this time there were about 140 Co-operative stores. In 1850 and 1855 the Public Libraries Acts were passed. In 1853 and 1855 the newspaper duty was finally abolished. The impor- tance of these Acts to men who were taking the lead in a movement requiring so much intelligence and education as the Co-operative movement, and who had introduced the principle of giving a part of their profits to education, to men who used to pay 7d. for their Northern Star or other newspaper, there is no need to point out. In 1847 the Corn-mills of Leeds and Halifax were started; in 1850 that of Rochdale, and in 1851 that at Sowerby Bridge. For the other productive societies now existing, and the date of their foundation see, p. 103. In 1854 the Mitchell Hey Cotton ]\Iill was started at Rochdale on the principle of bonus to labour, which plan was abandoned in 1862. The publication of the History of Co-operation in Rochdale (1857) * largely helped to spread a knowledge of Cooperative work at this time. The cause of Co-operative educa- * By Holyoake. 26 WORKIXG MEN CO-OPERATORS. [chap. tion suffered now through the omission, in the Friendly Societies Act of 1855, of the clause which allowed societies to provide for it. This was a real misfor- tune, as societies which do not start with this provision in their rules, find it hard to introduce it later. The omission was remedied in the Industrial and Provident Act of 1862, which gave societies a corporate existence, and enabled one society to hold shares in another, a most important provision which made the Wholesale Society possible. During these years the earlier conferences of Co-operators both in the north and the south began. (See Chap. VI.) And in 1860 the Co-operator newspaper was started (see p. 126), from which time the Co-operative movement has always had a recognised paper of its own, which to many leading Co-operators has been an instrument of immense educational value. In Lancashire, the seat of the most important growth of Co-operation at this time. Co-operators had to face a severe trial at the close of this period, in the cotton famine. The stores weathered the storm, and indeed, during the years 1861 — 66 their share capital was considerably increased. (See Wholesale Almanack, 1883.) In 1862, for the first time, Parliamentary Returns were made to the Registrar, and the account of this period may be closed by a table showing in round numbers what progress had been made in somewhat less than twenty years. Estimated position of societies in 1 862 : Ko. of- No. of Share and Loau Annual Societies. Members. Capital. Sales. Profits. 450 90,000 £450,000 £2,350,000 £166,000 III. 1864— 1884.— From the beginning of the English Wholesale Society to the present Time. — The finst balance sheet of the English AVholesale So- ciety was published in May, 1861, and showed sales for about seven weeks, or half a quarter, of about £6,000. The sales for half a quarter of the same society at the present time, twenty years later, are about ^£600,000. The importance to the movement 11.] HISTORY {1S24~1SS4). 27 of the establislniieut of tliis society was very great. (See Chap. IV.) 1. During the period 1864 — 1869, before the National Co-operative Congresses began, progress in several directions was made. The Co-operative Printing Society was formed, and the Co-operative Insurance Comjiany. In 1868 the Scottish Co-opera- tive Wholesale Society, which now does an annual business of £1,500,000, was founded. In 1805, by an Act amending the law of partner- sliip, industrial partnerships between masters and workmen were for the iirst time made possible, and the industrial partnerships of Briggs and Son, and Greening were started, from which, at one time, great hopes were entertained. Before closing this section, a review (which looks two or three years forward) may be given of the position of societies in 1872, showing their progress in round numbers in ten years from the time of the first Parliamentary Peturns. Estimated position of societies in 1872 : — No. of No. of Share and Loan Annual Societies. Members. Capital. Sales. Profits. 920 340,000 £3,340,000 £13,000,000 £935,500 In ten years the number of societies has moi-e than doubled, the members have more than trebled, the sales and jirofits have increased more than five- fold, and tlie share capital ha^ increased more than sevenfold. The savings bank element of Co-operation has, therefore, during these years been rapidly ex- tending. 2. 1869— 1884.— The beginning of national Con- gresses and the foundation of the Central Board, 1870, were very important matters for the general welfare of Co-operation. (See Chap. VI.) In the first part of this period of fourteen years there Avas a good deal going on. The record of the last few years is dull, not to say, in some respects, unprogressive. During the years 1869 — 1874 Co-operators went forth to concjuer in the field of j)roduction, but their success has not yet been proportionate to their enthusiasm. 28 WORKING MEN CO-OPERATORS. [chap. The great strike in the Newcastle district came in 1 869. The Ouseburn Engine Works were started, and the Industrial Bank at Newcastle was also founded shortly afterwards. Several societies were started on the bonus to labour plan, and several firms, such as those of Fox, Head and Co., and others, adopted the industrial partnership principle. Various mining and manufac- turing enterprises were started or supported by Co- operative societies. In 1874 there were said to be fifty co-operative productive societies in existence. During these years also the Joint Stock Cotton Spinning Mills of Oldham, and other places, to which allusion will be made elsewhere, were being rapidly developed, and a great deal of Co-operators' money was going into them. In these years several of the productive societies which ai'e now fiourishing and healthy were started. (See page 103.) But in 1874 and a few succeeding years, one by one a variety of failures were reported. The Scottish Iron Works, which were started in 1872, were closed in 1874. The Ouseburn Engine Works, by which it is said £150,000 were lost to the working classes, and the Industrial Bank, broke down. The industrial partnerships of Briggs, Pox, Head and Co., Greening, and others came to an end. Several mining and manufacturing societies went into liquidation. In those days some societies burnt their fingers, and a burnt child fears the fire. But apart from these matters, by which a large number of societies were entirely untouched, there was progress in vai-ious directions. The law was amended in 1871 and 1876. The Sectional Boards were arranged, and the districts began to be ma]>ped out. The Co-operative Neivs, now the property of the societies, was started. Cottage building was being rapidly developed by some societies, as a safe form of investment. An interest in the practical propaganda of Co-operation in the wilderness where its very name is sometimes unknown, was shown by the foundation of the Co-operative Guild in the Southern Section, 1877. II.] HISTORY {1S24—1884). 29 (See page 114). Meantime, important subjects, such as those of Co-operative production and banking, were being discussed at Congresses, and the Congresses them- selves were doing much good by bringing leading Co- operators face to face witli one another from all parts of England and Scotland, promoting a feeling of good fellowship, rubbing down differences, and inci'easing the stock of general experience. Also the light thrown on the subject of Co-operation by the inaugural addresses at Congresses of Messrs. Hughes, Morrison, and Cowen, who approached the subject to some e.xtent from inside tlie movement, and of Professors Thorold Rogers and Hodgson, and Messrs. Auberon Herbert and Brassey, who looked at the work from outside, was valuable in various ways. It should not be forgotten that Mr. Hughes and Mr. Morrison were both deprived of their seats in Parliament in 1874, their advocacy of Co-operation having, without any doubt, a great deal to do with the loss of their seats. During the last half-dozen years there is no special matter of stirring interest to chronicle. No special advance has been made in Co-operative production or in Co-operative education. Congress addresses have been given in the last six years by Lord Ripon, the Bishop of Durham, Lord Derby, Lord Reay, Mr. W. E. Baxter, and Professor Stuart. It was thought that Professor Stuart's address at Gloucester in 1879 might give a considerable stimulus to the cause of educational work among Co-operators. The same has been thought about the Co-operative Congress at Oxford (1882), whei-e thei-e was a most useful inter- course between the Co-operative delegates and Univer- sity men, both senior and junior, for several days, during which a good many preconceptions were con- siderably modified, and a great deal of genuine friend- liness was shown on both sides. The future alone will show whether these hopes arc likely to be realised. A review of the Co-operative position in 1882 is 30 WORKING MEN CO-OPERATORS. [chap. here gi\en, which can be compared with the position in 1872 and in 1862. (See also the Table annexed, giving the percentage of Co-operators in each county in 1882). No. of No. of Share and Annual Profifs Societies. Members. Loan Capital. Sales. 1,200 640,000 £8,000,000 £25,500,000 £2,100,000 It will be observed that while there are nearly twice as many members of existing societies now as there were ten years ago, there is an addition of only about one-third to the number of societies. It will also be noticed that share capital has not increased so rapidly in proportion to members and trade as it did in the previous ten years. At the same time, the amount of profit in proportion to trade done is greater than in the previous periods. In looking back over the period here rapidly re- viewed, any one who can fully realise what the position of working men and women was sixty years ago, is bound to admit that the progress of the working class during that time has been in many ways con- siderable. But, as has been often pointed out, the important question is, " How far are the labouring classes in town and country becoming better off as compared with the sU.Jard of wealth of other classes?" Every one knows that their condition is in many respects better than it was half a cn'vry ago, but four centuries ago the average English workman was certainly wealthier than he is at the present day. The record of these sixty yeai's of Co-operative work is a record of work done under the influence of many different motives ; but if it could be written out in full, it must contain the names of many unselfish and earnest men, whose names were never known beyond their own town, and even there may now have been forgotten. In the earlier days men were fettered by laws which prevented their combined action, and there was little to protect them against fraud. There were taxes on newspapers, few even decent schools, no Co-opeiative manuals or literature. 11.] HISTORY (1S24—1884). 31 PERCENTAGE OF CO-OPERATORS TO THE TOTAL POPULATION m EACH COUNTY IN 1882. EXGLANT). Anglesea Brecknock Cardigan Cannarthen Carnarvon Denbigh Percontatfe of I'crcentace of ConxTY. Cd-nin-nitors County. Co-operators to Population. to Population. Beds 1-2 Lincoln 8-0 Berks ... ... ... 2-7 Middlesex 4-0 Bucks 1-6 Monmouth 1-7 Cambridge 3-8 . Norfolk 1-2 Cheshire 13-6 Northampton ... 13-2 Cornwall 21 Northumberland 22-4 Cumberland 2;5-9 Notts l;rO Derby 19-6 Oxon 11-n Devon 7-2 Rutland •0 Dorset 1-2 Shropshire •5 Durham 3()-6 Somer.sot 2-4 Essex 5-3 Stafford 21 Gloucester 3-8 Suffolk 4-1 Hants •8 Surrey 11 Hereford •3 Sussex 1-3 Herts 1-7 Warwick 4-3 Huntingdon •0 Westmoreland... 17-2 Kent 3-7 Wilts 4-3 Lancashire 24-2 Worcester 5-2 Leicester 17-0 Yorkshire 27-0 •0 •0 •0 •5 1-8 10 Wales. Flint Glamorgan Merioneth Montgomery Pembroke... Radnor Scotland. •0 3-7 7-3 •2 •0 •0 Aberdeen •5 Kinross 17-3 Argyll •3 Kirkcudbright... •0 Ayr 13-7 Lanark 4-6 Banff 4-5 Linlithgow 31-9 Berwick ■0 Nairn •0 Bute 2-6 Orkney •0 Caithness 12-5 Peebles 1.5-3 Clackmannan 86-0 Perth 13-8 Dumbarton 22-3 Renfrew 167 Dumfries 7-3 Ross ■0 Edinburgh 14-2 Roxburgh 20-2 Elgin 1-1 Selkirk 46-1 Fife 23-7 Shetland •0 Forfar 27-4 Stirling 38-4 Haddington 0-.5 Sutherland •0 Inverness 1-3 Wigtown •0 Kincardine .)-.i 32 WORKING MEN CO-OPERATORS. [chap. Now all this is changed. The changes in the laws, by which so much improvement in these matters has been effected were very largely the result of the demands of working men. Everything is comparatively simple for Co-operators now. Will they be the better, and advance more rapidly in the true sense of progress because the road is easier '} This is the question of the future. CHAPTER III. THE DISTRIBUTIVE SOCIETY OR STORE I.— INTRODUCTOEY. What is ordinarily involved in dealing with and being a member of a Co-operative store is something of this kind : Some one wishes to become a member, deposits Is. 3d., and practically becomes a member at once, for the store is open to every one from any class who may wish to belong to it {essential point No. 1). The member, either man or woman, or one of the family, goes to the store, which may be a building worth .£40,000, or one rented at £5 a year ; in either case the methods are just the same. She (we will suppose that it is a woman member) buys goods at the ordinary market prices of the town or village (essential point No. 2), handing ready money over the counter {essential point No. 3). If she has not ready money she must go away.* When she has done buying, the shopman gives her tin or paper tokens, stamped or marked so as to show how much she has spent, whether it be 6d. or several pounds. These tokens are retained till the end of the quarter, and then returned to the shop to show how much has been spent during the quarter, for it is on the amount of her purchases at the sliop that her dividend or share of profits is declaimed {essential point No. 4), whether that dividiMid bo Is. or as much as 3s. on * See " Co-operatiofn and tlio Perils of Credit," G. Hiues. HI.] THE DISTRIBUTIVE S(TCIETY. 33 every £ that she has spent. Suppose tliat it is her first quarter's dealing at the store, tliat the amount of her dividend for this quarter is 10s., and that she only paid Is. when she became a member'. May she withdraw that 10s. 1 Yes, with the exception of an amount equal to 3d. per week per share, which must be contributed, because every member must be a shareholder to the amount of at least a <£1 share, in order that the store may have some working capital of its own (essential point No. 5). After she has got her £1 share, she can withdraw all future dividend as often as she likes. If she is wise, she will let it accumulate in the store, which will be her savings bank, and will pay her 5 per cent., and she may after a time find hei-self with £50 or £100 in the store, as hundreds of working 2)eo2:>le do, simply as the result of no other effort on her part than that of paying ready money for her daily supplies. She goes to her first quarterly meeting, where some im|)ortant matter, ])erhaps, is discussed, and finds that her vote counts for just as much as that of the member who may have £200 worth of share capital. All are equal here ; none have more than one vote (essential point No. 6). II.— THE BEGINNING OF TIJE STORE. PEELIMINARY ARRANGEilENTS. The way in which stores generally begin is usually as follows : — Some working man of somewhat more intelligence, or with somewhat more influence than his fellows, hears of what is being done by working men Co- operators in England and Scotland. He talks the matter over with his friends and comrades, obtains and circulates tracts, and finally they make up their minds to see if they can start a .society. The first thing is to appoint a small provisional committee, which does all it can to enter into comnnmication Avith other working men in the place through Friendly Societies, Trade Unions, and in other ways. The pro- c 34 WORKING MEN CO-OPERATORS. [chap. visional committee lias to consider at least seven things : — 1. Advice from the Co-operative Organisations. — If a society, when making a start, will make vise of the Co-operative organisation (see Chaj). YI.), which is bound to give advice and help, and most willing to do so, it may be saved a world of trouble and many mistakes. The General Secretary of the Union, City Buildings, Corporation Street, Manchester, can be consulted, and will give any applicant the name of the right person in the district to communicate with in order that personal assistance and advice may be foi'thcomiug. 2. The Rules. — What is desirable to have and not to have in the rules can be gathered in part from what follows in this book. The committee will procure a copy of the Industrial and Provident Societies Act, under which they will be registered ; and will obtain a copy of the Model Rules (jDrice 2d.) for a Co-operative society drawn up by the General Secretary of the Co-operative Union. If they adopt these, with a few special rules, they are saved much trouble. One matter is worth mentioning as most important. The rules should provide for setting aside 2 1 per cent, of the profits for educational purposes. The society will never regret the rule, but would repent its absence. Every good Co-operator will make a point of being thoroughly well up in the rules of his society. 3. Registration of the Society. — Registration costs nothing. It should be done before the shop is opened, usually as soon as money begins to be collected. The address of the Registrar of Industrial and Provident Societies for England and Wales, is J. M. Ludlow, Esq., Abingdon Street, Westminster ; for Scotland, J. Ij. Paul, E.sq., 43, New Regi.ster House, Edin- burgh ; and for Ireland, W. E. Littledale, Esq., 9, Upper Ormond Quay, Dublin. If the Model Rules are adopted, which are well known to the Registrar, there is little difficulty over this part of the business. III.] THE DISTRIBUTIVE SOCIETY. 35 4. Public Meeting. — The Central Board of the Co-operative Union and also the Guild in the South are always willmg to send two or more speakers to a public meeting free of charge. These should be applied for, as they have a considerable fund of experience to go upon, and they are most willingly sent. This is owing to the strong feeling of working men Co-operators that they cannot do less than do their best through their own organisations to hand on to others not so well circumstanced as themselves as full a knowledge as possible of the benefits to be derived from the Co-operative movement. The essential points (see page 73) should be mentioned several times over, as when a new scheme is being presented to those who have never heard of the matter, it takes a long time for what seem to be the simplest ideas to soak into people's minds. Several resolutions will be moved, and the pro- visional secretary should stand at the door to take names of those willing to join. A very slight amount of urging may induce a member to give his name on his way out, who would not liave the courage to give his name up to the platform. 5. Collection of Money, and how much to Collect. — The first work now is to collect money. The whole system is based on ready money, and the shop must have ready money to pay for its outfit and its goods before it makes a beginning. Some of the committee act as collectors, and try to push on the matter as well as they can. Then the question arises how much money must be collected, and how many members there should be before a start is made. If a shop is to be opened all day, thei'e should be at least XI 30 of capital, 100 members, and a fair prospect of doing a trade of from £40 to £50 per week. Nothing less than this will insure payment of expenses and a fair dividend. In many places, especially villages, it is impossible to get 100 members before a shop is started. In such cases it is necessary to begin without a shopman, and 3fi, WORKING MEN CO-OPERATORS. [chap. without being oj^en all clay. The stores are opened in the evenings only, and on Saturday afternoon, the committee themselves acting as shopmen for a time ; or perhaps a member's wife is engaged, who is capable and tidy, and who carries on the little shop for a short time in her own house. In any case the members must stand on their own feet. A society which is in part propped up by the patronage of others rarely flourishes. It should not as a rule accept loans or gifts, but fight its own battles, and if it makes mistakes, leam by experience how to remedy them. Members who are burdened with debts to shops can buy a little at the stores, and a little at the shop, and pay their debts with the dividend. 6. Conditions made with Members about the Money now Collected or afterwards Accumulated in the Store. — This is a point to be considered before the rules are })rinted. It is almost always arranged that the money shall be held in £\ shares by members. The chief pomt to settle is, Shall any member be allowed at any time to ivithdraw the whole of his shares, or shall he only be allowed to transfer or sell them to some one else, and not to withdraw them 1 A great number of Co-operators think now that, on the whole, the best nile is to make every member have oiie transferable share of £\, which he cannot draw out, and let his remaining shares, which he builds up out of dividend or by investing money on deposit, be withdrawable. The reason for all members having at least one transferable share which cannot be withdrawn is to lessen the effects of a panic Vjy which loyal members might suffer veiy seriously ; for it is quite certain that no society can at any time afford to have all its shares withdi'awn, as a great deal of capital must be locked up in stock, buildings, &c. Many societies have a rule whicli enables committees to stop withdrawals in case of a panic, and this also is a most important rule, and protects the loyal members who nre not in a hurry to withdraw their money. Some societies with this rule in.] THE DISTRIBUTIVE SOCIETY. 37 think that all cai)ital may be withdrawable. The rules usually ])rovide that shares shall be made payable or accumulated at the rate of 3d. a week, or 3s. 3d. a quarter. Some societies insist on the single shares being £2 or £3, or on a full member holding two, three, or five £1 shares. Usually mem- bers are allowed to vote and have full pi'ivileges when they have been admitted and have paid Is. entrance fee. If some of the shares are transferable, the com- mittee usually have the power of buying them up from individuals in special cases, and extinguishing them. The Industrial Societies Act provides for a society buying up its own transferable shares, on con- dition that inmiediately they are bought up they are cancelled and extinguished. Interest on Share Capital. — The almost invariable rule with societies is to give 5 per cent, on all share capital ; some give rather more to trans- ferable share capital than to withdrawable. The giving of the 5 per cent, has proved an immense attraction to shareholders, and a great strength to the movement. At the same time, when there is more capital than can be employed in the store, it has been found difficult to obtain the 5 per cent. without risk, and, for this reason, and sometimes because the members who have little capital in the stoi-e were jealous of the 5 per cent, given to capital-holding members, some stores have limited the amount of capital which a member may hold in the store far below the legal limit of £200. (For the grave disadvantages of tliis policy see p. 70.) 7. Arrangements for paying Dividend in propor- tion to Purchases. — Every time members come to buy any article, a token must be taken away to show at the end of the quarter how much they have bought, that they may claim their Is. 6d. or 2s. in the £ on their purchases, or whatever dividend may be declared. This is arranged by a method of checks or tickets made of metal or paper, which are given at the time of purchase, and which are to be brought back when the dividend is to be claimed. ;ii)sOcH 38 WORKING MEN CO-OPERATORS. [chap. The metal checks are tin tokens bearing the name of the society, and representing |d., Id., 3d., 4d., and so on, of different sizes and shapes. For 10s. or =£1 the checks are generally of copper, and the tin checks have to be exchanged for copper checks. If the checks are of paper, each one has on it the amount purchased, the date, if possible, is inserted, and the checks, being gummed at the back, are put on to sheets of paper, which when full are exchanged for new ones. One advantage of paper checks is that the colour can be changed each quarter, and so the checks must be brought back in the same quarter in which they were issued. Members have been known to keep metal checks from one quarter to another for the hope of a better dividend. This, of course, upsets the accounts, and is not fair to the society. To obviate this, some societies declare dividends on the total sales, and carry any balance to a dividend reserve fund. The bearing of these systems on the question of controlling or checking the honesty of the manager or shopman is a separate matter, and will be considered elsewliere. (See p. 52.) III. APPOINTMENT OF COMMITTEE AND STARTING OF THE STORE. 1. Appointment of Committee. — When the society is registered, and begins work, the first step will be to call a general meeting of members and to elect a committee. At this meeting, and at all future meetings, it is very important for the members to see that the rules are being observed. There is often much too easy a way of looking at this matter. " If we do what we want, don't let us trouble too much about the rules," mem- bers say. Til is is a great mistake, as many a society has learned to its cost. One of the members is put in the chair, and tlie various officers, who are eligible in general meeting, and the committeemen, are pro- posed and seconded one by one. At first it is some- times difficult to iret men to come forward at all in.] THE DISTRIBUTIVE SOCIETY. 39 for the work. It is one weakness of many working men, especially of the best sort, tliat tliey have too little assurance, and not enough contidence in them- selves in these matters so necessary for their ]>rogress. In hiter stages of the society, the ditticulty is not to get men, but to get the right ones. Candidates for honour are easily found, and are too easily promoted, without due regard to their real qualifications, the best men keeping in the background, and the members as a body not being sufficiently careful about their real interests to find them out. The election of ollicers and committeemen is by show of hands or by voting paper ; the latter is the best plan, and is one of the rules in some societies. Public voting, when there is much feeling, often leads to an embittered state of things, every vote being known. The number of the committee is important. In some cases 7 or 9 may be a better number than 12. It is much easier to increase the number than to lessen it. 2. The Shop. — Sometimes, as has been said, in early stages it has been found possible to begin work in a member's house, and without a shopman. But this stage is passed sooner or later, and the committee are not any longer their own shopmen in the evenings, nor does the store remain in a private house : the committee then, either at starting or soon after, if they go on well, look out for suitable premises. When they have found likely premises, or if they doubt which of one or two possibilities to select, they call a members' meeting, and lay the matter before them. The only case in which they might engage premises before laying the case before the members is where publicity might destroy their chances of making a good bargain. In this case they explain the whole matter to the members, and appeal to them to sanction what they believe to have been done in the best interests of the society (see p. 51). The main object aimed at is the greatest convenience of the majority of members, actual and future. In former days Co-operators usually took premises in a back street; 40 WORKING MEN CO-OPERATORS. [chap. latterly they have preferred a front street, and, on the whole, they are probably right. The additional expense may frequently be counterbalanced by the additional convenience and publicity. Care must be taken not to get into the hands of a landlord who may have pressure put on him to act to the disadvantage of the store, or if possible a freehold should be obtained. 3. The Store-keeper. — His salary in a town is usually from 2os. to 30s. a week, with rooms and gas ; and sometimes more. In the country a good man is usually got for from 18s. to 25s. per week. If a society is fortunate, they sometimes get a young man who has been trained in a Co-operative society, and is walling to come for low wages for the chance of making a good position. But it is well worth while to pay a good honest store-keeper who believes in Co-operation well — a truth which societies have sometimes for- gotten, and at the saving of a few shillings or pounds yearly, which makes the diffei*ence between a good and an indifFei'ent man, have lost hundreds of pounds, or even been ruined. In this matter the Central Board, Wholesale Societies or Guild (see Chaps. lY. and VI.), may be consulted. If no one is recommended by them, an advertisement in the Co-operative News generally produces a good man. Co-operators lay stress as a rule on getting a man trained in Co-opera- tive methods, and acquainted with the routine of the Wholesale Societies. This is the result of experience. Til ere may be great dexterity and considerable elhciency in a shopman, but it may not be of the kind wanted in the store. In practice it has been constantly found diilicult to turn an expert private shopman into a good Co-operative store-keeper. 4. Fitting up the Shop. — The articles needed in the way of counters, scales, canisters, etc., are often su))plied by the Wholesale Societies at a very much cheaper rate than the society would probably get them for elsewhere. If the window is double-fronted, one side of the shop is fitted with plain unvarnished deal counter and shelves, which are kept clean by III.] THE DISTRIBUTIVE SOCIETY. 41 washing, for provisions, i.e., bacon, butter, &c. ; the otlier side has painted or polished tittings, and is used for grocci'ies. If the window is single-fronted, with only one counter, the counter will be divided : one part will be for groceries, the other for provisions. 5. The Shop Window. — In some stores it is thought a waste of time to dress up the shop window. In many stores the practice is habitual. Two things should be observed : — (1) Goods of a non-perishable kind, not easily injured, should be placed in the window; (2) if samples of currants, raisins, &c., are set out, they should be fair samj)]es, not specially selected or dressed. In any case, whether the shop window be dressed up or not, the shop itself should be kept scrupulously clean, light, and tidy. The expense involved in constant cleaning is amply repaid by the pleasure of members. 6. Purchase of Goods. — The many difficulties of earlier Co-operative days in this matter can be got over now by the enormous advantage of the existence of Wholesale societies in England and Scotland, which are the work of a federation of Cooperative societies, and which are open to all societies that wish to join (see Chap. IV). New societies usually join at once. There are branches or depots in many parts of the kingdom, and societies are certain to find advantage in getting a great proportion of their goods from the Wholesales. 7. Relation of the Store to the "Wholesale Societies. — The Wholesale Societies are not perfect any more than many other human institutions. Their goods, arrangement, and management, receive a great deal of criticism from various Co-operators, and it is perfectly right that this should be so. It is not im- possible that, with the general increase of interest in Co- operative matters among the general body of Co-opera- tors which may be hoped for, the criticism may become keener than it is at present. The great constituency of the Wholesales — that is, the delegates who go, or ought to go, from the societies, all over England and Scotland 42 WORKING MEN CO-OPERATORS. [chap. to the meetings at Manchester, Newcastle, London, or Glasgow, are, after all, responsible for the persons they select to manage their own societi/ ; are responsible to a great extent if the society does not progress in the way they wish, or if they do not do their veiy best to make the management supply genuine and satisfactory articles. Criticism of the Wholesales by its members, just like criticism of the ordinary store, must always go on if Co-operation is to be in a healthy state. But, notwithstanding this, this general truth, which the experience of many wise Co-operators confirms, may be laid down with reference to the purchase of goods, to which there are but few exceptions, and those in rare cases. If a store-keeper or manager persistently refuses or objects to deal with the Wholesales for a considerable part of the goods required ; if he will not give the Wholesales a fair trial for all goods that can be reasonably got there ; if he will not support the committee in doing all possible business with the Wholesales while making reasonable complaints to the Wholesales whenever required, there is something wrong. Either the manager is influenced by motives not favourable to the best interests of Co-operation in dealing with other firms, or else he has not grasped the essential, the vital, importance to Co-operation of the Wholesale societies, and he is sacrificing his own society and the general interests of the movement to his ignorance. This also is true, that when a society knows it has a good and loyal manager, it ought to treat him well. The society which is beginning business can inform the Wholesales of its number of members, its amount of capital, and how much money it will spend in goods. The Wholesales will make out a list of the qualities and quantities which they recommend for purchase at finst. This can be scrutinised by the com- mittee and store-keeper, and varied iiccording to local needs. The payments to the Wholesales have to be made, the first at once, the others, within seven days of date ni.] THE DISTRIBUTIVE SOCIETY. 43 of invoice. This method is a valuable one, us it acts as a check upon an inexperienced committee. They cannot get much into debt, they are taught the impor- tance of keeping their enterprise within reasonable limits. In early days fatal mistakes were mtule in ordering goods that wei-e not really wanted, and that should never have been ordered. If there is a Co-operative flour mill in the neigh- boui'hood, or a productive Co-operative society, these should be supported, if their articles are good, in the general interest of the Co-operative body. 8. Amount of Stocks to keep. — The amount of stocks should usually not exceed the amount of sales for three or four weeks in groceries ; for ten to fourteen days in provisions ; for one month in bakery ; for three or four days in butchery ; for ten to thirteen weeks in drapery, boots and shoes, and furnishing. All pinx'hases beyond these are speculative, and if such are advised the committee should insist on knowing why ; and several points must be considered : — 1. The estimated profit over the i-egular profit. 2. The extra expenses in (a) interest on capital, (b) warehouse-room, (c) possible deterioration. 3. Whether the nett extra profit is really worth the risk. 9. What Prices are to be charged ? — The answer to this is, " The ordinary shopkeepers' prices of the district," whether their average is high or low. In some villages in the North, the store has obtained such an influence that it charges high prices without fear, and can therefore give a very large dividend. It would be ridiculous to compare the efficiency of stores by the amount of their dividend. It may do more real credit to a committee and manager to obtain a dividend of Is. 6d. in one place than is due to another management which may declare a dividend of 3s. 3d. 10. Relation of the Store to the Shopkeepers. — The shopkeepers may, by lowering prices, tempt the store to follow, or vice versa. The store should aim at charging the reasonable retail prices of the district, 44 WORKING MEN CO-OPERATORS. [chap. and not at lowering prices below that level without a good reason. The dividend must be remembered as one of the most important parts of the system, and members must be drawn into the store by a considera- tion of its general advantages, not by the lowering of prices, as in the Civil Service system. What must be done when single shopkeepers, or a combination, begin to sell various articles at much less than the ordinary retail price, in order to tempt customers into their shops 1 When " cutting " tradesmen, as they are called, work for a time largely in this way, with what are called " leading " articles, in their shop windows, on which they make no profit, it may be necessary to appeal to members to explain the matter to them. No body of small retail shop- keepers can reduce the price of all articles largely for a long time together. But there always will be eflbrts made, and naturally enough, to eclipse the store, and members must be exhorted to remain firm in dealing at their own store, if they believe the store is doing well for them on the whole. " Loyalty to the Store " must be preached at all times, especially to wives and mothers, if the store is to succeed. 11. What Profit to Expect.— The amount of profit that can be made varies, as lias been said, largely according to circumstances, according to the expenses of various kinds, according to whether goods are delivered or not, &c. On groceries to make 12|^ per cent, profit on the selling value * is thought good work in some places. In other places from 15 to 25 per cent, is expected. On boots and shoes, hardware and drajjcry, from 15" to 30 per cent, can be made. The turnover in the case of groceries and provisions is, of course, much more rapid than in otlicr goods. 12. Delivery of Goods.— In the Soutli, where many * N.B. — It is of course important to distinguish between the percentage on wliat your goods, cost, and the percentage on their Belling value. To get 25 per cent, profit on the selling value you must add more than 25 per cent, of the cost price. If goods cost 20s., ami you add 5s., or 25 per cent., and charge 25s., your profit on the selling price will be 20 per cent., not 25 per cent. HI.] THE DISTRIBUTIVE SOCIETY. 45 of the wives have been domestic servants, they insist on delivery, and though their wages may be less than in the North, they get the luxury of delivery, and less dividend in consequence. In the North, veiy frequently, except in a few great towns, the greater part of the goods are carried away in baskets by the members, and so a great deal of parcelling and delivery is altogether saved. In the early stages of a society', if deliveiy is insisted on, small hand-barrows are used for short distances, and as the society grows, vans deliver often at considerable distances. In this way the store is brought to the door of the member who lives a long way from the centre or from a branch, and no doubt in many cases of this kind delivery is a great advantage. In some outlying villages and hamlets this delivery by van from some town or larger village is, perhaps, the only hope that such places can have of being able to get Co-operative advantages. 13. Amount of Purchases by Members. — In Scot- land the average purchases of members of a society vary from £20 to .£50 per member per annum : in the north from £7 to £G0, in the south from £4 to £4-8. Some stores insist on all members purchasing at least so much a quarter : this is because there is jealousy of those who have capital in the store, and get their 5 per cent., but do not purchase much, or at all. Many Co-operators believe that it is better to have no restrictions. Let the members, they say, have freedom to use the association as much or as little as they like. If there is a glut of capital in the store, let the committee and members try to find some new form of Co-operative outlet for it (see page 70). 14. Non-members: their Dividend. — The general practice is to give to non-members half the dividend given to members. They ought to be encouraged, in the hope that they will become member.s. Why don't they deposit their shilling as members, it may be said, and make a start 1 It is partly ignorance, partly timidity — which has no real foundation. Sooner or 46 WORKING MEN CO-OPERATORS. [chap. later the greater number of non-members do become members. One plan, which has something to recom- mend it, has been to give non-members full divi- dend, only allowing them to withdraw half of it, the other half being carried to a share account for them. 15. Meetings, different kinds: Attendance by Members. — There are different kinds of meetings : monthly and quarterly business meetings, and annual social gatherings. It is important to attend them all ; but it is especially important that members should attend the monthly and quarterly business meetings. They should watch the business closely, and train themselves thus to be good Co-operators and useful critics. 16. Voting Power of Members. — Every member has one vote, whatever be the number of his shares. Thus the member with the smallest amount of capital is equal in power to the wealthiest member. This is a vital and most important principle, and herein Co-operative societies are much more democratic than many other societies. 17. Position of Women. — Women usually have the same powers of voting and investing as men. The stores used to give it them before the law was altered, and have often refused to allow a drunken husband to draw out his wife's money, trusting to his getting sober before he could take legal steps to com- pel them. Women are in some few instances mem- bers of commitees. The practice might be extended with advantage. Many Co-operative women are of opinion — perhaps with truth — that the men members and committeemen do not pay sufficient attention to the women's opinion as to goods, their quality, variety, etc. ; and yet women are the chief buyers. The male sex has perhaps too much tendency to con- sider its opinion on most points to be of more value than that of the opposite sex. The Women's Guild, or League, for the Spread of Co-operation, wliich has been started in several parts of England, may do a great deal towards helping and III.] THE DISTRIBUTIVE SOCIETY. 47 developing Co-operation in the best way. Information about this can be ascertained by writing to the Central OfEce, at Manchester (see p. 34). 18. Duties of Members generally. — They should see that the goods sup[)li('d are what they ought to be, and firmly remonstrate if they are not. They should be uniformly civil to the employes. They must look after their committees. They must try to keep up a high standard at all the meetings and dis- cussions. They must grumble wisely, and at the right time, but not perpetually. " Great grumblers are generally poor reformers, and great talkers but little doers." They ought to come regularly to monthly meetings, to hear the minutes of committee meetings read, to criticise, comment, and express opinions. At quarterly meetings, when elections take place, they ought to do their best to secure first-rate men, and not be influenced by requests to vote for this or that man. It is no wonder that societies go wrong, or that the power gets into the hands of small cliques, when members attend meetings so wretchedly in proportion to numbers as often hajipens. They ought to come regularly to the great annual gather- ings, and ought to insist on these being held regularly. They ought to support their committee in all efforts to assist the spread and general welfare of Co- operation, by sending delegates to Conferences and Congresses, and by supporting the central organisa- tions, the Union, and the Wholesales. Every effort to support the centre, or backbone, of the movement, every effort to develope, through subscriptions to educational work, the general intelligence and effi- ciency of members and officers, will return to the society tenfold interest, with increased prosperity and strength. If members regularly, by their vote against any grant for Conferences, Congresses, and the like, isolate tlieir leading membei'S from all communi- cation with other Co-operators and other societies, they ai'e sure to feel it to their cost some day. 48 WORKING MEN CO-OPERATORS. [chap. IV.— THE MANAGEMENT: OFFICERS AND EM- PLOYES, THEIR APPOINTMENT AND DUTIES. 1. The Committee and Officers. — There is almost always a chairman and secretary, sometimes a treasurer, and a varying number of committee-men. Election.— The Chairman or President of the Society is generally chosen by the members in quarterly meeting, sometimes by the committee from among themselves. The Secretary, if a paid servant employed for accounts and other matters of business, will be, and, in the opinion of most Co-operators, certainly ought to be, appointed or dismissed by the committee. If the secretary is only a minute secre- tary for committee-meetings, die, he will be one of the committee, and will be ap])ointed by them, or might be elected, if desirable, in general meeting ; and, in this case, all the other duties are undertaken by a paid official, whether general manager, cashier, or otherwise. TJie Treasurer may be chosen in either way. If there is no treasurer, the secretary will dis- charge his duties. In the opinion of some Co-opera- tors, a treasurer is not necessary. Auditors. — It is most important that good men should be selected. Tliey- ought to remember what a grave responsibility rests upon them in signing balance-sheets. They should be careful of their own reputation, and not run risks or try to screen tlie conunittee. They ought to have a full knowledge of accounts, which is not always found. It would be very useful if the Co-operative Union would in- augurate some scheme by whicli auditors could be duly certificated. 2. Rotation.-— In some societies there is no rule as to the retirement of officers or committee. In many societies a quartcsr of the committee retire in rotation quarterly. In otliers the retirement is yearly. In others the rule is made that, after a certain term of office, an officer or committeeman must retire for a short period before he can be III.] THE DISTRIBUTIVE SOCIETY. 49 re-elected. Societies have made many alterations and variations on this subject in their rules, and the most sweeping changes of coiuinitteemen and officers are made from time to time as waves of poi)nlarity or unpopularity pass over their heads. But no rules will make a good committee. Members should do all they can to get tirst-rate men, above suspicion of mere ambition or party and personal hostilities. There may be a good deal of wire-pulling unless memliers are careful. Wlien they have got a good committee, members must look after them, criticise them, and help them to improve the society. Violent changes are bad for the welfare of a society. It should be remembered that the bigger a society is, the longer it takes for a committeeman to become acquainted with the work ; and it may be found that, in any case, ordinary changes through retirement, unpopularity causing non-election, and death will supply sufficient new blood. 3. Payment. — In most societies committeemen are paid lor their attendance at the weekly committee ; but it is most desirable, in fixing the scale of payment, to avoid the likelihood of men trying to get on to the committee simply for the sake of the fees. This is a danger to be carefully watfhed in the Co-operative movement. The work of its managing men (not its paid officials, to whom it is a profession) should be that of volunteers, who are repaid in moderation for their expense or trouble, and who will withdraw or resign their position at once, without a moment's hesita- tion, on the score of money, if that is being done of which they so strongly disapprove that they believe this to be the right course. Otherwise they ai-e not independent, and may tend to get into the hands of men more powerful than themselves, who are well aware that they will not resign if they can ])ossibly help it. From 6d. to 2s. a time for weekly com- mittee meetings, and nothing for -sub-committees or adjourned meetings, is a common rule in a moderate- sized society D 50 WORKING MEN CO-OPEBATORS. [chap. The secretary may receive some additional fee for his clerical labours. Security to he given hy Secretary and Treasurer. — Tliis is a veiy important matter. They have to make a deposit in the society — say, £20 to £50 — or they get a guarantee through the Co-operative Insurance or other society. In all good societies as the business increases the amount guaranteed will increase. 4. Sub-Committees. — In most societies there are sub-committees to give special attention to various departments of the society's work — one for groceries, another for bakery, another for butchery, &c. In the early stages of a society it may not be desirable, but later on it becomes ahnosta necessity. As a rule, working men committees have only the eA^enings free, and the whole committee could not possibly all of them go into all the matters requiring attention. Sub- division of the work is necessary. 5. Duties of Committeemen and Officers. — The Chairman should have lirmness, impartiality, coolness, keenness, and tact. It is no good having a chairman, however virtuous, good-natured, or consistent, if he cannot keep a meeting in order. The Secretary should be able to work hard and continuously, must be well up in figures, and must write well and quickly. A bad secretary can bring a society to grief very quickly. He ought not to try to dictate to the committee, and whatever his own opinion, ought loyally to carry out their decisions. A valuable paper, which should be placed in every new Secretary's hands, bearing on meetings, minutes, agenda, &c., is the Co-operati\'e Guild paper. No. 5. In a committee there are always likely to rise up rival parties. This ought to be avoided as far as possible. A member should firmly state liis opinion, and accept a defeat with good temper, or, if the matter is very serious, resign. He ouglit to feel himself /ree to resign if necessary, as has been mentioned before. Party spirit on a committee is to be dejjlored. The members should not send hot- headed firebrands into office. They should send III. J THE DISTRIBUTIVE SOCIETY. 51 steady-going able men, who luive a capacity for patient, persistent enthusiasm that commands success and is not afraid of dilliculties. The committee should aim at keeping tlie confidence of tlieir members ; shoukl remember tliat the constitution of the society is republican ; should not mind criticism, but welcome it. It should be considered a golden rule that the committee should never unnecessarily keep anything back from the members, unless its being known is likely to be injurious to the society. Committees should desire publicity and criticism of any kind within reasonable limits. They should not be thin- skinned, or make too frequent appeals to the forbear- ance of members. Members ought to have the moving power in as many matters as possible, and this power should not be taken from them. Publicity and frank and full discussion of all matters concerning the welfare of a society ai-e essen- tial to its well-being. Many a society has come to a bad end through the want of this. The committee should never be jealous of rising talent among the members. There are plenty of outlets for activity ; and, j)erhaps more than anything else, what is needed now is that colTimittees should encourage young- members to be personally interested in the fuller and higher development of Co-operation in many different ways. A great deal can be done in the way of train- ing up good and loyal members and active and efficient officers in a society where a good spirit l)revails, and wdiei'e the best men have an influence such as they deserve. 6. Servants of the Society. — All servants of the society are almost invariably appointed and dismissed by the committee. The Manager. — Upon the question what kind of person is the .storekeeper, manager, or buyer, depends, to a very large e.xtent, the success or failure of the society. Is he to be the master or servant of the committee 1 What is to be the relation between them 1 A manager has great opportunities of influence 52 WORKING MEN CO-OPERATORS. [ciiAP. through much intercourse with the members, and he can use it well or badly. Many managers of Co- operative stores are first-rate men, and zealous Co-operators. Yet there are great temptations to managers to aim at personal power rather than the general welfare of the society. 7. Checks on Managers. — Some societies are con- tent with a guarantee or deposit similar to that de- manded from the secretary or treasurer. Such a guarantee merely provides against certain kinds of dishonesty. It does not provide against waste. (a) Leakage Bonds. — To aim at lessening waste and preventing possible fraud, many societies arrange for a leakage bond or agreement to be signed by the manager. In this he binds himself to return as much money as is equal to the selling value of the goods entrusted to him subject to a deduction for leakage (■i.e., waste and loss in weighing out). Opinions diflfer as to the leakage allowable, and it depends partly on how the accounts are made up ; 2d. or 3d. in the £ is a very ordinary average allowance. Copies of a leakage bond can be obtained from the Central Board or the Guild.* {h) Check Systems. — There are mnny ways in which a fravidulent manager or shopkeeper can cheat a society, and no methods can obviate this altogether. At the same time it is very important that, in order to remove temptation and keep the business up to the mark, there should be a check system, with a view of seeing how much cash really passes through the manager's hands. Let it be understood that the mere having of checks or tokens, metal or otherwise, as explained before, to enable members to claim their dividend at the end of the quarter, is not a check system in the sense of being a check upon managers or shop- men. You may or must liave checks, as they are called, to give to members, but it does not follow that you have any check on your manager, or that the * See Congress Report, 1874, p. 24. ]ii.| THE DISTRIBUTIVE SOCIETY. 53 committee know whether they get all the cash which is paid over the counter. For instance, non-members who know nothing about the dividend niay come in, buy and pay, and go away without any check, the shopman pocketing the money and not being found out. It has been found also that with the metal checks employes may pilfer the checks, and their friends bring them in and claim dividends at the end of the quarter. With the paper checks, one being given for every sale, there is some security, but even this has often not worked well. In large stores, the method of the shopmen giving the customer a ticket, who takes it to a boy, who gives metal cliecks in exchange and registers each shopman's sales, has been found fairly satisfactory. For the whole subject, which is a diHicult one, see Marmal of Cliecks, published by the Central Board. Apparently, the ideal chock system has yet to be discovered. Still, it may be said generally that a good committee can soon find out if a manager is doing really well or not, and that, as in so many other matters of management, the only thing to be done may be to say to a manager, " We do not charge you with dishonesty, but simply with want of managing power. Experience shows every day in every kind of business that of two men with the best intentions one can make a good profit and another will make a serious loss. We have given you a good trial, and tried to help you. We propose to part with yon and try anotiier manager." 8. The Employes. — The shopmen, baker's uwm with the cart, and otJiers employed by the stoi'e, will be appointed by the connnittee, who, if they are wise, will give their managers and branch managers (foi branches see p. G9) a good deal of power in this matter. Get good managers, and trust them in minor matters ; give them power over those below them, if you think they will use it well, and while always willing to investigate complaints, show the employes that you do trust your manager. If the committee as individuals listen to complaints of shopmen, clerks, 54 WORKING MEN CO-OPERATORS. [chap. and others, they may do a great deal of harm. Branch managers should be made as far as possible responsible for what goes on at the branches, and, if possible, sliould have a pecuniary interest in the success of the branch. 9. Bonus to Employes. — Many societies have begun this plan, and, under pressure from their mem- bei's, have given it up. It may fairly be said that, if Co-operators believe in the principle of the workman having a pecuniary interest in his work, they ought to apply it to the shopmen in their shops. Many Co-operators show by their votes in meetings and by their practice that they do not believe in the principle. On the other hand, many do. Some committeemen would gladly apply the principle if they could prove to their members that a real saving is effected by it. If it is to be conceded as an abstract principle of justice, not many societies will carry it on this ground. It is worth considering whether the plan, which has been tried in some societies, of giving a bonus on wages, at the same rate as the dividend declared — e.g.. Is 6d. to .3s. in the <£, accoixling to the success of ti'ade in each quarter, is not a mistake, except perhaps in very small stores. Rather it would seem that each small group of employes should be made to feel a direct personal interest in the department or branch in which they are engaged. Then they have much moi'B chance of getting something by their eflbrts, than they have as individuals of i*aising the general dividend for the whole store Id. or 2d. in the X, which will bring tliem but little after all. Where de])art- mental accounts are kept, it ought not to be dillicult. If societies and committees would turn their attention more fully to tliis subject, and not listen to isolated instances of failure, it is probable that they would find that there is a good deal more in this matter of profit-sharing by employes than has yet been found out. The number of employes employed in distributive work in stores is about 13,000. Almost all societies close the store for .one half-holiday in the iii.l THE DISTRIBUTIVE SOCIETY. 55 week; for the employes, generally not on Saturday, In addition to tliis unusual privilege, the hours of labour are usually considerably less than the hours in private shops. The Saturday half-holiday movement for shops was largely inaugurated by Co-operators. They felt that shopkeepers had as much right to the holiday as they had. For rules for shopmen, see a useful paper at the end of " Model Book-keeping." 10. Average Working Expenses. — These vary a good deal ; in some stores they are as high as 7^ per cent, or more, in some below 5 per cent., but a great deal depends on local circumstances. It is impossible to lay down a rule. Inquiry should be made from societies in similar circumstances. 11. Stock-taking. — Quarterly stock-taking (or half-yearly where the accounts are only made up and dividends declared half-yearly) is a most important matter, and it may become a most fruitful source not only of error but of fraud. It must be done on a systematic principle, and the members of committee should personally superintend it. Stock ought to be taken at cost jjrice, unless the goods are deteriorated or the market value has gone down. In that case, they should be taken at what they wo\dd cost to buy at the time stock is taken. In no case ought goods to be put at more than cost price. To do so is tc appropriate the ])rofits before the work of selling has been done, and the expense of selling provided for. v.— BOOK-KEEPINa, BALANCE SHEETS, APPLICA- TION OF P110FIT8, DIVIDENDS, &c. 1. Methods of Book-keeping. — The importance of good book-keeping is fully recognised by Co-operators. In the earlier years it was difficult of attainment. Now, it is comparatively easy, thanks to the un- wearied elibrts of a few men, who, after having patiently educated themselves in it, gave other secre- taries willingly and unstintingly the benefit of their labours. An "Easy Method of Book-keeiDing " was 53 WORKING MEN CO-OPERATORS. [cn.\p. {)uljlished by the Southern Section in 1878; but this has been superseded by the Manual of Book keeping issued by the Co-operative Union in 1880. The very completeness of this Manual frightens some inexperienced Co-operators, so the following selection from the forms given in the manual will be useful as a guide to a new society. Page in Manual 1. Members' application forms ... ... ... ... ... 2 2. A guard book, iu which to paste and register the forms. (This, to save expense at the outset, may be made of a quire of shop paper stitched together) 3. Members' share pass books ... ... ... ... ... 4 4. A share ledger ... ... ... ... ... ... ... 12 5. A contribution and withdrawal book ... ... 8 & 9 6. Notice form for withdrawal ... ... ... ... ... 10 7. Notice form for transfer 16 8. Transfer forms ... ... ... ... ... ... ... 17 9. Transfer register. . . ... ... ... ... ... ... 17 10. Alphabetical list of shareholders ... ... ... ... 2 1 1 . Nomination books (containing nomination to shares and loans in case of decease of owner, and revocation and variation of the same) ... ... ... ... 15 & 16 12. Summary of members' claims . . ... ... ... ... 11 13. Cash book 35 14. Shopman's takings book ... ... ... ... ... 28 15. Guard books in which to paste invoices and cash receipts. (This also, if nec^,^ary to save expense, could be made of shop paper) 16. Order book 52 17. Goods receiving book ... ... ... ... ... ... 53 18. Trade and general ledger ... 45 19. Stock book 50 20. Balance-sheet book 64 to 68 These forms and books are supplied by the Co-operative Printing Society, Manchester. 2. Balance Sheets. — The following simple form of balance sheet is extracted f ioui tlie more elaborate one in tlie Manual. The first {)age is usually occupied with the com- mittee's report, "Instructions how to join tlie society," and a number of notices ; the second and third pages are occupied with the accounts ; the last page is occu pied with the auditor's report certifying the accuracy of the balance sheet, and the notice of the time, place, and programme for the quarterly meeting : — III.] THE DISTRIBUTIVE SOCIETY. 57 ■^COCOtDOSi-lOOOCO ^ 3 : r- Ul CO CO . -* ir> t~ rt , O CO O C-l .^ _cj bfl 42 ^o i^o g fcoow H'3 1" II 1 1~^ ^.H .t: R O mP ^ -^^ U5 -H tH O O 'O k «■ ■« «5 ur t~ ■* wc r-i H=^ CI CO ;o c-i -< r.- o mo" o . a CD ^ t^ -f C^I — ' cc — ^ o ^: 'H ^ 1 '"' CO o H : : o "Si . . pqoi 2 3 •43 • ■'O ^ : a*; d ^ 2 H Xi '^ ja o o a ^ occHc >> - - P O O o Q o> CO o — I OS ^ ■* ■* o t^ CO —1 •— fl 2 I -.cl J; *^ • i. • § 5i2 : S CO o &a« p M HH -J ^ * 0*-4 CD Ol 5 f 2 cj CO a "S m d ® ,^ « a ^ to m -u (u . i«! * ci 58 WORKING MEN CO-OPEBATOBS. [chap. ^ >0 ■* «0 O) oj C5 O —I ■* Crt ^ o o o CO S3 ^ -5 ^ M w c» m t»> - - - fq ' " " C(J o o o CO t^ o O ■<*< 1-H O0;00000f-H(M-*CO-* 0-<*- d a*^ .o*^ r- o a .&■ O O a tn ^ g a'>: oj 3 o c •- a^-^'C o _ a tc j3 c3 to -a CO WORKING MEN CO-OPERATORS. [chap. 3. Auditing. — The auditing of accounts is not yet all it should be, although great advances have been made ; and the publication of the " Manual of Auditing"* will cause further improvement. An inexperienced auditor will do well to act on the following hints. Ascertain that stock has been care- fully taken and checked. See that everything is priced at the cost, or a less value, and that all deteriorations of stock have been amply provided for. Count the cash in band. See that proj^er vouchers have been received for all payments ; and if not sufficiently master of book-keeping to adopt short systems of check, by comparing the totals of different accounts, check every individual item from its first entry until placed in the balance sheet. Compare the members' pass books with the ledgers. See that the total of the members' accounts agrees with the amount placed in the balance sheet. Ascertain that all goods received and taken into stock are duly paid for, or else taken as a liability, and also that all sums due by the society to merchants and others are taken as liabilities. The best plan is to send a circular note at stock-taking to all persons the society does business with, asking them to advise the auditors what sums are due to them by the society. Examine the com- mittee's minute book, to see that all expenditure has been duly authorised, and inspect the deeds and other securities of the society. 4. How to Criticise a Balance Sheet. — Members should insist on the balance sheet being issued a week before the meeting. They should then compare it with previous balance sheets, and carefully note any difl'erences in amount of sales, stocks, expenses, and tlie like. These ditf'erences .should be the subject for questions civilly put at the quarterly meeting, and made as concisely and distinctly as possible. Tlie answers made should be carefully noted for future use if necessary. The growth of fixed stock, and the * This is about to be i)ublisLeu'this year (1884) by the Central Board. III.] THE DISTRIBUTIVE SOCIETY. Gl tendency to put repairs to that account, ought also to be carefully watched. It is well for members to make inquiries respecting the state and practice of neighbouring societies, and to study the weekly criti- cisms of balance sheets in the News. The safety of societies depends on the energetic watchfulness of its members in these matters. In the sample lialance sheet at pp. 57, 59, it will be noticed on examination that the stocks at the end of the quarter are much lii;hter than at the beginning. This would be a fair sul)ject for a question. The answer might be, "We bought heavily of cheese and butter because the market was advancing. We are now cleared out. This makes the diflerence in stocks, and the successful speculation has made us heavier profits than usual." An answer like this ought to be satisfactory. Again, a member might ask why £20 was placed to the reserve fund. The reply might be, " We have made exceptional profits. We are in- creasing our business rapidly ; we shall some day have to buy new premises ; and we wish to make the society as strong and safe as possible." The chairman might even adel that " the society ought not to be satisfied without a much larger reserve in proportion to the share cajjital." Members ought to be satisfied with such an explanation, and should encourage prudent committees to amass large reserves. A member might ask why the balance sheet did not show the separate stocks, and also the amount of profits made by each department, viz., grocery, drapery, and boots and shoes. The chairman miglit reply : — " It will cause a great deal of extra work to the secretary, and we shall have to pay him extra. We want to be economical ; and, besides, we think it may arouse jealousies if the separate profits are published." An answer like this ought to be con- sidered unsatisfactory, and a member would be justified in moving a resolution that separate accounts of each department be published in future, on the grounds (1) that the members can then see that the stocks of 62 WORKING MEN CO-OPERATORS. [chap. drapery and boots and shoes are kept within proper limits ; and (2) that these departments are much more likely to be well managed when they cannot have their mistakes or shortcomings cloaked over by the grocery department. A promise from the chair- man that the committee would consider the matter during the quarter should insure the withdrawal of the motion ; but if no readiness to concede the point is shown, the motion should be pressed to a vote, unless the members generally seem not sufficiently familiar Avith the question to be able to give an intelligent decision. In that case a notice to make a motion on the subject at tlie next meeting is the most advisable course. 5. Application of Profits. — Declaration of Divi- dend. — According to the Model Rules, pi'ofits are allotted in the following order: — (1) Interest on loans and deposits ; (2) Dividend on preference shares, if any ; (3) Reduction of fixed stock ; (4) Reduction of preliminary expenses (this should not last beyond a year or two) ; (5) Payment of dividend on withdraw- able and ordinary shares; (6) Reserve Fund ; (7) Edu- cation Fund ; (8) Subscri})tion to Central Board, social, and other purposes ; (9) Dividend on purchases, and bonus to employes. An extract from the ordinary form of notice to members on the quartei^y balance sheet might run as follows: — "To the members. Gentlemen,— We beg to submit to you the balance sheet. (A comparison of trade with the corresponding quarter of the past year here follows, and a statement of increase or decrease of members.) After allowing £1 Os. 4d. for interest on capitid ; £4 7s. lOd. for depreciation of fixed stock ; X20 for the reserve fund ; £4 5s. 2d. for the educational fund, at 2^ per cent., as per rules; £\ Is. subscription to the Children's Hosjntal ; £\ Is. subscription to the Co-operative Lifeboat ; £\ sub- scription to the Co-operative Union, and £4 bonus to employes — the nett profit amounts to £145 19s. 2d., which we propose dividing thus: — £10 12s. bonus III.] THE DISTRIBUTIVE SOCIETY. 63 on non-membei's' purchases, at Is. in the £; .£132 12s. dividend on members' purchases, at 2s. in the £, ; leaving a balance of £2 15s. 2d. to carry forward to next quarter." The great importance of an educational fund has been alluded to. Subscriptions to public and benevo- lent purposes become more and more the duty of Co-operative societies as they increase in wealth and occupy the position of capitalists. The chief points which require special notice here are — reduction or depreciation of fixed stock and reserve fund. 6. Depreciation of Fixed Stock, &c.— Depreciation means the wiiting off quarter by quarter a certain proportion of the amount that buildings and fixed stocks have cost to allow for loss by wear and tear in use. The amount allowed is generally in excess of the real loss occasioned, and this excessive allowance constitutes a useful form of reserve which strengthens the society. Some committees, by carrying re- pairs and renewals of plant to fixed stock account instead of to expenses account, weaken the position of the society. A new van, if additional, might be carried to fixed stock, but certainly not if it were bought to replace an old one. Wise and far-sighted societies and committees will steadily and regularly depreciate to the full always and at all costs, without thinking about how much the dividend is going to be in any given quarter. When a time of trouble comes a society with well depreciated buildings and fixed stock is often able to stand in consequence. Some societies depreciate on original value, some on the depreciated value, e.g., first year 10 per cent, on £1,000; second year, according to one plan, 10 per cent, on £1,000 = £100; according to the other, 10 per cent, on .£900 = <£90. The former is the best and most prudent rate of deduction ; while it does not look so large in figures it is more efficient in practice. Two and a half per cent, on original value is equal to about 5 per cent, on depreciated value. As to the rate of depreciation, (1) land is depreciated in some societies 64 WOEKING MEN CO-OPERATORS. [chap. 2i per cent., in some not at all. (2) Buildings are depreciated fiom 2|^ to 5 per cent. (3) Fixed stock should be depreciated not less than 10 per cent. Some Co-operators object to any depreciation of land or buildings, but it is most important to remember that a Co-operative store, built to meet special require- ments and in a peculiar way, is by no means worth in the open market what it may be worth to Co- operators. The members' confidence is strengthened by a good depreciation, and it is well to bear this in mind. 7. Reserve Fund. — Some members say. Don't have a reserve fund ; let each generation meet its own difficulties. This is a most penny- Avis' and pound- foolish policy, not based at all on the true principles of Co-operation. The first object of a store should be to be sti-ong to meet a panic or an evil hour which may arise at any moment. A good reserve fund is a pillar of strength. Members should be so placed that they can have their money when they want it. This can only be done by having a reserve fund pi'o- portioned to the amount of share capital, and the amount tied up in buildings. Reserve funds should not be used except at a time of real trouble, and any committee aiming at popularity by increasing the dividend out of the reserve fund should be discredited at once. Some societies very wisely carry, if neces- sary, an amount equal to 2 or 3 per cent, of share capital to the reserve fund each quarter, and aim at always keeping up the reserve fund to at least 10 or 15 per cent, of the share capital. Members know that the iuterest on a good re.serve fund goes to swell their interest and dividends, and this gives them a real strength. If the reserve fund is equal to 10 per cent, of the share capital, every £ that a member invests in the store is worth 22s. 8. High or Low Dividends. — A high dividend is a great attracticjn, and increases the savings of Co- operators. The first object of the committee will be to manage with economy, but a good deal can be done in any case towards lessening or increasing dividend. lir.] THE DISTRIBUTIVE SOCIETY. Co Prices, notwitlistancling local custom, can be pushed up a little ; selling a lower quality of goods will raise the dividend, if nothing is laid by for reserve fund, and if the buildings and fixed stock are not amply depreciated, this leaves more for dividend. In some societies no dividend is given on some articles, e.g., sugar, and a separate dividend is given on some departments, e.g., butchery, and hence the general dividend is raised. There may be good i-easons for this policy, but an all-round dividend on everything, if possible, and a steady dividend not vaiying too much from quarter to quarter, is preferred by many experienced Co-operators. Committees ought not to try to curry favour by aiming at high dividends to the exclusion of other important considerations, such as keeping up a high quality in the food, the clothes, and the like, that are sold. But members appreciate a good dividend honestly earned more than a trifling reduction in price, and it encourages thrift. 9. Unclaimed Dividend. — This is either put back into the profit account, or else is taken to reduce the fixed stock or swell the reserve fund. Stamp Duty. — Societies are not exempt from any stamp duty. They are liable, like all other trades. The exemption was taken away in the last Industrial and Provident Societies Act of 1876, at the express reipiest of the Co-operative Union. Income Tax. — Societies are not liable to pay income tax in bulk, like joint-stock companies, unless, like them, they limit the number of their members This is not with a view of giving any privilege to societies, but to relieve the income tax otticials from an unprofitable duty. If societies %vere assessed in bulk, almost all members would individually be able to claim exemption. The Commissioners have power to inspect the books to see if any individuals are liable. 10. Nomination of Persons to whom Money in the Store is to be Paid upon Death. — The new Act obtained by the Co-operative Union in 1883 provides K fiO WORKING MEN CO-OPERATORS. [chap. for members instructing their society to whom shares are to be paid on their death. Amounts up to £80 can be dealt with without legacy duty or probate dues. VI.— GROWTH AND DEVELOPMENT OF THE SOCIETY. Under this head some of the more general questions which will constantly be coming in one form or another befoi'e a society as it grows will be treated. 1. Departments. — ^It has been taken for granted that groceries and provisions will form the first de- partment of the stoi'e. In practice this is almost invariably the case. («) Hardware, Brushes, Crockery, &c. — This department can he easily attached to the grocery department. It is simple to manage. The goods can be obtained from the Wholesales, who may even agree to the principle of sale on apisrohation or return. The stock is turned over slowly, but a good profit attaches to it as a rule. (6) Bakery. — This is one of the most successful branches of Co-operative Stores in those iJai'ts of the country where members expect shop bread, and do not bake at home. A store will begin sometimes by arranging with some baker who will supply them at a wholesale price, say from a halfpenny to a penny per quartern loaf less than the retail price. Generally some one is found willing to do this, notwithstanding some prejudice against the store. As the store begins to do well, it will build or hire a bake- house. A small society will sometimes begin with baking only two or three sacks of flour (that is, at the rate of about ninety- two quartern loaves to a sack), and in this case the storekeeper is also a taker. At the lowest estimate, in order to paj^ for a baker and his assistant, the store must bake at least ten sacks a week. Many stores have bakehouses of the best kind, fitted with excel- lent machinery, patent ovens and gas-engines, and do an immense business. Where bakeries exist delivery is universal. In some societies, the members who live near the store and fetch the bread claim to have their bread a halfpenny cheaper per quartern than those to whom it is delivered. As a rule, this demand is resisted, unless the custom of the shopkeepers makes it necessary. The weighing of bread carefully and giving full weight must be insisted on by the committee if they are bent on carrying out the true principles of Co-operation. It should be here noticed that the ^oing round of the baker's cart has sometimes been the cause of the introduction of the thin end of the wedge of credit, which has brought so many societies to ruin. The man vfith the cart has allowed customers to get a week behind, and has not insisted on cash payment. This should not be allowed, and the man should be held responsible for the money due every day. nr.l THE DlSTPilBUTIVE SOCIETY. 67 (c) Boots and Shoes. — The Wholesale societies which manu- facture their own boots and slioes give facilities for every society, however small, to enter into this business. The supply is chiefly ready-made, though boots are also made to measure. Some societies engage a shoemaker to make boots to measure and to do repairs. In this case a small branch of what may be called " domestic production " arises. Clogging is a local industry, con- lined to some parts of Lancashire and Yorkshire. The dogger, as a rule, is in the emi^loymeut of the store. (rf) Coals. — It is a common practice, in districts where there are no collieries, to begin by making arrangements with a local dealer to execute the society's orders at a wholesale price. When near collieries, societies are soon able to help to make a horse and cart pay by drawing coal for members. When societies not near col- lieries grow large, they order truck-loads or ship-loads, and many own trucks, barges, or ships of their own. There is at least one instance of a society which does a business of over 1,000 tons a week with its members. We now" come to two departments, both of which have given much anxiety aud trouble to many a Co-operative committee, and contintie to do so in many cases, viz., drapery and butchery. (<0 Drapery, Millinery, &c. — There are certain arts required in appealing to the lady members of Co-operative Stores which have not been gi-aspcd fully by Co-operative managers and shopmen. Further, great care and knowledge is required in buying the stock. In goods wliich belong to a fancy or fashion trade care must be taken not to have a larger stock than is needed for the season. Societies must begin with the heavier goods— caHcos, flannels, blankets, sheetings, and the like, on which there is not much risk of depreciation, and go on gradually to the other articles. Considerable help and guidance can be obtained from the Wholesales in this matter. In the early part of the quarter there is generally an increase of di'apery aud boot and shoe busi- ness, as a good many members buy clothes with the dividend. {/) Butchery. — ^In this matter, as things are at present, the WTiolesales can give no help. It is a diihcult business for a general manager to get a close acquaintance with. Some of the farmers and stock-dealers know how to take advantage of an inexperienced buyer, or how to make arrangements with some Co-operative butchers behind the manager's back. It has not been found so easy to get satisfactory head butchers as to get satisfactory heads for grocery and other departments. Butchers can easily set up in business for themselves. A journeyman butcher will conduct a business for himself even if he only makes a verj' Uttle bej'ond what would be journeyman's wages. As a matter of fact, for these and other reasons, few societies do as well in this department as in others. Some have closed their butchery department; a good many give a separate and smaller dividend for butchery. It should bo remembered that any dividend is better than nothing. A dividend of 6d. in the £ on butchery will always justify a store in carrj-ing this department on. Ultimately butchery will succeed as well as other departments, perhaps. If Co-npcrators get to the point of having small fanns of their own, the ditlictdties will be much less than they often are at present. 08 WORKING MEN CO-OPERATORS. [chap. {g) Tailoring. — Ready-made clothes are very common articles with working-people, and this gradually forms a department of the business of some societies. Some few societies employ tailors of their own. (A) Furnishing. — Some societies supply to order through the Wholesales or otherwise by means of illustrated designs. Carpets, curtains, crockery, and hardware may come from the drapery and hardware departments^ (/) Milk, Dairy, and Farm Produce. — A few societies do a veiy good business in milk. It is a most important and most profitable department if well managed. To buy milk at 8d. or 9d. a gallon from the fanns, and retail it at Is. to Is. 4d. a gallon, gives a good margin for profit. Great care must be taken with the sanitary arrangements, as milk carries infection very easily. If some societies could see their way to feeding their own cows, and rent- ing small pieces of land, even at a high rent, near their village or town, they might probably, with a little care, do well. In market- gardening, too, there is a considerable opening possible. (k) Beer and Spirits.— A great number of Co-operators being total abstainers, this department would be looked upon with great disfavour. As a matter of fact, there are not twenty societies in the whole of England and Scotland with this depart- ment. {I) Cottage Building— Penny Banks. — These may be con- sidered to be to some extent dejiartments of the society. Cottaye- huiUUmj will be considered elsewhere (see Chap. VIII.). Penny B/ft/ks are frequently very useful in encouraging provident habits and attaching young members to the store. In some societies an annual treat is provided for the members of the Penny Bank, which is a very good practice. General. — As a substitute for some departments, some societies contract with local tradesmen to supply- goods at a discount, wliicli enables a dividend to be given. Members are often doubtful how far prices are put up to make up for the discount, and the advantages hardly compensate for the dissatisfaction often caused. It is better to wait till a department can be started. Speaking generally, "make one department a success at a time, keep the accounts of the depart- ments separately, and publish the profits of each department in the balance sheet," would be the advice of many Co-operators. The number of the chief de- partments carried on by Societies is as follows : 1,185 societies do business in groceries and provi- sions, 772 in drapery, 715 in boots and shoes, 333 in coals, 211 in butchery, 188 in baking, 185 in furuisliiuij;, 137 in hardware. 7(1 in tailoiiiiii;. III.] THE DISTRIBUTIVE SOCIETY. f.9 2. Branches. — It is a well recognised policy to start branches of an old society instead of new societies, if the distance is not too great. Confidence has been established in the old store ; it has the requisite capital and experience, and is more likely to succeed. On the other hand, there is much education gained by piloting a store through its difficulties, and by the in- dependent nianngenient of a separate store by a re- sponsible committee. It is difficult to suppose that there are the same number of Co-operators trained in the higher princij^les of Co-operation in one of the giant societies, as would be trained if such societies were broken up into more moderate sized ones. A huge society with branches spread out to great distances cannot give its members that sense of tmity, that combined desire for self-improvement, and social and educational advance, which may be obtained in a smaller society where the members more thoroughly know one another. This is a real disadvantage. Before starting a branch the committee must try to stipulate for a certain amount of trade in the neighbourhood, and must have regard to loss at the centre or at other branches in consequence of removal of custom to the new branch. Many Avould say that two miles from the centre is far enough for a branch. In practice branches are established, or the vans visit, at much greater distances. 3. Surplus Capital. — If a store is pro.sperous, the time is sure to come when it will have more capital deposited with it than it can employ in the business. Co-operators are always hoping for the time when there may be so many and such safe investments to be made in Co-operative productive enterprises that no society need ever be at a loss. That time has not yet come. Meantime some such investments are available, and the chief ways of employing surjilus capital now in use may be enumerated as follows : — 1. Building or purchasing the store and branch buildings. 2. Building cottages for members. 3. Lending money to the Wholesale societies. 4. 70 WORKING MEN CO OPERA TOES. [cnAP. Investing in Co-operative corn mills or Co-operative productive societies. 5. Investing in railways (this might give an opportunity to societies to use their influence in behalf of railway employes). 6. In- vesting in miscellaneous stocks and shares (some investments in mines, &c., have turned out very badly). 7. Repaying the capital back to members, and telling them the society will not have the amount they may legally entrust to it. This latter method is fatal to one of the chief and higher objects of Co-operation, and many Co-operators would say that the leaders of the movement should initiate means of investing capital safely as quickly as they are needed, without ever refusing a penny which members wish to leave in the store. To refuse capital appears to many Co-operators to be a most suicidal policy when the higher objects of Co-operation as a power for accumulating capital in the hands of the working classes are considered. It Avould be better, they think, to lower the rate of interest than to say to a working man, " Although you want to leave your savings with us, we won't have them ; you must take them away and waste them or spend them. You shall not leave in the store more than £30, or £50, or £100." This is what some societies have said and are saying, whereas by law a man may have £200 in his store, and his wife another £200. As yet many Co-operative societies have not enterprise or intelligence enough to see their way to employ the capital which they might have from their members if they would. This many think to be one of the weakest points in the whole movement, and earnestly hope that such a fatal policy will not gain ground, but rather that it will be abandoned. Not only the want of enterprise on the part of the committee-men, but the jealousy on the part of dividend-hunting members of their capital- holding brethren is to de])lored. It may be reasonable to insist on some small lixcd amount of purchases every quarter from all members, and this is frequently done ; III.] THE DISTRIBUTIVE SOCIETY. 71 but it is not wise to get rid of tlie capital for fear the dividend may be slightly decreased by the payment of five per cent, on shares. Plenty of caj)ital well invested is a pillar of strength to the society. 4. Deposits and Loans. — Deposits of muneyas shares which may have been saved in other ways, not only by dividend in the stores, should be encouraged. Loan capital should be encouraged also, and it is generally arranged that money accumulated as shares can be ])ut in as loan capital, so that a member can go beyond his ,£200 worth of shares by transferring part to a loan account. 5. Educational Department.— For this most im- portant part of the work of societies, see Chap. VII. It may be here mentioned that members should do all they can to help the circulation of the Co-operative News, which, if members will read it regularly, may develojie their interest in, and knowledge of, the movement very ra])idly. (See p. 126.) 6. Social and Recreational Gatherings. — It is a good thing to have these gatherings, and not at casual and irregular times, but at definite times in the year, so that members look forward to them. This makes a great difference to their success, ^ome committees do not take the trouble to hold them at all ; they look after the business, and leave social progress to look after itself. A tea party, with meeting to follow, at which there are both speaking and singing, is the usual plan. At the tea and in the singing, women and the Women's League can be of much use. Speakers are often invited from the Co- operative Board, A\niolesale Societies, or Guild. Local magnates are sometimes asked, if likely to be really in sympathy with the cause. 7. Conversation Rooms, &c. — Co-operative societies could, if they chose, develope I'ound themselves all the healthier intluences of working men's clubs ; discus- sions and debates will be of much value ; the influence of music and mu.sical gatherings is almost always good. Cricket clubs may be started, and a great deal 72 WORKING MEN CO-OPERATORS. [chap. niiglit be done (which i.ee.l not be identified with more purely educational work) to develope the social side of the work, which at present is comparatively so little advancing. It is to this work that the ability and vigour of men not absorbed in the business work of the society might be turned. 8. Relation of the Society to the Central Organisations. — All the best societies join the Co- operative Union, and support it well (see Chap. VI.). All true Co-operators, who have the welfare of the movement at heart, may well urge this on their fellow members. If we could see now what the Co-operative movement would be if there had never been a Union, a Central Board, a General Seci'etary, nor Congresses, nor any action upon Parliament through this machinery, we should see a soxTy sight. (For conditions of membership and the work of the Union see pp. 110- 113.) Some societies are strangely niggardly in their contributions, when the usefulness of the work is considered. To support the Wholesale Societies (see Chap. IV.), Corn Mills and Productive Co-operative Societies (see Chap. V., 12), the Co-operative Newspaper Society (see Chap. VIII., 1), the Co-operative Insurance Com- pany (see Chap. VIII., 2), both in the way of taking shares, and giving custom where possible, is both wise and right for those societies which really desire the welfare and progress of Co-operation, and therewith of their brother working men, and who do not wish to stand in a selfish or isolated position, whereby they may at any time themselves seriously sutFei-. VII.— SUMMING-UP OF IMPORTANT MATTERS. 1. Causes of Success and Failure. — {a) Caioses of Success. — (1) A clear under.standing and pex'foriu- ance of tlie duties of an ofiicer, an employ^, and a member; (2) competent and painstaking ofiioers ; (3) competent and trustworthy employes ; (4) proper security for tlie honesty and efficiency of the principal employes ; (5) amicable and earnest working together ; in.] THE DISTRIBUTIVE SOCIETY. 73 (6) promptitude and punctuality in business ; (7) impartiality, civility, and pleasant manners in the members and in the staff ; (8) generous treatment of the employes ; (9) judicious purchasing and careful regulation of the stocks ; (10) ready-money pur- chases and ready-money sales; (11) carefully regu- lated expenses; (12) judicious investment of all surplus capital; (13) ample depreciation of pro- perty; (14) ample reserve funds; (15) good book- keeping and auditing; (16) officers giving full and free explanations to the members' meetings; (17) members having full confidence in the officers. ih) Causes of Failure* — (1) Allowing the store- keeper to do as he likes ; (2) allowing credit to purchasers ; (3) bad book-keeping and auditing ; (4) bad rules ; (5) carrying repairs and renewals to pro- perty account instead of expenses account ; (G) com- peting with all the " cutting" shops ; (7) expenses too great for the business ; (8) employment of incom- petent persons ; (9) dishonesty ; (10) injudicious pur- chasing; (11) injudicious and frequent changes of policy ; (12) members purchasing away from the store; ^13) not taking ample security from persons in a position to misapply the society's effects; (14) permitting the manager to buy away from the Whole- sale Societies ; (15) inefficient officers ; (16) members being unreasonable and quarrelsome; (17) purchasing goods on credit; (18) overbuilding; (19) starting branches or new departments before the society is strong enough to bear the burden ; (20) waste behind the counter from bad stock-keeping or careless weighing. 2. Essential Points. — (a) The store is open to all ; {h) charges ordinaiy market prices ; (c) receives ready money only, and gives no credit ; {d) gives dividend in proportion to purchases ; (e) every member must have a share or shares, and receives good interest on * One thousand and sixty-one societies have become extinct since 18G2. This no doubt includes many which were never really started, but it includes many genuine failures also. 74 WORKING MEN CO-OPERATORS. [chap. them ; (/) all are equal in voting power, whether they have few or many shares ; {g) the store sells genuine articles, which are what they profess to be ; {h) the store has an honest manager and an active committee ; {i) the society insists on an efficient and intelliijent audit and stock-takinc;. 3. Statistics of Retail Co-operation. — The dia- grams on pp. 76 and 77 show the existing condition of retail Co-operative societies. These figures are exclu- sive of the Wholesale Societies, Federal Corn-mills, and Productive Societies. The totals including these will be found on page 12. NOTE. Co-operative Stores in Agricultural Villages and County Towns.— It would be a great mistake if it were supposed that Co-operation can floui'ish only in great manufacturing towns, dockyard towns, or towns where there are a special number of intelligent artisans working together in some trade. The following two instances of (1) an ordinary county and cathedral town, and (2) an ordinary agricultural village, show what might be done in a great many places : (1) Gloucester, established 1860; 3,500 members; annual sales, £78,500; annual profit, £7,200; share capital, £40,000; value of land, buildings, &c., £18,000 ; advanced to members to buy their own cottages, £12,000. (2) Harbttry, Warwickshire, established 1865, managed entirely by agricultural labourers; 600members; annual sales, £17,000; annual profits, £1,250 ; share capital, £5,500 ; value oi freehold land and cottages, £3,300. In county towns there is no valid reason against success. In some iigricultural villages the matter is different. Any one who considers seriously why the agi'icultural labourer has not adopted the Co-operative movement more than he has, will come ultimately, in all probability, to some such conclusion as this : that it is not a question of money (his wages arc in actual value not so far behind those of a good many Co-ojjcrators in the towns) ; nor is it a question of iiitellif/cnce (his work often demands quite as much versatility and intcdligence as that of many a town workman) — it is that he has so little to hope for, so little absolute security for the safety of his store if he starts ono. What often impresses town Co-operators wishing to help their countr}' brethren is (1) that they often cannot make a safe Btart ; (2) that even if they start, when they have begun to 111.] THE DISTRIBUTIVE SOCIETY. 75 save, the safest and best investment for their money is not in their power. (1) " You must not start to lit up a nice building for your store without a long lease or a freehold," says the town Co-operator. "But wo can't possibly get this," often says the country Co-operator. " You mean, then," says the other, " that after you have been going on well for some years and got a lot of your sa\nngs invested in i>lant, stock, buildings, and the like, if the landloi-d had a diftereu<'c with you your w-hole work of years might possibly be ruined 'i We do not run risks like this in the towns." (2) Or if a store is started, and is sa\ing smplus capital, " what shall w-e do with it," says the country Co-operator, " that is really safe h " " Do as we do," says the town Co-operator : " buy a strip of freehold or long leasehold land, form a building department of your store, and begin to build cottages for your own members. This will give them sometliing to work and hope for better than anything else you could think of, and they will not then be so anxious to hurry off into the towns. IMany of our people do it without ha^4ng such very large wages after all." " Impossible," often says the country Co-operator ; " we cannot get the land." There are exceptions, no doubt, but serious hindrances often stand in the way of country Co-operators which are not felt in the towns at all. INIany persons, not themselves agricultural labourers, who live in the country, \'iew w'ith sus^jicion, or, to say the least, do not encourage, any independent association or union among the labourers. If they would realise the enonnous educational value of association among working people with a Aaew of doing tilings for thcmseives, which no amount of benevolence, or of model cottages or model villages or reading-rooms can give them, and if they would ponder the words of Dr. Lightfoot, the Bishop of Durham, quoted on the title page, they might, perhaps, take a different view of the matter. 76 WORKING MEN CO-OPERATORS. [chap. COMPARATIVE POSITION OF RETAIL CO-OPERATIOW IN GREAT BRITAIN AND EACH OF THE SECTIONS. •ST EACH SQUARE REPRESENTS 100,000 IN MEMBERS, OR £100,000 OF SALES, CAPITALS, OR PROFITS. THE SQUARES SHEW THE ANNUAL SALES. THE SQUARES MARKED / SHEW THE CAPITAL. >> >. \ .. NO. OF MEMBERS. » >> o i> ANNUAL PROFITS. TTius in the Scottish Section {see helow) the Annual Sales are £2,650,000. The Capital is £600,000; the Number of Members, 100 000 ; and the Profits, £300,000. M h GREAT BRITAIN. 10 / / / -1 9 ^ / / / 8 / ^ / / 7 / / / / 6 ^ / / / / 5 X ^ / / / / •^ y^ / / / / 3 X / / / 2 ^ / / / 1 fcX, /_ / / / 12 3 4 5 6 7 8 9 1011 1213 14 151617 18 / / z A -- r^ X 1 / y / / / / / / 1 / / / / / - I / / / /^ 1234 123456789 10 123 rii.] THE DISTRIBUTIVE SOCIETY. 77 78 WORKING MEN CO-OPERATORS. [cuAP. CHAPTER IV. THE CO-OPERATIVE AVHOLESALE SOCIETIES. 1. The Eng-lish Wholesale Co-operative Society — Origin.— Various causes led to the fovmation of the English Wholesale Co-operative Society, of which the following are the most important. The success of the retail societies having aroused the jealousy of some of the private shopkeepers, they at- temjjted to persuade some of the wholesale dealers not to su})ply the stores, and threatened to take away their trade from any firms who refused their request. The smaller stores also had to contend with the difficulties arising from their ignorance of the qualities of goods, the variations in price, and the intiicate cus- toms of the wholesale markets. The existence of these drawbacks created a determination to overcome them, and this was strengthened by the desire of some of the larger societies to use their capital and their energies in securing the profits to be obtained by Co-02)erative effort in the wholesale trades. 2. Failiires. — The Christian Socialists started a central Co- operative agency in London, in 1850. It died in 1856. In 1855, the Rochdale Pioneers started a wholesale department. It gradually dwindled away. In 1863, a MetropoUtau and Home Counties Association was formed. This came to an end in 1869. A second central Co-operative agency was started in London, in 1872. It transacted both a retail and a wholesale business. The latter department was relinquished in favour of the Co-operative Wholesale Society, who established their London branch in March, 1874. A conference held at Oldham at Christmas, 1862, decided to establish a wholesale agency on the following basis: — An office to be opened at Liverpool or Manchester ; none but Co-operative societies to be allowed to become shareholders or purchasers ; the business to be conducted for ready money ; goods to be bought only to order, and to be invoiced at cost price, a small commission to be charged to defray the working expenses ; societies to pay theirowu carriage ; the capital to bo raised by every society taking up shares in proportion to the number of its members. The new organisa- tion was enrolled in August, 1863, under the title of the North of England Co-ojxirafivc Wholesale Industrial and Provident Society, Limited, and Im.siniss \vas begun in Manchester, in 1864. 3. Method of doing Business. — Theplanof srllingat cost price, and then charging a .small commission, was found unworkable in practice. Within six months of the start the ordinarj' system was IV.] CO-OPERATIVE WHOLESALE SOCIETIES. 70 adopted, of buying at one price and soiling at another ; the nett profit being divided among the shareholding societies in propoi-tion to the amount of their purchases. Non-shareholding societies were not, at tirst, allowed to share in the profits; in 186.5, they were allowed half dividend under cei'tain couditious, and in 1867 they were allowed it unconditionally. 4. Progress. — The table on the next page shows the progress of the English Society. 5. Selling Brandies. — In 1871, a branch was opened in New- castle, and in 1871 another was opened in Loudon. Sub-branches liave been opened at Leeds, in the Manchester district; and at Bristol, in the London district. The former was opened in 1S82, and the latter in 1884. Buying Branches. — A branch for the purcliasc of butter was established in 18(16 in Tipperary. Others were successively placed in Kilmallock, in 18G8; Limerick. 1869; Armagh, 1873; Water- ford, 1873; Tralee, 1874: and Cork, 1877. The shipments from these branches during 1883 were over 125,000 firkins, the value being £500,000. In 1875 a purchasing branch was opened in Liverpool. It is also a forwarding depot. A branch for the pur- chase of American produce was placed in New York in 1876. Its annual shipments are £300,000. In 1881 a fiurchasing branch ■was opened at Copenhagen. The shipments during 1883 amounted to £350,000. In 1884 a purchasing branch was opened in Ham- burg. The annual purchases are estimated at £250,000. In 1882 a special departimnt for the purchase of tea and coffee was created in London. It.s annual purchases amount to £300.000. 6. New Selling Departments.— At Manchester the work of buying and selling is now divided into ten departments ; at New- castle there are four, and in London there are three. The drajiery department at Manchester was started in 1873. It is the only di'parfment where the employes particijiate in the £rofits. The Newcastle Drapery was started m 18(5, and the rondon Drapery in 1880. The total yearly sales in these three departments amount to £300,000. The Manchester boot and shoe department was opened as a separate department in 1872. The Newcastle boot nud furnishing department was oi)ened in 1875, and the London boot and furnishing department in 1880. The annual sales in these departments amount to £170,000. The furnishing department at Manchester was separated from the boot and shoe department in 1876. Its annual sales amount to £30,000. 7. Manufacturing Branches. — In 1873 a biscuit and confec- tionery works at Crumpsall, near Manchester, was purchased. The manufacture of dry soap and soft soap has been added. The annual output is £25,000. In 1873 boot works were opened at Leicester. The annual output is £100,000 ; and the works are being enlarged, so as to enable the production to be doubled. In 1880, another boot works was opened at Heckmondwike. Its output is €20,000 anniudi}'. A soap works at Durham was pirr- chased in 1874. Its output is £16,000 a year. 8. Shipping —In 1876 the s.s. Plover was chartered for six months to run between Goole and Boulogne or Calais. At the end of the charter the Plover was pin-chased, and continued running 80 WORKING MEN CO-OPERATORS. [chap. a: .5 3 0) OJ KiaS •lOi-ieoCC^eO'M(MO-*t^b--*i— KMt^MCO . T*i lO •* M CO ^H to ■* C<1 1— I 1— I (N 1—1 1—1 KCcocot— Oi<3iooaooicoiOt--t^-*coo2coiceooooo>-OOoo-*t^tN-*i-.!r> ■ •*'cO00C5 >OOCO-*-f^^COCOCCiOC-lCiCDOiMCOOOCiCOOO 001- t0'OCOtO-t0 00Oi-iC' .oocC'HCO'Mi— ii—icoio-*ioa3^H-^a)i^co. 1-h' i-T c-oc5ra^e'M'MiOCC i-ii-llMC^ICJi— i'*0i00a50005(MC000.-liO i-ii-H— I'MCqiJ^C^COCOCO-*-* .-."^i— ia5(Moc>ooTiccoast^icococo>oooco0i;Dt^000s05O-^C . ^ • -t— r^co CO 00 oo e. ^ -I IV.] CO OPERATIVE WHOLESALE SOCIETIES. 81 until 18S0, when she was sold. A new steamer, named Pioneer, was built, and started running between Garston and Rouen in 1879. In 1881 the s.s. Comhrian was purchased to run between Calais and Goole. A line from Goole to Hamburg was started at the beginning of 1S8.'3, and another steamer, the Marianne £riffc/s, was purchased. At present the society runs one steamer between Garston and Rouen, two between Goole and Calais, and three between Goole and Hamburg. Four of these steamers are owned by the society. The society has its own offices at Garston, Goole, and Rouen. At Calais and Hamburg it employs agents. 9. Banking. — In 1872 a loan and deposit department was started. In 1S7G it was re-christened " the bank deiiartment." Its turnover on current account is about £9,000,000 annually. It has branches at Rochdale, Darwen, Leicester, and Newcastle. Arrangements made with other bankers enable customers to pay money to the credit of the Wholesale society, free of charge, at banks in 3G0 different towns in England and Wales. The profits ai'e divided among the bank customers in proportion to the amount of the interest and commission debited or credited to them. 10. Internal Management. — The head of each department, dep6t, or branch is responsible to the committee of management. Each of the three committees (Muncliester, Newcastle, and London) divide themselves into sub-committees, who take the direct super- vision of departments. The branch committees are subject to the general committee. There are also mixed sub-committees, which consist of representatives from the three committees at Manchester, Newcastle, and London. It is customary to have joint meetings occasionally of the members of all three committees. The Scottish committee also attends or is represented on these occasions. Stocks are taken and the accounts closed quarterly. An unusually full balance sheet is published. There are four auditors, elected by the shareholders. The auditors have command of ample clerical assistance. Every department is charged with its own working expenses. 11. Losses. — The society has sustained some severe losses by investment iu shares or loans with Co-operative productive associations or with working-class joint-stock companies. These losses amount to £G6,000, the whole having bcpn written off since 1876. The losses from bad trade debts amount to £7, 154 on a total trade of £30,000,000. 12. Reserve Funds and Depreciation of Property. — The table on p. 80 will show that the foraiation of a strong reserve fund has been constantly kept in view. Another reserve has been fonned through the society itself insuring a large portion of its fire, guarantee, and marine risks. This fund now amounts to £22,000. Laud, buildings, and fixtures are depreciated as follows: — Land at 2^ per cent., buildings at 5 per cent., and fixed stock at 7i per cent., off their original cost. 13. The Rules. — The rules provide for the following, among other matters :— («) The society may caiTy on any business except working quan'ies. 82 WORKING MEN CO-OPERATORS. [chap. (jb) Any registered societj' or limited liability company may become shareholders. (c) Quarterly meetings and balance sheets. {(l) Societies must take up one £5 transferable share for every ten members ; Is. per share is paid on application. {e) Shareholders are allowed to send delegates at the rate of one for eveiy 500 of their members, or fractional parts thereof. Each delegate has one vote. (J') Shares are transferred at par free of charge. {g) The society has a lien on all shares or loans. (h) Profits are divided in proportion to the trade done, non- shareholders taking half. (i) The general committee at Manchester consists of sixteen members, and the two branch committees of eight members each. The latter send each a representative to the general committee. (k) The elections of committee-men are by voting paper, societies being entitled to as many votes as they are allowed df legates. Not more than one member of a society can be a member of the committee. {I) Quarterly meetings are held at the branches and at the central. A majority of the votes of all three meetings are required to carry a resolution. 14. Miscellaneous. — In 1866 a reserve fund was commenced. Since 1867 the committees' remuneration has been fixed at second- class fares and os. fee for each aUeudance at committee or sub- committee meetings, and the auditors at £40 a year each and second-class fares. The general committee's secretary receives £2 10s. a quarter; the branch and sub-committees' secretaries £1 10s. a quarter. For attendance at conferences railway fare and 2s. 6d. are given ; for deputations which involve staying out the night, railway fare and 12s. a day to cover expenses. In 1872 all the emploj-es were allowed to participate in the profits of the society. In 1875 the grant of a share of profits to employes was dis- continued. In 188.3 letters were received from the Queen and Prince of Wales acknowledging the receipt of the Wholesale Annuals, and expressing their approval of Co-operation. In 1883 the total investments of the Wholesale in land, buildings, and fixtures for trade purposes were £295,000. Average attendances of delegates at members' meetings : — 1864-73. — 1.')4 delegates, representing 67 societies. 1874-83.-353 „ „ 182 Ten committee-men have at different times resigned to bccomB employes of the society. 659 Co-operative societies in England and Wales are share- holders, and 801 societies in the same area are supplied with goods. 15. The Scoltish Co - operative Wholesale Society. — In 1864-8 conferences were held in Glasgow to discuss the ad- visability of starting cither a brroductioii of wealth. But the distinction between the "distributive" store and tlio "productive" manufactory is sufficiently clear to be useful for all practical purposes. 86 WORKING MEN CO-OPERATORS. [chap. couiiection (1st) with the stores and (2nd) with tlie Wholesale societies. (1) The stores, being banks, constantly acciiiuu- late more capital than they can employ in the shop, and then the question arises, " What shall we do with if? Shall we not employ it in our own in- terest in production, or must we invest it in private trade, or throw it back on our members to be perhaps wasted ? " (2) The Wholesale societies, besides their foreign expenditure, spend large sums in England among pri- vate traders and manufacturers for all kinds of articles of domestic use wanted in the stores. Shall they not manufacture and obtain for themselves the manu- factui'ers' profits 1 These two questions will continually arise so long as the Co-operative movement exists. So that it will be understood that this is not with Co-operators a speculative question, as it is with the Political Econo- mists, but a question of pressing and constant interest. But while the art of managing a distributive store can be reduced to certain fairly definite rules based upon experience, it is not so yet with Co-operative pro- duction. This has been, and still is, a subject of constant discussion and controversy among Co-opera- tors, and sometimes jjerhaps controversy has hindered progress. We shall try to indicate, so far as a small space will permit, the views that have been held on the question, and shall then show what Co-operative pro- duction is going on at the present time. And as Political Economists liave devoted much consideration to this subject, it will be well first to give a short account of what some modern Political Economists have said, for though Co-operators have not always agreed with their conclusions, they have always heard witli interest Avhat the economists might have to say. 2. Views of Political Economists. — We sliall here give the views of some representative modern econo- mists on the subject of profits and of Co-operative v.l CO-OPERATIVE PRODUCTION. 87 production.* At tlie Siiine time, we should say tliat we do not make ourselves responsible for the views here stated, and also that on some points many Co- operators would diiler from them very considerably, especially as to inteivst, earnings of management, the lending of capital to men who have none or little, the tendency of industry in the despotic, not the democratic direction, and other matters. (a) Profits. — Mauy economists would say, as has been often remarked by Co-operators and others, that to speak of the antagonism of hibour and capital, as that wliich Co-operative production is meant to remove, is to use words in a loose sense ; that it is better to speak of the antagonism of employer and employed. Capital is no man's antagonist. The proper share of the capitalist, as capitalist only, is interest. The share of the capitalist and employer together, who are often the same pei'son, is usuallj' called profit, and when used in this sense it includes two parts: (1) Interest, which usually includes recompense for risk; (2) Earnings of management. (6) Interest. — In considering interest, if compensation for risk be left out, "there is a constant tendency, other things being equal, to the equality of interest in all branches of industry." Tlius, when we say that such and such a capitalist gets enormous projits, this may be true. If we saj'he gets too high interest on his money, this is not so likely to be true. Suppose the capitalist A is getting a profit of 15 per cent, on his capital in a business involving a small amount of risk. We might then suppose that he is getting perhaps 7^ per cent, interest (which includes 3^ per cent, for risk, 4 per cent, being about the average rate of interest in England), and Ih per cent, as wages of superintendence. Such a sub-division as this is of course but seldom made in practice. But supposing this to be the real state of the case, on a business with a capital of £100,000 there would be for the emploj'er and his partners £7,500 a year as earnings of inanagemeut between them, besides their interest on whatever portion of cajiital eaih of thcni might have in the concern. {(■) Earnings of Management. — With reference to earnings of management, this century, it is said, has brought about great char.ffes. " The business man of fonner times required industry, sounu judgment, and the power of dealing with men, but he could very often get on without much faculty for originating new schemes. But now the difficulty of the work of pioneering is increasing in many ways." f Much of the work of business is so dillicult, and requires so much sjiccial training, and such a rare combination of natural qualities, that the earnings of manage- ment got bj^ it may be very high without there being many men who can do the work and get these high earnings. And capital * The statements here made are borrowed for the most part ^artlj^ from Professor Walker'8 "Political Economy," and partly from Mr. and Mrs. Marshall's " Economics of Industry." t Marshall, p. IH. 88 WORKING MEN CO-OPERATORS. [chap. is lent to meu with these special gifts. And though a man who works with borrowed capital will in one form or another pay a high rate of interest, yet, notwithstanding this, he seems likely to beat the man trading with his own capital.* Why? Because he will be content with very much smaller earnings of manage- ment. Thus, to take the above case, he might be willing to employ £100,000 a year borrowed capital, and only to clear £1,000 a year for it, making only 1 per cent., not 74 per cent., in earnings of management. The capitalist employer would not think it worth his while to have all the trouble of management only for 1 per cent. But a distinction may be made between two kinds of business : (1) those which are of a more or less routine kind ; (2) those which involve speculative enterprise, or special "engineering" or administrative powers. (I) Joint -stock companies are especially likely to succeed in businesses where there is a good deal of routine. Even if it be true that they will " almost always be managed vrith less energy and economy than a similar private business in able hands," they can get on ^vith a much lower payment for earnings of manage- ment than would remunerate a wealthy capitalist. (Much less even than 1 per cent, on the capital is the pay for management of Co-operative com mills, or Oldham spi nnin g companies.) And so "Joint-stock comiiauies have a monopoly of railways and other undertakings which require enomious capitals, and they are fast pushing their way in all businesses in which large capitals can be managed chiefly by routine, and in which there is little need for bold and speculative enterprise." -t* 2. On the other hand, there are some businesses, administered by men with a special genius and capacity, in which profits appear to be the creation of the individual man which other men might try to create and would entirely fail. "The perfect temper of business is found in few men." " The continual increase in the complexity of business, and the continual increase in the amount of capital that can be employed in business under a single manage- ment are giving to business ability of the highest order the oppor- tunities of obtaining greater earnings of management than were ever heard of in earlier generations." The man who has these qualities in a very high degree will generally get capital. It is well known that, notwithstanding the enormous advantages in favour of existing employers (and their relations), such as their capital, business connection, patents, and the like, many artisans have risen, or are rising to be large employers. That part of the profits, then, here spoken of is created in this case by the exceptional abilities of the employers or managers, and the greater these abilities, the greater the chance their owners have of increasing their earnings. Thus, in a business of a special kind where this peculiar and special skill was required, the total i)r()fits niight be 30 per cent. Supposing that 7i per cent., as before, was for intcrc!.st, this would leave 22i per cent, for earnings of management. If one com- plained of this as too high, the answer, according to this theory, would be, "Put ninety-nine out of any 100 men you may name * Marshall, p. 13G. f Marshall, p. 138. v.] CO-OPERATIVE rRODUCTION. 89 to mauage tliis business, and tlic 22\ per cent., or the greater part of it, will disappear at once. It is a special return for a special kind of brain power," or what Professor Walker calls "master- ship of industry," which he considers to be on the increase. "Whatever may be true in politics," ho says, "the industry of the world ia not tending towards democracy, but in the opposite direction."* As to the amount of the earnings of these "captains of industry," with their special genius and power, obviously a good deal must depend upon how many of them are born and reared up to compete with one another in the future. " But," Mr. Marshall says, "the total amount of tlie earnings of management is not so high in jiroportiou to the capital employed as it used to be." The amount of the earnings of management in proportion to the capital employed will probably continue to diminish. "For the growth of education will increase rapidly tlie supply of business power that is completing for the aid of hired labour in pro- duction, ".f (jT) Co-operative Production (the economist's view). "In Co-operative production, the three parties to production besides the landlord (viz., the capitalist, the employer, and the laboui-er) would be reduced to two. The labom-er becomes self-employed, borrowing capital, if necessary, as he may want it, and p.iying interest for it. Interest, the share of the capitalist, remains as before, but wages and i)rofits become united in one person, that is, the laboui'er, for the employer is got rid of. The whole significance of Co-operation as a scheme of industrial reform lies in this, that tlie labouring classes expect to divide among themselves the large amount of wealth which they now see going day by day into the possession of their employers as their protits. The labourers and capitalists may well and properly unite to do this if they can. Economically there is no excuse for the existence of the employer, except so far as he performs services to labourers and cajiitalists which they are not able to perform for themselves. Equitably there could l)e no excuse for the employer receiving profits in any degree except as he performs such services. The advantages of the scheme woxdd be a considerable pecuniary gain to the labourer, the power to produce independently of the will of the employer, the doing away with strikes, greater industry and carefulness in the use of machinery and materials, and a considerable stimulus to frugalit}'^ in consequence of the labourer having the opportunity of investing liis savings at once in his own business. But why has this scheme, proposed so long ago, sanctioned by the highest economicjxl authority, appealing directly to the self-interest of the labouring classes, advertised extensively in endless discussions relating to labour and wages, not been immediately successful on a large scale? The history of productive Co-operation alike in Frauce, where it may be said to have originated, in England, and in the United States, has been one of the most discouraging if not of the most disastrous character. The advantages are great, the difficulties are enormous." J "I see nothing," says Professor Walker, "which indicates that within any near future industry is to become less despotic than it now is. The power of the master * Walker, p. 7G. t Marshall, p. llo. + Walker, pp. 258,353. no WORKING MEN CO-OPERATORS. [chap. iu jjroductiou, the captain of industry, has steadily increased through the present century with the iucreasiug complexity of commercial relations, with the great concentration of capital, with improvements in apparatus and machinery, with the multiplication of styles and fashions, with the localisation and specialisation of' manufactures. I shall be heartily glad to see the working classes rise to the height of the occasion, and vindicate their right to rule in industry by showing their power to do so. But meanwhile it must be distinctly understood that nothing costs the working classes so much as the bad or commonplace conduct of business. Any cause which brings incompetent persons intothe management of business, or keeps them there against the natural tendency of the trade to throw them out, increases the profits of the success- ful employer, and is at the expense of the general body of consumers." * "The term Co-operative i^roduction, in its stricter use," says Mr. Marshall, "is confined to cases in which the working men and women employed supjjly a part at least of the capital reqxiired for the business, and take some share in its management. It may be laid down as a general rule that Co-operative workshops are not likely to succeed in those trades in which the work of engineering is difficult and important. For in such trades a board of business men is at a great disadvantage iu com j)eting with a single individual. . . But no Co-operative workshop has yet offered a sufficient salary to retain the services of a manager of first-rate ability, unless he is so much imder the influence of the Co- operative faith as to be willing to work for the cause at a less salary than he could get in the open market. Thus Co-operative •workshops have not succeeded in the past, and they are not very likely to succeed in the future in businesses that require much inventive jjower, such as many kinds of machine-making trades, or that depend much upon passing opportunities, and so require much knowledge of what is going on, together with quick decisions, and bold action, such as trades for making materials for ladies' dresses, in which the fashion changes quickly, or in which the profits are made chiefly by successful speculation. But in trades that easily fall into a regular routine, so that the employers' work is chiefly mere superintendence, Co-oiierators can make great savings by preventing the greater part of this work from having to be done at all. For Co-operators can keep one another to work, they can secure the efficiency of their own foremen, and other subordinate managers, and they can prevent waste and mis- management in many matters of detail. Co-operative work has succeeded in many trades that supjjly the ordinary wants of the working class, and seems likely to succeed in many more. It has m.iile liitlierto but little progress iu agriculture, although most of tlic conditio7is for its sticc^css are present there. But agricultural laliourcrs, even if they can g(^t command over the capital required for stocking a farm, cau seldom stand the brunt of several bad harvests in succession, and what is more important, their narrow school and social education unfits them to some extent for Co-operative work ; for ' Co-operation is the child of confidence ^ and ignorance i.s the parent of mistrust/ "f * AValker, p. '662. f Marshall, pp. 221, 222. v.] CO-OPEBATIVE PRODUCTION. 91 With some of tliese opinions, as has been said, many Co-operators may not agree. Our object licre is to state them ratlicr than to criticise them. Wliat is said about the difficulties of i-apid progress in Co- operative production is certainly coutirmed by the cxpciience of the last few years within the movement. AV'hile the national income is increasing every year at a rapid rate, Co-operative production has been almost at a standstill. There are, however, now some siijns of a forward movement. Having thus seen what the economists say, we may proceed to consider what various forms of Pro- ductive Co-operation are recognised by Co-operators. Before attempting to classify the 23ossil)le forms of Co-operative production, it may be well to notice two forms of production which do not come directly under this head, but yet are of considerable interest to Co- operatoi's, viz., industrial partnerships, and those joint-stock companies in which shares are largely held by working men. 3. Industrial Partnerships. — Arrangements insti- tuted by employers for paitnership in profits between themselves and the workmen have always been viewed with great interest by Co-operators. For those which were started about 18G5 — 70 and their failures see Chap. II. The subject has been much disciissed in various ways of late years (see especially the writings of Sedley Taylor, * who brings before English people accounts of what is being done in France), and in a few instances employers in England have niade begin- nings in this direction in the last few years. In some firms heads of departments, and in some cases workers also, are allowed shares under certain conditions. Thus arrangements of this kind have been made by the firms of Tangye in Birmingham, of Cassell and Co. in London, and others. The Decorative Co-operators' Association (40."), Oxford Street, London) has also been founded with a view of giving to working house * "Profit Sharing betweeu Capital and Labour," six Essays by Sedley Taylor (Kegan Paul). 92 WORKING MEN CO-OPERATORS. [chap. painters and decorators a direct interest in the success of the society, and ultimately a large share of the management, after the manner of the successful busi- ness founded by Leclaire in Paris (see p. 130). Pro- fessor Jevons is of opinion that neither capitalists nor trade unions look favourably upon such schemes. It will probably be found that if the value of the schemes could be demonstrated by marked success, such views, if they exist on either side, would be soon dissipated. 4. Joint Stock Companies, in which working men are largely shareholders. Of these the Oldham spinning mills are the most remarkable. It is roughly estimated that the number of woi'king men share- holders in these mills is about 10,000. There is no doubt that a good deal of the money invested by working men was originally saved in the two Co-opera- tive stores at Oldham. The views taken of these mills by Co-operators have been very various. It has been said by one who looks favourably on them : — "It is undeniable that such proprietorships are a great advance on the individual system, or even on co-partneries or companies of rich men. Wliatever distributes profits, so as to create comfort for the many instead of wealth for a few, is un- questionably a great gain for the community." Another has said : — "The shareholder in any of these companies has an interest only in procuring for his capital the largest possible dividend. He neither cares for his workpeople, their wages, nor tlieir hours of labour, nor does he care for t.lie consumer of his produce, nor the quality of the article produced." It is a remarkable fact " that the cotton ojieratives pi-efer, under present conditions of employment, not to invest their savings in the mills in which they work." 5. Various Forms of Co-operative Production. — We now proceed to consider what are tlie various forms of productive societies which Co-operators would generally consider to be entitled to the name Co-operative. Some economists would not give the name Co-operative to some of these ; but Co-operators v.] CO-OPERATIVE PRODUCTION. 93 are fairly well agreed to give the name to those societies in which the capital is that of working men, and which give a share of the profits to the customer, after the manner of the store, or to the worker, or to both. (1) The first form is where the whole capital belongs to the workers in the workshop ; where rules j)rovide for eveiy worker who joins the shop either bringing the money or accumulating it in divi- dend ; and also where, on leaving oil' work, the worker parts with his share. This is the case where the workers alone are con- cerned ; where they have taken the place of the indi- vidual employer, and no outside shareholders are allowed. The difficulty in such cases is to get the exact amount of ca])ital required at any time from the actual workers. In many foi-ms of industry it is an impossibility. (2) The moment we j)ass to the stage where the outside shareholder comes in, we introduce a new interest. The interests of workers and capitalists are not necessarily identical. In this case it is supposed that the outside shareholders are individuals. The workers are no longer the sole managers, and, should the non- working shareholders be in a majority, the worker's special interest may no longer be considered. (3) If we stai't from the point of view of the store, not from that of the individual, any store may begin to manufacture for itself, either employing two or three shoemakers or having a huge corn-mill of its own. In tliis case it rests with the store members to decide whether the workers shall have any share of the profits or not. All other profits, with this possiltle exception, come ultimately to the store mendjers them- selves. (4) There may be a combination of shareholding stores and shareholding individuals. The results for the workers will be the same as stated in (2). (5) There may be a combination of shareholding stores and shareholding individuals, the individuala 94 WURKING MEN CO-OPERATORS. [cuap. being workers, and no individual shareholders who are not workers being allowed. The results for the workers are the same as in cases (2) and (4). (6) There may be a combination of shareholding stores who do not allow any workers to be shave- holders. This does not exclude the possibility of a bonus to labour for workers (not in the form of shares) if the federated stores so determine. (7) Either of the Wholesale societies may do the work, instead of a federation of a few societies exclu- ding shareholding by workers. Here, again, a bonus to labour is not excluded. In both (6) and (7), methods have been suggested by which a limited number of shares might be allowed to workers, and there are various other possible modifi- cations. Having briefly indicated some of the more likely forms of productive societies which either exist, have existe'd, or have been frequently discussed, we have now to consider the o})inions which Co-operators have held and expressed on this subject of Co-operative production. 6. The Co-operators' Views. — This is a very important matter, whatever may be the wisdom or unwisdom of the views here stated ; for Co-operators are not influenced by economic treatises so much as Ijy the writings or speeches of their leaders. The practical question for Co-operators is this : how are they to investthe surplus capital of their stores? The amount of such capital at the present moment not being used in the work of the distributive stores may be reckoned roughly at £3,000,000. To get capital has not been so hard as to know how to use it. There have been two main forms of opinion bear- ing on the important questions of the management of the cajiital and the distribution of profits ; and these two forms of opinion must be called, for want of better names, the opinions of federdliats and those of individualists, according as the subjc.'ct is approached v.] COOPERATIVE PRODUCTION. 05 from the point of view of tlie stores (feileralisin), or from the point of view of the individual workei (individualism). 7. Federalism. — Those who start from the point of view of the store say, Working men have saved joint capital in the stores. Suppose you have a big store which has got £50,000 of capital to spare. Let it supply its own wants. It has got a shoemaker on its premises repairing boots. Let it make all its own boots instead of buying them. Let it tan its own leatlier. Let it have a farm, and provide its own milk and vegetables and its own beef and mutton. Let it grind its own Hour. Or, whereas no single store can do all these things, and as one place is better suited to one trade and one to another, let several stores combine, and let one combination or federation do corn-milling, one tanning, another shoemaking, another farming, and so on. Ox', it says, let the Wholesales, wliich are federations of all or most stores, employ the capital of the stores in their behalf, and do these things. Here you have working men employing their own capital to feed and clothe themselves. The work is the work of the working men consumei'S in their own interests. Every penny of profit made in the work conies back into the working man's store as interest on capital or dividend on consumption. The stores ought to be the only customers, supplying both the caj)ital and the trade, getting both interest and dividend. There ought to be no individual share- holders. You cannot trust them. You can trust the shareholding stores, which represent the general inte- rest of lai-ge bodies of working men. To the working man, as consumer, the profits of the manufacturing ought to come. Now, as for the workers in these works, they may or may not be members of a store ; that makes no difference. If they are store members, they get the same share of the profits through the store that other members do. But shall they i-eceive any bonus on labour ? By all means, if it can be proved to pay. Can they receive it in the form of 96 WOJRKING MEN CO-OPERATORS. [chap shares 1 No ; for there must be no individual share- holders. The works must belong to the societies alone. While the advocates of this scheme would warmly commend individual employers who give shares to their workers or foremen, they would not advise this where Co-operators are employers. The works are formed in the interests of the stores, who alone can supply adequate capital, not in the interest of individual workers. The whole profit must go back to the customer, unless it can be shown that the ofter of bonus to labour will create additional pi'oht. To the whole, or part, of this the worker may be fairly entitled. 8. Individualism. — The other side approaches the subject from the point of view of the worker. It says : — If intelligence and capacity and willingness to trust their fellows is increasing among working men, we ought to get together the pick of such men, and show what can be done by them. If they can provide the capital, well and good. If not, individual Co-operators, or the stores, ought to lend it them, and encourage them to develope their work in their own way, and especially, if they can, help them by dealing with them. If their customers are Co-operators, and they find that Co-operators are so accustomed to dividend on purchase that they will have it, by all means let them have a share in the profits. If their customers are not Co-operators, let them go into the open market, and hope that, by the soundness and genuineness of their work (witness Leclaire in Paris), they may make themselves a name and get a trade. We admit there have been failures ; but we say this scheme must be tried again and again. You will educate meyi, you will develope workers, of the best and highest quality ; by the other scheme you will never develope the same higher qualities, the same personal interest in work. Your Leicester boot- makers employed by the English Wholesale Society i-eceive no bonus on their work, have no share in managing it, and never can have. They are v.] CO-OPERATIVE PRODUCTION. 07 managed by a far-off committee from INTancliester, who are always liable to change, and who represent scattered bodies of Co-operators all over England. 9. Federalism again. — To this the other party will reply: — It sounds well, and in a few cases may succeed where you can get first-rate managers. But there is no guarantee of permanency in it. If the business is small, it does not meet the great needs of the Co-opera- tive body, with its large consumption. If it is large, the outside shandiolders may turn the thing into an ordi- nary joint-stock company at any moment. It may now be well to quote some of the more forcible expressions of the views of both parties. The Federalist speaks for himself . — " We want an organisa- tion of the whole coiiiuiuiiity, and the basis for this is the retail store. Every one, ricli or poor, should be asked to become a mem- ber, and pui'fhase from it."* " Co-operation considers profit to belong to the public, and not to any one section of it, vvliether they are employed in selling goods over the counter, keeping the accounts, buj'ing the goods, or making them. Co-operation makes no distinction between one part of the useful workers and anotlier.f " The distinction attempted to be drawn between pro- ducers and aU the hard-working and useful distributors won't hold good, and when tlie working classes themselves are called upon to pay the producers out of their own pockets they will refuse. It is quite another thing to urge that it will^jff// the em- ployers to share profits ■with the whole workers, jjroductire a,nA. distributive. But the servant in the store can save plant and material, and make di\adend larger, and there are hundreds of thousands of men who tend machines who cannot do a bit more. What is good in the Co-operative manuf actimug society is equally good in the stores, or the Joint-Stock Company. The work- people can increase profits in all three if they arc allowed to share in the profits, and they can do it as well in one as in the other. But those who have to allow them to share don't yet see how the work- people can increase profits, and, yet being workmen themselves, tliey ought to be the first to see it. This is a work which Co- operators have before them — the work of showing how it can be done, and of urging that trials of numerous kinds shall be made." Another writer says : — " The practical question now before us is whether the existing organisation founded on the stores shall, in their confederate capacitj% seek to utilise their rapidly growing capital by producing for themselves tliosta])lc articles of their own consumption, or whether they shall induce their well-to-do members to withdraw their divitlend fi'om the stores, and to set up independent companies, which will seek, like any ordinary * Congress Eeport, 1876, p. oG. t Wholesale Almanack, 18S3, p. 172. G 98 WORKING MEN CO-OPERATORS. [chap. manufacturer or wholesale dealer, to get the highest possible prices for their goods from such stores as choose to deal with them."* "All the known evils of competition, and many unknown evils, would still exist were it possible so to organise production as to place the control of wages and of price in the power of those only who were engaged in any special trade. " The value of the plant required in every trade to employ a workman, or, in other words, the amount of capital required, in- creases every year, and thus the possibility of the workers only ever being able to become owners of the capital which employs them, becomes more difficult every year. Spinning mills often require an average of £200 to £300 per head for all employes. "The consumers have a claim to some share in the profits. Indeed, this share is much greater than may at first be recognised, for the working of a sure market is the best preventive of those commercial curses from which we at present so greatly suffer." t 10. The Individualist speaks for himself. — The views of individualism as against federalism have been put in this way : — "What is the federal system? To have a body of men like those employed in the Wholesale societj^'s shoeworks at Leicester, who are to be governed by a manager who is appointed by a com- mittee elected by a large number of voters. The workmen could not by any possibility become shareholders in the concern in which they are employed, and yet they are told that thev are their own employers. If, then, a few men share the results of their own work, they are their own employers, but if one or one hundred men hire a number of other men who may be arbitrarily discharged, and over whom they have comi)lete control, it is a mockery to call such men their own employers. The effect of such Co-operation would be to make it impossible for any workman ever to be his own employer. It would go on perpetuating trade unions and strikes all the world over." % " Co-operation is not worth talking about imless it lifts the labourer out of the position of a hired servant, and gives him some share in the proceeds of his labour." ^ " Federative production seems to destroy the individuality of the workman engaged by the societies, and it will be a serious loss to the community if over this sinking of the individual becomes complete and universal." J| " It is only a small body of workers to whom the working population could give employment in supplj'ing their own con- simaption of manufactured articles. When the federal scheme is put forward as Ww. general rule for regulating a system of Co- operative industry, we must face the objection that the bulk of the profits will go, not to the working producers in any shape, but to the wealthy consumers. This scheme for raising the position of the working population by distributing among them the profits of • Congress Report, 1873, p. 50. t Congress Report, 1870, ^i. 7. J Congress Rejjort, 1876, p. o6. ^ Congress Report, 1877, p. 11. li Congress Report, 1877, p. 48. I v.] COOPERATIVE PRODUCTION. 99 manufacture, would, if comiiletely realised, end iu giving back to each working man's family on an average a possible 5s. a year. The protits of the WholesiCle socii-ty's shoeworks at Leicester, when dis- tributed over the Co-operative consumers, may bring to each Co- operator one half-f:irtliiug on every pound that he spends at the store. But the conditidu.s under which the work at Leicester are carried on m'uiht be such as would keep it always miited with the Wholesale, while the workers might liave a direct interest in the Prosperity of the establishment. All bodies of workers who might e disposed to start any productive enterprise ought to come to the Wholesale for support, and, accepting its control, to enlist under its banner in the great Co-operative union. "The close connection of Co-operative Production with Co- operative Distribution is an essential element to its success on any considerable scale. The claim asserted for the consumer to share in the profits of production must rest not on any natural right, but simply on the wish to reconcile conflicting interests.* "The dangers of the federal system highly developed under the Wholesale arc the dangers of over-centralisation. When you first centralise, j'ou are able to produce great efi'ects because you are able to organise and dispose of all the forces that exist. But tliis is only for the moment. The sources of foi'ce are dried up. You have used up j'our capital. All the play of local life, and wants, and feelings, has ceased, and the strong characters that were produced by them cease to ai)pear. The revolution of our indus- trial system is far too large a thing to be placed in the hands of any board, t " In a commercial point of -vaew great profits in productive in- dustry are generally obtained by infinitely small economies. Direc- tors in a board room can effect nothing in thi, way. The manual operations will be skilfully and probably more diligently performed in a Co-operative establishment. The personal interests of the workmen will be so directlj' advanced by their applic ;i tion and per- severance that they will work hard. But their best efforts will fail unless the organisation is perfect also. This organising faculty is a rare gift, and it must be combined with long experience and excellent judgment, or the commercial result cannot be satisfactory." % It has already been pointed out that some of the federalists advocate bonus to labour in the stores and in pi'oductive societies, and one of them says : — "If it be thought that more local interest would be secured at Leicester by malang the workmen shareholders to the extent of one-third of the capital than bj' a liberal bonus in addition to wages, then let this plan be adopted by all means." It is admitted that there are great difficulties in the way, and that unless the cost of the article were increased, in the shoeworks at Leicester the most in the way of bonus that a workman could expect would be about 5d. a week. "Will this influence workpeople vciy much? " * " Manual for Co-opera toi-s," published by the Central Board, pp. 131, 134, 140. t Congress Report, 1877, p. 6. % Congress Report, 1874, p. 5. 100 WORKING MEN CO-OPERATORS. [chap. To this the individualist answers: — "The economical benefits to the worker of becoming his own employer will not commonly be found in the positive addition which he will thereby be able to make to his present iraf/cs. It will consist more in the power he may thus obtain of regulating the conditions of his own life, in the manly qualities of prudence, foresight, and self-government, which union for the puipose of mutual aid in self- employment, will cultivate in the indi's-idual. Is it unreasonable to expect that under such circumstances the workers will commonly learn to act in a way in which, were they commonly to act now, their con- dition would assume an aspect very different from what it now offers? " * The federalist replies that the practical question is. In what way are Co-operators willing to invest their money at the present time? and believes that the stores should themselves, in a com- bined capacity, undertake the manufacture of all goods which they sell. Without attempting to decide between the two views (for the object of this book is information rather than argument), we may notice that the federalist does not object to the princi])le of bonus to labour, and that the individualist believes in the value of federal association under some common centre. This, at any rate, appears in the views here quoted, but it would be ridiculous to suppose that in a few pages views could be put forward which would be fully representative of the great variety of Cooperative opinions on this subject. 11. The Question a Practical One. — This, how- ever, has to be borne in mind — that the question will continue to be a practical one, and must go on being discussed. Co-operators will never be always content either to invest their money in ordinary private enterprise, or to throw back their savings upon their members. There is money to spare in the stores, and it would be employed in productive enterprise much more often than it is, if Co-operators could but see their way. A veteran Co-opei'ator said fourteen years ago, " We seem to be in a cliai-med sleep as regards Co-operative production. It is a strange puzzle why Co-oi)erators do not use their suri)lus capital in productive industry." t And at the present * " Manual for Co-operators," published by the Central Board, p. loO. t Cfongress Report, 1871, p. 7 (Lloyd Joues). v.] CO-OPERATIVE PRODUCTION. 101 day a Co-operator says, " Tlie reason why we have so much capital lying at our bankers is because we are not enterprising enough to use it. We have had a hundred and one ways of employing it put before us, but for want of confidence in each other, and a little more tact, we allow it to remain in the bank, and call it surplus capital. Some societies have I'eturned capital back to their members. We do not hear of bankers returning money to their shareholders and customers. The societies should rather lower their interest than return money back to the very people whom they have asked to be thrifty and careful." It is in the interest of the arduous and difficult work in connection with this matter which lies before Co-operators, that, above all, education of a practical and genuine character needs to be carried on among our members. Meantime, all intolerance of other views than our own, and dogged assertion that our way is the only way, is certain to hinder progi-ess. "We are none of us infallible, not even the youngest of us," as the head of a college remai'ked once when not in full agreement with the view of one of his juniors. If success is to come, it must come by various roads, suited to various men and various circumstances. Meantime, if Co- operators grumble at, the little ])rogress made, and say that for .some time nothing has been done, and ground is being lost while the national income increases hugely every year, it may be asked whom do they grumble at ? Do they say the Wholesales ought to be more enterprising 1 After all, the great body of Co-operators, scattered all over the kingdom, elect the committees of the Wholesales, and are responsible for what these committees are doing or not doing. Or is it, perhaps, the individual societies that are complained of 1 The general body of members cannot be expected to consent to any productive scheme, especially after tlie failures there have been, without being educated up to it. They are likely to hesitate to support any scheme out of the range of their own lOi WORKING MEN CO OPERATORS. [chap. knowledge and neighbourhood, unless they can see clearly that it is likely to succeed. It remains now to show what Co-operative pro- duction is going on at the present time (according to the general use of that word by Co-operators), to indi- cate some of the probable causes of success and failure, and to say a few words about the future. 12. Statistics. — The extent of Co-operative pro- duction at the beginning of 1884 is estimated as under : — Description. Capital employed. Annual Prodiu-liiin. No. of Bniplcyes. Wholesale societies' works Com mills Other productive associations... Domestic production by retail ' societies j" £ 60,000 600,000 120,000 120,000 £ 180,000 1,800,000 200,000 900,000 1,200 300 800 4,000 £800,000 £3,080,000 6,300 For details about the Wholesales see pages 79, 83. In the Scottish Wholesale, it should be noted, all the employes receive a bonus on their wages at double the rate that dividend is given to purchasers. In the English Wholesale no bonus is given to any pi'oduc- tive department. The Corn mills are a very important branch of Co-operative production. There are alto- gether twenty-si.K societies doing corn-milling business, with sales of £1,800,000 yearly. In these mills it is the execration to give any bonixs to em|)loy6s. The following table shows all other known existing productive societies, the businesses carried on by them, and the method of dividing profits. The amount allowed to shareholders before dividinj^ any profits with custonioi's or workers varies from 5 per cent, to 10 per cent. In the majority of cases it is 7^ per cent. Tlie shares in Productive Associations are invariably transferable, not with- drawable, and this has caused Co-operators generally to come to the conclusion that such capital oufjlit to be better paid than with- drawable capital invested in a, distributive store. 13. Failure and Success in Co-operative Pro- duction. — An exhaustive list prej)ared by a leading v.] CO-OPERA ri VE PROD UCTION. 103 •9 "O t3 -a «; "O •o E* . fl s £ £ £ fl 03 e 3 1 1 £ £ ^e M £ 2 S S ^ ^ ■« £ 0) to (^ HI 1-. 0* O) fci 0) ■£ 11 g3 6 is tj ts -d -c) -a 1 1 1 p 13 a 3 C 3 3 fl C fl 3 3 a 3 fl eo 3i C3 u oi cS « S " cS « S •o S2 §2 £ £ £ £ £ £ £ £ £ £ c> s a) oj 0) 0) OJ "> 2-0 s-S -a 73 T3 'd "d TS 13 "O "O •o £"3 0-3 000 '0 "o "3 "o "o "3 v« -a^ ■S-^ .a -s -s -a ^ .fl .fl M ,a .fl o ^ a> K Qj a> OJ ^ 0) 5 (^ !~ ti S h S « s ■ ^ 3 , ^ . cj CJ oj C3 a S oj <:j • 5 "S-^ fe-S^ £-5 £ "S m "a x' "S ^ rj^ M to cc^ -"3^ m * a; ^' k C C^ C C.« C^ C" C'S fl Cj i; pen mn 03 ffilziat^pq pa ^ffi;2;pq ^«;2;J?;» k;^; ^i r^ CD s n t~ X -.o 00 a CO : g 8^<^8 S i^^l CO 53 =»< : 4i< : (N t» c^ . °i '"£i ?f '-'' " i? -• 2 05 T* CO 05 »J 5< t- t~ 35 CO sgss CO CT> •«• (N -^co :o IN CO f CO CO -1 CO CD -H .-c ■* « t- t> 1^ -JJ 1- lO t>- [^ w t>- t>- t^ X t~ I- -.o X^- i: r-^ cc 2 2 cc X X X yj ao X X X » X X X X X X X s to ■c 3 p a II £ l« .0 ^ (JO £ B a •c PM > 1 . . . .§ : : : I'd ....^ ri |a;||£;| 3 3 r -0 g ^ ,_ pi; ;ii pL| tc _fl 'E 3 3 a -a C n g •s w 1 ' ■ 3 ■ ■ ii . :^ 3 : lit. .g § is a ■ ■ tito ' □ fl ■E 3-3 tfl .0 a = a 3 •IIIJI MaQQQXpN ■•C : If 0) r; c 2 |l 104 WORKING MEN CO-OPERATORS. [chap Co-operator shows that 224 Co-operative productive societies registered under the Industrial and Provident Act have been dissolved. Of these 224, it has been stated by another leading Co-operator, 15G societies were small joint-stock companies with no Co- operative element in them, foi'ty-four pi^oposed to divide profit between capital and customers, and twenty-four between capital, customers, and workers. Bad man- agement and disagreement among members, want of capital, of business experience, of taste in design and execution — these have too often been the causes of failure. Plenty of capital, an assured demand for the produce, good management, loyalty and unity, taste, energy, and excellent workmanship — these have been among the causes of success in existing societies. 14. Sphere of Work for Co-operative Productive Associations in the Future. — There is ample room for both the federal system and the system arranged by individuals. Corn mills have . never yet been started in the interests of individual operative millers. In domestic production by individual societies, unless tlie consumers found the capital and commenced the biisiness, the thing would be left undone. In addition to the corn mills and domestic produc- tion, the Wholesale societies, as the trustees of the consumers, have a vast field to work in. At the Con- gress of 1883, the Englisli Wholesale was requested to start a corn mill on the Tyne, and a tannery in some suitable locality. The pi'oduction of butter in Ireland, Germany, and Denmark ; the production of cheese in America; the growth of tea in India iuid (*liina ; the growth of cotl'ee in Ceylon ; the establishment of a sugar refinery at Goole, and other smaller manu- factories, are all quite within the powers of the Wholesale societies at the present time. To enter into these difl'ercnit businesses would require a total capital of about £12,000,000. Besides this, enormous quantities of English-grown wheat, potatoes, fruit, butter, and meat are consumed v.] COOPERATIVE PRODUCTION. 105 by Co-operators. What has been said shows that there is no need to talk of surplus capital, but there is a necessity for more courage to enter on under- takings, which, wliile piofitibly employing large sums of money, would produce articles that are already in extensive demand. Some other kinds of Co-operative production cannot stand still until the consumers agree to organise them. If they have to wait till then, they will have to wait a long time. The tea and coffee produced in India and China have to be paid for by the manufactures of this country. £240,000,000 of nianufactui-es are exported annually. Shall the pro- ducers of these manufactures wait until the Indian and Cliinese labourers and others who consume these productions have become organised, and have sent representatives over to England to start factories on their own behalf, in which they shall employ English- men to work for them ? This is the logical conclusion of the argument that all Co-operative production must be done by the consumer. Yet we can scarcely think English Co-operators will wait until this is done, neither do we think this would be the best form Co-operative production could take. What foi-ms, then, must Co-operative production take in the cases here under consideration'? There appear to be only two answers. It must be done by (1st) industrial partnership, or (2nd) a Co-operative organisation composed of individuals. To forecast the probable course of the growth of Co-operative production is very difficult. An attempt to do so may, however, be beneficial. An examination of the occupations of the English people shows that there are : (1) 650,000 persons employed in professions. (2) 1,800,000 ,, ,, domestic service, (3) 1,000.000 „ ,, conuiuTce. (4) 1,400,000 „ ,, afrriculturo. (5) 6,400,000 ,, ,, other industrial occupations. (6) 15,000,000 ,, of the non-productive class, including women and cliL'dieu. lOG WORKING MEN CO-OPERATORFi. [chap. An analysis of these may show to what extent woi'k on Co-operative lines in any form may touch them. (1) About 350,000 of these are now in the employ of organised bodies, such as municipalities and the govei'nment. Their employment is more or less on the Co-operative ])rinciple. (2) The 1,800,000 domestic servants would not be absorbed into Co-operative employment unless associated homes were generally adopted ; and the strong preference shown by Englishmen for their own individual homes seems likely, for several generations to come, to outweigh the manifest economic advantages arising from associated house- keeping. (3) The 1,000,000 engaged in commerce are divided roughly into 330,000 merchants, dealers, and agents, and 670,000 carriei-s by road, rail, and sea. The former class is being rapidly enci'oached upon, both by the working-class Co-operators and by the middle and higher classes, who are organised under the title of supply associations and otherwise. In banking, joint stock companies have already largely supplanted private banks, and already in many banks, the employes participate in the profits. The vast amount of capital required in proportion to the number of people employed in the carrying tiades renders it impossible for the work-people to own railways and the like. It appears probable that such undertakings will always have to be backed up either by men of wealtli or else by the government itself. (4) There is no reason why the persons engaged in agriculture should not some day be to a great extent endx)died in ('o operative organisations, in a way which would bring to both farmers or baililfs and to labourers more security and a better return for capital than at present. (5) Of the 6,400,000 occupied in other industries, 1,300.000 are workers or dealers in minerals, and v.] COOPEIiATIVE I-JtoDUCTTON. 107 270,000 more are workers or dealers in machines and implements; 1,100,000 are occupied with textile fabrics, and 1,000,000 are occupied with various kinds of dress, including hats, boots, gloves, shirts, and umbrellas. There are 800,000 occupied in building operations, furniture, and house decorations; 100,000 are employed in connection with printing and publish- ing, 90,000 in connection with carriages and horses, 50,000 in connection with boat- and ship-building, and 000,000 in connection with food, drinks, and board and lodgings. Co-operation by consumers may ultimately employ a large number of those occupied with food and drinks, and of those occupied in the hat, umbrella, and other sundry trades. But most of the remainder will either have to be employed in Co-operative asso- ciations composed of the workers, or of capitalist- employers and workers combined. Co-operation by the consumer will never reach them all. There may be many differences in the future as to the best form of organisation for productive work. But steadily and surely capitalists, workers, and consumers are seeing more and more clearly how essential each of the three is to the other two, and that the interests of the three classes must be in the future much more closely linked together than they have been heretofore. And the workei's, if they are wise, will aim at such a staudai d of life and civilised comfort as an intelligent man may fairly e.xpect, and will try to bring it about in practice. A five-roomed house, with ultimately the ownership of it, plenty of good food and clothing, provision for education, a reserve fund useful for a rainy day, and to equip the children so that they may be at least as comfortable as their parents ; this to many Co-operators is possible, and it is not only possible, but necessary, if they are to retain the advantages that Co-operation has so far given them. Finally, it may be said, a great deal of experience has been learnt of late years, and there is more room 108 WORKING MEN CO-OPERATORS. [chap. for hope than ever there was.* With the spread of education, with an increased determination to bring to bear the highest intelligence and the most practical business power of the movement upon this question, there will be progress, even if slow ; and if Co-operators are faithful to themselves, we may depend upon it that the world has not heard the last of successes in Co-operative production. CHAPTER VI. ORGANISATION AND PROPAGANDA. Since the earliest days the need of organised union for many purposes among Co-operators has been felt. And the importance of propagating a knowledge of the benefits of Co-operation among the working classes is known to be as real now as ever it was. It must be so if thousands of working people are ignorant of its very name ; if, as is often said, there might easily he ten, or even twenty, Co-operators for every one that there now is ; and if it be true that out of every £25 sjjent by the working classes, only <£1 is spent at a Co-operative store. 1. First Organisation. — With the exception of the efforts of the Oweiiites iu 1830-1, and tlie Christian Socialists in 1850-3, the societies iu East Lancashire and West Yorkshn-e were the first to organise. In 1860 they started the Lancashire and Yorkshire Conference Association. The Co-operators of Northumberland and Durham next formed a Conference Association ; but although Scotlaud had held con- ferences in 18GG-8 which resulted iu the successful establishment of the Scottisli " Wliolesalc," neither there nor iu the reumiuiTig districts of England was anything douc, until the formation of the present great orgauisatiou knowTi as the Co-operative Union. 2. Early Conferences. — Six conferences were held between 1850-5. Five of these were held in the North and one iu the South of England. No conferences were held between 1856-9. Nineteen conferences were held iu the years 1860-8 ; four of these were held in Scotland, twelve iu the North, and three in the South of England. * The Co-operative Aid Association lately started in the Southern Section, with a view of giving support to productive societies, ajjpcars to be based on thorougli business principles and to have real promise of success in it. The Co-operative Productive Federation also may be useful iu uniting societies together VI.] ORfiANISATlON AND PROPAGANDA. 109 3. National Congresses. — In 1868 the desirability of forming a national association of Co-operative societies was discussed, and in consequence a Congress was held in London in 18G9, to which all societies were invited to send delegates. The results were encouraging, and since then a Congress has been held annually, with gradually increasing success. It is the practice to invite some eminent man to preside on the tirst day of Congress, and deliver an inaugural address. The Congress is now held at Whitsuntide, and the place of meeting is changed every year. The accompanying table shows the places in which the Congresses have been held, the number of delegates who have attended them, and the names of the px'esi- dent of the first day's meeting : — Anitoal Natioxal Congeesses held by the Co-operative Union. No. of Date. Where held. President on the First Day. Deletrates at Congress. 1869 London T. Hughes, M.P 63 1870 Manchester... W. Morrison, M.P 106 1871 Birmingham.. Hon. A. Herbert, M.P 113 1872 Bolton T. Hughes, M.P 193 1873 Newcastle on- Tyne Halifax J. Gowen, Jun 198 1874 T. Brassey, M.P 189 1875 Londou Prof. T. Rogers 114 1876 Glasgow Prof. Hodgson 116 1877 Leicester Hon. A. Herbert 1G8 1878 Manchester ... Right Hon. Marquis of Rijiou... 276 1879 Gloucester ... Prof. J. Stuart 133 1880 Newcastle on- Tyue Bishop of Dui-ham 176 1881 LeecLs Right Hon . Earl of Derby 273 1882 Oxford Riglit Hon. Lord Reay 219 1883 Ediiibiugh ... Right Hon. W. E. Baxter, M.P. 376 1884 Derby Right Hon. Earl of Shaftesbury 4. Subjects discussed at Congresses, — Besides the administrative business of the congresses, the follow- ing subjects have been discussed : — 110 Working men co-opebators. [chap. No. of Times. .. 2 .. 2 .. 1 .. 7 .. 5 No. of Times. Objects, Prospects of Co- operation 6 Policy of High Dividends... 1 Production £ Propaganda and Organisa- tion £ Store Management 1 Sui"plus Capital A Trade Unions 6 Transferable or Withdraw- able Shares Wholesale Distribution ... Working Men's Clubs Industrial Partnerships . . . Insiu-ance and Guarantee... International Co-operation Co-operative Joui-nalism . . . A Labour Exchange Amendment of the Law An Orphanage Associated Homes Banking — Wholesale Banking — Credit Banks Best Method of Voting in Societies 1 Bonus, or Profit-sharing ... 2 Check System 1 Co-operative Union 7 Cottage Building 2 Credit 1 Education 10 Hindrances, Causes of Failure, &c 4 Land and Agriculture ... 6 Leakage 1 Manual of Auditing 1 5. The Co-operative Union. — At the 1869 congress a central Co-operative Board was formed, consisting of two sections, the London and the provincial. The London section consisted of a number of well-wishers to Co-operation ; the provincial section consisted of representatives of Co-operati^■e societies situated mostly in Lancashire and Yorkshire. Scotland, the Newcastle district, and the Midlands were, however, also represented. At each Congi-ess up to that of 1873 the Central Board was elected in these two divisions. A regular constitution was now given to the Union, and the Board was divided into tive sections. Another was added in 1875. 6. Objects of the Union. — In the constitution the objects are stated as follows : — "This Union is founded to promote the practice of truthful- ness, justice, and economy, in production and exchange. " 1. B}' the abolition of all false dealing, either (a) direct, hy representing any article produced or sold to be other than what it is known to the jjroducer or vendor to be ; or (i) h/dirtrt, by con- cealing from the purchaser anj' fact known to the vendor, material to be known by the pui'chaser to enable him to judge of the value of the article ptirchased. "2. By conciliating the conflicting interests of the capitalist, the worker, and the jiurchasor, through an eqiutable division among them of the fund commonly known as profit. " By preventing the waste of labour now caused by unregulated competition. VI ] ORGANISATION AND PROPAGANDA. Ill 7. Members of the Union. — Industrial and provident societies, friendly and buikling societies, trade unions, joint-stock com- panies, and industrial partnerships may become members ; but no trade union, friendly society, nor joint-stock company are yet members. 8. Finances. — Eveiy association is asked to subscribe |d. per member per quarter. The appended table shows the yearly subscriptions for the last ten years, and the proportions contributed by each section. The expenditure is in the following proportions : — Printing, stationery, and postage, ,£9l)U; travc'lling expenses, £900 ; salaries of paid staff, ^£700 ; sundries, including rents, £2')0. Out of the funds each section is granted £'lo0 per annum, and an additional £3 per annum for each of its district associa- tions. The remainder of the subscrii>tions are expended under the direction of the United Board. 9. Constitution and Business of the Congress. — The annual congress is composed of delegates from societies in union, each Society being entitled to send one delegate for each annual sub- scription of l,00()d., or fractional part thereof. 13usincss of the Congress. — There is first the inaugural address, then the report of the central Co-operative Board, the election of scrutineers of the voting for the new Central Board, and the discussion of papers and projjosals bearing on Co-operation. 10. The Central Co-operative Board. — It is divided into six sectioiLS as follows : — Midland, D members ; Nortiiern, 7 members ; North-western, 1 1 members; Scottish, 10 members; Southern, 9 mem- bers ; and Western, 7 members. Each section elects its own members. The elec- tions are conducted by voting papers ; each society being allowed as many votes as it is entitled to send delegates to Congress. Any section may change its method of election. The whole of thesix sectional Boards meet together twice a year; once on the Saturday before the Congress, when the draft report to Congress is dis- cussed and revised ; and once on the Wednesday of the Congress, when they appoint an office committee and transact other necessary business. 11. The United Board. — This body is compo.sed of representatives from each of the sectional boards as follows: — Nortli-we.stern, three members; Midland, Nortliern, Scottish, and Southei-n, two members eacli ; and Western, one member. It holds at Manchester three regular meetings in each year, viz., in September, December, and March. Subject to the resolutions of 112 WORKING MEN CO-OPERATORS. [chap. the Congress, the United Board is the governing body of the Union. 12. The OfiQce Committee. — It may be composed of any mem- bers of the Central Co-operative Board that the combined meeting may appoint. The North-western section has for several years been appointed on grounds of economy and convenience. The Office Committee's duties are to act for the United Board, and control the paid staff between the United Board meetings. It meets monthly. Out of it a small sub-committee is appointed which attends at frequent intervals to sign cheques, and transact other urgent business. A rejjort is prepared by the office com- mittee quarterly, and submitted to the United Board meeting. 13. The Staff. — The paid staff consists of a general secretary, an assistant secretary, a book-keeper, and sundry junior assist- ants. But the strength of Co-operation lies in the impaid staff who work on payment of the travelling and other necessary ex- penses which they incur. It at present consists of the fifty-three members of the Board, and some hvmdreds of officers of conference districts. In addition, there are a large number of unattached workers. 14. The Sectional Boards. — Each of these meet monthly, at their own centres. The business usually comprises the appointment of members of the Board to attend conferences or meetings ; making arrange- ments for sectional conferences ; receiving reports of meetings and conferences that have been held ; ar- ranging to carry out the resolutions passed at con- ferences ; keeping an oversight over the well-being of societies, and stimulating the development of Co- operative enterprise. All the minutes are printed in the Co-operative News. 15. Conference Districts and their Organisa- tion. — The sections are divided into districts as follows : — Scottish, 10 ; Northern, 7 ; North- Western, 15 ; Midland, 9 ; and Southern, 9. (See map opposite title page, and list in appendix.) The Western section has not yet been able to form districts. The work of these districts is, to hold local conferences, at which are discussed the details of business management, the advisability of entering into fresh enter^jrises, the principles and the statistics of Co-operation. Each section ari-anges its districts to suit local circumstances. At present, the arrangements arc as follows. The Scottish have each a chairman, secretary, and committee. The Northern have each a chairman, secretary, statistical secretary, and executive VI.] ORGANISATION AND PROPAGANDA. 113 CONTRIBUTIONS FROM EACH SECTION TO THE CO-OPERATIVE UNION DURING THE TEN YEARS, 1874-83. Total 1 £ Yearly '.-^ Contn J 1375 1495 1556 £ 1764 £ 1939 £ 1981 £ 2190 £ 2122 £ 2416 £ 2660 Date 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 £ 1200 /* 1100 ^ / / r / 1000 /^ / / V / ^ 900 ^ / / / 800 y / / ^ NOR-WEST / 700 -•-^'~^ — / ,y 600 500 400 V 300 / y ,<^ NORTHERN ^^. 200 — '•"^ _ :^^^ ■ X"''^^ ■ - y^ -- y y^ DONATIONS MIDLAND SCOTTISH -^^ 100 ^^X^, y- '-'t> _J^ h<^. ' ^^ ,^^ ■— '' SOUTHERN WESTERN - — ^.^ •r""^ ^ ■'^ — * - — * — ' ' ■ 1874 1875 1876 \%ii 1878 1879 1880 1881 1882 1883 114 WORKING MEN CO-OPERATORS. [chap. committee. Twelve of the North-western districts have each a chairman, secretary, statistical secretary, and a committee. Three are not yet completely organised. The Midland districts are each provided with a chairman, secretary, and committee. Of the nine Southern districts, one is without officers, four others have only a secretary, four have a committee and secretary. 16. Conferences. — The growing activity of Co- operators is shown by the following statement of conferences held in addition to the annual Congresses. Years. Sections. 6 5 1 00 CD 'O oi 19 12 3 4 00 8 7 1 o cc 9 5 4 00 9 8 i' 00 56 33 9 14 CO 00 70 '\ 33 7 2 00 78 26 16 21 10 5 00 69 14 13 14 5 16 7 CO t^ 00 73 25 11 7 3 17 10 00 92 37 12 13 6 18 6 00 1^ 00 86 35 7 14 5 22 3 00 106 38 13 16 12 25 2 o 00 00 120 '39 18 CO 00 133 35 96 2 Great Britain — total North of England... South of England... Scottish Section ... Northern ditto 129 ... ■37 9,3 North-western ditto 33 36 45 Midland ditto 7 8 9 Southern ditto 21 19 13 Western ditto 2 9 2 17. Publications. — The Union circulates a large number of tracts, pamphlets, &c., annually. They may be divided into three classes : — 1st. The Congress Report, an annual volume of 120 pp., which contains a full record of the transactions at Congress, together with detailed statistics of Co-operation. 2nd. Business yiulilioations, calculated to aid Co-operators in the successful maiiagfuieut of their associations. Among these are the manuals on book-keeping, on auditing, and on check systems. 3rd. Books, tracts, and pam])hlets, bearing on the principles, practices, objects, and advantages of Co-operation. Some of these are very elementary, ami iitluis are of a more pretentious character. Su]>iiIios can ha purrliascd at cost prices, but large quantities are given away. During the year 1882, 100,000 copies were sold, and 125,000 copies were given away. A list of these publications can be obtaiuecj from the Central Board Office, City Buildings, Corporation Street, Manchester. 18. Guild of Co-operators.— At the Glasgow Congress (1876) it was proposed to have a Co-operative organisation for propa- gandist work. With a view of following up this idea, the plan of a guild was brouglit before the Southern Section of the Central Board. The Soutliern Section Board agreed to the recommenda- tion witli some misgivings, and in the other sections the scheme was looked upon with mingled feelings of curiosity and distrust. These VI.] ORGANISATION AND PROPAGANDA. 115 feelings have now worn away, the Guild having shown its practical usef uluess by bringing togetlior both men and moucyf or the extension of Co-operative work. Tliere is plenty of work to be done in the south of England by men and women willing to give their services. The adtkessof theGuildis31, Southampton Street, Strand, London, W.C, where information can be obtained as to its work and pub- lications. In 1.SS2 it held sixty public meetings, and helped to form nine societies. 19. Political Action. — Party politics are avoided by Co operators as Co-operators. But this has not pre- vented them from taking political action to promote or di'fend Co-ojierative interests ; and many modifications in the laws affecting these have been obtained by them. Political action has also been forced on them several times by the hostility of the private traders, who, in 1879, obtained the appointment of a Parlia- mentary commission of inquiry into the conduct of Co-operative stores. The results of the commission were unfavourable to the trader.s. In 1880 pressure was put by them on the President of the Board of Trade (Mr. Chamberlain) to induce him to forbid the Government employes taking part in the management of Co-operative stores. Although this was intended only for the London supply associations, it would also have affected working men's societies at Plymouth, Portsmouth, Sheerness, and a number of other places. The private traders professed not to wish to interfere with working men, but they had in several places tried to induce railway companies and other large employers to forbid their men using their leisure in managing Co-ojjerative stores. The Union, therefore, sent a monster deputation to the President of the Board of Trade, and this resulted in the Government employes being left unmolested. Working men are determined to protect as a sacred right the power to use their leisure as they may think fit, without any interference from their emjiloyers. It is probable also that, when the hours of leisure of some working men at jiny rate increase, as is not un- likely in the future, not only the Co-operative stores, but other associated interests, may be looked after by working men. instead of being looked after for them. 116 WORKING MEN CO-OPERATORS. [chap. It seems pretty certain also that Co-operators will be compelled, sooner or later, through the steady woi^king of a gradual process of enlightenment, to take an active part in social politics ; that is, in those so-called political matters which are directly and immediately concerned with the moral and physical well-being of the masses of the people, of which Co-operators themselves are no unimportant part. Already the more far-sighted among them appear to be preparing for the coming change, and not much instruction will be needed to convince Co-operators that, both in imperial and local government, perma- nently successful management will only be insured by the widespread application, in the interests of the com- munity at large, of those general principles which have influenced the highest and best work of Co-operation. Occupations of Membees of the Centeal Co-opEEATrra; BOAED. 9 Iron-workers. 1 Carpenter. 7 Co-operative employes. 1 Colliery Overman. 4 Coal, Insurance, (fee., Agents. 1 Dockyard Writer. 3 Clerks and Accountants. 1 Gilder. 3 Shoemakers. 1 Hosier. 1 Engineer. 1 Mill Manager, 2 Journalists. 1 Painter. 2 Miners. 1 Plumber. 2 School Board Inspectors. 1 Rope-maker. 2 Shipwrights. 1 Store Inspector. 2 Weavers. 1 Tailor. 1 Barrister. 1 Water Inspector. I Brickmaker. 1 Yarn Draper. 1 Bursar of an Oxford College. — Total . . 53 [Note. — Three of the above do not now follow any occupation. Most of the Co-operative employes mentioned, and all the agents and journalists mentioned above, were originally employed as artisans.! CHAPTER VII. EDUCATIONAL WORK " My whole doctrine is summed up and iiirliidod in tliis grand word — Ednrnllon. Wo do not seek to csf.ililish a new order of things through violence. Any order of tilings establisliod through violence is tyranny. What we have to do is to propose for the VII.] EDUCATIONAL WOIIK. 117 approval of the uatiou au order of things which we believe to be superior to that now in existence, and to educate men by every possible means (o (/ere/ope it." (Mazziiii.) "Individual reform must bo the groundwork of all social progress. ' ' 1. Introductory. — To some extent, if we con.sider it in its widest sense, and its connection with health and proi^ress in the movement, this is the most import- ant subject in the book. More and more the opinion is fbrcin<^ itself u[)on all Co-operators who care about the welfare of tluiinselves and their brother Co- operators, that no amount of })rovision for elementary or other education will lessen the need for work in Co-operative education too. Rather, as general edu- cational progress is made throughout the working class, it becomes of more and more vital importance, if Co-operators are to maintain their work, and not fall backwards while others move on, that they should be themselves educating the new genei'ation as it arises. No doubt, if a Co-operator merely looks upon his society as a handy machine for making him a little money, and does not make any ellbrt to look into the question whether it is likely to sink or swim in the future, simply saying, " If it fails I can't help it — I must do witliout it," he will not be likely to care nuich about this matter. But if, knowing how much good it has done him, he wishes, not only in his own interest, but in the interest of his children when they grow up, that Co-operation shall continue to be strong and healtliy, then this matter concerns him very nearly indeed. 2. What has been Done in the Past. — The Roch- dale Pioneers gave 2i per cent, of their profits to etlucation,* and some societies followed the examjile. In the case of societies founded between 1855 and 1862, these grants were not recognised as legal (see page 26), which was a very great misfortune, as societies got out of the way of thinking it an essential matter. Only about 200 societies out of 1,100 now * See Tract, Educational Department of the Rochdale Pioueera. (A. Grueuwood.) 118 WORKING MEN CO-OPERATORS. [cHAP. make any grant. Of these 200, only about 60 in England, and only 5 in Scotland, give over <£50 a year; and of these 60 societies, 16 English societies give more than half of the whole amount which is given. It will be seen, then, that educational work does not occupy the attention of many Co-operative societies at the present time. And, of the money granted, some is spent on matters not educational, such as tea-parties, trips by omnibus or train, amusing entertainments, and the like. On the other hand a good deal of the money is spent by a few societies on news-rooms, libraries, or on a local Co-operative periodical. In some cases science and art classes are supported, but these do not usually cost much. Now that large Free Libraries (with branches) are being- founded in our great towns, possibly the educational gi'ants may in such places be better spent in some other way than in libi'aries and news-rooms. A scholarship for Co-operators is now being founded at Oxford, as the result of a subscription by Co-operators to a testimonial to Mr. Thomas Hughes, which he wishes to be spent in this way. But the real question is not only one of money grants. A society which only gives the loan of a room, or a subscription of only one penny a member per quarter, or even nothing, might l)e doing more real educational work than a society with a lai-ge grant. It is quite possible that a society with a large apparatus of news-rooms, libraries, &c., might really be going to sleep. The question is a question of men, and of living interest in Co-operation on the part of these men, and a determination to promote and spread a knowledge of its principles. 3. The Question not one of Sentiment. — Let no Co-operator think tliat this is a matter of "sentiment." No genuine Co-operator, however much he may pride himself on being hard-headed, practical, and anti- sentimental, can really tliink this. The remarks made by the practical-minded editor of the "Wholesale Almanac " for 1883 are to the point : VII.] EDUCATIONAL WORK. 119 " We regret to find that educational grants do not keep pace with the general growth of the societies. Necessity led many of the old Co-operators to study Co-operation ; but the growth of profits wliich has resulted from that study appears to make many young ones care less for it than the old ones. Now, unless the young ones are taught what Co-operation means, and what it is calculated to do, how are we to prepare our future directors, managers, and other officers? Our opinion is that it will pay tvtrij sDvivty to devote at least 1\ per cent, of its uett profits to education, and that, though societies may and do succeed without this, yet it is because tlie older generation still lives and guides them ; but, when the day arrives that they no longer take part in tlieir management, the societies will run a great risk of sufi'ering thereby." 4. A Practical Way. — Now, tlie important thing appears to be to find a practical way which is really useful, of furthering the work, a way which will give openings to indiciduals to set to work so that they need not wait for their society as a whole to become convinced (which may take years), but may begin at once. A practical demonstration that something of real use may even now be carried on, is likely to be worth more to convince a society than many argu- ments or eloquent speeches at quarterly meetings. Let us suppose an earnest Co-operator who is anxious not so much to talk as to work to be looking round and considering what wants doing, and what can be done. Will he not be convinced, after a short consideration, that one of the gi'eat sources of weakness in the movement is the want of knowledge by Co- operators of what the work of Co-operation really means ? " Though the full knowledge of liow to keep Co-of)eration safe and healthy, and how to develope it, is really a very diilicult matter, we seem," he might say, " to leave it to fate ; we don't seem to care whether our meml)ers are believers or unbelievers." Surely Co-operators must be taught at some time in their lives. They cannot be expected to absorb a knowledge of the principles of Co-operation with their mother's milk, or with the groceries which come from the store. If our individual Co-operator agrees with this point of view, he will begin to do something. He 120 WORKING MEN CO-OPERATORS. [chap. will try to get others to join him in a small class at his house, or elsewhere, for the study of Co-operation and its principles ; or he will try to get the store to grant a room for a montlily social meeting, at which a paper shall be read and discussion invited ; or he will try to get hold of a few young people and teach them. But he says he cannot teach. Then he must learn how, and at least others will join with liim to read and discuss. Let him ask forty likely people. Might he not hope to get six 1, But he will not like to put himself forward. Such a reason is no reason. If there is no one in his society trying to do anything of this kind, this is a sufficient indication that there is a call to him to do it. But the committee will be jealous of him, will say that it is their place to arrange about anything of this sort being done. If they were to try to suppress him, they would indeed be an iin worthy committee. The j^robability is, that if he proceeded with tact they would welcome his work, knowing that they are so busy themselves, that this is a special reason why every spontaneous effort on the part of individuals must be encouraged. Let it be said once for all that the new educational movement which may arise among Co-operators will not come largely from committee-men, and it cannot be expected that it should be so, except in the few cases where there are educational committees. Let individuals act, and not for any consideration be afraid of com- mittees. Let them be bold, and not mind a few rebuffs from unsympathetic members. Let us suppose that a small class has been obtained of six for one winter ; there might be a dozen the next winter perhaps. With patience and perseverance, and a detL'rniination not to be disappointed, a good deal could gradually be done. Our Co-oporator would get tracts from the Central Board. He would perhaps find this book useful, which lias been partly drawn up for the very purpose. He would make a point of con- sidering seriously wliat further helps he wanted ; perhaps simple outlines of each lesson on large sheets of vn.l EDUCATIONAL WORK. 121 paper, perhaps simple cli:igrains or further statistics, and he would make a point of letting the I']ducational Committee of the United Board know, and would ask them to help him. This kind of communication between the centre, and men who are really practically at work, and who know their local needs, might bring about the best results. Quiet and steady work of this practical kind by earnest-minded Co-operators, of whom there are plenty to be found throughout England and Scotland, might do more good than a great deal of money expended on magic lantern enter- tainments, or single lectures, or even on a large library where there was also a big free library in the town. And the man giving his time to this might find it worth ten times more than struggling to be a connnittee-man. Let it be supposed that a few such classes were started. The next im^iortant matter would be that the teachers or " class leaders," or whatever they might be called, should from time to time confer with one another. Might it not be possible for them to meet occasionally to hear a lecture delivered by some first-rate educational authority on the work of teaching, or the like, and for them to state their needs and discuss how to meet them 1 The Educa- tional Committee of the United Board could not do anything more useful than to help on work of this kind. There are many earnest men who know how much Co-operative education is wanted, and whose societies will do nothing, who feel helpless and isolated. jNIight not some voluntary union or guild of such people gradually grow up for the purpose of getting together the best opinions and suggestions on these most important matters with a view of mutual encouragement and helpl Nobody can doubt that small beginnings might lead to great results in this case. Do not working people want a good deal of * See also Congress Eeport, 1877, p. 75 ; and 1878, p. 65 ^J. Holmes) and Tract, " ludividuul Duties of Co-opeiatora " (A RusUtou) . 122 WORKING MEN CO-OPERATORS. [cHAP. help yet in the work of self-education, schemes for self-education of a practical kind, lists of the right books, and every help which may lessen waste of time? In this, and in arranging for a judicious scheme of pi'izes, and in appealing for help to bodies founded for advancing work of this kind, the Educa- tional Committee of the United Board miglit do a great deal, if (and all depends on this if) it was encouiaged by individuals to think that the work was likely to be of use. 5. Co-operative Libraries. — The formation of small libraries of books on Co-operative and econo- mical and social subjects ought to be considered a matter of great importance, whatever may be the genei'al supply of books available from other sources. Due regard should be had to providing branches with the same facilities as the centime. Jealousy of the centre by branch members has often stopped an educational grant. 6. Systematic Teaching by University Men. — If Co-0[)erators wei-e once induced to take up seriously educational work in Co-operative princijiles, many things might follow from this. It would be quite inevitable that after a good grounding in Co-operation men would demand further intellectual advantages. Especially they would demand that the institutions in their own towns, such as the University Colleges which already exist at Nottingham, Sheffield, Leeds, and the like, sliould give them help. Or where these institu- tions do not exist they would take advantage of the opportunities offered by Cambridge and Oxford tluough the scheme which Professor Stuai't of Cam- bridge founded, and would get University lecturers to come regularly to them. Several societies would combine for the services of one or two lecturers through a whole winter. They would be prepared to make reasonable payment, and still more to insure good classes. For even if free education .should come, as is not unlikely, for the children in our national sfiliools, the needs of adult education will be the same, VII.] EDUCATIONAL WORK. 123 and that wliich is obtained at a small cost, whether of money or effort, by societies, is likely to be more valued than that which is to be got for nothing. No one else is able to do this kind of work as our Co-operative societies can do it, or to speak with such force as they can. It lies with them to say to their young grown-up men and women, " You have passed through the stages of teaching which govern- ment or other agencies have provided for you. The Co-operative movement is one of self-help, not depend- ent on government or any other power for support. We now offer you advantages which we hope you will not refuse. We offer you systematic education, the object of which is not to obtain for you ])rizes or certificates, but to help to make you think, and think reasonably and sensibly and thoroughly. Our object is to urge you to consider the question whether, in these short lives of ours, you individually, each grown- up young man and woman, cannot do something by the help of careful thought, careful reading, careful and wise discussion, to improve yourselves, to strengthen your minds, to give yourselves, as far as you can, a good outfit for the great work which lies before us all, of trying to leave the world, if we can, in our little place on this big earth, a little better, as far as our work goes, and not a little worse than when we found it. We want to help to prevent any waste of time or effort in your work of self-education. We want to get you straight to the best help and advice that can be got. We want you to make the best of those very few hours of thought and study which, even with your utmost endeavours, you can obtain. We wish you to take up one subject each winter, and try to master it. We wish you to meet week after week for ten or twelve weeks at least in succession a capable University teacher who has long and fully studied his subject, who would perhaps sjieak for half an hour, and then ask questions and put questions, and help you to thrash out the subject in hand, so that nothinj; should be left obscure." 124 WORKING MEN GO-OPERATORS. [chap. 7. The Education of the Citizen. — And in what subjects are they likely to demand teaching? As the late Mr. Toynbee said, " What part of education " is left for Co-operators to appropriate? The answer T would give is, "The education of the citizen."* Various subjects of science, literature, history, and the like, might be studied, but the following subjects, in connection with this education of the citizen, would be of special importance : — 1. The Labour Question. 3. The Citizen in his own Home and City ; (a) health ; (b) education ; (c) municipal affairs ; (d) the poor law. 3. The Citizen and the State ; (a) the central govern- ment as a machine ; (h) the relation of the State to (1) legislation, (2) taxation, (3) labour, (4) the land. These and other similar subjects might be taken one by one and read mth good text-books, such as those published in the excellent series lately published, called " The English Citizen Series, "t Such subjects can be studied and are studied con- stantly without any party spirit, and a man who studies them in this way is far more likely to be a good Co-operator and a good citizen than if he always approaches them from a partisan point of view. 8. The Method of Teaching.— The nature of the teaching would be of the following kind : — (1) Its sole object would be to encourage thinfii////. Mauy of our best art and science teachers will tell us that their difficulty is to prevent the work done under them from being mere cram, that is, an uninteUigeut packing in of knowledge learnt by rote, and just enough of it to secure a certificate. Such work does little good. (2) An essential point would be to have a class for discussion after every lecture. (S) No course would be complete under ten weeks with the same teacher throughout. The work must be continuous and systematic. Far more good will be done to a society by a course of ten lectures to fifty earnest members than by ten popular lectures by diflerent men to 500 members. Tiie latter woi'k, though it may sometimes stimulate, has often very little real or lasting educational value. ♦ Congress Eeport, 1882, p. 60. t See also a list of books on "The Education of Citizens," by A. II. D. Acluud, i^ublished by the Central Board. VII.] EDUCATIONAL WORK. 125 The good work which would be done if Co-opei-a- tors took the subject of adult self- education by the working classes seriously in liand might be enormous. The work done is far more likely to be effective if done by themselves than if it is pressed upon them from above. The many forms it miglit take cannot even be indicated here, and the whole subject requires the careful thouglit of all sensible Co-operators.* 9. Conclusion. — Each Co-operator who tries to raise the standard of discussion at monthly and quartoi-ly meetings, to appeal to generous and not sordid motives, is doing some good. Such a man will habitually try to make men see what Co-operation aims at. He will show them that it strives to mitigate the evils of competition, to give hopefulness to labour, to increase the lei.sure, to lessen the hurry and pres- sure of life, to insure for men healthy lives in homes of their own ; that it aims at diff"using wealth more equally, at diverting it more from merely private ]uirposes, and expending it more for the jniblic good ; that, however often it may miss the mark, it strives for genuineness, fairness to one another, honesty, and straightforwardness. He will say that, above all, it tries to make men really men, that they may have self-respect and self-control, that they may be inde- pendent of the beershop, or of the over-persuasion of others, tliat they may think for themselves. And when the education question is raised, he will show that what is wanted is to put the best food for tlie mind, like tlie best groceries, vnthin the reach of all, that tlie best that has been thought and known and said by the greatest men may be the common property of all alike. This is most distinctly Co-operative work. He will point out that when a member deliberately votes against an education grant, he is deliberately refusing to spare about 6d. or 9d. a quarter which he could not really feel, and wliich might be used for the immense ad\'antage if not of himself at least of his fellow working men and liis children. But it must still be * See the tract by the late Joseph Smith. (Educational Funds.) 126 WORKING MEN CO-OPERATORS. [chap. remembered that even here, too, money is not the only point ; the member does not refuse this money merely because lie is too selfish to spare 6d. a quarter. He is alarmed at what soinids to him " unbusiness-like and sentimental," he is half afraid it may injure the society. It rests with individual Co-operators to show by practical demonstrations, which need not cost money, by social meetings, with papers read and dis- cussion to follow, by classes in Co-operative education, and the like, that the exact . 'opposite is true, that education is, as Professor Stuart says, " the life's neces- sity for Co-ojjerators." Such- practical demonstration will make men much less unwilling to make grants when they are asked for. ' The matter here briefly treated is one of the ut- most importance. Gradually, the older leaders, through whose enthusiasm the movement has been made what it is, are passing away. They got their strength, their education, and their enthusiasm too, to some extent from the difficulties they had to struggle with and conquer, difficulties which we of the younger generation cannot adequately picture to ourselves at all. A similar strength, enthusiasm, and capacity will certainly not be forthcoming either in the present or the future to guide Co-operators in the right direction, and to create a really healthy public opinion in the Co- operative body, unless some very earnest educational work is done. CHAPTER VIII. MISCELLANEOUS. 1. The Co-operative Newspaper. — In 1860, the Manchester Equitable Societj' started the Co-operator. In 1861, it passed into private hands, and so continued until its f^radual merging into the ^tnfi- Vaccinator., and final extinction ia 1871. It was often suh- sidised by subscriptions from societies and individual Co-operators, and after its decease, some hundreds of pounds, due by the editor to the printers, were paid by the EngHsh Wholesale Society. In 186.3, the Scotthh Co-operator was started as a private enterprise, and was published montlily at tlie price of a halfpenny. It ceeised to exist in 1871 at the starting of the Co-operative News. vm.] M ISC ELL A NEO US. 127 In 1871 a Co-oporative Xnw.s Socifity was started at Manchester, and re-cisti'ied. At lirst individuals were admitted as shareholders, but now none but scuiotics can be admitted. The shares are £1 each, transferable, interest limited to five per cent. All the profits are either added to reserve or used in improving the newspajier. The ('o-ij]Hriitirc..Ncirs is published weekly, jnice one i)enny. Its cuTiilatiou is now about 2'), 000 weekly. At the end of 1874 the JNVm'.s had lost £()()0. In 1883, its share capital was £1,700, and its reserve fund was tl,SOO. • 2. The Co-operative Insurance Company. — Immediately after the establishment of the English WHiolesale Society, the founders turned their attention to the subject of insurance, and in 1867, the Co-operative Insurance Go, was registered. The shares are all transferable, interest six per cent. The suqilus profits are added to reserve. The society is a member of the Tariff Union of Insurance Companies, in order to effect safe re-insurances of heavy risks. As this Union forbids any of its members to allow the insured to share in the profits, the Co-operative Insui-ance Co. appoints as. agents all societies in- suring with it that are willing to act as agents. The commission on the ineniiums forms their bonus or di\'idend. By insuring through the agency of their own societies individuals can in- crease the profits divisible. ■ The first fire policy was issued in 1868, and the first fidelity guarantee policy in 186;). Life insurances are not taken by the society. The following tables show its progress : — Five m 46 96 180 V CQ Fire Department. Ki(i D<|iur ■iity nn-nt. N Tears. Premiums. Losses. Pre- miums ~£ 538 2,382 2,587 Losses £ Nil. 473 1,167 K^ Gross. Nett. £ ^ 861 6,057 14,161 Gross. "£ 68 3,619 22,701 Nett. ~£~ 68 3,570 8,944 1868-72 1873-77 1878-82 £ 6,468 12,365 20,170 £ 861 6,754 24,740 £ 617 2,540 1,529 3. Cooperative Banking. — This subject has been discussed from two points of view — (1) the establishment of a bank in which the Co-operative stores, and other associations, could make deposits, keep current accounts, and obtain advances, (2) the imitation of the system of Genua n credit banks. The latter has not met with favour, and is not likely to do so, since the circumstances of British working men are altogether different from the circumstances of the members of the German credit banks. The former idea has been worked out to some extent by the English " Wliolesale " ; but whether it is capable of extensive development on its present basis, is a matter of keen and even acrimonious discussion among Co-opciators. An idea -wnth many is an independent bank, supported by share guarantees, and managed by representatives from Co- o)ierative stores, trade iiin'ons, friendly and building societies. This bank would establish branches wherever there was a sufficiently good business prospect, and would imitate the economical arrange- 128 WORKING MEN CO-OPERATORS. [chap. ments of the Post Office, by putting their management into the hands of a responsible store, union, or building or friendly society, until the branch business was sufficiently large to bear the ex- penses of a separate st^ifF and separate offices. Individuals would be allowed to bank with these branches, and each branch would have a local committee of management, from whom, and by whom, the general committee of management would be elected. In the investment of the funds, regard should be had : 1st, to the security ; 2nd, to the Co-operative character of the investment or borrower ; 3rd, to the opportunity for promoting the well-being and elevation of the worker ; and 4th, to the retui-n on the capital invested. The present method of di%'iding profits at the Wholesale appears to be an equitable one, and to satisf j^ nearly everj'^body, viz., in projiortion to both the commission and interest credited or debited to the customers. Discussion conducted with evenness of temper, and an earnest desire to arrive at tlie truth, must result in a satisfactory solution of this knotty problem. * 4. Co-operative Cottage Building. — The statistics about this matter are very incomplete : but it will be within the mark to say that sixty societies have building departments, and have .spent in cottage building over £-iO0,O0O. One society alone, duiing the j'ear 1883, expended £1.5,000. and has altogether 352 cottages. Also forty-one distinct building societies registered mider the Industrial and Provident Act, have built, at least, another £500,000 worth of cottages. Members of Co-operativestoreshavealsostarted numerous building societies under the ordinary Building Societies Act, and have frequently distinguished them by including the word Co-operative in their title. AU building societies are, how- ever, reallj' " Co-operative," when the interests of both lenders and borrowers are fairly consulted, and where the societies have not been got up in the interests of lawyers, or accoimtants, who look upon them as their freeholds and treat them accordingly. There is a good sprinkling of working-class members in ordinary building societies, and it will not be a high estimate to put the amount invested by them in cottages during the last twenty-five j^ears at £2,000,000. Altogether, then, at least £3,000,000 will, during the last twenty-tive years, have been devoted by working men to providing their own houses ; and at an average of £200 each, this would give 15,000 cottages. Co-operators, when forming these societies, have steered clear of all those forms of societies which either introduce the gambling element or tend to the benefit of the officials rather than to that of members. Irres])ective of the apparent advantages of dividing the risk, it has been found in some localities that a separate build- ing society, although managed by Co-operators, has attracted numerous shoji-assistants and j>ther dependents on shop-keeping wlio would never liave taken part in a building department of a Co-operative society. In the building departments formed by retail societies, various expciimcnts have been made. Repeated discussions have taken ])lace on the best methods of applying the princijjle, that all shall 1)C treated alike, to cottage building. Lending money to members ♦See " Manual for Co-oiierators," chapter x. Viii.] MISCELLANEOUS. 129 to buy their cottages, cliargiiig five per cent, interest on the unpaid balance, and a very small sum for working expenses, has been adopted in many instances. Some societies have built cottages and rented them out to the membci-s, while others have built them, and sold them to the highest bidder, the profit going into the general funds, and helping to swell the profits. All three plans are still being worked ; and, notwithstanding the difference of methods, the nett results cannot wfU be otherwise than bencfieial. The present unsatisfactory land sj'stem prevents in some places any very rapid extension of cottage owning by occupiers, since there are numerous villages owned almost exclusively by one person, who refuses to allow independent ownership. In London also it is often absolutely impossible to erect small dwellings, owing to the enormous price of laud. But this may perhaps be got over by the formation of Co-operative companies owning blocks like the Peabody trustees, the shareholders having the option of occupjong apartments rent free up to the value of their scrip ; and if not occupiers, then partaking of dividend like other shareholders. Shares might also be allowed to be paid up aa in an ordinary building societj'.* 5. Civil Service Co-operation. — Three Civil Service Associa- tions t have joined the Co-operative Union, partly, it may be sup- posed, because in one respect at least their interests and those of some of the working-men Co-operators have been bound up together {see p. 115), and also perhaps because some of the direc- tors of their associations, which employ many workpeople and do a certain amount of manufacturing, have taken some interest in the Co-operative principles of working-men Co-operators, which, they might do much to forward and support. Other associations generally classed with these, of which the Army and Navy Stores in Victoria Street does the largest business, have for various reasons not thought it desirable to join the Union. It is often thought that the only difl'erence between Civil Service Stores and Working-men Co-oi^erative Stores is that the former charge as near cost price as they can, while the latter charge ordinary market prices for their goods. Leaving aside the educational and social value of working men's Co-operation, it is verj' imj)ortant to remember this diftcionce, that in the Civil Service Stores there is a limited number of shareholders, the value of whose shares, as the result of the trading done, often becomes very large. In the working man's store there are no privileged shareholders. Any one can become a sliareholder by depositing Is. and paj'ing a small quarterly subscription. 6. Co-operation and Trade Unions. — It must be obvious that the question wlutlur trade unionists could not to some degree employ their large funds to employ themselves instead of investing them in private enterprises of various kinds, and the question whether * See Tracts published by the Central Board, " Cottage Build- ing " (Scotton) ; " How can a Man become his own Landlord ? " (Havercroft), Congress Kcport, 1871, p. 28, and 1880, p. 5G. Also in connection with associated homes, see section 7 of this chapter. + This movement began in 18Gt, when a number of clerks united to purchase a single half-chest of tea, and divided it among themselves. I 130 WORKING MEN CO-OPEBATORS. [chai". they could not utilise their own surplus laboiir bj' tlie aid of tlieir own funds, will have been raised more than once in the past, and will be raised more than once in the future. The matter has been brought before Co-operative Congresses and Trade Union Con- gresses several times. The diihculties in the way are obvious. The funds are subscribed for a special jjui-pose, and may be largely drawn upon at any moment. Various suggestions have been made to meet the difficulties, for which the Congress Reports must be consulted. That there is a desire to cultivate a friendly feeling between trades imiouists and Co-operators will be seen from the following extract from the report made by the Trade Union Parhamentary Committee to the Trade Union Congress of 18S3: — " The interests of our two movements are absolutely identical. Co-operation is essentially a labour movement ; the flower of our workmen are its sujjporters, and many of our prominent unionists are among its trusted leaders. Year by year Co-operation becomes a larger employer of labour. . . It is undeniably a move- ment for the elevation of the working people. Duty and self- interest should therefore alike prompt the unionists of the country to do all they can to assist its progress and shape its policy by becoming its active coadjutors and associates." 7. Co-operation Abroad. — In the Congress Eeports will be foimd a good deal of information as to what has been going on abroad in various countries, such as Italy, Denmark, France, German}^, and others. Perhaps the work done in Gennanj^ and in France has excited the greatest iutei-est. The Co-operative societies and credit banks, which owe their success so largely to Schulze DoUtsch, have been fully reported on (see Mr. Morier's interesting account, Congress Report, 1871), and the German credit bank system has been often pressed on the attention of English Co-oj)erators (see p. 127). The successful development of profit sharing, or industrial partnership, in a variety of ways in France is well wortliy of fuller attention in England. It is impossible to give any details on these matters here. But reference shoidd be made to Sedley Taylor's book, mentioned on j). 91, for Leclaire's work; also to "Poverty and its Remedy," by Miss Hart, published at 405, Oxford Street ; for the very remarkable work of M. Godiu, at Guise, which included the formation of an associated home, or Familistere, see The Fa mi lint ore nt Gidsr, by Godin, translated by E. V. Neale (Central Board Tract). The question of associated homes is one which Cn-oi)crntors have often discussed with in- terest. (See Tract ])ul)lished by the Central Board, "Associated Homes," liy E. V. Xeale.) 8. Co-operation and Agriculture. — Some remnrks about Co- operative stores in the comiti'y, ami th(! dillirulfics iu their way, will be found at p. 7(5. They would uMturally ])recod(! any great success in Co-operative (agrit iiHural) prodiu'liou, as has been the case in the towns. They would provide that education in asso- ciated work wliich is a necessary preliminary. Th<>re is no reason why Co-operative fanning should not succeed, if the right men could be found or (■ducated. It is a subject whicli is receiving more and more ;itt(Mition on the ]>art of Co-operators. The quan- tity of fresh English butter, English potatoes, beef and mutton, IX.] ADVANTAGES OF CO-OPERATION. 131 liay and straw, eggs, fruit, and the like, which Co-operative stores cousuiiio, is very cousidcrablc. The success of the lialahiue expe- riment in Ireland as lonp as it lasted is well known. At Assiiifjtoii the Co-oiierativc farms have been of much service to the peojile living there, and thougli thoy have passed through a time of adversity, yet tlicre is nmch hope for the future in a newly- developed scheme of working. Other schemes are at woi'k else- where, of wliich more may be heard after a time. Whatever new departures are made should be made with very great care, in order to msure that success which, with reasonable jirecautions, certainly ought to be obtained. CHAPTER IX. THE ADVANTAGES OF CO-OPERATION. — CONX'LUSIOX. It has been admitted in tlii.sbook that Co-operators are often very far from coming up to some of their higher ideals. But, without claiming for the Co-operative movement mcire thair is its due, it would be fair to say that the following are among its chief advantages : 1. The prevention of waste, and of a position of disad\antage to those who can least afford such disadvantage. 2. The encouragement of sympathy with public aims, and a desii'e for the well-being of the community generally. 3. The development of intelligence, self-reliance, and business knowledge Ln a manner that has had a real educational and political value. (1) Co-ojieration tries to help peojilc who wish to look after their own afi'airs. The rich, who may clioose to do their shopjiing through servants to save themselves trouble, or wlio expect special and various attentions from shop people of a particular kind, will be willing to ])ay for tliis. But the working class cannot afford this kind of thing. They desire to lessen the disadvantage at which they are placed (through not being able to carry their custom to London, or elsewhere, as the rich do) as much as possible. They try to lessen the artificial increase of price caused by unnecessary middlemen, preventing the growth of these persons, w ho tend to increase gradually, not through any one's fault, but to save indi\iduals 132 WORKING MEN CO-OPERATORS. [cHAP. trouble. Oo-opex'atioii does away with the grave evils of debt, especially in connection with little shops. It lessens waste, and saves a large sum of money for the working class and the nation. It encourages saving up to the point, in many cases, of giving members houses of their own, and gives a far better interest than an ordinary savings bank. It promotes independence, prevents pauperism, and helps peoj^le to rise above the demoralising influence of charitable gifts. Its constant aim is to give hopefulness to working men, which they need perhaps more than anything else ; to lessen as far as possible the great inequalities that exist at the present time, and to diffuse more evenly, and more reasonably, the possession of wealth. (2) The Co-operative society is open to all, and its work is done in the interest of the conununity at large. Co-operators give their warmest sym]jathy to all work of a similar kind, and they are well aware that not only work which aims at providing the daily needs of food and clothing in the best way, and at giving hopefulness to labour, but work which aims at giving more health, more fresh air, more chance of recreation and happiness to hard-worked people, is really work on Co-operative lines. And so all work which aims at brightening, civilising, lifting up, and encouraging the great masses of our community, and which in no true sense can ever be called party poli- tical work, should receive their heartiest support, be- cause, like their own, it is for the good of the whole community in matters where it most needs help. And so, too. Co-operators will willingly work hand-in-hand with those wcaltliy pei\sons Avho desire to divert their own wealth from merely private cliannels to purposes of public good, and with men of education and ability who want to bring within the reach of all those advantages of intellectual knowledge and intellectual pleasure which they have themselves enjoyed. In this way, and in common social gatherings in which all may take part, that good feeling between classes which is so important, and yet which is interfered ix.J ADVANTAGES OF CO-OPERATION. 133 with by so many suspicions (by no means altogether unfounded), may be more fully brought about. And it may be possible that there will thereby gradually be de- veloped better means than have always hitherto been found of expending the wealth whether of the >State or of individuals, and a distribution of wealth which shall not press so hardly on many as at the present time. (3) Co-operation aims at straightforwardness and integrity in its dealings, and at genuineness in the goods in which it deals. Co-operation educates people in knowledge of business and of the industrial and economical relations between men in these days. It gives men self-reliance and self-control. It gives them something to hope for — some reason not to be reckless in undertaking responsibilities, whether as individuals or in family life, which they cannot fulfil. It strengthens men's power of judging the real worth of others. It provides a valuable political training ground, giving many lessons of the best practical kind in the work of self-government. The three great movements of self-help which have tended to improve the condition of working people, and which occupy the attention of so many of their best men — Trade Unions, Co-operative Societies, and Friendly Societies — have all done excellent work.* But those who know them best are well aware that there is room for improvement in them all. As far as Co-operation is concerned, if all those who can really help would realise what the Co-operative move- ment is capable of doing, a great deal more might be done. Those who desire to serve the community well may rightly turn their attention to this matter. But no advance, as we have said several times in tlie course of this book, will be made unless single indi- viduals will get to work instead of holding back. If this book is of any use to any such individuals, to encourage or to help them, our purpose in writing it will have been ful611ed. * To tlicse three might he added, in reference to some parts of England especially, Workmen's Clubs. APPENDIX. LIST OF CONFERENCE DISTRICTS of the CO-OPERATIVE UNION {are JLip opjwsite Titlc-pa'jc). NoiiTHEEN Section. Namo of District. •H.2~ a §5 a . la X:ime of District. III tea Hid r-AND Sectiox. 1 Earl's Barton 24 6 Stafford 15 2 Ketteriug 18 7 Biriniup'liain 19 3 Leicester 21 8 Nottiugliam 22 4 5 Coveutry Derby 21 22 9 Lincoln 14 1 N. Nortlmniberland . . . 18 5 East Durham 19 2 SoutliNorthumberlaml 11 6 Soutli Durham 20 3 Cumberland and ) 29 7 South Durham and") Westmoreland j North Riding of J> 16 4 West Durham and ) S. Northumberland j 22 Yorkshire j Noeth-Westeen Section. 1 Bolton 28 8 Calderdale 27 2 Manchester 41 9 Dewsbury 33 3 North-East Lanca- ) shire J 41 10 Hudderstield 39 11 East Yorkshii'e 15 4 Rochdale 31 12 South Yorkshire 24 5 Oldham 13 13 Macclestield 29 6 Rosscndalc 19 14 Cheshire 10 7 Airedale 41 15 North Lancashire ... 24 Scottish Section. 1 Ayrshire 26 6 Fife and Kinross 29 2 Border Counties 8- 7 Falkirk 21 3 Central 31 8 Glasgow and Sub- ) 32 4 Eastern 34 j urban j" 6 Stirling, Fife, and ) ,g Clackinannau J 9 Perth and Forfar ... 43 10 Renfrewshire 23 Southern Skction. 1 North Metropolitan ... 22 6 Oxford 32 2 Soutli MetropoUtau ... 16 7 Cambridge 8 3 Sheerness 10 8 Norwicli 8 4 Lewes 8 9 Colchester 17 5 Wilton 8 Western Section. — No districts at present. INDEX. Advantages of Co-operation, 14, 15, 131—133. Agricultural Co-operation, 130. Auditors, 18, 60. Bulance Sheets, 56—62. Bimkiug, 127. Book-keepiug, 55. Branches, 69. Capital, Surplus, 69. Central Boaid, 111—116. 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