History of Co-operation (7)
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CHAPTER XIX.

CO-OPERATION IN STORMY DAYS
 

"To seek the noblest—'tis your only good,
 Now you have seen it; for that higher vision
 Poisons all meaner choice for evermore."

GEORGE ELIOT.


POLITICAL economists, who are all privately persuaded that Nature would never have been able to carry on until now had they not arisen to give it suggestions, were full of prediction; that Co-operation might keep up its health in time of average prosperity, but in days of adversity it would take a low fever, fall into bad ways, suffer from coldness in the extremities, have pains in the "chest," and put the social "faculty" to their wits' end to pull the creature through.  Let the cotton famine arrive, and fat Rochdale would become as lean as Lazarus.

    In 1861, when the American slave war broke out, and the South armed against the North with a view to establishing a separate slave dominion, the dangerous days set in when cotton would be scarce, mills would stop, wages cease, and eating would be interrupted in hundreds of thousands of households.  Would white workmen, who were not quite sure they were not slaves themselves, put up with privations year after year, consume their hard-earned and long-treasured savings, all for the sake of their long-heeled, woolly-headed, black-faced brothers, who probably did not understand freedom—would not know what to do with it when it should come, and who most likely cared nothing for it while the pumpkin was plentiful, and the planter's whip fell on somebody else's back?  Sentiments in favour of freedom might be pretty strong at home—where it concerned ourselves—but it would be drawn very fine and thin when it had to reach all the way from Rochdale and Leeds to the cotton swamps of the Southern States.  The French and Italian workmen might in their chivalrous way die for an idea, but John Bull might have small sympathy for the remote "nigger" whose ebony caprices and apple- squash ideas of liberty interfere with John's repast.  If members of Parliament, sure of good dinners and the bountiful resources of territorial acres—if noblemen who grew rich while they slept—if merchants and manufacturers, wealthy beyond the dreams of avarice or limits of public safety—could basely cry, "Open the ports, and let the negro howl under the whip," half-educated or wholly uneducated workmen could not be expected to be discerning, or generously solicitous for the welfare of distant Samboes.

    So thought the mob of politicians of that day, for, as Samuel Bailey says, "those are a mob who act like one," and neither a good coat nor high station alters the mob quality.  Character goes by acts.  Copperheads, clerical and political, infested Lancashire and Yorkshire, retailing insidious proposals to recognise the South.  In these I do not include the honest politicians who really believed that the separation of North and South would increase the individuality of nations, and conduce to general progress.  I speak here only of the Copperhead class.  The Copperhead in America was a political creature who talked union and helped separation; and when their agents came among the co-operators of the North of England, talked freedom and argued for slavery, they disguised their aim under specious forms of trade policy.  Physiology and Scripture were pointed against the Negro in lecture-room and pulpit.  Ultimately the Copperheads slunk away under a storm of discerning scorn.  Many a stout blast blew from Rochdale.

    Statistics (an ugly, recondite, abstract, discomfiting word, invented, one would think, to turn attention from the study of facts) of business done by co-operators in cotton famine days will be instructive.  The King Street Industrial Society, Oldham, is an example:—
 

Year No. of Members Capital (£) Business (£)

1861

924

9,130

47,675

1862

824

8,034

41,901

1863

861

9,165

36,366


    There are two societies in Oldham, one in King street the other at Greenacre Hill.  King Street was the larger by about one-sixth.  The two societies together had 3,299 members, who did business to the amount of £87,766, and made £7,636 of profit.  So that, taken together or singly, Co-operation carried a saucy head in the slave war storm.

    Here are a few examples of what were the fortunes of stores elsewhere:—
 

Name of store No. of members Amount of business Profits realised

Liverpool

3,154

£44,355

£3,201

Bury

1,412

£47,658

£4,689

Bacup

2,296

£53,633

£6,618


    The reader may be assured that no bare bones were found in Mother Hubbard's co-operative cupboard in the cotton famine days.  There was no old lady in any competitive district of the working people so bright and plump as she.  Bacup workers suffered more from the cotton scarcity than Rochdale.  Bacup had scarcely any other branch of trade than cotton.  Their store receipts went down nearly one half at the time of the greatest scarcity.  The Relief Committee prohibited the recipients going to the store to buy goods with the money given them.  They might have bought at the store to more advantage, but probably the Relief Committee considered the shopkeepers more in need of support than the storekeepers.  The Liverpool store was little affected by the cotton scarcity.  Mr. William Cooper wrote me at the time his estimate of store affairs, which I quote for his amusingly contemptuous appraisement of Manchester.  "Liverpool," he said, "has had difficulties of its own making—namely, by giving credit to members—but they have adopted the ready-money system, which will check its sales for a time, but its stability and growth will be all the more certain after.  Some of the stores have given to the relief funds.  Mossley, Dukinfield, Staleybridge, Ashton, Heywood, Middleton, Rawtenstall, Hyde, have suffered badly, being almost entirely cotton manufacturing towns; yet none of the stores have failed, so that, taken altogether, the co-operative societies in Lancashire are as numerous and as strong now as before the cotton panic set in.  Even Manchester, which is good for nothing now, except to sell cotton, has created a Manchester and Salford Store, maintained for five years an average of 1,200 members, and made for them £7,000 of profit."

    The reader may be satisfied of the actual and inherent vitality of Co-operation to withstand vicissitudes.  Yorkshire and Lancashire live on cotton.  When the American slaveholders' rebellion cut off the supply, of course a cotton famine occurred, and people who regarded Co-operation as a Great Eastern ship—too unmanageable for industrial navigation—predicted that it would founder in the southern tempest.  The scarcity, instead, however, of destroying co-operative societies, brought out in a conspicuous way the soundness of the commercial and moral principles on which they are founded.  Mr. Milner Gibson's parliamentary returns at that time show that co-operative societies had increased to 454, and that this number was in full operation in England and Wales in the third year of the scarcity.  The amount of business done by 381 of these societies was upwards of £2,600,000. In Lancashire there were 117 societies, in Yorkshire 96.  The number of members in 1863, in the 381 societies, was 108,000.  The total amount of the assets of these societies was £793,500, while the liabilities were only £229,000.  The profits made by the 381 societies (excluding 73 societies which made no returns) were £213,600; and this in the third year of the great cotton scarcity!  It may be, therefore, safely concluded that Co-operation established for itself a place among the vital business forces of the country.  No one can foretell where the right steps will lead.  No moralist foresees the whole of that ethical change which his maxims will generate.  No railway inventor ever had any idea of that omnipresent traffic which has grown up.  Mr. Bright and Mr. Cobden, when they first addressed the people in favour of the repeal of the corn laws, scarcely anticipated that one result would be that they should make the English nation heavier.  Every man that you meet in the streets now is stouter, and weighs two stone more than he would have done but for Mr. Cobden and Mr. Bright.  Calculating from our present population, it may be said that these eminent corn-law repealers have increased the weight of the British race by 400,000 tons.  So that if our men were precipitated unarmed against battalions of any other nation in the field, they would have increased advantages in bearing them down by sheer weight.  And the humble co-operative weavers of Rochdale, by saving twopences when they had none to spare and holding together when others separated, until they had made their store pay, set an example which created for the working classes a new future.


 
CHAPTER XX.

NATURE OF CO-OPERATIVE PRINCIPLE


"It is not co-operation where a few persons join for the purpose of making a profit from cheap purchases, by which only a portion of them benefit.  Co-operation is where the whole of the produce is divided.  What is wanted is, that the whole of the working class should partake of the profits of labour."—J
OHN STUART MILL (Speech at the Crown and Anchor Tavern, London).


EXCITED Labour seems on fire and the Political Economist, albeit a damp creature, seems powerless to extinguish it.  Doctrinal streams of "supply and demand" poured upon it, act as petroleum upon flame.  Organised capital grinds industry as in the mill of the gods—very small.  No protests that capital is his friend reassures the worker.  Experience has made him unbelieving.

    Sitting at the windows of the Marina, St. Leonards, watching the great ocean raging all alive with tumultuous and ungovernable motion, surging and roaring, I have thought how like it was to the industrial world.  There is unfathomable cruelty in murderous waves.  Vessels, laden with anxious emigrants, have been, by them, sucked down to death.  As far as the eye can stretch the raging ocean covers all space, resembling some insane and boundless beast.  Society heaves with the unrest of pitiless competition more devastating than that of the sea.  Its remorseless billows wash away the fruits of humble labour.  There is no bay or cavern where property lies but is guarded by capitalist or trader, whose knives gleam if the indigent are seen to approach it.  The co-operator is not one of them.  He can create wealth for himself, and foresees the rapacity and tumult of greed will be stilled, as the principle of equity in industry comes to prevail.

    Co-operation is a very different thing from Co-operation as defined in dictionaries.  When several men join in moving a boulder, because one alone could not stir it, it is called Co-operation.  In this way, a bundle of sticks bound together present a force of resistance which separately none could pretend to, and in this sense the sticks are as much co-operators as the men.  But industrial Co-operation means not only a union for increasing mechanical force, but for obtaining the profit of the transaction, and having it equitably distributed among those who do the work.  It is not knowing this difference which causes such confusing chatter in the highest quarters in literature about "Co-operation being as old as the world," and "which has been practised by every people."

    Gibbon Wakefield says: "Co-operation takes place when several persons help each other in the same employment, as when two greyhounds running together kill more hares than four greyhounds running separately." [149]  This is the nature of the Co-operation chiefly known to political economists.  But industrial Co-operation unites not merely to kill the hares, but to eat them.  The greyhounds of Wakefield run down the hares for their masters—the new co-operative greyhounds run down the hare for themselves.  Industrial Co-operation is not only union for creating, but for dividing profits among all who have helped to make them.

    Politeness, as explained by that robust master of definition, Dr. Johnson, consists in giving a preference to others rather than to ourselves.  In this sense Co-operation may be defined as the politeness of industry, for it consists in giving the total of its produce equitably to those who create it.

    Co-operation was, in Mr. Owen's mind, a paternal arrangement of industry, which could be made more profitable than one in which the employer considered only himself.  The self-managing scheme, under which working people create profits and retain them among themselves, Mr. Owen did not propound.  His idea was to organise the world—Co-operation attempts the more modest task of organising the provision store and the workshop.

    Von Sybel defines the Communists proper as "those who desired to transfer every kind of property to the State." [150]  This is Continental Socialism, not English Co-operation.  M. De Metz founded a criminal community.  He was a man of wealth.  Had he been a poor man he had been regarded as a hired agitator.  He was as mad as any other social philanthropist, for he believed in the radical goodness of little scoundrels, and that honesty could be cultivated as successfully as fraud, and criminals colonised into an industrial self-supporting community.

    A writer who has a cultivated contempt for social innovations, but not intentionally unfair, remarks: "We have had republican societies like Plato's, Fourier's, and Babeuf's; hierarchical and aristocratic like St. Simon's; theocratic like the Essenes; despotic like the Peruvians and Jesuits; Polygamists like the Mormons; material like Mr. Owen's.  Some recommended celibacy as the Essenes—some enforce it as the Shakers, some, like the Owenites, relax the marriage tie; [151] some, like the Harmonists, control it; some, like the Moravians, hold it indissoluble; some would divide the wealth of the society equally among all the members; some, as Fourier, unequally.  But one great idea pervades them all—community of property more or less complete, and unreserved common labour, for the common good." [152]

    When the Irish Land Bill was before the House of Commons, May 16, 1870, Mr. Gathorne Hardy said, "It was not wise to endorse by the sanction of Parliament the principle that the ownership of land was a better thing than the occupation.  He protested against the clause as socialistic and communistic.  (Hear, hear.)" [153]  When a politician does not well know what to say against an adversary's measures, he calls them "socialistic," a term which, to employ Mr. Grant Duff's useful phrase, is a good "working bugbear."  In former days, when a clerical disputant met with an unmanageable argument, he said it was "atheistic," and then it was taken as answered.  In these days the perplexed politician, seeing no answer to a principle pressed upon him, says it is "communistic."  He need give no reason, the "working bugbear" clears the field of adversaries.

    One thing may be taken as true, that the English, whether poor or rich, are not, as a body, thieves.  Now and then you find some in both classes who have a predatory talent, which they do not hide in a napkin.  Statesmen may sleep in peace.  The working men will never steal knowingly, either by crowbar or ballot-box.  Tories and Whigs have robbed them; and I think I have seen the Radical hand with marks about it, as though it had been in the people's pocket—doubtless in some moment of patriotic aberration.  Nevertheless, the common sense of common men is against peculation.

    The Co-operative Magazine of 1826 declared happiness as the grand pivot on which the co-operative system turned.  "Happiness" was explained as "content and uninjurious enjoyment, that is, enjoyment, not injurious either to one's self or to any other."  This, as the Americans say, rather want "grit."  The mind slides over it.  A later advocate of some mark, Dr. King, of Brighton, defined Co-operation as "the unknown object which the benevolent part of mankind have always been in search of for the improvement of their fellow creatures."  The object of a definition is to make the thing in question known; and we are not helped by being told it is the "unknown."  There is, however, something dimly revealed in what he says of "society," which he derived from the Greek word sanus, sound or safe, and lieo, to call together, the meaning of which was declared to be—to call together for safety. [154]  No doubt there is sense in this.  Persons do require to be called together for safety; but what they are to do when so called is not defined.

    A writer in the Co-operative Miscellany of 1830, signing himself "One of the People," saw his way to a clearer specification of the "unknown" thing.  He exclaims: "What is Co-operation? some may inquire."  Certainly many did make the inquiry.  The answer he gives is this: "Co-operation in its fullest sense is the opposite of Competition; instead of competing and striving with each other to procure the necessaries of life, we make common cause, we unite with each other, to procure the same benefits."  This is rather a travelling definition, it moves about a good deal and has no fixed destination.  It does not disclose how the "common cause" is made.  A definition has light in it as soon as it discloses what a thing is not, and names its contrary.  We learn now that Co-operation is not competition; but is the "opposite."  This writer gives an explanation of the method of procedure—namely, that a co-operative society devotes the profits of the distributive stores to productive industry and the self-employment of the members of the societies.  After a lapse of seventy years, the greater and more important part of the plan—the self-employment of members—is but scantily realised.  The educated co-operator has always borne it in mind, and it remains as a tradition of Co-operation that production and self-employment go together.

    Mr. Thompson, of Cork, the first systematic writer on Industrial Communities, never defined their object otherwise than to say that "workmen should simply alter the direction of their labour.  Instead of working for they know not whom, they were to work for each other."  Such a definition could only be made intelligible by details, and these Mr. Thompson gave with much elaboration.  As a student under Bentham, Mr. Thompson was sure to mean something definite, but the conditions under which men shall "work for each other," the essential feature of Co-operation, he never otherwise brought within the compass of a definition.  But community and Co-operation are distinct things.

    Practically, the principle of Co-operation grew out of joint stock shop keeping.  A few persons with means supplied capital for the business, with the understanding that after interest was paid on their capital, the profits should be devoted to the establishment of a community.

    The next conception of it was that of prescribing that each purchaser should be a member of the store, and should subscribe a portion of the capital—the profits, after paying interest, were to be kept by the shareholders.  At this point Co-operation stopped eighteen years.  Nobody was known to have any conception how it could be improved.  If everybody was a shareholder, and the shareholders had all the profits, nobody could have more than all, and nobody was left out of the division.  There was no enthusiasm under this management, and yet there was no apparent fault.  In some cases there was great success.  Shareholders had 10 and 15 per cent. for their money, which, to a member who could invest £100 was a sensible profit to him.  Nevertheless custom fell off, interest in the stores abated, and many were given up.  If any solitary cogitator proposed to divide the profits on purchases, it was said, "What is the good of that?  If there are profits made, they appear in the interest.  You cannot increase them by varying the mode of paying them."  Yet all the while this was the very thing that could be done.  There lay concealed and unseen the principle of dividing profits on purchases which altered the whole future of Co-operation.  We have traced the idea of it to Glasgow in 1822, to Meltham Mills in 1827, [155] to Rochdale in 1844, whence it has spread over the earth.  One thing would strike most persons, that giving a profit to customers would increase them.  No doubt others saw that under the interest on capital plan, that while the shareholders who could subscribe £100 might get £15, the poorer member who could only put in £1 obtained only 3s., yet the large shareholder who receives the £15 may not have been a purchaser at all, while the poor member, if he had a family, probably contributed £50 of capital to the business, if his purchases amounted to £ 1 per week, and the 2s. in the £ which on the average can be returned to purchasers now would give him £5 a year, besides his 5 per cent. interest on his capital.  Thus it could be shown that the customer contributed more to the profits of the store than the capitalist.  The purchaser, therefore, was taken into the partnership.  Thus the mere form of distributing profits actually increased them.  The interest of the purchaser revived: he became a propagandist.  He brought in his neighbour.  Business grew, profits augmented, and new vitality was infused into Co-operation.  The vague principle that the producer of profit should have the profit, took a defined form, and he got it—and the purchaser was henceforth included in the participation of store gains.

    Definitions grow as the horizon of experience expands.  They are not inventions, but descriptions of the state of a question.  No man sees everything at once.  Had Christ foreseen the melancholy controversies over what he meant, which have since saddened the world, he would have written a book himself, and never have trusted the conditions of salvation to the incapable constructions and vague memories of illiterate followers.  Foreseeing definitions, guiding Co-operation at successive points, would have been a great advantage, but it had to wait for them.

    When it became clear that the purchaser must be taken into partnership as well as the capitalist, it did not occur to any one that Co-operation was not complete so long as the servants of the store were left out.  If profits were to be shared by all who contributed to produce them, the servants of the store have their claim.

    The conception of the co-operative principle in 1844 had assumed the following form: Co-operation is a scheme of shop keeping for the working people, where no credit is given or received, where pure articles of just measure are sold at market prices, and the profits accumulated for the purchasers to create like advantage in the workshop.

    It was not until twenty-four years later, namely, in 1868, that Rochdale attempted to extend the principle of Co-operation to manufactures.  Their method of doing this was to divide profits with the workers.  Those who had discovered that the interest of the purchaser was worth buying, were ready to admit that the interest of the workman was also worth buying.  Clerks, managers, workmen, whoever in any capacity, high or low, were engaged in promoting the profits, were to be counted in the distribution.  Twelve years more elapsed before any current definition of Co-operation contained the following addition: The main principle of Co-operation is that in all new enterprises, whether of trades or manufacture, the profits shall be distributed in equitable proportions among all engaged in creating it. [156]

    At the Social Science Congress held in Edinburgh in 1867, I asked professor Fawcett to take occasion in one of the Sections to define Co-operation as he conceived it, that we might be able to quote his authority in our societies.  He did so in words which included labour as well as capital, in the division of profits.

    The most comprehensive statement of Co-operation is that given by a master of definitions, and placed at the head of this chapter.  It occurred in the first public speech Mr. John Stuart Mill was known to have made.  A great Co-operative Tea Party, of members of co-operative societies in London was held in the Old Crown and Anchor Hall, Strand, then known as the Whittington Club.  Being acquainted with Mr. Mill, I solicited him to define the nature of Co-operation as he conceived it, for our guidance, and he did.  "It is not Co-operation," he said, "where a few persons join for the purpose of making a profit by which only a portion of them benefit.  Co-operation is where the whole of the produce is divided.  What is wanted is that the whole working class should partake of the profits of labour."

    Years elapsed before any official definition was attempted of Co-operation.  The Co-operative Congress at Newcastle-on-Tyne (1873) agreed upon a floating definition of a co-operative society, stating that "any society should be regarded as co-operative which divided profits with labour, or trade, or both."  Prior to this, I had taken some trouble to show that if the purchaser from a manufacturing society was to be placed on the same footing as the purchaser from a store, a similar extension of business and profits would be likely to arise in the workshop which had accrued at the store; and the cost of advertising and travellers and commissions would be greatly reduced.  This led to a more comprehensive definition of the scope of co-operative principle which was thus expressed.

    Co-operation is an industrial scheme for delivering the public from the conspiracy of capitalists, traders or manufacturers, who would make the labourer work for the least and the consumer pay the utmost, for whatever he needs of money, machines, or merchandise.  Co-operation effects this deliverance by taking the workman and the customer into partnership in every form of business it devises. [157]

    All co-operators who have, as the Italians say, "eyes that can see a buffalo in the snow," will see the policy of counting the customer and the worker as an ally.  Until this is done, Productive Co-operation will "wriggle" in the markets of competition, as Denner says in "Felix Holt," "like a worm that tries to walk on its tail."  Co-operation consists—

    1. Concert regulated by honesty, with a view to profit by economy.

    2. Equitable distribution of profits among all concerned in creating them, whether by purchases, service in distribution, or by labour, or custom in manufactures.

    Dr. Elder, in his work entitled "Topics of the Day," says: "The term Co-operation is restricted to organised combinations designed to relieve them of intermediates in productive industry.  Co-operation is partnership in profits equitably distributed in proportion to the severalties of capital, [158] labour skill, and management."

    There is an evolution in definitions, as in other things, which it is useful to trace.  There is need of this, for principles like—


"Truth can never be confirmed enough,
 Though doubts did ever sleep."


    The main idea that should never be absent from the mind of a co-operator is that equity pays, and that the purchaser at the store and the worker in the workshop, mill, or field, or mine, or on the sea, should have a beneficial interest in what he is doing.  A principle is a sign by which a movement is known, is a rule of action, and a pledge of policy to be pursued.  To be a man of principle is to be known as a person having definite ideas, who sees his way and has chosen it, while others are confused he is clear.  While others go round about he goes straight on.  When others are in doubt he knows exactly what to do.  But the majority are not of this quality.  They see a principle for a short time and then lose sight of it.  Some one may point out that the new paths lead to a place the very opposite of that they proposed to reach.  Having no clear discernment of the nature of principle the unreflecting think one object as good as another, or better, if they see immediate advantage in it.

    Co-partnery is not Co-operation.  A co-partnery proceeds by hiring money and labour and excluding the labourer from participating in the profit made.  English Co-operation never accepted even Louis Blanc's maxim of giving to each according to his wants, and of exacting from each according to his capacity.  This points to the reorganisation of society.  English Co-operation gives nothing to a man because he wants it, but because he earns it.

    Where the interest of the purchaser is not recognised in the store—where the claim of the workman is not recognised in the production—there is no Co-operation; and the assumption of the name is misleading.  Distributive Co-operation which takes in the purchaser, and leaves out the servants of the store, is partial Co-operation.  Productive Co-operation, which does not recognise the directors, managers, and workmen, is incomplete Co-operation.

    When capital divides profits with shareholders only and as such, that is joint-stockism.  It does not care for workers, except to use them—nor appeal to their sympathies, nor enlist their zeal, or character, or skill, or good will.  And to do the joint-stock system justice it does not ask for them.  It bargains for what it can get.  It trusts to compelling as much service as answers its purpose.  Even if by arrangement all the workmen are shareholders in a joint-stock company, this does not alter the principle.  As workmen, because of their work, they get nothing.  They are still, as workmen, mere instruments of capital.  As shareholders they are more likely to promote the welfare of their company than otherwise; but they do it as a matter of business rather than as a matter of principle.  Joint-stock employers often do have regard for their men, and do more in many cases for their men than their men would have the sense to do for themselves.  But all this comes in the form of a gift—as a charity—not a a right of labour.

    If workmen had capital and held shares in enterprises in which they were engaged in labour, they would be merely a capitalist class, studying how to to get the most by the employment of others, how early to desert work themselves, and subsist upon the earnings of those to whom labour was still obligation.  What Co-operation proposes is that workmen should combine to manufacture and arrange to distribute profits themselves, and among all of their own order whom they employ.  By establishing the right of labour, as labour, be counted as capital, by dividing profits on labour, they would give it dignity; they would appeal to the skill, goodwill, to the utmost capacity and honest pride of a workman, and have a real claim upon him in these respects.

    It is quite conceivable that many working men will yet, for a long time to come, prefer the present independent relation of master and servant.  Many a man who has the fire of the savage in him, and whom civilisation has not taught how much more happiness can be commanded by considering the welfare of others than by considering only himself, prefers working on war terms, unfettered by any obligation.   He has no sympathy to give, and he does not care that none is offered him.  He would not reciprocate it if it were.  He dislikes being bound, even by interest.  Any binding is objectionable to him.  Hate, malevolence, spite, and conspiracy are not evils to him.  He rather likes them.  His mode of action may bring evils and privation upon others; but he is not tender on these points; and if he be a man of ability in his trade he can get through life pretty well while health lasts, and enjoy insolent days.

    The imputations heaped upon capital arise from workmen always seeing its claws when it has uncontrolled mastery.  No animal known to Dr. Darwin has so curvilinear a back or nails so long and sharp as the capitalist cat.  As the master of industry—unless in generous hands—capital bites very sharp.  As the servant of industry it is the friend of the workman.  Nobody decries capital in itself, except men with oil in their brains, which causes all their ideas to slip about, and never rest upon any fact.  Capital is an assistant creator.  It is selfish when it takes all the profits of the joint enterprise of money and labour.  It is capable of buying up land and abruptly turning people off it—it is capable of buying up markets and making the people pay what it pleases; it is capable of shutting the doors of labour until men are starved into working on its own terms.  Capital is like fire, or steam, or electricity, a good friend but a bad master.  Capital as a servant is a helpmate and co-operator.  To limit his mastership he must be subjected to definite interest.  This was the earliest device of co-operators, but its light has grow dim in many minds, and in many undertakings has never shone at all.

    In Distributive Co-operation the interest of capital is counted as a trade charge to be paid before profits are counted; and in Productive Co-operation the same rule should be followed.

    In England we do not apply the term co-operative to business in reference to the source of profit, but to the distribution of the profit.  In a store, profit is not divided upon the amount of capital invested, but upon the amount of purchases by members.  The purchasers are in the place of workers—they cause the profits and get them, while capital, a neutral agent, is paid a fixed interest and no more.

    On the other hand, Productive Co-operation is an association of workers who unite to obtain profit by their labour, and who divide profit upon labour, just as in a store they are divided upon purchases.  Mr. Roswell Fisher of Montreal, presents the advantage of the principle of dividing profits upon labour in a clear form.  It is this: The workmen should subscribe their own capital, or hire it at the rate at which it can be had in the money market, according to the risk of the business in which it is to be embarked: then assign to managers, foremen, and workmen the salaries they can command.  Out of the gross earnings, wages, the hire of labour; the hire of capital; all materials, wear and tear, and expenses of all kinds are defrayed.  The surplus is profit, and that profit is divided upon the labour according to its value.  Thus, if the profits were 5 per cent., and the chief director has £10 a week, and a skilful workman £2, the director would take £50 of the profit, and the workmen £2.  The capital, whether owned by the workmen or others, would have received its agreed payment and would have no claim upon the profits of labour.

    The ceaseless conflicts between capital and labour arise from capital not being content with the payment of its hire.  When it has received interest according to its risk, and according to agreement, there should be an end of its claims.  Labour then would regard capital as an agent which it must pay; but when it has earned the wages of capital and paid them, labour ought to be done with capital.  Capital can do nothing, can earn nothing, of itself; but employed by labour, the brains, and industry of workmen can make it productive.  Capital has no brains, and makes no exertions.  When capital has its interest its claims end.  It is capital taking the profits earned by labour that produces conflict.  In Co-operation labour does not consider profit made until capital is requited for its aid.

    A distinguished French co-operative writer, M. Réclus, says, "Give the capitalist only one-third of the surplus profits, and the worker two-thirds."  Mr. Hill replies, "In countries like India, wherein capital is comparatively scarce, it can and will command high terms in any agreement it may make with labour; whilst in North America, where labour is scarce, labour can and will command comparatively high terms in its agreement with capital.  It would seem a monstrous violation of abstract principle that, whilst in order to earn fifty guineas a low-class agricultural labourer must work hard for two whole years, Jenny Lind should obtain such a sum for singing one single song!  But so it is; and why—but that mere labourers are plentiful, whilst of Jenny Linds there is but one." [159]  A Jenny Lind rate of interest must be given for it if it cannot be had without, but having got that it should not come up a second or third time for more.

    Capitalists hired labour, paid its market price, and took all profits.  Co-operative labour proposes to hire capital, pay it its market price, and itself take all profit.  It is more reasonable and better for society and progress that men should own capital than that capital should own men.


 
CHAPTER XXI.

DISTRIBUTION.—THE CO-OPERATIVE STORE


"Co-operation is the true goal of our industrial progress, the appointed means of rescuing the Labouring Class from dependence, dissipation, prodigality, and need, and establishing it on a basis of forecast, calculation, sobriety, and thrift, conducive at once to its material comfort, its intellectual culture, and moral elevation."—HORACE GREELEY, Founder of the New York Tribune.


SHOPS in most countries are confined to the sale of one, or a very few articles.  Among artificers in metals work-rooms are called "workshops."  In towns where articles, and provisions in portable quantities, are sold, they are called simply "shops."  Where great varieties of goods are collected together for sale it is called a "Store."  This American name was very early applied to co-operative shops, where articles of many kinds, groceries, garments, feet-gear, and goods of household use, were stored for sale.  This is called Distributive Co-operation.  The manufacture of articles for sale is called Productive Co-operation.

    The earliest, humblest, and quaintest store founded in England, so far as my researches have gone, is that set up by the sagacious Bishop Barrington, one of George the Third's Bishops, who held the see of Durham at the end of the seventeenth century [ED.— 'eighteenth' century—see Shute Barrington (1734–1826].  At first sight it is not a recommendation to posterity to have been one of the Georgian Bishops.  What did Walter Savage Landor say of the Georges? [160]

    However, Bishop Barrington was a great favourite in Durham, and had fine qualities and gracious ways.  When my inquiry for co-operative facts appeared in the New York Tribune, a correspondent, at the foot of the Alleghanies, sent me pages of an old magazine, which he had carried from England long years ago with his household goods, containing, in large type, an "account of a village shop at Mongewell, in the county of Oxford, communicated by the Bishop of Durham."  This humble provision store, with its scanty stock, its tottering pauper storekeeper, with his shilling a week salary, is a picture of the humblest beginning any great movement ever had.  No doubt the Bishop was a good secular preacher.  He certainly was a man of business, and showed perfect knowledge of the working of a store, and would make no bad manager of one in these days.  He describes the condition of poor people in those times: their ignorance, their helplessness, their humility of expectation, and the economical and moral advantages of a co-operative store, as completely and briefly as they ever were described.  I enrich these pages with the Bishop's words:—


    "In the year 1794, a village shop was opened at Mongewell, in Oxfordshire, for the benefit of the poor of that and three small adjoining parishes.  A quantity of such articles of consumption as they use was procured from the wholesale dealers as bacon, cheese, candles, soap, and salt, to be sold at prime cost, and for ready money.  The bacon and cheese, being purchased in Gloucestershire, had the charge of carriage.  This plan was adopted under the apparent inconvenience of not having a more proper person to sell the several commodities, than an infirm old man, unable to read or write.  He received the articles that were wanted for the week; and it has appeared by his receipts at the close of it, that he has been correct.  Since the commencement to the present time, there has been no reason to regret his want of scholarship: a proof how very easy it must be to procure, in every village, a person equal to the task.  As he has parish pay, and his house-rent is discharged, he is perfectly contented with his salary of one shilling per week, having also the common benefit of the shop.

    "As the prices of the shop articles have varied much during the past year (1796), it will be easy to judge of the advantage by taking them at the average, and the account will be more simple.  The price of the sale has been in the proportion stated against the prices of the shops in the neighbourhood.

    "The rate of bacon purchased, has been eightpence halfpenny per pound; the carriage rather more than a farthing.  It was sold for ninepence farthing; the advantage to the poor was twopence three-farthings per pound.  Cheese cost fourpence three-farthings; carriage more than a farthing; sold for sixpence: advantage to the poor, one penny per pound.  Soap, candles, and salt, sold at prime cost: the advantage on these articles to the poor was one pound eleven shillings.

    "There is a loss on the soap from cutting and keeping: to prevent which it is laid in by small quantities.  Buying the salt by the bushel, almost covers the loss sustained from selling it by the pound.

    "The quantity of bacon sold during the year was one hundred and sixty-eight score.  Cheese twenty-eight hundred weight.


Account of payments in 1796.

Candles, soap, and salt

£31   1   6

Bacon

£120   0   0

Cheese

£62   9   5

Carriage

£7  11   3

Salary

    £2  12   0

 

£223  14   2


    "The receipts corresponded, except by fifteen shillings: which arose from the poor of Mongewell having been allowed their soap and candles a penny per pound under prime cost.  The saving to the poor was—
 

On bacon

£34  16   8

On cheese

£11  13   4

On candles, &c.

 £1  11   0

 

£48   1   0


    "Hence it appears that the addition to the prime cost of bacon and cheese, is equal to the loss on the hocks and the cutting.  Every other part of the flitch being sold at the same price.

    "Since the commencement of the present year (1797) rice and coarse sugar have been introduced into the Mongewell and well shop, with much benefit; particularly the former (rice).

    "From the above statement it is seen that, taking all the articles together sold at the Mongewell shop, there was a saving to the poor of 21 per cent. in the supply of several of the most important articles of life.  Many, in every parish, would lend their assistance to carry this plan into execution, if it were known that the rates would be lowered at the same time that the poor were benefited.

    "From the adoption of this plan, the poor will have good weight, and articles of the best quality; which, without imputing dishonesty to the country shopkeeper, will not always be the case at a common shop.  Where there is no power of rejection, it is not probable that much regard would be paid to these considerations by the seller.

    "The comforts of the poor may thus be promoted, by bringing within their reach the articles of life which they chiefly want, of the best quality, and at the cheapest rate.  Their morals will also be improved by the removal of an inducement to frequent the alehouse.  The parish rates will be lessened, even if the articles were sold without profit; for the labourer will be enabled to purchase clothing for his family without other assistance.

    "Another benefit of this measure is the preventing the poor running in debt.  The credit given to them adds much to the sufferings they undergo from their situation.  As the poor find that they can procure necessaries for their families by credit, they feel less scrupulous in spending part of their weekly wages at the alehouse.  Hence the earnings of the following week are diminished, by having mis-spent their time as well as their money.  There are but few parishes which do not confirm the truth of these observations; and which have not been called upon to redeem such goods of the poor, as the shopkeeper had at length seized, to cover himself from loss, and when he had no hopes of security from their labour."


    It is impossible not to feel respect for the poor "infirm old" storekeeper—although "he could neither read nor write," his "receipts were always correct," and if he wanted "scholarship" he did not want honesty.  The reader will agree this is a very minute and remarkable account of the Village Shop.  The grocers of the diocese must have been as angry at the promoters of the innovatory store as they have been since.  There has been no Co-operative Bishop who has had more discernment of the subject, has taken such trouble to establish a store, or or given so useful an account of it, as the Bishop of Durham.

    The co-operative store which Mr. Owen established at New Lanark was very rudimentary, precisely such as we have in London under the name of Civil Service Stores.  Knowing that the workpeople—as is the case everywhere with the poor— had to pay really high prices for very inferior articles, and could never depend upon their purity or just measure, he fitted up a store at New Lanark with the best provisions that could be obtained and sold them to his workpeople at cost price, with only such a slight addition as to pay the expenses of collecting and serving the goods.  Some households (managers probably) with large families are said to have saved as much as ten shillings a week through buying at Mr. Owen's store.  After a time he added to the cost and distributing price a sum for educational purposes, and thus he laid the foundation of that wise plan for applying a portion of profit to the education of the members and their families.  Mr. Owen afterwards appropriated a portion of his manufacturing profits to the improvement of the dwellings of the workpeople, and the instruction of their families.  On one occasion, when his partners came down from London to inspect his proceedings, they found so many things to approve and so much profit made, they presented him with a piece of plate.  Mr. Owen had incurred an expenditure of £5,000 for new schools.  They had no belief that intelligence would pay.  Mr. Owen was entirely of the opposite conviction, and though he did not make his workpeople sharers in the profits of the factory, in the form of paying them dividends, he made them participators in the profits by the ample provision he made for their education, their profit, their pleasure, and their health.


    "Before completing this history I visited New Lanark, to look upon the mills erected on the falls of the Clyde by Sir Richard Arkwright and David Dale, now more than one hundred years ago, and made famous by Robert Owen.  Though ugh I had often heard him speak of what he had done there, and had examined several accounts given by his son, the Honourable Robert Dale Owen, I never conceived the high esteem for him which I felt when I saw with my own eyes what he had accomplished.  I thought the schoolrooms, of which so much was said, were some unused rooms in the mill and were entered by a hole in the wall—being, as I knew, commodious, but, as I supposed, mean and tame and cheap in construction.  Whereas I found the schoolhouse a separate structure, built of stone, vast and stately with handsome portico supported by four stone pillars.   There are three schoolrooms on the ground floor, which will each hold 600 or 700 people.  Above are two lecture halls, lofty and well lighted; one would hold 800; another, with a gallery all round it, would hold 2,000 people.  The reading-desk (and the stairs to it) from which Mr. Owen first announced his celebrated scheme for the reconstruction of the world; the handsome triangular lights, still bright, which used to hang from the ceiling, and the quaint apparatus for the magic lantern, are there still; and in another building, built by him for a dancing-room for the young people, are stored numerous blackboards, on which are painted musical scales and countless objects in various departments of nature.  There are also very many canvas diagrams, some of immense dimensions, which are well and brightly painted, as was Mr. Owen's wont, by the best artists he could procure.  They must have cost him a considerable sum of money.  Time, neglect, and 'decay's effacing fingers' have rendered them but a wreck of what they were, but they are still perfect enough to show the state in which Object Teaching was when it was first invented.  Mr. Owen knew Fellenberg and Froebel, and carried out their ideas as with the opulent ardour with which he conceived them,  years before they found opportunity of carrying them out themselves.  My purpose in mentioning these things is that the South Kensington or other Museum may hear of them.  Most of the diagrams are capable of being restored, and are numerous enough to make an exhibition in themselves, and would be of great in interest to the new generation of teachers in any town in which they could be seen.  The Messrs, Walkers, who now own the mills, and who have preserved this famous collection of school furniture, may be willing to transfer them to some public museum.  It is now (1878) nearly sixty years since they were first used, and their existence has long been unknown to teachers.  Dr. Lyon Playfair is in America, or I would ask him to interest himself about them.  Probably Professor Hodgson, of Edinburgh University, would—he being near them, and being one who cares for the traditions of education.  It matters little in what museum the relics in question may be placed, provide, they are preserved from loss." [161]


    On kicking away the layers of mortar which had fallen from the ceiling of the great lecture hall, to make sure that the floor was safe to tread upon, I found underneath diagrams which had been walked over until they were in tatters.  It was thus I was led to inquire whether any others existed.  Mr. Bright had just then asked whether the ruins of the mills of Manchester would one day mark the extinction of commerce, as the ruins of Tantallon Castle marked the extinction of the feudal system.  I thought as I walked through the deserted lecture hall of New Lanark, that I was treading amid the ruins of education.
 

New Lanark - the schoolhouse.
ED.—New Lanark is nowadays a major tourist attraction and a UNESCO World Heritage Site.


    So late as 1863 a store existed in London exactly in the condition to which they had degenerated when their social purpose had ceased, conducted merely as a joint-stock shop.  At that time Mr. Ebenezer Edger joined with me in endeavouring to organise a union of the scattered Co-operative Societies of the Metropolis.  Our circular was sent to one whose address was 30, Ion Square, Hackney Road, N.  Mr. Chas. Clarke, the Manager, sent the following reply: "Our association cannot be classed exactly amongst Co-operative Stores, so we have no interest to publish our affairs, as we won't have anybody in with us.  As for Directors we are very particular.  I am sole Manager of all, and intend to keep so.  Any who join us can make a small fortune, but must obey, my instructions, but we are independent of any who wish to join, we keep in working order with our present number."

    Mr. Clarke did not favour us with the method whereby "each member joining his store could make a small fortune."  Had he made it known and it proved satisfactory, so valuable a manager would never have been left to waste his abilities in Ion Square.

    Dr. Angus Smith has stated that London has in it nineteen Climates.  Every town has several different climates and several entirely different classes of people—quite distinct races, if regard be had to their minds and ways of living.  No one supposed that the men of Rochdale would carry Co-operation forward as they did.  The men of Liverpool knew more about it.  The men of Birmingham had more of its inspiration and traditions, and more advocates and leaders of Co-operation in it than any other town.  Manchester had more experience of it.  Leeds had more energy among its men.  Sheffield had more spirit and individual determination.  Scotland had seen its foundations laid in their midst, and two communities had been started among them.  Yet Rochdale, from whom no one expected anything, eventually did everything.  In England there is more business enterprise than in Germany, yet Schulze-Delitsch has overrun the land with Credit Banks for lending money to persons who would put it into trade or commerce, while in this country it has never entered into the heart of any human being, unless it be Dr. Hardwicke, to imagine that any person might profit in like manner. [162]

    The difference between German and English Co-operation is this: the German co-operator sets up Credit Banks, the English co-operator sets up Stores.  The Germans lend money, the Englishman makes it.  The way in which it was done was explained by Dr. Watts.  "A well-conducted co-operative store can offer a workman 7½ per cent. rise on his wages, and that without a strike or struggle.  I had before me in March of 1861 returns from sixty-five co-operative stores, and I found their average dividends showed a profit of 7½ per cent., which is one shilling and sixpence in the pound.  My own pass-book shows that I paid on November 3rd (1860) £1 to become a member.  I have paid nothing since, and I am now (1872) credited with £3 16s. 6d., nearly 300 per cent, on my capital in a single year.  Of course that arises from my purchases having been large in proportion to my investment." [163]

    Dr. Watts pointed out how singular a thing it is that "poorest people have the most servants.  The poor man has to the pay the importer, the wholesale dealer, the retail dealer, often the huckster.  These are all his servants; they all do work for him and they have to be paid; so the very poorest man who wants to become richer has only to drop his servants."

    A modern co-operative store generally obtains success by five things:—


1.    Intelligent discontent at being compelled to buy bad articles at a high price.

2.    By opening a small, low-rented clean shop, and selling good goods at honest measure and at average prices.

3.    By increasing the cheapness of goods bought by concert of custom.  The more money can be taken into the market, the further it goes in purchasing; the large custom diminishes the cost of management.

4.    By buying from the Wholesale Society, stock can be obtained from the best markets at the lowest rates and of good quality.  It is by continuity of quality that the prosperity of a store is established.

5.    By capitalising the first profits carried to the credit of the members until they amount to £5.  By this means the first hundred members supply a capital of £500.


    Leicester, which King Lear founded before his daughters were disagreeable, and which had a Mint in the year 978, did not at first supply its store with sufficient capital, the members subscribing but £1 or £2 each.  The result was that the store was pale in the face through financial inanition.  If the society had a physician it would have been ordered, appropriate increase of financial diet immediately.  Pale-faced stores are starved stores; and when young have rickets.

    The store must be fed with capital, the weekly official paper of the movement must be fed with subscribers, the heads of the members must be filled with ideas.  If a store have not sufficient capital for its business it has the ghostly look of a disembodied thing.  Wise members take in the Journal which represents the cause of the stores and the workshop.

    If, commencing a store, the first thing to do is for two or three persons to call a meeting of those likely to join.  In this world two or three persons always do everything.  Certainly, a few persons are at the bottom of every improvement, initiating it and urging it on.  Capital for the store is usually provided by each person putting down his or her name for as much as each may be able—towards payment of five shares of one pound each.  If the store is to be a small one, a hundred members subscribing a one or two-pound share each will enable a beginning to be made.  It is safest for the members to subscribe their own capital.  Interest has to be paid upon borrowed money often before any profits are made.  Sometimes the lenders become alarmed, and call their loans in suddenly, which commonly breaks up the store, or directors have to become guarantees for its payment, and then the control of the store necessarily falls into their hands.  By commencing upon the system of the intending co-operators subscribing their own capital, a larger number of members are obtained, and all have personal interest in the store, and give it their custom.

    A secretary should be appointed, and a treasurer; and two or three nimble-footed, good-tempered, willing fellows named as collectors, who shall go round to the members, and bring into the treasury their subscriptions.  Some place should be chosen where members can pay them.  Some will have the right feeling, good sense, and punctuality to go, or send, and pay their money unasked.  But these are always few.  Many will think they do quite enough to subscribe, without being at trouble to do it.  Considering, as Dr. Isaac Watts says, that "the mind is the standard of the man," it is astonishing how few people "know their own minds," and how many have to be fined to bring it to their recollection that they have "minds."  Numbers of well-meaning working men can only pay at a certain time in each week, and if the collector does not catch then, then, they cannot pay that week at all, for their money is gone.  The collectors of store funds require to be men of practical sense, capable of infinite trouble and patience.  Ungrudging praise is due to whoever undertakes this work.  They are the real founders of the store.

    At first, wholesale dealers were shy of co-operators, and would not sell to them, and the societies bought at a disadvantage in consequence.  Before long friendly dealers arose, who treated them on fair terms.  Mr. Woodin, of London, Mr. J. McKenzie, of Glasgow, tea merchants, Messrs. Constable and Henderson, of London, wholesale sugar dealers, Messrs. Ward & Co., of Leeds, provision merchants, were examples of tradesmen of the kind described.  A wholesale agency now exists in Manchester, which keeps buyers who understand what to buy and where to buy it.  This Wholesale Society [164] enables a young society to offer at once to its customers goods of quality, so that the poor residents of Shoreditch or Bethnal Green could buy food as pure and rich as though they were purchasers at Fortnum and Mason's in Piccadilly—in fact, obtain West End provisions East End prices.  Dishonesty among co-operators is very rare, and it is sufficiently provided against by guarantees.  When servants are appointed, they should never be distrusted on rumour, or conjecture, or hearsay, or suspicion.  Nothing but the clearly ascertained fact of wrong-doing should be acted upon as against them.  If every society took as much trouble to find out whether it has good servants as it does to find out whether it has bad ones, many societies would flourish that now fail.  As Mr. J. S. Mill said to the London co-operators, whom he addressed at the Whittington Club, "Next to the misfortune to a society of having bad servants, is to have good servants and not to know it."  Talleyrand used to say to his agents, "Beware of zeal," which leads men into indiscretions.  But if earnestness without zeal can be got, success is certain.  A true co-operator has three qualities—good sense, good temper, and good will.  Most people have one or the other quality, but a true co-operator has all three: "good sense," to dispose him to make the most of his means; "good temper," to enable him to associate with others; "good will," to incline him to serve others, and be at trouble to serve them, and to go on serving them, whether they are grateful or not in return, caring only to know that he does good, and finding it sufficient reward to see that others are benefited through unsolicited, unthanked, unrequited exertions.  Sooner or later—generally later—they will be appreciated.

    In a properly-constituted store, the funds are disposed of quarterly or half-yearly in six ways. (1) Expenses of management; (2) interest due on loans; (3) 10 per cent. of the value of the fixed stock, set apart to cover wear and tear; [165] (4) dividends on subscribed capital of the members; (5) 2½ per cent. of the remaining profit to be applied to educational purposes; (6) the residue, and that only, is then divided among all the persons employed and members of the store in proportion to the amount of their wages and of their purchases, varying from 1s. 6d. to 2s. 6d. in the pound.

    Co-operators have known how to keep accounts.  Dr. Watts, being the manager of an insurance society which guarantees the integrity of persons in responsible situations, bears this testimony; "I have had to do with a considerable number of them professionally, having had to guarantee the honesty of the managers, which has enabled me, when I see any fault in the accounts, to insist upon it being rectified; and I can say that the balance-sheets of co-operative societies, as a rule, would be a credit to any public accountant.  There is no single thing hidden; you may trace the whole of the society's operations through the figures of the quarterly report."  Co-operators also manage their affairs very peacefully, for though I, the writer, have been appointed arbitrator to many societies, I have never been called upon to adjudicate upon any difference, save twice in thirty years.  Other arbitrators have also reason to complain of want of business.

    It is not pretended that Co-operation is a special solvent of scoundrelism, only that it diminishes the temptations to it.  The dealer, the order-getter, and travelling agent of commercial firms are often the corruptors of store-keepers and store managers.  Some few years ago a manufacturer of a class of articles in general demand in stores, endeavoured to do business with them.  Being a man of honesty himself, his agents made no offer of commission or any gift to store-keepers, and he soon found that he could not do business with them worthy of his attention.  He succeeded for a time, but ere long orders fell off, or complaints were made without reason.  It was within my knowledge that the goods offered in this case were really pure.  The manufacturer, for there were not many competitors in his business, knew that orders were given by the stores to the firms that could not supply goods equal to his in quality and cheapness.  At the same time I knew of cases in another part of the country where Co-operation was better understood which was creditable to store-keepers.  There was a dealer in London known to me who would corrupt any one he could for trade, and who did not care who knew it. His doctrine was the common one that if he did not do it some rival would—an argument by which any knave might justify himself in pocket-picking.  This villainous logician was a man of respectability, punctual in the payment of pew rents.  He showed me a letter he had had from Jay Giggles, a well-known store-keeper in the North.  Any one would think the name fictitious who did not know what extraordinary names co-operators have. [166]  Giggles had given an order to the house in question, and for reasons of his own, sent afterwards this note:—


"SIR,—Perhaps it is right to inform you that I do not ask, nor expect, nor take any gift from your traveller, to whom I have given orders; I therefore expect to have good goods sent me.  I may not find it out very soon if they are not what I am promised by your traveller, but I shall before long make the discovery, or somebody will for me, and then you will have no more orders.  I do not pretend to be such a very virtuous person; but my directors give me a good salary that I may not be tempted to seek gifts.  I am therefore bound to do the best I can for them.  If I do not, I shall be found out, and I shall lose my place.

"JAY GIGGLES. "[167]


    "Ah," said the dealer in his prompt and unabashed way, turning to his traveller, who was just up in town, "Here's a letter from J. G.  Jay may have the Giggles, but there a is no giggling about Jay."

    The local habits of purchasers make a considerable difference in the cost of managing a store.  In some towns purchasers will walk great distances to buy at a store.  In another place members will expect four ounces of salt butter to be sent them.  In many towns customers will wait in numbers to be served in the order of their arrival.  In other towns customers want to be served at once, and will go into any shop rather than wait long at the counter of the store.  In these cases, the directors are compelled to provide more counter-men than are really needed, in order that customers may be quickly served.  The impetuosity, or impatience, of members puts a large store to expense or loss, it may be of several hundred pounds, which another society in the next town saves.  No grocers could be persuaded that the day would come when co-operative societies would raise their prices and increase their profits.  Yet this continually occurs; grocers' profit, and the outside public are taxed by co-operative stores.  The public, however, can protect themselves by joining the stores.  As soon as the dividends on purchases at a store rise higher than the average ordinarily attained, it generally means that higher charges for goods are made by the directors of the store than is charged by shopkeepers in the neighbourhood.  As soon as the astute shopkeeper becomes aware of this, he is enabled to raise his prices in proportion.  All this is clear gain to him, and he owes this gain to the store.

    Any person engaged in promoting stores may obtain information and various publications upon the subject by writing to the General Secretary, Co-operative Union, Long Millgate, Manchester.  Among them is one by Mr. Walter Morrison, entitled "Village Co-operative Stores," which contains exactly those practical and familiar suggestions which everybody who belongs to a co-operative store, or desires to promote the establishment of one, would like to have at hand to consult.  Besides, Mr. Morrison gives a much-wanted and practical list of the "Description of the Goods," their weight, price, and quantity which a store should begin with; nor does he omit those higher considerations which make Co-operation worth caring for and worth promoting.

    One of the best accounts, next to that of the Bishop of Durham, of the formation and career of a country store given some time ago by Lord Ducie in the Times.  It is a complete story of a store, and would make a perfect co-operative tract.  This store was commenced on Lord Ducie's property at Tortworth, Gloucestershire, in March, 1867.  It was conducted on the "Northern" store plan.  The villagers were all in debt to the shops, from which the stores soon freed them.  Lord Ducie says, "The moral action of the store thus becomes of great value, encouraging a virtue which precept alone has long failed to promote.  The shareholders at the end of first year were as follows:—Labourers, 25; carpenters and masons, 11; tradesmen, 9; farmers, 6; gardeners, 6; clergy, gentlemen, and domestic servants, and various occupations, 16.  Large purchases have been made by non-shareholders, receiving only half profits.  The sales were: For the first quarter, £320; second, £349; third, £468 ; fourth, £511.  The dividends to shareholders have been, on purchases: For the first quarter, 3s. 4d.; second, 2s. 9d.; third, 3s. 2d.; fourth, 3s. 6d.  For various reasons, the dividends will not in future range higher than 3s. in the pound.  The accounts at the end of the year of three labourers who joined at the commencement were:—
 

  Paid-up Capital. Dividend on Money Expended.

A

£1   0   0

£5   0   7

B

£1  14  10

£2  10   0

C

£0  19   3

£3  17   0


Those men earn 12s. each per week; the difference in the amount of their dividends arises from the different amounts expended by each.  A, for instance, has a large family, some of whom add to the family income; his purchases have been large, and the result is a dividend which much more than pays the rent of his house and garden.  These men have also received 5 per cent. upon their paid-up capital.  The f first year of the store ended, the committee ventured upon a drapery branch, having expended £230 in stocking it.  They determined to pay their salesmen 2½ per cent. upon sales in lieu of a fixed salary, and have secured the whole of their time.  They have also decided to pay committeemen 6d. each for every attendance, a humble extravagance which will contrast favourably with the practice of more ambitious institutions."

    Of the success of these societies a thousand anecdotes might be related.  In these pages the reader will meet with many.  One is told by Mr. Alderman Livesey, of Rochdale: "A poor labouring man, owing about £15 to his grocer for provisions, resolved to join a co-operative society.  He called upon the grocer and announced his intention to leave the shop.  The grocer was of course indignant.  The debtor, however, remarked that he was quite prepared to pay his debt by such weekly or monthly instalments as the judge of the county court might direct, and he was willing to do it without the expense and trouble of a legal process.  Ultimately the grocer consented to this arrangement.  The man kept his promise, the grocer was in due course paid off; profits accumulated in the co-operative society, and he is now the owner of the house he lives in, and is also the owner of another property which he values very highly—a county vote."

    The rule of the co-operators to give no credit and take none, saves them the expense of book-keeping, and enables many poor men to escape the slavery of debt themselves.  The credit system existed in the Halifax Society until May, 1861, to the extent of two-thirds of the amount of paid-up capital by each member; the confusion, trouble, waste of time, vexation, and moral harm was great.  When some Lord Chancellor does what Lord Westbury attempted, abolishes small credits altogether among the people, the poor will become grateful enough and rich enough to put up a statue to his memory in every town.

    The normal condition of a workman who is not a co-operator, is to be in debt.  Whatever his wages are, he has a book at the grocer's, and he is a fortnight behind the world.  If any one benevolently cleared him of debt and gave him a week's money to pay his way with, he would never rest till he was in debt again.  The power of saving is an act of intelligence, and Co-operation has imparted it.  By its aid 10,000 families in some great towns have acquired this profitable habit.  Even if members dealing at a store really paid more for an article than at a grocer's, that surplus cost, as well as the entire profit made, are paid back to them.  It is merely a sort of indirect' method for increasing their savings, which otherwise they would not make.

    Cobbett used to advise a young man before he married, to observe how his intended wife employed herself in her own family, and unless she was thrifty and a good hand at household duties not to have her.  Had Cobbett lived to these days he would have advised young men to give the preference to a girl who belonged to a co-operative store.  A young woman who has learned never to go into debt, but to buy with money in hand and save some of the profit at the store, is literally worth her weight in gold.  Many a gentleman would save £500 or £1,000 a year had he married a co-operative girl.  In many parts of the country now, no sensible young woman will marry a man who does not belong to a store. [168]

    At the Leicester Congress, 1877, 20,000 copies of a clever little statement were circulated, which will suffice to explain to the most cursory reader what advantages a good co-operative store may confer upon a town.


"1. It makes it possible for working men to obtain pure food at fair market prices!

"2. It teaches the advantage of cash payments over credit!

"3. It gives men a knowledge of business they could not otherwise obtain!

"4. It enables them to carry on a trade of one hundred and sixty thousand a year!

"5. It makes them joint proprietors of freehold property worth upwards of twenty
thousand pounds!

"6. It secures them an annual net profit of sixteen thousand pounds!

"7. It raises many a man's wages two or three shillings per week without a strike!

"8. It alleviates more distress than any other social organisation!" [169]


    During the year 1875-6 the Leicester Society divided amongst its members, as dividend, upwards of £23,000, in addition to several thousands added to the members' share capital.

    "Practical" people deride sentiment, but they would not be able to make a penny were it not for "sentimental" people, who have in perilous days bleached with their bones the highway on which the "practical" man walks in selfish safety.  People would not save money, much as they need it, did not "sentimental" people make it convenient and pleasant for them.

    Some societies are obliged to pass resolutions compelling members to withdraw £10,000 or £20,000 of surplus capital accumulating.  It was the original intention of the founders of early stores to start manufactories which might yield them higher dividends than the store paid.  In some towns of enterprise this has been done, and building societies, boot and shoe works, spinning mills, cloth factories, have been undertaken.  Stores have been discontinued, or remained stationary because the members had no faculty for employing their savings.  Some societies have failed, not because they were poor, but because they were too rich, and working men, whose despairing complaint was that they had no capital, have lived to be possessors of more capital than they knew what to do with, and have been compelled to draw it out of the society because they had no capacity for employing it productively.  Men who at one time thought it a sin to pay interest for money have lived to regret that they can find no means of obtaining interest for theirs.  Many men who complain of capitalists taking interest become the sharpest dividend hunters anywhere to be found, and think of nothing else, and sacrifice education and reasonable enjoyment to the silliness of needless accumulation.

    Thieves did not understand their opportunity when stores began.  For many years gold might have been captured in quantities at many co-operative stores.  Between the time of its accumulation and its being lodged in the bank, quantities might have been stolen with impunity.  I have seen a thousand sovereigns lying in a bucket, under a cashier's table—which a clever thief might have carried away.  But sharper management, the purchase of good safes, the rapid transit of the cash to the bank, have taken away these chances.  At one store, the cashier used to carry a few hundred pounds to the cottage of the treasurer at night when he thought of it; and the treasurer, the next day—if he did not forget it—would take it to the bank.  But the fact that the law had begun to prosecute peculators intimidated the thieves, and the general honesty of co-operators afforded security where carelessness prevailed.  I remember a secretary of the Oddfellows who was brought before the magistrates in Manchester for stealing £4,600 from the funds, and he was dismissed, as the law then permitted members of a Provident Society to rob it.  Very few robberies of co-operative societies have taken place since the law afforded them protection.  In 1875 the Hyde Society robbed of £1,100.  In London, the secretary of a Co-operative Printing Society made away with £2,000, and the magistrate dismissed the charge, for no reason that we could discover, unless he thought co-operators ought to be robbed as a warning to them not to interfere with the business of shop keepers.  But, as a general rule, it is not safe now to rob co-operators, and it commonly proves a very unpleasant thing for any charged with such offence.  J. C. Farn, who recorded very valuable experience he had both in the illegal and legal period of Co-operation, gave instances.  "I have been instrumental in placing persons in co-operative stores, and they have in bygone days plundered almost with impunity.  The following cases which I have reported for newspapers will show the state of the law as it was and is.  The deciding magistrates were Mr. Trafford at Salford, and Mr. Walker at Manchester:— 'Applicant: We want a summons.  Mr. Trafford: What for?  To compel the trustees of a co-operative society to divide the money they have among the shareholders.—Mr. Trafford: Was the society enrolled? No.—Did you take security from those who held the property on the basis of an individual transaction?  No.—I can't help you, and I would not if I could.  You first form an illegal society, you bungle in the management, and then you want me to help you out of the mess; and, as though this was not enough, you let the Statute of Limitations cover everything.  No summons can be granted.' The second case was as follows:—This man, your worship, is charged with embezzling the funds of a co-operative society.—Mr. Walker: Is it enrolled? Yes.—Where is a copy of the enrolment ? Here.—Very well. Who is here authorised by the society to prosecute?  I am, your honour, said a person in court.—Go on.—He did go on, and the man was committed.  So much for co-operative law in 1853 and 1863."

    Stores are in some cases dreary places, and there is often more pleasure in looking into a well-arranged shop window than into a store-window.  The taste and ingenuity with which shop-windows are set out certainly give life and interest to the streets.  The streets of some cities, which are now brilliant with every art, product, and industry, would look like a prolonged poorhouse, if they were filled with Civil Service and ordinary co-operative stores.  The act of purchasing is in itself a pleasure.  The dainty association under which a beautiful thing is first seen adds to the delight of possessing it, and the delight is worth paying for.  So long as taste and art are unextinguished, the higher class of shop keeping will endure.  The lower class of shops, of cleanliness, simplicity, and articles of honest make, have always been frequented with pleasure and always will.  The purchaser of prepared food feels under a personal obligation to the vendor who sells him what is savoury and cleanly made, and what he can eat without misgiving.  Mere vulgar shopkeeping, which ministers only to coarseness and cheapness, which lowers the taste of every purchaser, or prevents him acquiring any, and furnishes a means of selling articles which ought never to be made, is but a demoralising business.  Such shops were well superseded by real co-operative stores.  Co-operative stores improve taste so far as honesty and quality go, but its humble members cannot be all expected to have simple and true taste, which might exist among the poor in degree as well as among the rich.  It is seen in the jewels of an Italian peasant, in the dress of a French girl, and in the homes and handicrafts of working people of many nations.  Lectures upon the art of choosing products, why they should be selected in preference to others, in what state consumed, or worn, will no doubt be one day fully associated with co-operative stores.

    The Corn Society's New Mill, Weir Street, Rochdale, according to the engraving which represents it, which I published at the Fleet Street House, twenty or more years ago, is the most melancholy mill that ever made a dividend.  Dark, thick, murky clouds surround it, and the sky-line is as grim as the ridges of a coffin.  The white glass of the plain front meets the eye like the ghost of a disembodied mill.  A dreary waggon, carrying bags of corn, guided by drivers that look like mutes, is making its way through a cold Siberian defile.  The builder might have made it pleasant to the eye, with as little expense as he made it ugly.  But in those days nobody thought of comeliness, seemliness, or pleasantness in structures, in which men would work all their lives.  The really pleasant part about the corn mill was in the minds of the gallant co-operators who set it going, and kept it going.  But grimness is gradually changing for the better.  Some of the Oldham mills put up under co-operative inspiration are places of some taste, and in some cases of architectural beauty, with towers making a cheerful sky-line without, and spacious windows making the workrooms lightsome within.  The old bare-bones view of economy is dying out.  It has come to be perceived that it is ugliness which is dear, and beauty which is cheap.

    A few years ago there appeared in Reynolds' Newspaper a series of letters signed "Unitas," advising the formation of a "National Industrial Provident Society," of which, when the prospectuses appeared, William Watkins was named as the secretary.  The object appeared to be to establish co-operative stores, to retain the profits due to the members, and convert them into paid-up premiums in self-devised insurance societies, guaranteeing endowments, superannuation allowances, and other benefits.  The plan was ingenious and attractive, and no doubt might be worked as a new feature of co-operation, which would spread the system in many quarters.  The idea of persons being able to provide payments in sickness, or loss of employment; and, if the fund to their credit was not exhausted in this way, to secure a sum at death, or a fixed income at a certain age, by simply buying their provisions at a certain store, is both feasible and alluring.  This scheme made great progress in Wales.  I felt bound to oppose it, but with considerable regret.  Its frustration was ascribed to me, and I was threatened with an action for libel on the part of the proprietor of the paper in which the scheme originated.  The plan required to be conducted by persons of known character and require substance of the nature of security, and business capacity.  If it succeeded to any extent, the profits of the members would be in possession of a comparatively unknown committee of men living in the metropolis.  In their hands also would be vested the property of all these stores.  The provisioning of these stores from a central agency would be entirely under their control, and the rates of charges, the quality of provisions, and the funds would be practically unchecked by the subscribers.  At the same time there is no doubt that in the hands of known, responsible, and able men of commercial resource and business organisation, a comprehensive scheme of this kind of Co-operative Insurance would have great popularity, great success, and do a great amount of good, and make Co-operation a matter of household interest in a way not yet thought of by the great body of co-operators.

    Since Co-operation means that everybody concerned has an interest in doing what he ought to do, the directors of the store, the secretary, the manager of it, all persons engaged in serving it, should have an interest in performing their duties, as well as they were able.  It is not good for business when no one has a permanent motive for service and civility.  If few persons come to a counter, the better it is for the shopman, who has no interest in them.  He will repel or neglect all he can.  A shopman having an intelligent interest in the purchasers, and friendly to them, makes custom at the store a personal pleasure as well as profit.  For all to be respectful and pleasant to each other is no mean part of the art of association which co-operators have to cultivate.  Personal courtesy, which is never neglectful, never inconsiderate, diffuses more pleasure through the life of a town than the splendour of wealth, or the glory of pageants.  They are seen but for an hour, while the civilities and kindnesses of daily intercourse fill up the larger life, and convert its monotony into gladness.

    The earlier stores were a sort of Board School of co-operators.  Co-operative education began there; and as the majority of all co-operators were themselves or their families in daily intercourse with the store, that was the place where useful information was diffused, and the greatest number of good impressions given.  That is where co-operative literature can be sold, where news of all that concerns members can be posted up, that is where the stranger looks in to see what is going on.  Everything should be clean there, and the brass work and every article that can be shown, without deterioration displayed with taste.   The pleasure of seeing and selecting is half the pleasure of buying.  Knowledge of the nature and varieties of pure provisions, taste in colours, patterns and texture of garments is a part of education in man or woman, and shows the quality of their individual character. Wise shopmen, therefore, who understand what business service means, and who have interest in its success, are as important agents in their places as directors or managers.  Servers should be carefully chosen, treated well, and have a clear interest in the success and popularity of the store.  It is in their power to make the store repellent or popular.  Those who hesitate to give them good wages and a dividend upon them, the same as that accruing to purchasers, do not understand what may be got out of good servants.  Those who render service in Co-operation have influence.  The server is in a position of equality.  I purposely write Server instead of Servant, because servant is understood to imply meniality; while a server is one who obliges.

    Societies do not always consider sufficiently the qualities of those whom they appoint directors.  They often elect those who talk well instead of those who think well.  Sometimes a person coarse-minded, harsh and abrupt, unceremonious in dealing with officers of the store under him, will harden them into indifference to the welfare of the store, and be unpleasant to purchasers.  A member of fluency and ambition will be very flattering in quarterly meetings, and will repute for most agreeable qualities until he gets an appointment, who has himself no sense of personal courtesy, and will be very offensive to others over whom he has power.  Courtesy, where a man has his own way, and to all who can help him to it, may co-exist in the same person who is at the same time insolent to any who have independence of spirit, and who may withstand him.  There never was a tyrant deservedly execrated by a nation who had not a crowd of followers ready to testify to his humanity and amiability.  Tennyson in his drama, warns Harold how he should comport himself towards the Duke of Normandy, in whose power he is, and who is only gracious to those who lend themselves to his ends.


                                   "Obey him, speak him fair,
 For he is only debonair to those
 That follow where he leads, but stark as death
 To those that cross him." [170]



END OF VOLUME I.

____________


 
CHAPTER XXII.

CO-OPERATIVE WORKSHOPS [171]

"Chi ha un compagno ha un padrone."—ITALIAN PROVERB.
("He who has a partner has a master.")

 

John Bright, M.P. (1811-89)

INDUSTRIAL Co-operation includes not merely union for Strength, but union for participation in the profits made in concert, but the theory has not always been applied consistently to the workshop.

    In a store the purchasers share the total profits.  In a proper productive society, after the payment of all expenses of wages, of capital, material, rent, education, and reserve fund—the total profits are divisible among the thinkers and workers who have made them, according to the value of their labour estimated by their respective salaries, and to customers according to their purchases.

    The members of manufacturing societies in some cases prove themselves wanting in patience and generosity towards their comrades.  The smarter sort, perceiving that a successful trade may speedily produce large profits, prefer converting the co-operative affair into a joint-stock one, and keeping the gains in their own hands, taking their chance of hiring labour like other employers.  Thus, instead of the mastership of two or three, they introduce the system of a hundred masters. [172]  They multiply organisations for individuals, and enlarge the field of strikes, and prepare new ground for contests between capital and labour.

    The theory of a co-operative workshop is this.  Workmen provide all the capital they can as security to capitalists from whom they may need to borrow more, if their own is insufficient.  Nobody is very anxious to lend money to those who have none: and if any do lend it, they seek a higher interest than otherwise they would.  The workmen hire, or buy, or build their premises; engage whatever officers they require, at the ordinary salaries such persons can command in the market.  Every workman employed is paid wages in the same way.  The interest on the capital they borrow, and that subscribed by their own members for rent, materials, wages, business outlays of all kinds, for reserve fund, for depreciation, for education, are the annual costs of their undertaking.  All gain beyond that is profit, which is divided among all officers, workmen, and customers.  Thus in lucky years when 20 per cent. profit is made a manager whose salary is £500 gets £100 additional—a workman whose wages are £100 a year takes £20 profit, in addition to the interest paid him for his proportion of capital in the concern.  There is no second division of profit on capital—the workers take all surplus, and thus the highest exertions of those who by labour, of brain or hand, create the profit are secured, because they reap all the advantage.

    The workman has of course to understand that a co-operative workshop is a Labour co-partnery, and to take note of the Italian proverb that "he who has a partner has a master."  He knows it is true when he takes a wife, and if he does not consult in a reasonable way the interests of home, things soon go wrong there.  And so it will be in the workshop.  All his fellows are partners, all have a right to his best services, and he has a right to theirs, and he who neglects his duties or relaxes his care, or skill, or exertions, or makes waste, or loss, or shows neglect, or connives at it, is a traitor and ought to be put out of the concern.

    There has been confusion caused by there being no clear conception of the place of capital, which has been allowed to steal like the serpent of Eden from the outer world into the garden of partnership, where, like the glistening intruder of old, it has brought workmen to a knowledge of good and evil—chiefly evil: and times beyond number the serpent of capital has caused the original inhabitants to be turned out Eden altogether. Hence has come discouragement to others, and that uncertainty which rob enterprises of their native fire and purpose.

    Co-operation has a principle which is distinctive, and those who ignore it have no right to the distinctive name of co-operators, and are trading under a false name.  Labour Co-partnership demands that the worker shall put his skill and character into his work and shall be secured an equitable share of the profits.  The joint-stock system uses the labourer, but does not recognise him.  At best it invites him to join the capitalist class as a shareholder, in which case he looks for profit, not from his labour, but from the labour of others.  Under the joint-stock plan labour is still a hired instrument—labour is still dependent, without dignity, because without rights.

    The condition of the working tailors of the metropolis, then 23,000 in number, appeared, from the description in the Morning Chronicle, to be so deplorable and so unjust, that several gentlemen, with Prof. Maurice, Mr. E. V. Neale, Canon Kingsley, J. M. Ludlow, and Thomas Hughes, attempted to rescue them from such wretchedness, and, if possible, supersede the slop-sellers.  For this purpose they subscribed £300, rented some suitable premises, and fairly started in business a body of operative tailors, numbering some thirty, under the management of a person who was a tailor and a Chartist.  The manager was absolute master until the Association repaid the capital advanced to it.  He received a salary of £2 a week, the other members worked by the piece, according to a fixed tariff of prices.  All work was done on the premises.  Interest at the rate of 4 per cent. only was paid on the capital lent.  One-third of the net profits was by common agreement devoted to the extension of the Association, the remainder was to be divided among the workmen in the ratio of their earnings, or otherwise applied to their common benefit.  The plan was fairly co-operative.  Here capital took a very moderate interest for its risk.  The manager "went wrong."  A manager of energy, good faith, and good capacity might have made an industrial mark under these well-devised conditions. [ED.—see "Gerald Massey; Chartist, Poet, Radical and Freethinker," by David Shaw, Chapter II. and Appendix 1.]

    Printers, who are the wisest of workmen, as a rule, are not yet infallible in co-operation.  The Manchester Co-operative Printing Society has this rule for the distribution of "The net profits of all business carried on by, the society, after paying for or providing for expenses of management, interest on loan capital, and 10 per cent. per annum for depreciation of fixed stock and buildings, and paying 7½ per cent. [173] per annum (should the profits permit) on paid-up share capital, shall be divided into three equal parts, viz., one to capital, one to labour, and one to the customer."  Were the capital all supplied by the workers the double profit to capital would come to them.  But in this society none are shareholder, and therefore labour works to pay capital twice before it get paid once.  Yet this society is in advance of "co-operative" productive societies, as that of Mitchell Hey, for instance, at Rochdale, which gives nothing to labour.  Mitchell Her however, does admit individual shareholders, giving them profit on their capital, but not on their labour.  In the Manchester Printing Society the capital is subscribed by stores, and individual members have no opportunity of investing in it.  But in proper co-operative societies where capital is simply a charge, and paid separately, and paid only once—the division of the profits in proportion of two-thirds to labour, and one-third to custom, gives labour a large interest and a fair chance.

    Among the higher class of masters a responsible servant is adequately provided for; they give a salary which secures the whole of his interest and powers, and they commonly tolerate his prosperity so long as they are well served.  The working class are apt to fix all salaries at the workshop rate, and begrudge every sixpence over that.  For a man's brains, devotion, interest, and experience, they award nothing willingly, and make it so humiliating to receive anything extra, that he who does so eventually accepts employment elsewhere.

    Workmen who have known want, who have risen from small beginnings, through struggles and privations, are pecuniarily timid.  They are always afraid their means will fail them.  Workmen who have risen from nothing may like others rise, but they expect and rather like to see them rise through the same process.  Working-class masters should set an example to other employers.  It is only a liberal frame of mind among men that can make a co-operative workshop possible.

    Sometimes a committee of a co-operative society find open government more troublesome than secret.  Sometimes their manager would be able to show them that great advantages had been obtained if he was not fettered by the obligation of explaining how he acquired them.  As a rule persons will do things in secret which they would never think of doing openly.  In a co-operative productive society in London, it transpired that a person in the office was paid by a private firm to give it timely notice of all estimates of tender sent by the Co-operators.  It came to pass continually that a lesser tender was made by the rival firm, and the co-operators lost the work.  Had the private firm been co-operative and the workmen been acquainted with this treachery it could not have succeeded long, and probably would not have been attempted.  A co-operative society would seldom be got to vote secret service money for unknown application.  The publicity which co-operative policy implies and compels is one of its beneficial influences in the conduct of trade.  Honesty is a fetter, but it is a noble obligation.  The secrecy and promptitude of individual action is often the source of honest profit.  Responsible directors are delegated considerable power.  This is practically acting as private firms do, with this difference, that in Co-operation nothing can be done which those who do it, do not feel themselves able to explain and justify to the whole society at the proper time.  This is a restriction upon enterprise as understood in the competitive world.  But it tells in favour of the morality of trade.  We have seen at repeated Congresses directors of the Wholesale Society complain of the publicity of criticism brought to bear upon their proceedings.  At the Annual Congress criticisms arise upon the officers of the Central Board, upon the character of the investments of the Wholesale Banking Department, and of the sufficiency of the reserve fund which many consider ought to be provided for the security of the Bank.  The equality of members, the appointment of all officers by representative election, the eligibility of all members to the highest offices when their fitness is discerned by the society, are essential features recognised in the constructive period.  It is intended that all members shall acquire the capacity of conducting their own affairs.  Co-operative workshops are the great means by which hired labour can be superseded.

    Writers of business experience and commercial authority give useful suggestions to working men.  Here is a passage; "The extensive trial of the system of co-operation in its different forms would tend to the correction of the present exaggerated ideas of the working classes respecting the profits of employers, and their disposition to under-estimate the value of the contribution of capital and skill which these furnish.  Experience would show them that losses are frequent and inevitable, that it is easy to lose money and difficult to make it, and that the rate of net profit is not, in cases of only ordinary good management, very high.  They would learn that the employer . . . contributes to the process of production, an element of intellectual labour, on which the efficiency of their manual labour depends." [174]

    Manchester Commissioners, who visited the Emperor Napoleon respecting the Cobden Treaty, explained that the average profit of the cotton trade was 12½ per cent. on the capital employed.  And the balance sheets of the Cotton Spinning Companies of the Oldham District, Dr. Watts says confirm the statement.  The best known of the modern crowd of Spinning Mills which have sprung up in Oldham is the Sun Mill, which commenced in 1861.  It originated with the co-operators, members of the Distributive stores there, conjointly with a few trade unionists, with a share capital of £50,000 and a loan capital of a similar amount.  They soon set 80,000 spindles to work.  In 1874 their share capital amounted to £75,000, the whole of which, within £200, was subscribed.  In addition to this, it has a loan capital of £75,000.  The entire plant may be estimated at £123,000.  The mill has always been depreciated 2½ per cent. per annum, and the machinery at 7½.  The total amount allowed for depreciation during the first ten years of the company's existence has been £32,000.  The profits declared have been very large, varying from 2 to 40 per cent.  Most of the Oldham mills have declared a rate of profit which seems very high.  But as their loan capital is large and is paid only 5 per cent., the high profits are counted from dividends paid upon the share capital alone.

    It has been ostentatiously held that Distributive stores could never succeed without one absolute directing mind.  Yet numbers of stores have been successfully conducted by directors, chosen in what appeared to be the worst manner—that of public election—where those who made the most speeches got the most votes.  Yet it has come about that men of business faculty are generally brought to the front.  Now the same objectors say, this plan may do well for such a simple affair as distribution, but in productive manufactures nothing can be done without the presiding and commanding mind.  Distribution is not at all a simple affair; a few errors will suffice to ruin a store of ten thousand members, and it requires great capacity to plan distribution on a large scale, to watch at once the fluctuations of a hundred markets and consult the personal tastes and interest of a million families, as now has to be done.  Joint-stock companies are successfully conducted by working men, who surmount the difficulties of manufacturing management heretofore declared to be insurmountable.  Sometimes employers who establish partnerships of industry will be discouraged by the apathy and selfishness of their men, who will be willing to take profits without exerting themselves to create them.  Sometimes men will be discouraged and deprived of advantages they are entitled to have, by impatience or injustice on the part of employers.  But new experiments increase, and the number which succeed increase.

    The commercial sentiment of Co-operation is not philanthropy but equity.  Charity is always a grace in business men, but many persons would be glad to see it eliminated.  The demand of people of spirit and insight is justice, not charity: for if justice were oftener done there would be less need of charity to redress inequality of condition.

    Good-will is a virtue.  Masters may show it to servants, the rich to the poor—but masters do not use it towards one another; the rich do not ask for the good-will of the poor.  They prefer not to require it.  It is not wanted between equals.  Courtesy, cordiality, deference, and respect are the virtues of intercourse.  Co-operation seeks to supersede good-will by establishing good conditions which establish it in practice,

    The names of Mr. Slaney's Committee of 1850 which first inquired into the laws affecting the finances of the industrial classes deserves recording.

    The Select Committee originally consisted of the following members: Mr. Slaney, Mr. John Abel Smith, Mr. Labouchere, Mr. Cardwell, Mr. Greene, Mr. Ewart, Lord James Stuart, Mr. Wilson-Patten, Lord Nugent, Mr. Stafford, Sir R. Ferguson, Mr. Littleton, Mr. J, Ellis, and Mr. Frederick Peel; to whom Mr. Heald and Mr. Stansfeld were added in place or Mr. Wilson-Patten and Mr. Stafford.  Mr. John Stuart Mill gave evidence on this Committee.  In speaking of the remuneration of capital, and the mistaken notions which he believed to prevail among the working classes in regard to it, Mr. Mill dwelt upon "the extravagant proportion of the whole produce which goes now to mere distributors," as at the bottom of the greater part of the complaints made by the workers against their employers.  In answer to the question whether this evil would not cure itself by competition among the distributors, Mr. Mill replied that "he believed the effect of competition would be rather to alter the distribution of the share among the class who now get it, than to reduce the amount so distributed among them."  But no one dreamt that large bodies of working men would arise who would combine to use the savings on their own consumption, not to employ themselves, but to employ other working men to work for them, that they might put the profits in their own pockets. [175]  This has been done in Oldham with fervour.  In the fertile field of Oldham co-operative production is unknown.  Mr. William Nuttall, a man of ability and energy as an industrial agitator, developed quite a passion for joint-stock companies there.

    In Oldham, joint-stock companies do not give workmen, as workmen, a chance.  A town without the co-operative instinct of equity is not favourable to the enfranchisement of labour.  Mr. Joseph Croucher, writing from the Royal Gardens, Kew, related that a gentleman once told him that he was stopping at an hotel, and noticing the waiter (a Yorkshireman) to be a sharp fellow, he asked him how long he had been in the place.  "Eighteen years, sir," was the answer.  "Eighteen years!"  said the gentleman; "I wonder you are not the proprietor yourself!"  "Oh," said the waiter, "my master is a Yorkshireman also." [176]  Wit may outwit wit: equity alone gives others a chance.

    The joint-stock theory of Oldham is that if every inhabitant becomes a shareholder in some company, the profit of the whole industry of the district will be shared by everybody in it—which is what Co-operation aims at.  This scheme requires everybody to join in it, which never happens.  But if this universal joint-stock shareholding really results in the same equitable distribution of profits as Co-operation seeks to bring about, why not put these aims in force in every mill?  Co-operation works for the common benefit.  The joint-stock system works for private ends and not for labour.  Some examples of the diversity in the division of profits in co-operative societies will be of the nature of information to the reader.

    The rules of the Brampton Bryan Co-operative Farming Society, promoted by Mr. Walter Morrison, order that every person employed as an officer or labourer shall be paid such sum of money that neither exceed one-tenth part of the net profits, nor one-sixth part of the salary or wages earned by such officer or labourer during the year.  The rules of this society are all through remarkably clear and brief, and are model rules for co-operative farming.

    The Agricultural and Horticultural Co-operative Association, of 92, Long Acre, London, limits its interest upon capital to 7½ per cent.  It takes no second interest, but returns the balance of profit to the purchasing shareholders.

    The East London Provident and Industrial Society set apart 2½ per cent. profits for an educational fund, and a portion of the profits may be applied to any purpose conducive to the health, instruction, recreation, or comfort of the members and their families, which may include lectures and excursions.  The Hawick Co-operative Hosiery Company, 1873, divide such portion of the net profits, or such portion as may be agreed on at the quarterly meeting, equally between capital and labour, at so much per £ on share capital, and so per £ on wages received by the worker.  The profit rule of this society has one merit, that of not containing the "bonus," but it pays capital twice.

    The Manchester Spinning and Manufacturing Company, 1860, permits net profits to be equally divided upon capital and wages at so much in the £, payable to all workers who have been a full half-year employed, others have such sum placed to the credit of each workman, until he by purchase or otherwise holds five shares in the company, the rest is paid to the worker.  These rules recognise capital as an equal participator with labour.

    The Union Land and Building Society of Manchester has a special rule on the marriage of female members.  Any married woman, or any woman about to be married, may be a member in accordance with, and subject to, the provisions of section 5 of the Married Women's Property Act of 1870, and such female member may apply in writing to the committee pursuant to provision 5 of the aforesaid Act, to have her shares entered in the books of the society in her name as a married woman, as being intended for her separate use.  If she omits this notice, the shares would be accredited to the husband.  The profits of this society are divided equally between labour and capital.  Capital is a creature with an impudent face, and as Elliot said of Communism, always "hath yearnings for an equal division of unequal earnings."

    The Cobden Mills Company proposed to distribute half profits arising over 10 per cent. interest to capital, among the officers, clerks, overlookers, weavers, and other persons in the employment of the company, in proportion to the wages or amount of salary received.  If any invention or improved process be placed at the disposal of the company, by any one in its employment, the value of it is taken into account in fixing the amount of profit to be given to him.  But the remaining half of such clear net profit over and above 10 per cent. is to be divided between the members of the company in proportion to the respective amount belonging to them in the paid-up capital of the company. [177]

 

 

    In the "Co-operator's Hand-book" it is provided in the 60th clause, which relates to "Bonus on Capital," that "Capital (having received its interest) shall further be entitled to a bonus consisting of all surplus of the dividends from time to time, consisting apportioned therein beyond the interest due." [178]  This being the doctrine of the Hand-book of 1855, the first Hand-book issued, no wonder confusion as to the claims of capital long existed in the co-operative mind.  Mr. Neale and his coadjutors the Christian Socialists, made no claim of this kind with regard to their own capital.  It was put in the Hand-book under the belief that capital could not be obtained for productive enterprises without the allurement of this extra remuneration.  This has contributed to the slow and precarious career of co-operative manufacturing.  The allurement was needed for workmen, instead of which it was accorded to capital.  It was enthusiasm among workmen that was wanted to be called out by prospect of gain.  Had it been so encouraged, large sums of capital subscribed in the prospect of double interest would never have been lost, as it often has been, through the indifference and torpidity of workmen.  Had the second interest been secured to the men, the capitalist had seldom lost his first. [179]

    The rules of the Hebden Bridge Fustian Co-operative Society, 1873, after paying 7½ per cent. on paid-up shares, divide profits at an equal rate per £ between labour and purchasers.  This is a workman's society.

    In the division of profits prescribed in the Hand-book published by the Co-operative Board, 1874, the surplus which exists after payment of all charges legally incurred, is to be divided equally between purchasers and workers.

    The problem is, can there be a division of profits between labour and trade which shall content the worker, and accord to the consumer that proportion which shall secure his custom, which may largely supersede the cost of advertisements, travellers, commissions, and other outlays incidental to ordinary business?

    The consumer, it is said, has "no more right to share in them than has the man who goes to an inn, is fed and lodged there and pays his reckoning and never dreams of share in the profits made by the landlord."  Nevertheless, if advantage accrued to the landlord of increase and certainty of custom by concession to the traveller, it would be worth his while to make it.  It is not a question of right, but of policy.

    Those who advocate the recognition of the purchaser in production as in distribution, do so on the ground that it will pay, as it has done in the store.

    Three things are necessary to production—labour, capital, and custom.  Capital and labour would have a poor time of it were it not for the consumers who pay for their product.  Of these three, why should custom alone be left out?  All the while the customer can be as active as any one if he has a motive.  He can point out what he wants, give orders, or bring or procure them from others.  In fact, he can make it worth the while of any producing society to recognise him.

    To select as a rule cheap things rather than good things is immoral.  Any purchaser of humane feeling would rather feel sure that those who made his goods were not ground down in wages, but had been fairly paid.  As well buy off a murderer as buy from a manufacturer who murders his workers through excess of business capacity.  If there be not a spot of blood on the article when you place it in your room, there is a spot of murder on the mind content to profit by it.  Canon Charles Kingsley fixed for ever a stain upon willing or careless buyers of "cheap clothes and nasty."

    If the co-operative workshop is to succeed like the store, it must pray for men of the type of Caleb Garth, with whose portraiture George Eliot has enriched industrial literature.

    "Caleb Garth often shook his head in meditation on the value, the indispensable might of that myriad-headed, myriad-handed labour by which the social body is fed, clothed, and housed.  The echoes of the great hammer where roof or keel were a-making, the signal-shouts of the workmen, the war of the furnace, the thunder and plash of the engine, were a sublime music to him; the felling and lading of timber, and the huge trunk vibrating star-like in the distance along the highway, the crane at work on the wharf, the piled-up produce in warehouses, the precision and variety of muscular effort wherever exact work had to be turned out—all these sights of his youth had acted on him as poetry without the aid of the poets, had made a philosophy for him without the aid of philosophers, a religion without the aid of theology.

    "I think his virtual divinities were good practical schemes, accurate work, and the faithful completion of undertakings: his prince of darkness was a slack workman.  But there was no spirit of denial in Caleb, and the world seemed so wondrous to him that he was ready to accept any number of systems, like any number of firmaments, if they did not obviously interfere with the best land-drainage, solid building, correct measuring, and judicious boring (for coal)." [180]  If the myriad of craftsmen share in the advantage of their skill, how much nobler is the spectacle they present!

    Pothier, in his Treatise on the Law of Partners, defines partners as "a society formed for obtaining honest profits," a definition which would tell against a good many partnerships of very respectable pretensions.  There is a charm in any plan that has a moral element in it, and if the element be what the lead miners call a "lode," or the colliers a "thick seam," or iron masters a "bed cropping out on the surface," so much the better.  If, however, the moral element be merely like one of Euclid's lines, having length but not breadth, it is not worth public attention, and human interest in it takes the form of a mathematical point which has position but no parts.  But if it has in it a palpable equitable clement, recognising the right of the artificer to ultimate competence, the interest in such a workshop has all the dimensions of solid satisfaction.



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