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Industrial Co-operation:

THE STORY OF A PEACEFUL REVOLUTION.
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CHAPTER III.

Table of Events

GENERAL EVENTSCO-OPERATION
1846 Corn Laws repealed.
1847 Factory Act (Ten Hours         Bill).
1848 Chartist Fiasco.
Revolutionary movements abroad.
1851 First International Exhibition.
1854-56 Crimean War.
1857 Indian Mutiny.
Beginning of Rochdale Co-operation
(Association of Consumers).
Redemption Societies.
Christian Socialists.
Second period of activity of
associations of producers (cf. 1830-35).
The Self-governing Workshop.
1844 Rochdale Equitable Pioneers.
1847 Leeds Redemption Society Flour Mill
1847 Halifax Flour Mill.
1850 Rochdale District Flour Mill.
1852 Industrial and Provident Societies Act.
1854 Rochdale Co-operative Manufacturing Society.
1862 Industrial and Provident Societies Act.
1863 Registration of the Co-operative Wholesale Society.

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Period II., 1844-1863. — Pioneer Work.

THE political world was fairly quiet for working men during the twenty years now to be considered.  The Anti-corn Law Agitation came to an end after the repeal of the Corn Laws in 1846; and similarly the movement for Factory Legislation died down after the passing of the Act of 1844 and the Ten Hours Act of 1847.  With the practical advantages thus gained the majority of the workers seem to have been for the present content; and Chartism ceased to be a living cause.  The interest of the nation at large was absorbed in the well-meant experiment of the Great Exhibition of 1851; in the war fever of the Crimean Campaign; in the thrilling events of the Indian Mutiny; and, finally in the progress of the American War of Emancipation.

A new era in the distributive or store side of the Co-operative Movement was inaugurated by the introduction of the “Rochdale System.”  The legalisation of co-operative societies under the Industrial and Provident Societies Act was a valuable contribution by the Christian Socialists to the work of co-operation.  We shall have to notice also the part taken by the Christian Socialists in education and in connection with “self-governing” workshops.

In our first co-operative period we saw a time of activity in the establishment of co-operative stores, followed by rapid success and by ultimate failure.  Yet the evils against which workers had to strive were unremedied.  There was still lack of work for the hand weaver, as machinery, long dominant in cotton manufacture, was now displacing handlooms for silk and woollen goods.  Notwithstanding the Truck Acts of 1830-31, there was still much tyranny, the worker being at the mercy of his employer in the price and quality of the food he was forced to purchase.  There was, under the new industrial system, the ever-increasing improbability that the working man could himself individually become an owner of the means of production.  Hence the spirit which prompted the early co-operative ventures was ready for a repetition of these experiments.  But the work which we are now to consider was of a permanent character — good solid foundation work.

THE ROCHDALE PIONEERS.

The flannel weavers of Rochdale had their turn of bad times from 1840 onwards. Among them were Owenites, Chartists, and teetotallers. Many of these, however, saw little hope of a far-reaching remedy for present ills in the existing methods of their movements. They therefore reverted to the Co-operative Store, not as an end in itself, but as a means to the wider objects they had in view (see p. 14).

They applied, however, to the old plan a new method for preventing the indifference of members from wrecking their ventures.  At one and the same time they appealed to the spirit of self-interest, and succeeded in doing away with what Robert Owen had so clearly recognised as a deadly snare, the making of “profit on price.”  This they accomplished by paying to capital only a fixed rate of interest, and treating any surplus of receipts over expenditure as a surplus paid by the purchaser, and therefore to be returned to him as his share of “dividend.”  But although the property of the purchaser, this was frequently re-invested in the society as an addition to capital.  In fact, the intention was that capital should constantly be increased in this way as well as by weekly subscription.

The Rochdale Society of Equitable Pioneers was founded in 1844, and had a successful career in store-keeping, as may be traced in Chapter VIII.  Grocery, a meat department, and drapery were successively added; [1] and production was begun in 1852 by shoe-making, clogging, and tailoring.

Even earlier (in 1850) they had taken an active part in the founding of the Rochdale District Corn Mill (the Holme Mill) on the same principle of considering any surplus, not as profit for the investor of capital, but as the property of the purchaser.  In fact here, as in the store, the purchaser was taken into partnership, capital receiving interest at a fixed rate (5%).  The Rochdale Co-operative Manufacturing Society for cotton spinning was started in 1854 by members of the Pioneer Society, but in this case they took, not the purchaser, but the worker into partnership, dividing out the surplus as profit between capital and labour.  However, this mill, known as the Mitchell Hey Cotton Mill, soon became merely a capitalist concern. [2]

About 1855 the Pioneers attempted to carry on a wholesale department for neighbouring stores.  Although this was not successful, it was the beginning of a movement which ultimately led to the establishment of wholesale co-operation.  Early in 1863, Abraham Greenwood, at that time president of the Pioneer Society, formulated a scheme for establishing a wholesale agency by the union of co-operative societies.  A new society was registered in November as the North of England Co-operative Wholesale Industrial and Provident Society Limited, and its prospectus appeared in The Co-operator, December, 1863. This subsequently became the Co-operative Wholesale Society. [3]

THE REDEMPTION SOCIETIES.

The Redemption Societies of this period must be mentioned here, although rather survivals of the old spirit than leaders of the new movement.

The earliest seems to have been the Leeds Redemption Society, started to improve on “the community system of Mr. Robert Owen,” by avoiding “the heterogeneous elements composing it.”  Its aim was “to unite the labour of all for the benefit of all.” [4]  Funds were to be raised by the subscription of one penny or more per week.  Mazzini is said to have been a weekly subscriber of threepence.

The Leeds District Corn Mill was started largely by its help, a farm was worked in Wales, and shoe-making begun; but want of capital prevented the development of hat-making and tailoring.  Even the starting of a store by some members of the Redemption Society in 1852 and the devotion of its profits to the Welsh community did not suffice to develop the latter.  The society, therefore, dissolved in 1855, dividing the surplus left, after payment of all debts, among Leeds public institutions.  The store, however, survived, and is now the largest in the kingdom, with extensive manufacturing departments. [5]

There was an offshoot of the Leeds Society at Pudsey, and societies for the “Redemption of Labour” existed also in Bury, Norwich, and Stockport.

CORN MILLING.

The need of the poor for protection from injustice in the price of corn seems to have been felt very soon after the Industrial Revolution.  Hence among the earliest co-operative enterprises were corn mills.  Some of these claim attention here, together with those of the period, rather than in strict chronological order.

At the end of the eighteenth century many corn mills were converted into cotton mills, so that those remaining had practically “a monopoly in the most important article of life.”  In 1795 several of the poor inhabitants of Hull petitioned the Mayor and Corporation for assistance in building a mill, because, in consequence of “an exorbitant price of flour,” they found it necessary to preserve themselves “from the invasions of covetous and merciless men.”  Donations were given, and the mill was duly started. [6]   So successful was it that in 1811 the millers of the town indicted it as a nuisance, but lost their case!

The Hull Subscription Mill was opened in 1801, and the Devonport Union Mill in 1817.  The reason given for the founding of the latter was, “There was such an outcry about china clay being mixed up with flour.” [7]

The mills of our Pioneer period seem to have been started for similar reasons.  In 1846, just before the opening of the Redemption Society’s corn mill, “flour in Leeds was 4s. per stone of 14lbs. and very poor; also it was adulterated to a very great extent.”[8]  The quality of the co-operators’ flour was such that a stone of it made one or two pounds more of bread than the flour of other dealers; and in a short time the price of flour was brought down 2d. in the lb. throughout the town.

In 1847 a flour mill at Halifax was opened by a branch of the Leeds Society.

An account appeared tin the local newspapers of 1849, of the success of the Leeds and Halifax Corn Mill Societies, which had effected a general reduction in the price of flour in those towns, thus serving the whole public, besides supplying to their own members pure flour cheaper than the public price, with added profits. [9]

The organisation of co-operative corn mills may advantageously be studied as typical of possible varieties of co-operative ownership in a business worked on the Rochdale plan, the customer being taken into partnership.

The eight corn mill societies at present existing (1904) are classified in the Board of Trade Report on Workmen’s Co-operative Societies, 1901, [10] as follows:—

(i.) Pure federations, their members being retail distributive societies (Derwent and Colne Vale);

(ii.) Societies consisting wholly of individuals (the two smallest, Northallerton and Ripon);

(iii.) Societies with mixed membership, i.e., both retail distributive societies and individuals (Halifax, Star [Oldham], Rochdale, Sowerby Bridge).

To these must be added —

(iv.) Corn mills owned by distributive societies (Leeds, Banbury, Barnsley, Leigh, Lincoln, Leicester, Carlisle, and others);

(v.) The corn mills of the Wholesale Societies, English and Scottish, which jointly produce more than all the rest put together.  These are federal societies of the same type as class (i.), but their operations are not confined to corn-milling as in societies of the first three classes. (Chapter XIV.)

THE CHRISTIAN SOCIALISTS

About 1848 some of the extreme Chartists and Socialists, disappointed by the failure of their agitation, seemed likely to follow the example of their continental contemporaries and appeal to force.  At this time there came on the scene a group of reformers who sought to leaven socialism with Christianity, and to rouse the churches to a sense of their social responsibilities.  Their leaders were Church of England clergymen — Maurice, and Kingsley — whose only “quarrel with the charter is that it does not go far enough in reform”; with members of the legal profession — Hughes, Neale, and Ludlow: men of a type new in the history of co-operation.

With the work of these men, “the Christian Socialists,” we seem to be returning to the earlier idea of Robert Owen, when he looked to the professional and leisured classes for the help needed to improve the lot of the workers.  Like him, too, they laid great stress on the moral as well as the economic side of co-operation. [11]

They worked chiefly in London, where they formed a “Society for promoting Working Men’s Associations,” themselves providing most of the money needed for these associations.  Twelve of these “self-governing workshops” were started, but few lasted any length of time.  Ere long the promoters realised that they had been working on wrong lines in setting up in business chance aggregations of workmen, and expecting them without training or experience to carry on business harmoniously and successfully.

Their educative work was more successful.  The Working Men’s College, founded by them for the purpose of placing a liberal education within the reach of working men, continues to do good work down to the present time.

Even more important to the Co-operative Movement was the change which the Christian Socialists were able to effect in the law, by promoting the Industrial and Provident Societies Act of 1852.  In the old days, when goods were simply the property of the members, there was nothing to prevent any one member from appropriating them all to himself, the law regarding members as partners.  There was no legal remedy for fraud, and some of the earlier societies suffered greatly from their unprotected condition.  But the Act of 1852, “the charter of co-operators,” gave a legal status to co-operative societies.

A still further degree of protection was provided after another decade by the second important Industrial and Provident Societies Act, 1862.  This increased the amount to which individuals might hold shares from 100 to 200, recognised societies as corporate bodies with limited liability, and permitted one co-operative society to take up shares in another.  This last concession made possible the step in co-operative history already mentioned — the co-operation of retail societies for wholesale distribution and manufacture — and many further steps were made in the next forty years.


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NOTES

1. See Holyoake’s History of Rochdale Pioneers, Chapter III.


2. See Chapter X., page 85.

3. See Chapter XIII.

4. Co-operative Production. B. Jones Page 102.

5. The Leeds Society, which dates its existence from the starting of the Corn Mill, in 1847, recorded in the year of its Jubilee, 1897, a membership of 37,000; trade, 1,042,616; profit, 150,000; capital, 485,000. It carried on 13 distinct branches of business, employing 1,380 persons, paying in wages about 70,000 per annum. It had over 80 branches in the town of Leeds and in adjacent villages, and had built about 650 houses; and educational work was provided for by a yearly grant of over 1,000. The output of flour was nearly 100,000 bags. — Jubilee History of Leeds Society, by G. J. Holyoake.

6. See Chapter VII., page 53.

7. Co-operator, 1863.

8. Co-operative Production, B. Jones, page 177.

9. History of the Rochdale Pioneers, Holyoake, page 28.

10. Page 31.

11. See Chapter IX., page 72.