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Industrial Co-operation:

THE STORY OF A PEACEFUL REVOLUTION.

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CHAPTER V.

Table of Events
GENERAL EVENTSCO-OPERATION
1884-5 Third Act of Reform.
    (Agricultural workers enfranchised, cf. 1832 and 1867).
1888 Local Government Act.
1891 ditto.
1887 Jubilee celebrations.
1897 ditto.
1899 Transvaal War.
1901 Liability of trade unions extended.
1902-3 Education Acts.
Internationalisation of Co-operation —
    i. In commerce.
    ii. In propagandist work.
Co-operation in Ireland.
Fourth period of associations of producers (cf. 1830-5, 1850-5, 18700, co-partnership.
1884 Labour Association.
1887 Shieldhall purchased.
1888 Industrial and provident Societies Act (nothing excluded).
1893 Irish Co-operative Agency.
1895 International Co-operative Alliance.
1896 Educational Associations.
1897 Irish Agricultural Wholesale Society.
1903 Labour Co-partnership Association.

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Period IV., 1884-1903.  Expansion of the

Co-operative Commonwealth.

IN entering on the fourth and last period of our survey there is the natural difficulty arising from the recentness of the events — as in seeing in their right proportion objects placed close to the eye.

In the great world of English speaking folk, two main lines of development may be traced, apparently in opposite directions.  With the passing in 1884-5 of the Franchise and Redistribution Bills, which together constitute the third great Act of Reform, the political reform of the nineteenth century may be said to be complete.  Perhaps the work of the twentieth century may include the extension of the franchise to women. [1]

The first line of development is intensive, strengthening local power and interest, reverting in some degree to the good old Saxon days, when county, district, and village had each its shire-moot, hundred-moot, or village-moot.  This has been the work of the Local Government Acts (1888 and 1891), setting up county, district, and borough councils, and parish councils; the work of the Metropolitan Borough Councils Act of 1900; and in part the work of the Education Acts, 1902-3.  In these things the tendency has been towards decentralisation.

Yet the great trend of development has been otherwise, towards unification (and perhaps in this we may read the secret of much of the disappointment of those who expected great things from this gift of local government).

In Imperial affairs the Jubilee celebrations of 1887 and 1897 developed into expressions of this expansive tendency, and were used to kindle a desire to knit into one great whole the individual parts of the Empire.  Two more recent expressions of the same tendency, too controversial to be discussed here, may likewise be mentioned — the Transvaal War, and the “Protectionist” campaign.

This co-ordinating and unifying tendency has shown itself also in home affairs — for example, in the setting up of the new Educational Authorities by the Acts of 1902-3.  In the commercial world the individual finds it increasingly hard to keep his place as employer or retailer; the joint-stock company swallows up the individual, the trust displaces or absorbs isolated companies.  The municipality, where strong enough, takes its place as caterer for wants which the individual cannot so well supply.  Trade Unions have felt the necessity for more united action as regards Parliamentary matters, not only amongst themselves, but in concert with co-operators and others. [2]

CO-OPERATIVE DEVELOPMENT.

Meanwhile, Co-operators, not being a class distinct from other citizens, have naturally been developing along the same lines as the nation as a whole.  There has been, we shall find, on the one hand, steady growth of local power and responsibility; on the other hand, international development, not merely in business but in sympathetic intercourse.  A development, significant of increased local power, has been the formation of Educational Associations in most of the sections of the Co-operative Union; whilst the unifying tendency is exemplified by the joint purchase of tea estates in Ceylon by the English and Scottish Wholesale Societies, and also by the formation of the International Co-operative Alliance.

Even in lesser degree we find a parallel between co-operative and general history, a parallel but also a contrast — Irish affairs have claimed much attention.  It is the era of Irish co-operative development, which is “almost entirely a growth of the past twelve years.”[3]  This period has seen the establishment of numerous dairying or agricultural societies, of an Irish Union (the Irish Agricultural Organisation Society), and of two Wholesale Societies (the Irish Co-operative Agency, and the Irish Agricultural Wholesale Society).

The event of the opening year of our period is the founding of the “Labour Association for promoting Co-operative Production based on the co-partnership of the workers.”[4]  Its promoters naturally hope that it will prove to be an epoch-making event of equal importance with the repeal of the Combination Laws, the founding of the Rochdale Pioneer Society, or the establishment of the Co-operative Wholesale Society. 

ASSOCIATIONS OF CONSUMERS.

In retail distributive societies, consolidation and unification are most marked.  The number of societies has increased, though not strikingly so, the increase being, for the United Kingdom, rather over 38 per cent.  But as the number of members has more than trebled, the average size of a society is more than twice as large as it was at the beginning of the period.  This is the result of numerous cases of amalgamation of existing societies, and of still more numerous cases of the establishment of branches by an existing society.  It may be added that the trade has considerably more than doubled, though not quite trebled. [5]  Of the societies which contribute to this vast volume of trade, the Leeds Industrial has annual sales to the value of 1,500,000 sterling per annum, Edinburgh (St. Cuthbert’s) has nearly the same amount; while seven other societies, all in the North-Western Section, except Plymouth (S.W. Section) and Newcastle-on-Tyne (Northern Section), have each an annual turnover of over 500,000 per annum, i.e., a weekly turnover of about 10,000. [6]  In the Southern Section, Woolwich and Stratford, the two largest societies, together have an annual turnover considerably over 500,000. [7]

For the value of goods manufactured by societies formed for retail distribution, figures are not obtainable for the whole of the period.  We may, however, safely consider that it has at least trebled, for from 1896 to 1902 it had increased 98 per cent.  Production by the Wholesale Societies has increased at a rapid pace.  The Scottish Wholesale began its manufacturing career in 1887 by the purchase of a large estate (Shieldhall) on the banks of the Clyde, not far from Glasgow, where many of its factories are grouped: clothing and boot and shoe factories, cabinet-making, printing, and brush works, a tobacco factory, and factories for the making of sweets and preserves, coffee essence, and pickles.  It has shirt, tailoring, waterproof, and aerated water factories in Glasgow, and other industries are carried on in various places, e.g., soap-making, fish-curing, and corn-milling.

In the case of the English Wholesale Society, salerooms and depots in England and abroad have been increased in number to keep pace with the four-fold turnover; factories have been multiplied to supply the twenty-fold output. [8]  In 1902 nearly one-fifth of the goods sent out by the Co-operative Wholesale Society were manufactured in its own productive departments.  In the Scottish Wholesale the proportion is more than one-fourth.  The list of industries seems to cover almost every department of industrial life, excepting engineering, the mining of coal, and other mineral industries.

CO-OPERATIVE PROBLEMS.

In considering which of the extensions are noteworthy, perhaps the developments of the tea, coffee, and cocoa business may be chosen to illustrate the lines of work and some of the problems connected therewith.  A department for packing tea, and roasting and grinding coffee, was opened in London in the preceding period (1882), and to this was added the manufacture of cocoa and chocolate in 1887.  In this business the English and Scottish Wholesale Societies are partners, so that here the maximum of federation possible among consumers in Great Britain appears to be reached.  The next step is significant — the joint purchase of tea estates in Ceylon; so that now the middleman is entirely dispensed with, and the source of all production — the land — reached.  Co-operators thus come face to face with one of the imperial problems of the day, the employment of coloured labour; and those in authority have promised careful and independent study of the question.  Another step, no less significant, has been the transfer of the cocoa works from Leman Street, the headquarters of London Co-operation, in the crowded East end, to the country town of Luton.  Here one solution of the urban population question is touched, the solution advocated on a wider scale by the projectors of Garden City.

The urban land question has had constantly to be met by co-operators, in the difficulty frequently experienced in obtaining a freehold site, in the heavy price to be paid for the land necessary for extending their business, even when the value has been entirely given to the site by their own enterprise.  Since the early days of communities and redemption societies, the purchase of rural land has not made much progress amongst English co-operators.  Recently, however, the Co-operative Wholesale Society has taken up agricultural land in Shropshire, the Roden Estate (1896), where fruit-farming has been successfully carried on, and it has bought an extensive fruit-farm in Herefordshire (1903); whilst a number of distributive societies help to make up the total acreage of nearly 8,000 acres under co-operative farming. [9]  The latest purchase of the Scottish Wholesale Society, the estate and castle of Calderwood — for over four centuries the home of the Maxwells, of Calderwood — to be used for the purposes of fruit-growing and cattle raising, marks a further development.  Moreover, the question of the purchase of land for agricultural holdings is now being brought before co-operative societies.

Labour questions at home have been at least temporarily met by the policy of paying not less than the trade union or standard rate of wages, and of providing cheerful healthy factories.  It is claimed [10] that in the case of women workers “no serious grievance has missed attention.”  But the ultimate solution will be approached only when co-operators manufacture approximately all that they need, and are thus able to employ the majority of their members, instead of, as at present, only about 5 per cent.  The number of employees may include some who are not co-operators.  On the other hand there are many members of co-operative societies who, though not in the direct service of co-operative societies, are in the wider sense co-operatively employed, being servants of the whole community, as civil servants, municipal employees, teachers, &c.

CO-OPERATIVE THEORY.

In economic questions the last twenty years have seen the crystallisation of a theory of profit.  In 1886 the English Wholesale Society gave up its second and last attempt to put into practice a system of profit-sharing; and although the Scottish Wholesale gives a bonus to labour, public opinion seems to look on this rather as a gift to a privileged class of workers than as a final solution of the main question involved in the rate of wages, and the standard of life.

This theory, slowly evolved from the sixty years’ practice of consumers’ co-operation since 1844, bears an interesting resemblance to the ideal pictured by the intuitive genius of Robert Owen — the elimination of profit on cost.  The co-operative consumer of jam, or tea, or boots is using what was produced in a factory owned and controlled by himself (and other co-operators) and distributed by his own agents.  There is no manufacturer, merchant, commercial traveller, or dealer beyond himself and his own employees.  There is no one buying at a low price to sell at a higher one, as is seen when the transactions from manufacturer to retail purchaser are carefully analysed.  True, there may be a “surplus ” between the charge made by the manufacturing society and its total expenses of management; if so, this is returned to the purchaser.  The retail purchaser is charged ordinary market price only to receive back the overcharge or surplus in the form of dividend when wholesale price and expenses of distribution have been met.  Hence,“profits as understood by the ordinary economist have no existence in the co-operative movement.”[11]

In the same way the tendency to buy land, reached as the practical outcome of sixty years’ progress through retail trade, wholesale dealing, and finally manufacture, is the modern embodiment of the germ idea of the early socialist co-operators, “community on land,” a realisation better and fuller than they could then anticipate.  The land bought by co-operators for the extension of their business is in the truest sense socialised, rescued from the competitive system, made the common property of those who contribute to its development and enjoy its fruit; and the number of those who may thus become joint-proprietors of co-operatively owned land is, as we have seen, practically unlimited.

ASSOCIATIONS OF PRODUCERS.

The period opens, as already shown, with the founding of the Labour Association, “an educational, advisory, and propagandist body,” in 1884.  At first the term “Co-partnership” appeared only in the sub-title of the Association — “for promoting Co-operative Production based on the Co-partnership of the Workers.”  In 1894 it appeared in the title of the Association’s organ, “Labour Co-partnership,” and in 1903 the Association itself became the “Labour Co-partnership Association.”  In this evolution we have the key to the evolution taking place in these productive associations themselves — the result of the experience of the preceding twenty years.  An increased definiteness of aim resulted from the failures and successes of the previous attempts; the conditions of success and failure were observed, and the limitations of workers, managers, and directors estimated by experience.  Unlike its predecessor — the Society for Promoting Working Men’s Associations — the Labour Association aimed at giving aid not by funds but by advice, the result of experience.  Hence there are fewer failures among the recently founded societies.  The type of society has somewhat changed, the self-governing workshop has passed away, the direct control of the employee is, in many of the newer societies, transferred to an employees’ investment society, and his share capital is purchased through this society.  But the variety is great, and no fixed code is laid down.  There are, however, three standard requirements which a society must fulfil before rightly claiming the title of “Co-partnership.”  It must give to all its workers —

(1) A share in profit, apart from any capital which they may hold;

(2) A share, however indirect, in responsibility and control;

(3) A right to become members by taking up share capital.

In another way the old term “associations of producers” is losing part of its significance, as more and more the societies find their best customers in the distributive societies, and to this extent are producers for a known market.  In these cases the distributive societies are usually shareholders, and the producing societies give a dividend to purchasers as well as to labour; producers and consumers merge in one association and are very frequently the same individuals.  Good examples of such co-operative communities are Desborough and Kettering.

Of the 132 societies, in the Board of Trade list already referred to, reporting for 1899, 34 were already founded by the end of 1883, but of these not more than fifteen are recognised as co-partnership societies.  Of the 132 societies active in 1899, a much larger proportion would pass the tests, so that the growth in number of societies is at least six-fold.  The figures given in Chapter XVII. show that from 1883 to 1902 the number of societies was multiplied by seven, and their trade by twenty, approximately the same percentage of increase as that for the English Co-operative Wholesale Society.

In summarising the work of the societies to be considered in Chapter XVI., we find that the largest number in any one industry is in the boot and shoe trade.  Besides the Keighley Ironworks (1885) and the Leicester and the London Engineers (both dating from 1894), there are several in other branches of metal trades, three of them dating from the seventies, as already mentioned — the Walsall Padlock, Coventry Watch, and Sheffield Cutlery societies.  Others are Alcester Needle-makers, Bromsgrove Nail Forgers, Dudley Bucket and Fender Makers, and Midland Tinplate Workers, all of which have now a record of fifteen years’ business and a steady output.

Of the successful textile societies, most belong to the earlier periods — Eccles Manufacturing, 1861; Paisley Manufacturing, 1862; Hebden Bridge Fustian, 1870; Airedale Worsted, 1872; Leeds Silk Twist, 1874.  The three largest of those of the present period are Macclesfield Silk, Nelson Self-Help, and Wm. Thomson and Sons (Huddersfield), the last-named an interesting case of an employer converting his private business into a co-operative one under the Industrial and Provident Societies Act, not for the sake of the “extra zeal” induced by profit-sharing, but “as an act of justice, and under existing industrial conditions most expedient.” [12]

A recent society, the North Wales Quarries, Bethesda (1903), deserves special mention, repeating in its formation the history of the Walsall Padlock Society, which was formed as a result of a strike.  It is an encouraging feature of the present unity of the whole co-operative movement, that the new society is receiving support from many societies throughout the country.

EDUCATIONAL PROPOGANDIST ACTIVITY.

Of the seven propagandist bodies mentioned in the Board of Trade Report, 1901, three were in existence in 1884; the rest have been inaugurated during the twenty years under consideration.  Among the three older bodies, the Co-operative Union was already well established in 1884, but the Women’s Guild was only in the first year of its existence, and its history may therefore be considered as a feature of the present period.  It well exemplifies in its rapid and strenuous growth the force in the educational side of Co-operation.  The Co-operative Productive Federation is for the mutual assistance of the productive societies which are its members.

Side by side with these may be placed the following three bodies — the Irish Agricultural Organisation Society, which, with methods specially adapted to Irish circumstances, to some extent replaces the Union in Ireland; the Scottish Co-operative Women’s Guild; and the Labour Co-partnership Association, founded in 1884 as the Labour Association for Promoting Production, based on the Co-partnership of the Workers — all founded within the last twenty years.

Each of these will be considered later in its own section of the book, and need not now be further dealt with.  The seventh however, the International Co-operative Alliance, founded in 1892, so clearly illustrates the unifying principle at work during our period, that its objects must be stated here.  It is too young, and its elements are too heterogeneous, for us to look for tangible result yet.  But the holding of International Congresses of co-operators in itself makes for the spread of the common work.  Of these, two have been held in England, two in Paris, and one in Delft.  By a recent change of rule the Alliance is “a Union composed, so far as is possible, of co-operative societies and organisations, so that in future it may claim to represent the co-operative movement better than in the initial stage, when individuals might become members without any mandate from any co-operative organisation.”  Its objects are both ideal and practical:

(1) To make the co-operators of all countries acquainted with each other;

(2) To study in common the true principles and best methods of (a) co-operation, (b) profit-sharing, (c) of an association of labour with capital, (d) of the remuneration of workmen and other employees, but without presuming to impose upon any one the acceptance of any uniform type of rules, of systems, or regulations;

(3) To hasten a system of profit-sharing;

(4) To establish in the common interest commercial relations among the co-operators of the several countries.
     
It is inspiring, that in closing our summary of co-operative progress, we do so with the prospect of the co-operators of the world federated into one organisation on a catholic basis.


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NOTES

1. 1882, Enfranchisement of Middle-class; 1867, Enfranchisement of Urban Working-class; 1894, Enfranchisement of Rural Working-class.

2. E.g., Joint conferences re. Old-Age Pensions.

3. Board of Trade Report, 1901, page 81.

4. Now the Labour Co-partnership Association.

5. The Board of Trade Abstract of Labour Statistics furnishes the following figures:—

Societies *MembersAverage
membership
Sales
1883 . . . . .  . . . . . 1,051  . . . . . 627,625 . . . . .  597 . . . . . 18,540,004
1893 . . . . .  . . . . . 1,421 . . . . . 1,169,094 . . . . .  823 . . . . . 31,925,896
1902 . . . . .  . . . . . 1,454 . . . . . 1,892,907 . . . . . 1,302 . . . . . 55,319,262
* Not including the four Wholesale Societies.

6. Bolton, Barnsley, Pendleton, Bradford,Oldham Industrial.

7. See Co-operative Congress Report, 1902.

8. Board of Trade. Labour Gazette, January, 1904.

WHOLESALE SOCIETIES, 1902
EnglishScottish
Total sales . . . . .  . . . . .  . . . . .  . . . . . 18,397,5596,059,119
Output of productive departments3,442,3581,657,207

9. Co-operative Congress Report, 1903.

10. Co-operative Wholesale Societies
Annual, 1902.

11. Co-operative Wholesale Societies
Annual, 1902. See also Chapter III.

12. Schloss, Board of Trade Report on Profit-Sharing.