THE STORY OF A PEACEFUL REVOLUTION.
Objects and Rules of Retail Societies.
A CO-OPERATIVE SOCIETY established prior to the passing of the Industrial and Provident Societies Act, usually gathered round itself a certain individuality which found expression in the formula adopted for its “objects” and rules, and to some extent in its buiness methods and the adaptation of them to local circumstances. But with the progress and adoption of legal safeguards, certain formulae required by the Acts brought greater uniformity, and perhaps the loss of some personality, into the concrete expression of the co-operative faith as set forth in accepted rules and statutes.
For example, the rules of Upperby Society, established in 1829  state that —
A favourite formula with societies established in the ﬁfties was as follows:—
Upon the passing of the Act of 1862 the Pioneers of Rochdale issued a set of model rules to which was preﬁxed an address to co-operators. After enumerating the beneﬁts the Act conferred upon co-operative associations, the address proceeds:—
By the time the Acts were consolidated in the Act of 1876, the rules of societies had become to a large extent stereotyped, and, since the preparation by the Co-operative Union, of Model Rules couched in terms of legal uniformity with the amended Act of 1893, there has been little, if any, variation in the rules adopted by newly formed societies.
Large numbers of the older societies amended their old rules and adopted the model rules, which, while they give no scope to expressions of ideals, are found to lend themselves best to due uniformity with the orderly conduct required by law.
The rules of the Rochdale Equitable Pioneers’ Society have now been brought under the present Act, the objects of the society being stated in the following terse phrases:—
Some of the propagandist spirit of the old Pioneers still lingers in the rule book, however, for on the last page are found twelve items of “Advice to Members of this Society.” See Appendix (B). These axioms have been extensively copied by societies as a useful appendix to their formal rules.
PRESENT DAY DISTRIBUTIVE CO-OPERATION
We pass now to consider in detail some features of present day Distributive Co-operation.
As we have seen in Chapter IX., the advantages conferred upon co-operative societies by the Industrial and Provident Societies Acts of 1852 and 1862 were most important, the later Acts of 1876 and 1893 added to and completed the legal protection afforded by the law, and, with few exceptions, the existing co-operative societies in the United Kingdom are registered under the lfndustrial and Provident Societies Act, 1893.
A few societies are registered under the Companies Acts, and most of the agricultural co-operative banks in Ireland are registered under the Friendly Societies Act.
Registration under the Industrial and Provident Societies Act, as under the Friendly Societies Act, is optional and involves no expense to the society. Unlike the Friendly Societies, however, a society registered under the Industrial and Provident Societies Act is a corporate body with limited liability, and with a common seal, and on registration any property held on its behalf is vested in the society without formal transfer or rcconveyance. The society can sue and be sued in its own name, and has a special remedy in the courts of summary jurisdiction against an ofﬁcer or any person convicted of withholding books or other property of the society, or wilfully applying any part of such property to purposes not authorised by the rules or by the Act. Any number of persons, being not less than seven, may apply for registration of a society having for its object the carrying on of any “industry, business, or trade” — and in these terms is expressly included dealings of any description in land. Subject to certain special provisions of the Act, a society may also undertake the business of banking.
The Act also limits the amount of shares that any person may hold in a society to £200, but does not limit the holding of loans above this amount, nor the amount of capital a society may accept. Therefore the shares, which are usually of £1 value each, are always at par, and may be withdrawable.
A society can, however, invest an unlimited amount of money in another society, and receive as corporate members any society registered under the Act, or other body corporate, if its rules so allow.
To obtain registration there are certain provisions which the rules of a society must set forth, touching the name and seal of the society; admission oi members; mode of holding meetings and election of committees; capital, proﬁt, audit, &c., and no rules can be amended or altered, and no new rules made, without the consent of a speciﬁed majority — prescribed in the model rules as two-thirds — of the members voting at any special general meeting. No amendment of rules is valid until registered.
An important provision. of the Act (Section 24) relates to the exemption of co-operative societies from the charge to income tax under schedules C and D.
EXEMPTION FROM INCOME TAX
This exemption, however, does not prevent individual members whose incomes are over £160 per annum being liable to income tax for the income they may receive from co-operative investments. It is estimated, however, that fully 95 per cent of the membership of co-operative societies consists of persons not in receipt of taxable incomes.
It is highly important that this provision of the Act should be thoroughly understood, because attempts have been made, and are likely to be repeatedly made by the traders of the country to rescind this provision, and make co-operative societies directly chargeable with income tax in regard to the “proﬁts” said to be derived from their trading operations.
The grounds upon which Co-operation justly bases its claim to exemption are —
(l) That in co-operative trading no commercial proﬁt is made. See page 84.
(2) That persons individually exempt cannot be collectively chargeable.
RESTRICTION OF MEMBERSHIP
Although membership of a co-operative society is practically open to all, societies have the power to restrict membership —
(a) By excluding certain classes of persons from membership by rule or resolution.
(b) By admitting or excluding individual applicants for membership upon the approval or otherwise of the committee or of members’ meetings.
(c) By ﬁxing the minimum number of shares to be taken up upon application or the minimum amount of purchases to be made, or by requiring entrance fee or other condition.
Examples of method (a) may be found in societies that (1) admit one member of a household only; (2) admit husband and wife to joint membership, but not to individual membership; or (3) admit husband or wife (but not both) and grown-up children. 
This policy of restriction has for its ostensible object the keeping of share capital within workable limits, but its wisdom has been called in question on this ground, as well as on the ground that restriction of this sort generally results in excluding women from membership. Occasionally these restrictions are not embodi.ed in the rules of the society, but are put in force by resolution of a members’ meeting.
Examples of (b) are numerous and may be typiﬁed by the comprehensive rule of the L——— Society which enacts that —
Examples of (c) are found in societies which require two, three, or even live shares to be taken up before membership is complete. The requirement of an entrance fee of one shilling is common to the majority of societies, while a rule such as that of the M——— Society is frequently met with, viz.: —
The amount ﬁxed is frequently more than this sum.
These latter forms of restriction do much to exclude the poorest classes of workers from membership. Largely owing to the efforts of the Women’s Co-operative Guild, however, there is now a strong tendency amongst societies to abolish them. See Chapter XXIV.
An example of practically unrestricted membership is found in the following rules of the U——— Society:—
1. The Upperby Co-operative Industrial Society is still in existence, but its membership has never exceeded 100, and so far as can be ascertained, the society has never been engaged in manufacture. Its “object,” as stated in the rules now in force, is “to carry on the trade or business of grocers and general dealers.”
2. Rules of Price’s Workmen’s Stores, now the Battersea and Wandsworth Co-operative Society, established 1854.
3. Co-operator, March, 1863.
4. A summary of the chief features of past legislation affecting Industrial and Provident Societies has been prepared for the Co-operative Union by E. W. Brabrook, Esq., C.B., late Chief Registrar of Friendly Societies. See Appendix (A).
5. See Appendix (C).
6. Co-operative Societies and the Income Tax. Co-operative Union pamphlet, by J. C. Gray.
7. In an inquiry instituted by the Women’s Co-operative Guild as to the conditions of membership of 205 societies the following facts were elicited: — 145 societies had unrestricted membership, 28 admitted one member of the household, 12 admitted joint membership, 16 either husband or wife and grown-up children, 2 appeared to exclude the wife altogether, and 2 admitted any two members of a household, but no more. — 19th Annual, Report Women’s Co-operative Guild, 1901-2.