Click here to return to book index Click here to search the website Click here to search the website

Industrial Co-operation:

THE STORY OF A PEACEFUL REVOLUTION.

______________

CHAPTER XIV.

________________

Wholesale Co-operation  Development, Present Position, and Treatment of Employees. [1]


T
HE ENGLISH CO-OPERATIVE WHOLESALE.

As stated in its rules, the objects of the Co-operative Wholesale Society are to carry on the trades or businesses of wholesale dealers, bankers, shippers, carriers, manufacturers, merchants, cultivators of land, workers of mines, and insurers of persons and property.

The headquarters of the Wholesale Society have always remained at Manchester, where block after block of imposing warehouses and offices have arisen in and adjacent to Balloon Street, Garden Street, and Dantzic Street.  From here the societies all over the country were served until the opening of a branch at Newcastle-on-Tyne, in 1871, and the establishment of the London Branch, in 1874, supplied the wants of societies in the extreme North and South, and relieved the pressure on the centre.  The opening of Depots, both at home and abroad, followed in rapid succession.  At Balloon Street (Manchester) and at the Newcastle and London Branches fine conference halls have been built, in which the business meetings and many other co-operative gatherings are held.

The following calendar denotes the principal events that have marked the progress of the society from its commencement:—

Year.Year.
1863Society enrolled.1888Fire Newcastle Branch.
1864Business commenced.1891Dunston Corn Mill opened.
1866Tipperary Branch opened.1891Aarhus Branch opened.
1871Newcastle-on-Tyne Branch1894Montreal Branch opened.
opened.1895Printing Department opened.
1872Bank Department commenced.1895Gothenburg Branch opened.
1873Crumpsall Works purchased.1895Irlam Soap Works opened.
1873Leicester Works purchased. 1896Roden Estate purchased.
1874London Branch established.1896“Wheatsheaf Record” (first
1876New York Branch established.publication).
1876s.s. “Plover” purchased.1897Sydney, N.S.W.,Depot opened.
1879Rouen Branch opened.1897Banbury Creamery opened.
1881Copenhagen Branch opened.1898Littleborough Flannel Mill
1882London Tea and Coffee Departmentacquired.
opened. [2]1901Sydney Tallow Factory
1884Society’s twenty-first anniversarypurchased.
celebrated.1901Roden Convalescent Home
1884Hamburg Branch opened.opened.
1884Bristol Depot opened.1902Luton Cocoa Works opened. [2]
1885Fire at London Branch.1903Purchase of Ceylon Tea
1887Manufacture of Cocoa andEstates. [2]
Chocolate begun.

METHODS OF BUSINESS.

The bulk of the general trade is done in goods bought by the society’s buyers at home and abroad, and distributed to the retail societies from its warehouses, or, in the case of very large consignments of certain articles, sent direct to the retail society from the manufacturer or port where landed.  Large stocks are held in Manchester, Newcastle, and London in the Grocery and Provision, Drapery, Woollens, Boot and Shoe, and Furnishing Warehouses, from which the orders of societies in these districts are executed.  The stocks of bacon, hams, and canned goods from America are held in great warehouses at the ports of arrival, and on the receipt of orders at Manchester, Newcastle, or London the heavy orders are sent direct, while small and mixed orders are executed from the local warehouses.

One general principle runs through all the purchasing done by the society, namely, to go direct to the source of production whether at home or abroad, so as to save the commissions of middlemen and agents.  For some articles, such as tea, coffee, wool, and leather, there is, of course, a definite market where the whole supply is put up to auction by brokers, and in such cases the buyer has to take his place with the rest of the world and bid for what he wants.  The home buyers usually have samples offered to them by the manufacturers, but in some branches of trade they have to visit special markets.  The millinery buyer has to go to London and Paris at certain seasons.  The buyer for dried fruit goes to Greece in the autumn, and thus secures the pick of the crop by calling on the largest growers and paying cash on delivery.  In New York, Montreal, Sydney, N.S.W., Spain (Denia), Aarhus and Copenhagen, Hamburg, and Gothenburg, the Wholesale has purchasing depots with resident buyers, whose office it is to purchase and ship home the productions of these countries as required by English co-operators.  On arrival in England, the goods are divided among the warehouses at Manchester, Newcastle, London, Liverpool, and Bristol.  Samples are then placed on view in the various salerooms of the Wholesale, at Manchester, Newcastle, London, Bristol, Cardiff, Leeds, Huddersfield, Blackburn, Northampton, and Nottingham, so that buyers from the retail societies can at once see them and place their orders.

Foreign Trade. — The total amount of the goods imported direct by the Wholesale from foreign countries in the twelve months ended December, 1902, was 5,562,010.  The chief items that go to make up this total are as follows: —


America1,124,990Cheese, Bacon,Lard, Flour,
and Canned Goods.
Australia119,502Butter, Wheat, Tallow, Leather.
Canada321,978Cheese, Butter, Leather.
Denmark2,611,602Butter, Bacon, Eggs.
France204,281Sugar, Dried Fruit, Fancy Goods.
Germany361,084Sugar, Butter, Eggs, Fancy Goods.
Greece and Turkey148,828Dried Fruit.
Holland124,658Rice, Cocoa, Cheese, Yeast and
 Margarine.
Sweden431,436Butter, Eggs, Boxes.

Shipping. — For the transit of these goods the Wholesale soon found it necessary to provide ships.  The first steamship, the “Plover,” was purchased in 1876, and in 1879 the “Pioneer” was launched.  There are now seven steamers plying between Goole and Hamburg and Calais, and between Manchester and Rouen, and Garston and Rouen.  The society started as shipowners with the two-fold object of saving money on that part of the traffic carried by their own vessels and keeping outside freights down to a reasonable figure by providing a salutary object-lesson to grasping shipping rings and federations.  The knowledge that co-operators, if once roused by unjust exaction, have the tenacity and capital necessary to break down any ring, and possess from the working of their own little fleet the knowledge required to become successful rivals, has more than once already deterred continental shipping companies from largely increasing their rates.  Cargoes from other ports are brought by ordinary lines of vessels or by vessels specially chartered by the Wholesale; so that it may be said co-operators have, through their federal organisation, direct communication with every mercantile port in the world.

Joint Tea Department. — An important amalgamation has been arrived at between the two wholesale societies for the purpose of joint ownership and management of the tea, coffee, and cocoa department.  Two tea estates have been purchased in Ceylon, at Nugawella and Wellagana, where the cultivation and preparation of the crop is performed by coolies under the direct supervision of the agents of the Wholesale.  An endeavour is made to steadily improve the conditions of work and life of the native employees.

IRISH CREAMERIES.

Both the British Wholesale Societies followed up the opening of butter branches in Ireland by the establishment of creameries.  Those owned by the English Society are situated in the south-west of Ireland, chiefly in the counties of Limerick, Kerry, and Tipperary, with a few in Clare and Cork.  The Scottish confines its activities to the north of Ireland and the Enniskillen district chiefly.

The total production of the English Co-operative Wholesale Society’s creameries during the year 1903 amounted to over 50,000 cwts. of butter, representing a money value of about 250,000.  This output was from a milk supply of over 14,000,000 gallons, for which over 210,000 was paid to the Irish farmers.

The trade of the Scottish Wholesale Society at their creamery and margarine factory amounted to 83,128 in 1902.

The method of dealing with the milk suppliers is upon a fortnightly cash payment, the price being determined by the market price of butter at the time, and partly also by local competition.

Relations between the Wholesale Societies and the promoters of farmers’ dairy societies (see Chapter XVIII.) have not always been harmonious; the idea of the establishment of creameries in Ireland owned and worked by British co-operators being repugnant to those desirous of seeing the growth of self-sustained co-operative associations in Ireland.  The difficulty, however, is largely created by national sentiment, and will only be overcome by the friendly understanding that time and mutual acquaintance between co-operators the two countries can bring about.

The Wholesale Societies have started these creameries in each instance at the request of the farmers in the district, after the milk suppliers have held meetings in public and a substantial majority have petitioned the directors on the matter.  A general understanding exists that if at any time the farmers prefer to organise a local society and take over the creameries at a fair valuation, the Wholesale would be prepared to sell.  Under this arrangement, three main creameries and one auxiliary were sold to Farmers’ Co-operative Societies during 1903.

PRODUCTIVE WORKS.

With the exception of these creameries and a bacon factory in Ireland, a bacon factory at Herning, Denmark, and a tallow and oil factory in Sydney, Australia, the factories of the English Wholesale Society are in England, grouped for the most part round the three centres of the society, in Manchester, Newcastle, and London.  Certain of the more important industries, such as boots (Leicester and Heckmondwike), clothing (Broughton and Leeds), cocoa (Luton), are situated with regard to geographical convenience for the supply of raw material, quick dispatch of goods, the neighbourhood of the retail stores to be supplied, or the existence of a supply of skilled labour.

The machinery and equipment of the factories is of the most modern and efficient character, and the buildings are generally erected for the special purpose they are to serve, upon freehold land, and with due regard to architectural excellence.  The maximum of air space, ventilation, lighting, heating and sanitation required by Factory Act regulations is fully complied with, and the special additional provisions of dining-rooms, kitchens (for preparing food), and other comforts for the workpeople, carry the Wholesale Society into the first rank of good employers of labour.

HOURS, WAGES, AND CONDITIONS OF LABOUR.

In 1903, the Women’s Co-operative Guild made a careful investigation as to the hours, wages, and conditions of employment in the productive departments of the Co-operative Wholesale Society, and, the official report of this investigation submitted to the Annual Congress of the Guild [3] testifies to the generally satisfactory conditions prevailing.

With regard to hours of labour, the report shows that —

Of the thirty-five factories inspected, nineteen were working under 48 hours, five were working 48 hours, and eleven over 48 hours.  No factory works more than 55 hours.

With regard to wages, the report found that—

Throughout all the factories, in every trade where a trade union exists, union rates, or higher, are invariably paid.  The rate of payment of unskilled workers is also satisfactory.  There are no fines of any kind in any of the factories.  Nearly one-half (45 per cent) of the women workers earn 15s. or more per week.  More than one-third earn from 12s. to 15s., so that the great majority of the women (more than four-fifths) earn over 12s. per week.

Special effort is made to organise work in the different factories so as to minimise seasonal overtime and slackness, and the inevitable tedium and pressure of modern factory industries is lightened in every way possible.

A general idea of the point reached by the Wholesale Society in manufacture, so far as the general wants of the community go, may be obtained from the following rough classification, which shows only the chief heads of manufacture:—

FOOD. CLOTHING. MISCELLANEOUS.
Biscuits.
Sweets.
Cakes.
Jams.
Pickles.
Marmalade.
Candied Peel.
Flour.
Lard.
Bacon.
Butter.
Tea Growing,
Blending, and Packing.
Coffee.
Cocoa.
Fruit. 
Woollen Cloth.
Flannel.
Overcoats. ||Men's
Suits.           ||and
Shirts.          ||Boy's
Mantles.       \\ Women’s
Jackets.         \\ and
Costumes.     \\Girls’
Blouses.         \\
Skirts.             \\
Aprons.
Underclothing.
Boots.
Shoes.
Slippers.
Soap.
Candles.
Crockery.
Furniture.
Tobacco.
Cigars.
Cigarettes.
Printing.
Lithography.
Bookbinding.

In addition to the above, the Wholesale Society is engaged in a large number of enterprises which are not yet shown separately in the statistical tables, though in nature they are productive.  They are under the control and their figures are included in those of the respective distributive departments.  They are as follows:— Irish Creameries, Creamery Auxiliaries, Tralee Bacon Factory, Herning (Denmark) Bacon Factory, Longton, Crockery Decorating.  Manchester: Shirt, Corset, Mantle, Underclothing, and Pepper Factories, Saddlery Department and Bacon Stoving.  Newcastle: Drug, Printing, and Saddlery Departments, Bacon Stoving, &c., Tailoring, Shirt, and Underclothing Factories.  London: Bedding and Upholstery Departments, Brush Works, and Tailoring Factory.  Rodon Estate Fruit Farm.

Banking. —The Banking Department of the Wholesale, which was established in 1872, plays an important part in its transactions.  In the year 1902, 694 retail societies had accounts with the bank, and profits amounting to 18,708 were made on a turnover of 84,644,940.  A number of trade unions, friendly societies, building societies, and productive societies have placed their accounts with the bank.  See Chapter XX.

THE SCOTTISH CO-OPERATIVE WHOLESALE SOCIETY.

As has been already stated, the Scottish Wholesale Society was registered and commenced business in 1868, and the whole history of its operations since then is one of continued progress.  Until 1873 the Society’s premises were situated in Madeira Court, Argyle Street, Glasgow; but these premises rapidly became too small for the increasing business, and suitable buildings were erected upon a site purchased in Morrison Street and Paisley Road, which has remained the headquarters up to the present time.

For the first few years the sales made to societies consisted entirely of groceries and provisions; but in 1873 a small stock of the commoner articles of drapery goods was procured, and thus was started the Drapery Department.  In 1875 this department was severed from the grocery and placed under separate management.

In 1877 a Branch Grocery and Provision Warehouse was opened at Leith, and in 1878 a branch at Kilmarnock, this latter being primarily intended, and still largely used as a centre for the collection and distribution of the agricultural produce of the south and west of Scotland.  From this branch is also worked an extensive trade in potatoes grown in Ayrshire and surrounding counties.

The pressure of enormously rapid growth at the centre necessitated rapid extension of premises.  First the ground and buildings adjoining the original purchase made in Paisley Road were acquired, which gave the society possession of the island block, bounded by Paisley Road to the north, Morrison Street to the south, Clarence Street to the west, and Dundas Street to the east.  Various adjacent plots of ground were acquired and built upon, so that now the society owns some of the finest business premises in the city.  Departments for boots and shoes and furniture were added between 1875 and 1881, when another branch was opened at Dundee for the supply of societies in the northern district of Scotland.  There are now few articles of ordinary consumption in use that the society is not competent to supply to its members.

PRODUCTIVE WORKS.

The Scottish Wholesale Society “went on to manufacture” as early as 1881, when “with due caution and careful consideration” a small factory for the manufacture of shirts was established.  In the same year a tailoring factory was started, and in 1882 the business of upholstery and cabinet-making was initiated; these branches of production being also begun on a very modest scale.  In 1884 a cabinet factory was opened, and in 1885 a factory for the manufacture of boots and shoes.  The opening of a depot at Enniskillen (Ireland) in the same year (1885), for the collection and distribution of Irish produce, linked the two countries together.  Then followed in quick succession the starting of a hosiery factory (1886), a printing department (1887), and brush, preserve, and artizans’ clothing factories (1890); mantle, confectionery, and tobacco factories in 1891; coffee essence works, chemical department, mechanical department, and sausage works in 1892; and a tinware department and pickle works in 1893.

At this period the productive industries of the society were confined almost entirely to Glasgow, most of them being carried on at Shieldhall, Govan, near Glasgow, where twelve acres of ground were purchased for this purpose in 1887; but several of the factories are still conducted in the city, in Paterson Street and Dundas Street.  In 1894, however, an important departure from this centralised system was made by the erection of Chancelot Flour Mills, Edinburgh, 1894, and in 1896 the Ettrick Mills, Selkirk, were purchased for the manufacture of tweeds and blankets.  In 1897 the Junction Meal and Flour Mill, Leith, was acquired by the society, and the same year also saw the start of the soap works at Grangemouth, and of the aerated water works at Glasgow.  In 1898 a creamery was started at Enniskillen, with auxiliaries in various parts of the neighbouring country; and in 1899 a creamery and margarine factory was also established at Bladoch, Wigtownshire.  An interesting productive branch, a fish-curing station, was established in Aberdeen in 1899.

A factory for the manufacture of linen shirts was opened in Leith in 1901, and the society’s latest purchase is the Regent Flour Mills, Glasgow.

These productive departments have, almost without exception, been successful from the start.  The principle on which they are conducted is as follows.  The factory in which the goods are produced is charged with all the expenses of production, depreciation on whatever buildings or plant have been erected for the purpose of carrying on the industry, and with interest on capital at the rate which the capital costs of the society from time to time.  The goods manufactured are charged, or transferred, against the department at the same price as that at which similar goods could be purchased from outside manufacturers; and in cases where, previous to the starting of the society’s works, a discount was allowed by the outside firm from whom the goods were purchased, the same discount is allowed by the factory to the distributive department.

The productive departments are each superintended by a manager, whose appointment is in the hands of the committee.

Farming. — The society has also worked a small farm since l89l, the Carbrook Mains Farm, given up in 1901 for another at Carntyre, in Lanark, where 130 acres are in use for raising cattle, &c., for the society’s requirements.

GENERAL ATTITUDE TOWARDS LABOUR.

The Scottish Wholesale Society employed (September, 1903) some 6,615 persons, of whom 3,295 were adult males and 2,355 adult females, 302 youths under 18, and 663 girls under 18.  The total wages paid for 1902 was 331,980.
 
The conditions of employment under the society show a high level of comfort and consideration.  The hours of labour average 44 to 48 hours per week in all departments, and the wages are never below, and frequently above, the current rates of the district for similar service.

The society is especially careful regarding the comfort and well-being of its productive workers, particularly its women workers, providing dining rooms, good food at low prices, overalls and caps for working in when necessary, &c.  In its workrooms and factories the observance of Factory Act regulations is a matter of principle, and the society ranks high as a model employer of labour.

As in the English Wholesale, a strong effort is made to avoid seasonal pressure, and to give continuous employment to the workers, a matter that is not difficult in a rapidly-growing organisation with an extensive and certain market for its goods.

BONUS TO LABOUR IN SCOTTISH WHOLESALE.

The following authoritative statement, published by the Scottish Wholesale, [4] explains the past and present practice of the society in the payment of “bonus”:—

The payment of bonus, since its institution in 1870, has taken three different forms.  Till 1884 employees received on wages earned, double the rate per allocated as dividend on members’ purchases.  This arrangement was then replaced by one which set aside the double claim of the employee, and recognising a difference between workers in the distributive and productive departments, established a differential rate.  The distributive employees received the same rate of bonus as was the rate on members’ purchases, and the rate of bonus to productive workers was determined by the net aggregate profit made in the manufacturing departments only.  This arrangement continued till 1892, when the system of bonus payment was again revised.  Hitherto the whole bonus allocated had been paid over; but the present system, which allows a uniform rate to both distributive and productive departments, requires that one-half of each worker’s bonus be retained and put to his credit, forming a special fund, called the Bonus Loan Fund.  This capital bears interest at the rate of four per cent per annum, and is not withdrawable until the expiry of three months after leaving the service of the society, unless with the consent of the committee.

EMPLOYEE SHAREHOLDERS.

Simultaneously with the introduction of the present system of bonus, arrangements were made to permit of employees becoming shareholders in the society.  The number of shares held by one individual may range from five to fifty of twenty shillings each, and the paid-up capital bears interest at the rate of 5 per cent per annum.  By the rules of the society, the shareholding employees are entitled to send one representative to the quarterly meeting, and one additional for every 150 employees who become shareholders.  At the present time there are 367 shareholders, which permits of a representation of three at the business meetings of the society. [5]

EDUCATIONAL AND CHARITABLE PURPOSES.

The rules of the Wholesale Societies do not make provision for educational funds, but a liberal attitude towards all educational activities within the movement is consistently maintained.  Educational efforts among their employees are promoted and encouraged, grants are made to Congress funds, the Women’s Co-operative Guilds, and other propagandist bodies, and the meeting halls of both societies are freely put at the service of the movement.

The following tables show the amount and direction of sums allotted from reserve funds to purposes of charity, philanthropy, and public utility.

Table.

The English Wholesale supports a Convalescent Home for members of Co-operative Societies at Roden, and the Scottish contributes largely to the upkeep of the two Scottish Convalescent Homes.

Amongst the various useful services which the English Wholesale Society performs for its constituent societies is the publication of a monthly record called The Wheatsheaf, in which space is given for local matter.  See Chapter XXI., page 186.


Click for next chapterClick for next chapter


________________________

NOTES

1. Note.—The information given in this and the following chapter has been drawn mainly from official publications of the two Wholesale Societies, and from special information kindly supplied to the editor.

2. This establishment is the joint property of the two Wholesales.


3. The Co-operative Wholesale Society, from the Standpoint of the Women’s Co-operative Guild. Guild pamphlet, price ld.

4. Co-operative Wholesale Societies’ Annual, 1904, page 121.

5. Ibid.