the hands of the original shareholders, they almost all either failed
or became private property. In those early days, moreover, the
law gave no protection to the property of co-operative societies.
This remained so until 1852, when the Christian Socialists (see
Socialism) among their many great services to the working
classes secured such protection. In 1862 they secured also limited
liability for the members.
Before 1844 a co-operative society had already been formed and failed at Rochdale in Lancashire, yet some ardent spirits planned to form another. Twenty-eight poor men, flannel weavers and such like, got together a capital of £28 by twopenny and threepenny subscriptions, and inRochdale pioneers. December 1844 opened in Toad Lane, Rochdale, a little shop from which, speaking broadly, the whole of British co-operation, and very much of that of other lands, has grown. Their objects were those of other co-operative societies of the time, including the ultimate aim of a self-supporting community. In this last they never succeeded, nor indeed did they attempt it; but they did succeed in vastly improving the position of millions of the working classes by enabling them to obtain their provisions cheap and pure, to avoid the millstone of debt, to save money, to pass from retail to wholesale trade, and from distribution to manufacturing, building and house-owning, ship-owning and banking; above all to educate themselves, and to live with an ideal.
The Rochdale Equitable Pioneers began their trading in the smallest way, the members taking turns to serve in the shop; yet where so many other Union shops had failed Rochdale succeeded, and it has steadily grown to an institution with some 14,000 members, doing a trade of £300,000, owning shops and workshops, a library and reading-rooms, making large profits, and devoting a substantial part of them to education and to charitable purposes. What was the reason of this difference? Chiefly it would seem a different method of dealing with the profits. Earlier “Stores” had divided these according to the capital contributed by each member, or else equally among the members: the Rochdale Pioneers determined that, after paying 5% interest on the share capital, all profit should be allotted to the purchasing members in proportion to their purchases, and be capitalized in the name of the member entitled, until his shares amounted to £5. Thus each member found it his interest to purchase at the store and to introduce new purchasers. The ownership of the store remained always with the purchasers, and each came under the magic influence of a little capital saved.
Not only did Rochdale store grow amazingly, but its example spread far and near. New stores were founded on the “Rochdale plan” and old stores adopted it; soon they were numbered by hundreds. In spite of many failures there were in 1906 more than fourteen hundred such Growth of co-operative stores. stores in the United Kingdom, with nearly two and a quarter million members, over £33,000,000 capital, and sales exceeding £63,000,000 in the year. The number of societies does not increase of late years, the tendency being rather for established societies to open branches, but all the other figures increase rapidly from year to year.
These workmen’s Co-operative Stores, or Distributive Societies, flourish chiefly in the north and midlands of England and in Scotland, but are found more or less all over the country. They, and practically all other British co-operative societies, are registered under the Industrial and Provident Societies Act, which constitutes them corporate bodies, with limited liability, and fixes £200 as the maximum that any member may hold in the share capital. Their government is democratic, based on one vote each, for man or woman; and their members or shareholders, and their committee-men or directors, are almost exclusively the more provident of the working classes, or belong to the class just above. Store societies are of various sizes, from the small village shop to the greatest of them all, the Leeds Society, with nearly 50,000 members, sales exceeding a million and a half sterling, and an elaborate organization of branches and manufacturing departments. Their method, the “Rochdale system,” is as follows, subject to occasional variations. Membership is open to all who pay a shilling entrance fee and sign for a £1 share, which can be paid up out of profit. For the most part members may at any time withdraw their shares in cash at par. A record of each member’s purchases is kept by means of metal tokens or otherwise, and at the end of each quarter, after paying a limited interest (never more than 5%, and in very many societies less) on shares, and, in some societies, paying a proportion of profit to the employees, the surplus is divided to the members in proportion to their purchases: non-members also usually receiving half dividends on theirs. Thus the members in effect obtain their necessaries at cost price. The dividend on members’ purchases averages about 2s. 6d. in the £. In many successful societies even more is paid, but the average is falling. Where dividend is high, prices are often fixed above those current in the neighbourhood, so that the members, in addition to saving the retailer’s profit, use their Society as a sort of savings bank, where they put away a halfpenny or so for every shilling they spend. In addition to retailing, a store often manufactures bread, clothes, boots and millinery, sometimes farms land, or grinds corn; usually for its own members only, but occasionally for sale to other societies also. Their productions in this way exceed £5,000,000 a year. They also invest large and increasing sums in building cottages, to let or sell to their members; and they lend still more largely to their members, to enable them to buy cottages.
Outwardly these stores may look like mere shops, but they are really much more. First, they are managed with a view not to a proprietor’s profit, but to cheap and good commodities. Secondly they have done an immense work for thrift and the material prosperity of the working classes, and as teachers of business and self-government. But further, they have a distinct social and economic aim, namely, to correct the present inequalities of wealth, and substitute for the competitive system an industry controlled by all in the common interest, and distributing on principles of equity and reason, mutually agreed on, the wealth produced. With this view they acknowledge the duties of fair pay and good conditions for their own employees, and of not buying goods made under bad conditions. The best societies further set aside a small proportion of their profits for educational purposes, including concerts, social gatherings, classes, lectures, reading-rooms and libraries, and often make grants to causes with which they sympathize. Their members are prominent in local government affairs; co-operative candidates are occasionally run for town councils, and often talked of for parliament. Though the societies are non-political, and have refused to join the labour representation movement, they are usually centres of “progressive” ideas. There are of course many defects, and of their two million members a large, and many fear an increasing, proportion, attracted by the prosperity of the societies, think chiefly of what they themselves gain; but the government of the movement has, hitherto at least, been largely in the hands of men of ideas, who believe that stores are but a step to co-operative production, and on to the “co-operative commonwealth.”
It is indeed only when we come to federations of co-operative societies, and above all to production, with its large number of employees, that the educational side of the movement and its power to promote industrial reform are most seen. The Co-operative Union, Limited, for instance, is a propagandist federation of all the chief co-operative societies in Great Britain, and some in Ireland. Its income of £10,000 a year is contributed by the Co-operative Societies. It looks after their legal and parliamentary interests, carries on much educational work by means of literature, lectures, classes, scholarships, summer meetings at the universities, and so on; organizes numerous local conferences for discussion, and once a year a great national co-operative congress, and exhibition of productions, in some chief centre of population. The Co-operative Wholesale Society, Limited, is a trading federation of the great majority of the English stores. Founded in 1863 on a small scale, it now counts its employees by thousands, its capital by millions, and its yearly sales by tens of millions. Besides its merchant trade, it manufactures to the value of £4,500,000, owning factories, warehouses and land in many districts. It imports largely, and runs its own steamships. It is also the bank of the co-operative societies,
