1922 Encyclopædia Britannica/Coöperation
COÖPERATION (see 7.82). The term “coöperation” covered in 1921 a large number of forms of economic organization which had little resemblance except that of name. In considering their development since about 1907, it is necessary to deal with each type separately. Coöperative organizations may be conveniently classified under four main heads:—consumers' coöperation, industrial producers' coöperation, coöperative credit and banking, agricultural coöperation.
Consumers' Coöperation.—The British coöperative movement, though it contains producers' societies, is in fact almost synonymous with consumers' coöperation. Of 1,459 societies affiliated to the Coöperative Union in 1919, 1,357 were consumers' societies and 95 producers' societies; the membership of the consumers' societies was 4,131,477 and their trade over £314,000,000, while in the producers' societies the membership was 39,331 and the trade £7,000,000.
The growth of the movement between 1906 and 1920 was very remarkable. The membership of retail societies rose from 2,250,000 to over 4,000,000, their capital from £33,000,000 to nearly £80,000,000, and their sales from £63,000,000 to £198,000,000. The significance of these figures is not merely that this vast industrial system has been built up and managed by the working classes of the United Kingdom, but also that in 1921 between one-third and one-fourth of the population of the United Kingdom consumed commodities manufactured or distributed under this coöperative industrial system, a system which eliminates profit-making and implies democratic control of industry by the community of consumers. And it was now no longer true to say that the movement flourished mainly in the industrial districts of the North and Midlands; London, for instance, which for long had the reputation of being a “coöperative desert,” had become an active centre of coöperation, and the London Coöperative Society, recently formed by an amalgamation of two important societies, was in 1921 the largest coöperative society in the kingdom and had a membership of nearly 100,000 and annual sales of nearly £3,500,000.
But if the expansion of the distributive side of the movement in the local societies had been great, the growth of production and manufacture by consumers' societies was even more remarkable. Nearly all the retail consumers' societies are federated in the English, Scottish, and Irish wholesale societies for the purposes of manufacture and wholesale supply. The value of the goods supplied by these three wholesale societies to their members amounted in 1919 to over £115,000,000. The outstanding feature in the history of 1910-20 was the way in which the wholesale societies, particularly the English C.W.S., proved that the system of consumers' coöperation can be adapted to control the various branches of industrial production. The English C.W.S. is one of the most important and varied industrial businesses in the world. Its employees number about 40,000; in 1919, apart from its activities as a wholesale supplier and distributor, it produced or manufactured for its members commodities valued at over £25,000,000. It was in 1921 the largest flour miller in the United Kingdom and probably the largest timber importer at the Manchester docks. Its factories are to be found in every large industrial centre in England. It produces boots and shoes, textiles and clothing, furniture, metals and hardware, soap and candles, tobacco and groceries.
The most significant feature in the development of the productive activities of the consumers' societies is the way in which circumstances have compelled the C.W.S. to obtain control over the raw materials necessary for the production of the commodities consumed by coöperators. The supply of a staple article like bread will afford a good example of this tendency. The baking of bread has from the earliest times been a successful coöperative industry and large numbers of societies have their own bakeries. Coöperators, however, soon found that baking was only the last link in a whole chain of industries which determined the price and quality of bread. In order that the community of consumers might really exercise control over that price and quality, the movement was driven backwards from the baking industry to enter the milling industry. Though the C.W.S. has become the biggest miller in the kingdom, and the value of the products of the corn-milling industry of the movement was nearly £13,000,000 in 1919, events at the beginning of the World War taught coöperators the weakness of their position unless they also had some control over the production and supply of grain which was ground into flour in their mills. In the early days of the World War the movement stood out against “profiteering” in bread and flour, and there were several instances of societies which succeeded in keeping down the price of bread in their areas by refusing to enter into agreements with the other bakers to raise it. But coöperators had no such power of influencing the price of wheat upon which depended the price of flour, because they depended themselves upon the private wheat-grower for their supplies. These considerations induced the C.W.S. to acquire 10,000 ac. of wheat-growing land in Canada.
There are other equally remarkable examples of the same tendencies. In 1914 the C.W.S. had hardly touched agriculture; in 1921 it owned nearly 35,000 ac. of land in the United Kingdom, and in a single quarter of 1920 it started a cattle market at Gisburn, a butter factory at Carlisle, and a fish-curing depôt at Fleetwood. Again, it is only since the war that the English and Scottish wholesale societies have become really large owners of tea estates; during 1920 they purchased no less than 32,000 ac. of tea plantations in India and Ceylon. Lastly, the same process may be observed in the soap and candle industry, for in 1921 the C.W.S. at its depôts in West Africa purchased palm kernels direct from the natives, shipped them to its oil mills in Liverpool, which again supplied to its soap and candle factory at Irlam the materials of another industry.
Coöperative industry, based upon a democratic organization of consumers, spread in the decade 1910-20 from town to town and from industry to industry throughout the economic system of Great Britain, but perhaps one of its most interesting and important developments was in the sphere of international trade. In one sense the coöperative movement, as a large importer of food, raw materials, and manufactured goods, had always engaged in foreign trade, but as an importer there was nothing to distinguish its activities from those of the ordinary private trader or joint-stock company. But the C.W.S. has shown since the war what great possibilities there are in the movement for conducting international exchange of goods on a non-profit-making, coöperative basis. Coöperative international trade implies, of course, that there should be a direct exchange of goods between the organized coöperative movements of the several countries and that profit-making should be eliminated by the payment of dividend upon purchase. The machinery for such trade already exists, for no fewer than 19 European countries possess coöperative wholesale societies, and these wholesale societies can organize international trade with one another on a strictly coöperative basis.
To some extent this kind of trade had existed for many years; before the war, for instance, the English C.W.S. supplied tea to the German wholesale society and imported cheese from the Swiss wholesale society, while the German wholesale, again, supplied goods to the Danish wholesale. But the economic situation at the end of the war gave a great impetus to international coöperative trade. The ordinary machinery of foreign trade had broken down as the result of war and blockade, and it would not right itself, partly because of the chaos in credit and the exchanges, and partly because a great deal of the machinery was under governmental control. In such circumstances the coöperative movements of the various countries, resting on the broad basis of the organized consumers both in regard to trade and credit, and with their machinery of production and distribution intact, were not under the same disadvantages as capitalist enterprises.
The English C.W.S. took the lead in organizing international exchange, and it did so in three different ways. It supplied goods direct to the coöperative organizations of France, Holland, Switzerland, Norway, Australia, Canada, Egypt, India, South Africa, Palestine, Brazil, and China. Secondly, it gave credits amounting to nearly £1,000,000 to the Rumanian, Polish, and Belgian coöperative movements, the greater part of these credits being taken in the form of food and manufactured goods. Thirdly, it tried the experiment of direct barter with the coöperators of South Russia, sending a cargo of clothing, etc., to the Russians and receiving in exchange a cargo of raw materials. This experiment in coöperative barter was not very successful, partly owing to political difficulties, but the other enterprises led to an international movement among coöperators to develop coöperative foreign trade. In 1919 and 1920 there were conferences of the wholesale societies of the various countries, and a scheme was agreed upon under which each wholesale society would organize an export department, there would be joint purchasing arrangements between the various societies, and there would be a central bureau of statistics for the collection of information regarding goods which each wholesale society either demands or can supply.
Two other developments of the coöperative movement deserve notice. The first is insurance. The Coöperative Insurance Society, which is a joint insurance department of the English and Scottish wholesale societies, now undertakes life, fire, accident, and employers' liability insurance. In all these departments there has been a rapid development in recent years. The most interesting feature is the collective life assurance business, under which a coöperative society collectively insures the lives of all its members: under this system there is a great saving in cost, for there is no collection of premiums from individuals, the premiums being paid in a lump sum by the society and recovered from the dividend payable to members. In 1919 there were 817 societies assured in this way, and the number of members in these societies was 2½ millions. This insurance business is conducted on strictly coöperative principles; thus out of the profits on fire insurance, after the usual rate of 5% on capital was paid, a dividend of 2s. in the £ to members and 1s. to non-members upon their fire insurance policies was declared in 1918. The progress of coöperative insurance may be seen in the fact that the income from life, fire, and accident premiums rose from £104,615 in 1909 to £924,066 in 1919, an increase of 783 per cent. The C.W.S. banking activities have made equal progress. The C.W.S. Bank has (1921) two branches, one in London and the other in Manchester. It accepts current accounts from coöperative societies, trade unions and friendly societies, clubs and other mutual organizations. In 1920 the number of current accounts with the bank was as follows: coöperative societies 1,016, trade unions and friendly societies 3,347, clubs, etc., 1,391. The deposits and withdrawals in the half year ending June 1920, amounted to £314,000,000, showing an increase of over 26% on the corresponding period of 1919. The C.W.S. banking is, again, conducted on a strictly non-profit-making, coöperative basis, the profits being returned to customers in the form of a dividend upon their balances.
The facts and figures given above show the tremendous growth of the coöperative movement. The increase in its membership and the great extension in the area of its operations have brought new problems and created new tendencies. Up to the end of the 19th century the movement was content to proceed on its way of steady development in a certain amount of obscurity. This is no longer the case: coöperators have begun to claim the place to which their numbers and operations entitle them in the economic life of their country. These claims can be stated shortly as follows: Consumers' coöperation is a system which ensures a democratic control of industry by the community organized as consumers. Every consumer can join a society and every member has one vote and can, if he cares to do so, exercise an equal power of control over the conduct of industry. The dividend on purchase ensures that commodities are supplied to consumers at cost price and that, therefore, profit is eliminated. Under coöperation production and the various spheres of industry from banking to insurance, from the production of raw materials to the distribution of manufactured articles across the counter of the shop or store, are all carried on for use and not for profit. This system has already shown that it can adapt itself to one economic sphere after another and there is no reason to suppose that the scope and range of coöperative industry are not capable of almost indefinite extension. The movement, with its 4 million members, already represents from 12 to 15 million consumers or more than one-quarter of the population, and consumers' coöperation is now, in fact, an alternative to the ordinary capitalist system of controlling industry.
These claims and ideals are being put forward and are undoubtedly having an effect upon the development of the movement. They are not held consciously by the vast mass of the 4 million members, but they are slowly penetrating the movement, largely owing to the educational work of the societies and the Coöperative Union and also of a very active and influential coöperative organization, the Women's Coöperative Guild, which has a membership of nearly 50,000 women members of coöperative societies.
The increase in coöperative activity and in the consciousness among coöperators of the importance and capacities of their movement are partly the effects of the war. It might have been expected that the dislocation in the economic life of the country and the difficulties of food supply would have had an adverse effect upon a working-class movement like the coöperative movement. The facts show that the reverse was the case. The membership of retail societies, for instance, rose from 3,054,000 in 1914 to 4,131,000 in 1919, an increase of 35%, while the increase from 1909 to 1914 was only 24%. This increased rate of growth was partly due to the rise in prices and the popular irritation against “profiteering,” for the elimination of profit-making and the dividend on purchase tend to keep prices down in the coöperative store and make “profiteering” impossible.
Reference has also been made above to the way in which circumstances connected with the war led to an extension of the productive and distributive activities of the C.W.S. But the war had another effect upon British coöperators: rightly or wrongly there grew up in the movement a widespread conviction that it was being victimized in the interests of private traders. Definite complaints were made of unfair treatment of coöperative societies and their staffs by military service tribunals and of discrimination against coöperative organizations in the allocation of Government-controlled supplies. The decision of the British Government to tax coöperative societies by means of the Corporation Profits Tax brought the dissatisfaction of coöperators to a head. The argument was freely used that the movement, in order to protect itself against political action, must “enter politics.” In 1917 the whole question was discussed at the Coöperative Congress, and a resolution was passed that the movement should enter politics and nominate candidates in constituencies as an independent unit, but that it might work with other organizations having similar aims and objects. Several coöperative candidates stood in the general election of 1918 and one was elected. The Coöperative party was still in its infancy in 1921 and any estimate of its future was impossible. One feature of the tendency which it represented must, however, be noted. There was a considerable body of feeling in the movement which held that the Coöperative party should unite with the Labour party and trades union movement to form a “Labour and Coöperative Political Alliance.” On the other hand a large number of coöperators were not prepared to accept this proposal. The whole scheme for such an alliance was in 1921 still under discussion in the movement.
Another problem which has assumed great importance in recent years for coöperators is their relations to their employees. In 1919 the consumers' societies employed about 175,000 persons, of whom about four-sevenths were employed in distribution and three-sevenths in production; the wages and salaries paid to these employees amounted to about £20,000,000 a year. The relations between the movement and its employees have been complicated until recent years by a misunderstanding as to the nature of consumers' coöperation. Coöperators themselves did not distinguish clearly between the control of industry by the community organized as consumers for use and not for profit (consumers' coöperation) and the control of industry by the workers or producers in self-governing workshops or factories in which the profits were divided among the workers (producers' coöperation). Hence arose a certain school within the consumers' movement which held that the employees of consumers' societies should share in the “profits,” although the dividend on purchase eliminates “profits” in the sense in which a joint stock company or a self-governing workshop makes a profit. The illogicality of this position was, however, gradually realized, and in 1921 very few societies paid the bonus on wages by which the coöperative employee was given a “share in profits.”
The coöperative employee was therefore recognized to be merely a wage-earning employee of the democracy of consumers. But the movement, as a large employer of labour, was brought face to face with many new problems. As an employer it stood in a peculiar position. It was composed mainly of the manual wage-earning class, and a very large number of its members were naturally trade unionists. It always professed to pay good wages and to give the best possible conditions of employment. But it was competing with the businesses and factories of the ordinary capitalist type, and competition was so severe that coöperative trade and industry would soon be killed out if wages and conditions of employment within the movement were such as to raise the cost of production substantially above that of its rivals. Most people agree that on the whole the conditions of the coöperative employee compared very favourably with those of employees of private firms and companies, although there were still societies in which wages, etc., were bad. The movement had, however, increasing difficulties with organized labour. Up to 1920 large numbers of coöperative employees were organized in a special trade union, the Amalgamated Union of Coöperative Employees (membership in 1920, 90,000). This union was founded in 1891, and it throws some light upon its original relations with the coöperative employer that in the original rules there was no provision for strikes. But this happy situation could not and did not continue. The presence of large numbers of trade unionists within the movement means that any demand for increased wages will probably receive some support within a society. There is no doubt that organized labour to some extent took advantage of this fact: a demand for increased wages or shorter hours was often first made upon coöperative societies, with the intention that, when the coöperators had given way, labour could then go to non-coöperative employers and demand that they should pay the same wages or give the same conditions as coöperators.
These facts and conditions gradually led to strained relations between the movement and its organized employees. As a whole the movement stood as strongly for trade union recognition and for the payment of trade union rates of wages as the trade unions themselves, indeed several societies insisted that their employees should be members of their unions. There had also been for long in existence joint machinery of the movement and the unions for settling industrial disputes by conciliation and arbitration; but for various reasons this machinery did not work satisfactorily, and in 1911 the Amalgamated Union of Coöperative Employees began a more militant policy and made provision for a strike fund. Since that time there have been several strikes against coöperative societies. The whole question of the relation between the coöperative democracy and its employees has been raised by these events, and in 1921 it remained unsettled. It was complicated by the demand among certain sections of labour for workers' control of industry. Many coöperators believed that the workers should be given some share in control, i.e. that they should share with the consumer in the determination of rates of wages and conditions of employment. On the other hand it is obvious that the whole principle of consumers' coöperation, control of industry by the community of consumers for the use of the community, is inconsistent with the complete control either of individual factories and workshops or of whole industries by the organized workers, the principle of producers' coöperation, syndicalism, and guild socialism.
Foreign Countries.—The consumers' movements outside England owe their origin directly to the British movement, and all of them were many years behind it in development. But the history of their progress has been almost precisely similar to that of the British movement. In 1921 there was hardly a single European country without consumers' societies. Nearly all of these foreign movements showed a considerable increase in membership and trade during 1910-20; the war, both in belligerent and neutral countries, had a marked effect in increasing the number of coöperators and in extending the development and scope of coöperative industry. The following figures show the growth of some of the Continental movements after 1914:—
|Country.||Total Membership.||Total Turnover.|
Though the Continental movements were not so advanced, particularly on the productive side, as the British movement, there is evidence that most of them were firmly established in 1921 and were rapidly following the same path of successful development. The German movement, the largest and most successful on the Continent, had in fact reached the same stage as the British; its membership increased while the number of societies was stationary or decreased; it had a highly developed wholesale society, the Grosseinkaufsgesellschaft Deutscher Konsumvereine, whose productive activities included tobacco, soap, matches, textiles and clothing, and confectionery. The majority of the other Continental movements were still in that stage of structural consolidation which in England had been largely completed before 1900. Its most marked feature is federation or amalgamation of small, and often competing societies, so that an increase in the number of coöperators may be accompanied by a decrease in the number of societies. Examples may be found in the recent developments in Denmark and France. In Denmark, although agricultural coöperation had reached a very high state of development, consumers' coöperation in the towns only began about the beginning of this century. Its progress was slow until 1910. Then there was a rapid increase in the number of societies, members, and turnover; this was followed by a period of consolidation, in which there was extensive amalgamation among the Copenhagen societies while the membership and turnover continued to increase. This process, typical of the development of a consumers' movement, can be seen in the following statistics of Danish urban coöperative societies:—
|Year.|| Number of
| Number of
| Turnover |
The same tendency is at work in France, where since 1914 has been seen the establishment of large district societies which absorbed the small local societies.
Another feature of foreign coöperation, which should be noted, is the development of wholesale societies. The development of a consumers' movement into a large industrial system depends upon the growth of a strong wholesale society which shall eventually be capable of undertaking a great variety of productive enterprises. It is significant that in 1919 no less than 19 European movements had wholesale societies. It is true that many of them were still in the stage of wholesale dealing for the supply of the local distributive societies, but the history of the British movement shows that this stage must precede any large development in manufacturing enterprise, and many foreign wholesale societies, e.g. the French, German, and Swiss, have greatly extended their productive activities.
Lastly, it should be remarked that in 1910-20 consumers' coöperation established itself in many countries outside Europe. For instance, up to very recent times consumers' coöperation could hardly be said to have existed in the United States, but latterly, partly owing to the educational work of the Coöperative League of America, a vigorous movement and some 2,000 societies had come into existence. Coöperation had also established itself and was making progress in Armenia, some of the British dominions, e.g. Canada, South Africa, and India.
Industrial Producers' Coöperation.—The typical example of producers' coöperation is the workers' society in which the workers own and manage the factory and divide the profits of the enterprise among themselves. But many distinct types of industrial organization are ordinarily included under the term producers' or workers' coöperation, types differing as widely from one another as the ordinary business or joint stock company which gives its employees a share in the profits, and the self-governing workshop. Here we shall deal only with producers' coöperation in the strict sense, i.e. societies or enterprises in which the instruments of production are owned and control exercised by the workers or producers.
There was little change in the position of producers' coöperation during 1910-20. There was no marked extension in the number of enterprises or in the sphere of their operations either in Great Britain or abroad. Thus the number of productive societies in the Coöperative Union actually declined from 108 in 1913 to 95 in 1919, while the number of members rose from 34,662 to 39,331. It is true that their annual sales during the period rose from £3,710,234 to £7,047,147, but the rise in prices would more than account for this increase. The history of the workers' society from 1907 to 1921 is, in fact, a repetition of its previous history. This form of industrial organization is liable to peculiar difficulties. A small self-governing workshop is easily started and a small workers' coöperative society easily formed. But the problem of internal wganization and discipline is extremely difficult, if full democratic control is exercised by the workers. Hence in Britain, France and Italy workers' societies are continually coming into existence, but, with a few exceptions, their lives are short. And, since the larger and more highly organized the enterprise the more acute become the difficulties of organization, control, and discipline, the workers' society, where successful, has practically always remained a small and simple industrial unit. These facts account for the lack of development in producers' coöperation and its failure hitherto to adapt itself to the large-scale, complex organization of modern industry.
It should be noticed, however, that both syndicalism and guild socialism advocate forms of industrial organization which would in effect be developments of producers' coöperation. The workers' society takes the workshop or the factory as the unit of industrial organization and places the control of industry in the hands of the workers organized in factory or workshop; the syndicalist or guild socialist would make each industry, e.g. mining, railway transport or building, the unit of organization and would give control to the workers organized in these larger units. But, although experiments in guild socialism have already been made in England in the building trade, and although the Works Councils Act in Germany and legislation in Italy, following the seizure of factories by the workers in 1920, made some approach to a syndicalist control by workers, both syndicalism and guild socialism still remained in 1921 in the theoretical stage. They had, however, as theories and ideals of industrial organization, taken the place which previously workers' coöperation, in the strict sense, occupied with many people.
Coöperative Credit and Banking.—If the consumers' coöperative movements of the world owe their origin to the British movement, Germany can claim to be the pioneer of coöperative credit and banking. Two well-known types of credit societies are distinguished in Germany, the Schulze-Delitzsch and the Raiffeisen. Apart from their differences in constitution and structure, these two types are characteristic of a difference in function which runs through the whole of coöperative credit in every country. The Schulze-Delitzsch bank supplies credit or loans to the small industrialist in towns; the Raiffeisen bank supplies credit to farmers and agriculturists. This distinction of function is fundamental, and therefore it is not surprising that the history of the spread and development of urban and rural coöperative credit has not followed the same course.
It is obvious that neither large scale capitalist industry nor consumers, coöperation is favourable for the development of urban coöperative banks. The people whom Schulze-Delitzsch desired to help were townsmen, especially the small craftsmen working on their own account, the joiners, shoemakers and so forth; and his ideal was to do this by stimulating their thrift. The idea was to gather together into a society a number of persons, each individually weak economically, but whose combined capital, savings, and deposits would be sufficient to provide the credit upon which the bank might borrow money and lend it to its members. The membership of such an urban bank is always found to consist mainly of small craftsmen, shopkeepers, and small professional men. It follows that this kind of coöperative credit will only establish itself where the small independent hand worker still exists or where the small shopkeeper has an instinct for coöperation. But these conditions are not fulfilled in many European countries. Hence the success of urban coöperative credit has not been nearly so widespread as that of some other forms of coöperation. In Germany itself the movement was a great success during the first 50 years of its existence, but during 1910-21 it had not made much progress. Thus between 1859 and 1905 the number of Schulze-Delitzsch banks rose from 80 with a jnembership of just under 19,000 to about 1,000 with a membership of about 590,000: in 1921 the number of Schulze-Delitzsch credit societies organized in the general union remained about 1,000 with a membership of 600,000. Outside Germany the urban bank has established itself mainly in Italy, though it also exists on a small scale in France, Belgium and Switzerland. Its greatest success has been in Italy, where Signor Luzzatti was able to adapt the Schulze-Delitzsch model to the requirements of his own countrymen. As in Germany, so in Italy, the statistics of recent years pointed in 1921 to a very considerable slowing down in the growth of the movement. It should also be remarked that there is a tendency for the urban popular banks if they are financially successful, to lose their original object and function, i.e. they tend to neglect the small man for the big man, though there is probably some truth in the contention that this often results from the fact that the bank itself has helped its members to change from small men to big men.
The movement for rural coöperative credit associations has not been subject to the same limitations as the urban movement. In many Continental countries the peasant or small farmer exists in large numbers, and more often than not they are burdened by debt contracted with money lenders on usurious terms. In all these countries the scope for coöperative associations for providing credit to the small agriculturist is very great, and there has in fact been a considerable extension and development of this kind of coöperation. It has usually accompanied a development of other forms of agricultural coöperation, but one of the most curious characteristics of rural coöperative credit is that its development has been most erratic. Thus in Germany the whole of agricultural coöperation has developed from the Raiffeisen rural banks, and the credit associations remain the pivot of the whole movement. But at the other end of the scale are Denmark and Ireland. In no country in the world has agricultural coöperation been more successful than in Denmark, yet in 1921 rural credit societies or banks scarcely existed there. The growth of the Danish agricultural movement was singularly spontaneous, while Irish agricultural coöperation has been the result of intensive and prolonged propaganda. Yet the same fact with regard to coöperative credit is observable in Ireland: in some districts the rural credit societies have performed useful functions, but, taking the country as a whole, they have declined while agricultural coöperation has made great progress; this is shown by the fact that the number of agricultural credit societies declined from 267 in 1908 to 136 in 1920, while the number of agricultural societies and creameries rose from 458 in 1908 to 705 in 1918.
Between Germany at one end of the scale and Denmark and Sweden at the other, the different countries of Europe show great differences in the degree and manner in which they have accepted the rural credit movement. In Italy, Hungary, Finland and France, for instance, rural coöperative credit societies or banks have all proved successful, but as soon as the organization of the movement is investigated in the four countries, marked differences of development become apparent. One of the most important of these differences is the degree in which the movement does or does not rely upon State aid. Thus the Finnish banks are essentially voluntary associations which rely for their working capital mainly upon the Rural Banks' Central Credit Institute, while this central institute obtains its working capital very largely from Government loans. The Hungarian local credit societies in 1912 numbered 2,500 with a membership of between 600,000 and 700,000, and their capital voluntarily subscribed amounted to about £3,000,000, and deposits to about £8,000,000. For many years they relied in no way upon Government aid, but after the beginning of the century they received loans from a central credit organization financed almost entirely by the State. But it is in France that the reliance of agricultural credit upon the State is most marked. The French rural credit societies are grouped under a district bank to which a society wanting a loan applies; the district bank forwards the application through the Prefet to the Ministry of Agriculture, and the Ministry, if it approves, makes the loan to the district bank. The system is
therefore little more than a system of State aid to agriculture and has scarcely any of the characteristics of voluntary coöperation.
Agricultural Coöperation.—Voluntary association among farmers, peasants, or agriculturists can and does take place for many different objects. In addition to the rural coöperative bank or credit society, already dealt with, the chief forms of agricultural coöperative organization may be classified as follows: (1) societies or associations for coöperative supply of the instruments and means of production; (2) societies or associations for coöperative production, e.g. creameries, dairies; (3) societies or associations for coöperative marketing; (4) societies or associations having a variety of miscellaneous coöperative objects, e.g. coöperative insurance. It should be noted, however, that there is no rigid separation of function in the societies actually existing: a single society may and often does perform two distinct functions; it may for instance, as in the case of a dairy, perform both the function of production and that of marketing.
There was a great and widespread development of agricultural coöperation in Europe, and indeed throughout the world, during 1905-20. Unlike consumers' coöperation, however, there was very little uniformity in the development of agricultural coöperation in the various nations. As was pointed out above, in one country the whole of agricultural coöperation will centre in the organization of agricultural coöperative credit, while in another country, like Denmark, a no less highly developed system of agricultural coöperation will exist with little or no organization of coöperative credit. But this lack of uniformity is not confined to agricultural banking; it will be found that in one country agricultural coöperation has developed principally along the lines of coöperative supply, in another of coöperative production, and in another of coöperative marketing. It is not possible, therefore, to give a general account of the progress of agricultural coöperation which would be applicable to every country in which it has proved successful; all that is possible is to show the range of its development and to give one or two typical examples.
In 1907 a fully developed agricultural coöperative system existed already in Germany, Switzerland, Denmark, France, Italy, and Belgium, and a real beginning had been made in Ireland. Up to the outbreak of the World War the old established systems continued to maintain themselves, but such statistics as are available seem to indicate that agricultural coöperation was more adversely affected by the war than the consumers' movements. But the most notable feature of the decade 1910-20 was the spread of agricultural coöperation and its progress in countries where before it was non-existent or only feebly established. The best examples of this development are to be found in the United Kingdom, Norway, Sweden, Finland, and Siberia.
Agricultural coöperation in the United Kingdom nowhere developed spontaneously. Its greatest successes have been obtained in Ireland, where the whole movement was created by the Irish Agricultural Organization Society, founded in 1894. Thanks to the educational work of this organization a considerable number of societies for supply, production, and marketing were formed on the model of Danish societies. The most successful societies were supply societies, dairies or creameries, and egg and poultry societies. By 1908 there were 292 creameries and 166 supply societies. In the next decade there was continuous progress, and by 1920 there were 334 creameries and 371 supply societies. The membership of the creameries rose from 42,404 in 1908 to 50,052 in 1917, and the turnover from £1,700,000 in 1908 to £5,200,000 in 1917, while the membership and turnover of the supply societies rose from 12,999 and £87,000 in 1908 to 31,200 and £691,000 in 1917. These figures indicate the trend of development in Irish agricultural coöperation. It contains two main features. The creameries are productive societies mainly occupied in the coöperative manufacture of dairy products, principally butter and cheese. In the early years of the movement coöperative production was for the most part confined to butter, but the war adversely affected the butter trade, and from 1914 to 1918 there was a big fall in the quantity of butter and a big rise in the quantity of cheese manufactured. The creameries and the Irish Coöperative Agency Society, which is a federation of creameries, also perform the function of coöperative marketing for their members. In recent years the development of the productive side of the movement in the creameries has slackened, and after 1919 conditions in Ireland led to great destruction of property and heavy losses for the creameries. The second feature of Irish coöperation is the rapid development in recent years of the “Agricultural Societies,” which are supply societies providing the farmer with every kind of requirement at wholesale prices. They have had
a marked effect upon Irish agriculture, for the supply of such things as fertilizers and feeding stuffs at reasonable prices has created demand for them. The supply associations also perform an important function in providing agricultural machinery which the individual farmer could not possibly afford.
The example and success of the Irish Agricultural Organization Society led to the creation of similar movements and kindred societies in England and Scotland. In 1918 there were in England 237 supply societies with a membership of nearly 40,000 and a turnover of £4,670,000, and 39 dairies with a membership of over 5,000 and a turnover of nearly £1,500,000. In 1918 the total number of all societies in Scotland was 170 and the membership over 8,000.
In Sweden, Norway, and Finland the development of agricultural coöperation has been very rapid. In Sweden organized coöperation dates from 1906 when the “National Union of Swedish Agriculturists” was formed. This union acts both as a supply and a marketing organization. By 1910 the union had 42,000 members and a turnover of over £1,000,000, while there were 19 provincial and 940 local associations for supply and marketing; there were also 477 coöperative dairies. The development in Norway has been as great and even greater, and in 1913 there were 660 coöperative dairies and 1,344 local supply societies. Norwegian agricultural coöperation is remarkable for the highly organized system of federation among both productive and supply societies. Norway and Sweden resemble Denmark in the fact that agricultural coöperation has developed and succeeded with little or no reliance upon coöperative credit. Finnish agricultural coöperation is remarkable for the way in which the various forms of coöperation, credit, supply, production, and marketing have developed. This can be seen from the increase in the turnover of the various types of societies from 1903-13:—
The success of agricultural coöperation in Siberia has also been extraordinarily rapid. Coöperative butter-making associations were first started about 1900, and in 1908 the Union of Siberian Creamery Associations was established with 12 affiliated societies for the purpose of both marketing and supply. By 1914 the union had over 1,000 affiliated societies and a turnover of about £1,000,000.
Bibliography, General.—C. R. Fay, Coöperation at Home and Abroad (1920); L. Smith-Gordon and C. Obrien, Coöperation in Many Lands (1919).
Consumers' Coöperation.—E. Aves, Coöperative Industry (1907); G. J. Holyoake, History of Coöperation (1875-9, new ed. 1906); History of the Rochdale Pioneers (1893, new ed. 1900); Coöperative Movement of To-day (1891, new ed. 1896); P. Redfern, The Story of the C. W. S. (1913); The Consumers' Place in Industry (1920); Catherine Webb, Industrial Coöperation (1904); Mrs. Sidney Webb (Beatrice Potter), Coöperative Movement in Great Britain (1891, 1893, 1904); Leonard Woolf, Coöperation and the Future of Industry (1918, 1919, 1921); Socialism and Coöperation (1921). See also the reports and publications of the Coöperative Union and Coöperative Wholesale Society.
Producers' Coöperation—Benjamin Jones, Coöperative Production (1894); C. R. Fay, Copartnership in Industry (1913); Bernadot, Le Familistère de Guise (1892); Dallet-Fabre-Prudhommeaux, Le Familistère illustré (1901).
Coöperative Credit.—Morman, The Principles of Rural Credit (1915); H. W. Wolff, People's Banks (4th ed. 1919).
Agricultural Coöperation.—G. Radford, Agricultural Coöperation and Organization (1917); L. Smith-Gordon, Coöperation for Farmers (1918); H. W. Wolff, Coöperation in Agriculture (1912).