Consumers Cooperative Societies

by Charles Gide

Translator's Preface

This translation of Professor Charles Gide's " Les Societes Cooperatives de consommation " gives the English-speaking reader his first opportunity of reading what has been regarded on the Continent as the standard work on consumers' co-operation and what undoubtedly is the most careful study of the subject made by a distinguished political economist.

Professor Gide's reputation as an economist and as a co-operator is so well known that it is not necessary to enlarge upon it. He has written many books on economics and on co-operation which are standard works in his own country, and all of his works have appeared in many editions and have been translated into other languages. His principal works besides the present one are : "La Cooperation " (Conferences de Propagande), " Les Institutions de Pr ogres Social," " Histoire de Doctrines economiques depuis les Physiocrates jusqu'd nos jours " (in collaboration with M. Rist), " Les Principes d'Economie Politique" which has been translated into 14 languages, and " Des Institutions en vue de Vabolition du salariat." The present work has already been translated into Dutch, Polish, and Portuguese, and Czech, while Ukrainian and Spanish editions are in preparation.

Professor Gide undoubtedly ranks among the great leaders of co-operative thought in the world, and his book on " Consumers' Co-operative Societies" should be a source of information to all those co-operators who take a real interest in the working of their movement.

This translation is a joint work ; part of it has been made by Miss F. E. Marks, my Assistant Librarian, and part I have written myself ; but we have both gone through the whole translation, so that it is really impossible to say that one or other of us is directly responsible for any individual part. Professor Gide himself went to a great deal of trouble to bring this edition up to date. He revised it from beginning to end and made several lengthy additions. It was unfortunately impossible to publish the book when the translation was finished (November, 1919), and he again went through it in November, 1920, and again brought it up to date.

In the French edition there are 17 chapters ; Chapters 13 and 14 are concerned respectively with the legal position of consumers' societies, and the fiscal laws and consumers' societies, and were written for the benefit of French co-operators: Professor Gide himself suggested that in the English translation these two chapters should be very much altered and made into one, and this has been done in Chapter 13, which is called " The Relations between Co-operative Societies and the State." Professor Gide has omitted a large portion of the two chapters, which deal with purely French problems, and the whole subject has been treated in a more general way than in the French edition. Professor Gide has also written a special preface for the translation. Otherwise, this edition is unaltered.

Except in one or two small instances, we have not given any expression of our personal views, even where they do not wholly coincide with those of Professor Gide ; and in the one or two instances where we have expressed views of our own, we have made it clear that they are trans- lator's and not author's notes. Professor Hall has also added a few notes under the heading " Editor's notes." One chapter in which we are inclined occasionally to take issue with Professor Gide is Chapter 14, second section : " The Conflict between Consumers' and Producers' Co-operation," but we did not think it right to intrude our owr views on the reader, except in the one or two instances where we considered that a short explanatory note would help to explain some point which might present a difficulty to English-speaking readers who are not familiar with French conditions.

We have to express our gratitude to Professor Gide for the very great help he has given us all through the work of translating his book, and to Mr. Lionel Smith-Gordon, whom we consulted from time to time.

The appearance of this book is due to a joint arrangement made between the Co-operative Union, The Labour Research Department, and the Co-operative Reference Library, but the whole work of translation has been done by the staff of the last-mentioned body.

DIARMID COFFEY,

Librarian, The Co-operative Reference Library,

December, 1920. Dublin.

Author's Preface to the English Edition

We cannot expect to teach many new ideas to our English co-operative comrades, because it is from them that we have received almost everything. Still, it may happen that even ideas which are familiar to us appear in a more expressive and suggestive form when they return from a voyage abroad.

Moreover, if we wish really to reconstruct an international co-operative alliance in that Europe which has been so profoundly divided by the war, co-operators in the different countries must learn to know each other better, and they can only do this through translation, since the curse of the Tower of Babel still weighs on us and the era of an international language even if it were only Esperanto -is still distant.

We have retained in the text the figures of the French edition, which are those of 1913, because the war marked the beginning of a new era and it will always be of historical interest to have the last pre-war figures. But we have added in the notes the latest figures available, that is, those for 1919, wherever they have been published, and we have further revised various chapters of the French text, to bring them up to date.

CHARLES GIDE.

Paris, December, 1920.

Chapter I - The Object of a Consumers' Co-operative Society

IN a broad sense a consumers' co-operative society exists every time that a number of persons feeling the same need join together collectively to satisfy it better than they could do by individual means. ^[1] It would follow, therefore, from this definition that every consumers' society has for its object production, since to supply any need it is necessary to produce; and, indeed, that is the aim of consumers' co-operation, but, as a matter of fact, it only achieves this at an advanced point in its evolution. In its beginnings a consumers' co-operative society is satisfied with buying the requirements necessary for its members; it is a shopkeeper long before it is a manufacturer. Generally a beginning is made with the most important of all needs, the supply of foodstuffs, or in one of the particular branches of this general need, such as the supply of bread, wine, groceries. Thus, Monsignor von Ketteler, Archbishop of Mainz, said that the question of co-operation is summed up in the simple question of food supply ; but that does not belittle it.

If the consumers' society had no other aim but to enable the working classes and the poor to feed themselves better, that would be no small thing. To convince oneself that that is not a negligible end it is sufficient to consider : (1) That a considerable proportion of the working-class population (which Messrs. Charles Booth and Rowntree estimate at 27 to 30 per cent, in English towns) do not get the minimum wage necessary to maintain life; they do not receive the minimum wage necessary to buy the number of food units required for the maintenance of the human body. (2) That the means of purchasing at the disposal of the workman already very small are further wasted by his inability to use them with economy. He buys in small quantities a halfpenny worth of sugar or of coffee from small hucksters, whose goods are sold at third or fourth hand, deteriorated in quality and raised in price, each middleman having taken his profit on the way. When he is forced to buy on credit he submits, either through ignorance or through apathy, to all the frauds which the fierce struggle for life forces on hucksters as poor as himself. He has even to pay an insurance to the shopkeeper, in the form of increased prices, against the insolvency of those of his comrades who do not pay. These conditions are so un- favourable that, as has been pointed out with savage irony, "there are not many rich men who could afford themselves the luxury of buying under the same conditions as the poor."

Consumers' co-operation, above all when it is supported by strong purchasing federations, sweeps away all this misery. If a society aims at cheapness only it can sell goods well below current commercial prices, and even if, as is generally the case, it sells at the ordinary trade price, the consumers buy goods of better quality more nourishing food and more lasting clothes and also gain an increase in quantity resulting from just weights used for bread, for meat, for everything. It becomes an institute of social hygiene of the first order, and certainly has been one of the factors in the remarkable decline of tuberculosis in England.

In spite of what Monsignor von Ketteler says, consumers' co-operation is not confined to the supply of food stuffs, but is able to extend to all the needs of human life, ^[2] such as clothing, furnishing, and, above all, housing (the last is so important a category that the societies for the supply of houses are generally treated separately under the name of building societies). And not only to the supply of material needs, but also to intellectual and moral ones, including all that contributes to well-being, all that adds to the comfort and charm of life. One can well imagine in fact, there already exist co-operative clubs, co-operative theatres, co-operative newspapers, and, above all, co-operative churches, that is to say, institutions formed and maintained by those who wish to gain by them, to instruct, amuse, and edify themselves in common.

What makes the success of consumers' co-operation is the very fact that its ends are most varied. Whatever is wanted of it can be obtained. It lends itself with marvellous ease to any social aim, even the most diverse sometimes, it must be avowed, the most antagonistic so that we must choose between them. As we shall see, one can seek in consumers' co-operation either cheapness or an increase of income, savings for the individual or the constitution of an inalienable fund for social benefits; but one cannot seek all these results at the same time. Thus it is that one can see conservatives or revolutionists, bourgeois or workmen, collectivists or anarchists, Protestants or Catholics, preach co-operation in turn, although with very different objects.

It is also noticeable that besides the direct aim co-operative societies set before themselves they can serve indirectly all aims by the direction in which their funds are used. Thus we shall see the socialist co-operative societies in Belgium and in the North of France using their funds for political propaganda. Those Jews who are known as Zionists have formed a consumers' society in London, of which 30 per cent, of the profits are devoted to the development of the Zionists' movement, that is to say, to laying the foundations of the new kingdom of Jerusalem ; this is surely an unforeseen object of co-operative effort other such will arise.

French economists who have concerned themselves with consumers' co-operation considered at first that its only end was saving (see the last chapter of this book) ; but to-day that idea is quite out of date.

In what does co-operation differ from mutuality? Has not that also for its end the providing for the satisfaction of certain wants, as in the form of sickness benefit, old age pensions, burial societies, &c. ? Doubtless both are sisters, in that both spring from the idea of mutual aid and solidarity, but their features are very different. Mutual aid societies fight against risks which threaten human life sickness, old age, and death ; they are of a philanthropic nature, and were formerly called " brotherhoods." Co-operative societies have for their object the providing for the needs of every-day life by new economic means ; they are businesses in the true sense of that word in political economy. This difference of aims is so real that French law has had to make different codes for the one and the other. Mutual aid societies have one special form of legislation, co-operative societies another; For the one, capital is required, for the other, periodical sub- scriptions are enough. ^[3]

Chapter II - The Co-operative Programme : Criticism by Economists.

THE immediate aim of co-operative societies is to satisfy the needs of their members better and more economically than is done by existing institutions ; for example, if the need be bread, to furnish it of better quality, juster weight, and more cheaply than the bakers can supply it. Is their claim to do this well founded? It seems at first sight very daring, for is it probable that simple consumers, who by their very definition are not specialists, could be capable of making bread or supplying any other service cheaper and better than the bakers or members of the trade? Is not that a contradiction of the great law of the division of labour and of exchange? Is it not a return to a state of savagery, to the life of a Robinson Crusoe, or to a feudal family who had to provide for all their needs by their own exertions?

That is the objection on which the economists lay stress ; yet the experience of nearly all countries for the last half century, vouched for by countless successes, has proved indisputably that the claim made by co-operators is well founded. No doubt the co-operative business is heavily handicapped, first of all by the lack of technical capacity, and even more by the lack of personal management, of " the master's eye." The manager lacks the stimulus of individual profit, whether he be a salaried official or even a philanthropist.

But, on the other hand, a co-operative society, having to provide for the needs of its members only, can do so with certainty, particularly if its members are conscientious and loyal in purchasing from the store. It has not to run the risks of bad speculation and of bad stock which must be sold at a loss. Besides, the co-operative business, as it does not need luxurious premises since it does not appeal to the public and as it runs no risks of bad debts since it does not usually sell on credit is freed from the two heaviest expenses which weigh on ordinary commercial enterprises. Finally, a co-operative society can often obtain the services of honest, capable, and devoted managers at a far lower price than capitalist enterprises have to pay. One of the former directors of the English Co-operative Wholesale Society, Mr. J. T. Mitchell, in replying to an American economist, Graham Brooks, who asked him how he was satisfied with so small a salary, said, " I enjoy the esteem of my colleagues ; I have great power; I have great faith in the co-operative ideal. These things satisfy me. " By these means co-operation brings into the economic order and places at the service of industry a new and very powerful factor disinterested energy.

These factors are enough to balance all the disadvantages resulting from the inexperience of its managers, and, in the struggle against the traders, have given the advantage to co-operation. In tact, contrary to general belief, one does not find more failures among co-operative societies than among ordinary traders, and where statistics are procurable they show that co-operative failures are fewer. ^[4]

As for saying that co-operative organisation abolishes the division of labour and brings us back to the primitive times when each man was constrained to produce for himself everything essential for his needs, it is true in so far as one can say that a consumers' co-operative society is an enlarged family which as was formerly the case, and is the case to-day on certain farms makes its own bread and jam, and which also spins, weaves, washes, &c. Yet it is not the consumer himself who does all that, but specialised workers, preferably members of the societies. If the division of labour is abolished from the economic point of view it remains in full force from the technical point of view, and that is enough to ensure progress.

One may say that co-operative association confines itself to transforming that co-operation which already exists in a latent state in all human society into conscious, organised co-operation. It is one of the favourite themes of economists to point out how the play of individual efforts produces involuntarily a general harmony ; unfortunately, facts prove that this harmony is often but a frightful discord. The co-operative society's role is to make each man play in tune ; it is the conductor of the orchestra.

The function which we have just indicated as characteristic of consumers 'co-operation- the most economical satisfaction of all the needs of life suffices for the greater number of societies in the world to-day. Moreover, by itself it would be enough to make co-operation a factor of the first importance in economic evolution and to gain for it an ever-increasing number of supporters, not only among those workers whose wages merely suffice to maintain life, but also among the middle classes, officials, clerks, or persons of small private means who are crushed between the increase in their needs owing to the spread of luxury and the decrease in their incomes, by reason of the increase in taxes and the depreciation of Government stocks.

If the greater number of co-operators only seek from co-operation the means of living better, there are a small number in every country where the co-operative movement has made headway, who seek something more from it the attainment of greater justice in economic relations. It is not for nothing that the Rochdale weavers called themselves the " Equitable Pioneers." They did not content themselves with seeking from co-operation an increase in comfort for the poorer classes, " the chicken in the pot " promised by King Henry IV. They sought to find in it an instrument of economic transformation, not only in the sphere of exchange, but also in that of production and the division of wealth. A co-operative organisation for the distribution of wealth which had as its foundation a competitive system of production would form a highly unstable, perhaps uninhabitable edifice. They also sought to find in co-operation an equitable division of wealth, enabling the consumers to keep for themselves all the gains of the enterprise. Their system is the inauguration of a new system of the division of wealth ; it would mean that capital would have no more profits. Co-operation, therefore, means nothing less than an economic system destined to supersede capitalism by mutual aid, by one more like the earlier " domestic " system (see chapter 15).

Co-operative association brings with it the hope of moral progress ; but in abolishing the pursuit of profit as the only real motive of economic activity substituting for it the sole aim of satisfying needs whilst abolishing advertisement, lying, cheating, and inducements to extravagance, co-operation will succeed in establishing in business a reign of truth and justice ; in short, it will establish the "fair price." If we sought to define the object of co-operation in two words these last would be enough.

No doubt economists will reply that to seek such an end is unscientific, because neither co-operative association, nor even the State, has the power to fix a " fair price," or any price. Only the economic factors known as " the law of supply and demand " are able to do this.

Still, the fixing of prices is more and more the end sought by commerce and industry ; they seek to safeguard prices from the fluctuations caused by competition. It is for that reason that the fixed price has become the rule in all big markets, and that the manufacturers themselves tend more and more to compel shopkeepers to sell goods bearing their trade-marks at a fixed price, by forbidding them to sell below the price marked. This system, which has spread widely in the United States under the name of "price maintenance " has hardly yet appeared in France, except amongst chemists for patent medicines and among publishers.

But the fixed price has nothing in common with the co-operators' "fair price"; instead of eliminating profit it increases it, making it a direct element in the price of goods. If this system becomes general the consumer will be absolutely handed over to the discretion of the producer. That is why it must be answered by the co-operative system, which also tends towards fixed prices, but prices fixed by the consumer, and forbidding sale above the price marked.

We shall see, later, by what developments of co-operative association it is hoped to produce these great results, but we can say at once that it is by asking co-operators to give up, either wholly or in part, the individual economies which they gain from co-operation, or, at least, to deposit their annual savings in co-operative hands and to use the collective capital thus constituted to erect factories, buy land, and build houses, the profits from which will naturally go into co-operative funds, so that co-operation, like the snowball, will, little by little, swallow up the profits which up to now have gone exclusively to those who possess capital. It is not a question of expropriating the capital already in the hands of the capitalists, but one of forming new capital for the working classes.

Socialists object that it is ridiculous to suppose that the wage-earning classes will ever be able to raise from their wages which are already insufficient to support them- new capital. But why, since they admit (not without exaggeration, but that is of little importance) that all existing capital is but the product of labour, formed by the labour of past ages, why not admit that new work exerting the same effort can produce as much capital and keep it for itself? And if the workers gave up supporting the old capital and turned themselves solely to using the new capital which would be their own, then the old capital would gradually become useless, would become dry and empty as the cocoon after the butterfly has taken flight.

We recognise that this ideal is far from being realised, and that co-operation has not done much towards reforming commercial customs. The pursuit of bonuses " divihunting," as the English call it is scarcely less keen than profit-hunting, and there are even societies into which the worst bourgeois vices, such as illicit commissions, have introduced themselves. But that happens only when the co-operative society, instead of reforming current conditions, has let itself become saturated by them. In spite of such cases of unfaithfulness to the co-operative ideal co-operation none the less keeps its striking characteristic of being at the same time highly idealistic and very practical. It is at once Martha and Mary, Don Quixote and Sancho. It follows the blue bird, but instead of seeking it in the Fortunate Islands, shuts it up in a shop. It sets before itself the reformation of the world ; it begins by sweeping the pavement before its own door and setting its own house in order. It follows the star; but looks before it leaps. ^[5]

One often hears the somewhat academic question discussed : Is co-operation an end, or only a means? For the great majority of those who rally round the co-operative movement " bourgeois M co-operation, as it is often called, is only a means, a means of living better without spending more or, as we shall see later on, of saving without denying oneself. For those collectivists or anarchists who support co-operation it is also only a means, a means of preparing the advent of the collectivist or anarchist regime by training and arming the people for a class war; by supplying them with the necessary fortresses, munitions, and technical training, in order that on the morrow of the great revolution the people will find themselves capable of maintaining the services of production and distribution. ^[6]

But for those who love co-operation for itself, the true co-operators, whom critics ironically call "mystics/* co-operation is an end in itself. Not that they are prepared to rest content with the results already gained, but because they believe that co-operation is a living organism, and that the results achieved already contain the germs of all the possibilities to be wished for in the future, as the seed contains the fruit in a latent state. To drop metaphor, they believe that each co-operative society which obeys the laws that it has made for itself already constitutes a little world organised in conformity with justice and social benefit, and that it is sufficient to let it develop spontaneously, either by growth or imitation, to realise in the more or less distant future the best of all possible worlds.

In reply to those economists who laugh at these pretentions to social regeneration, one may say that they only amount to an attempt at realising one of the principles of a classical school of economists which Bastiat, a few hours before drawing his last breath, expressed in these words : "Political economy must be treated from the point of view of the consumer." The co-operative programme is to place the consumer in a position of economic domination. ^[7]

It is true that public opinion, especially that of protectionists and socialists, considers the producer far more useful economically, and morally nobler, than the consumer, because he almost always produces for others, while the consumer always consumes for himself and for his own benefit, and in consequence that it would be wrong to sacrifice the former to the latter.

But it is merely playing with words to pretend that the producer, in the existing economic organisation, lives for others. If the baker makes bread he does not seek to feed his customers, but to make profits ; and if he does feed them it is because this is his only way of gaining these profits. It is only in co-operative association that production is organised solely with the view of satisfying needs. In fine, it is not a question of sacrificing either the producer or the consumer, but of putting each in his proper place in society. But it is evident that the producer only exists for the benefit of the consumer, the baker for those who are hungry; it is not the other way round. It is this truth, too often falsified in the actual economic order of things, that the consumers' society seeks to re-establish.

Chapter III. - The History of Distributive Co-operation.

In Great Britain.

THE date and the birthplace of distributive co-operation is well known to everyone the 2ist of December, 1844, at Rochdale, near Manchester ^[8] and the name of the society which was, and is still the parent of the innumerable family of societies engendered by its spirit and after its model, is "The Equitable Pioneers of Rochdale." These pioneers were weavers, some of whom were disciples of Owen, that is to say, socialists, others were Chartists, but all of them had the vigorous confidence of the English mind in self-help, or rather in mutual aid. It took them one whole year of painful effort to collect the little capital which they deemed indispensable, and after many desertions twenty-eight of them remained loyal, with a capital of ^28. This is the starting point of a movement which to-day, after only seventy-six years, has penetrated every country, and unites more than twenty millions of families.

The title of " Father of Co-operation " is often given to Robert Owen, who was still living at the time of the Rochdale Pioneers, several of whom were his disciples. It is true that this socialist (who was at one time a big employer) has very admirably defined co-operation by this formula : " You must become your own merchants and your own manufacturers . . . to be able to supply yourselves with goods of the best quality and at the lowest price. " It is also true that he popularised the word " co-operation." But Owen, being pre-occupied in realising complete co-operation in his " towns of harmony " under the form of communism more particularly that of community of land was always somewhat disdainful of co-operative stores; any effort towards the partial realisation of co-operation in the guise of a shop he regarded as being more likely to discredit his system than to herald its approach.

However, it would be an error to suppose that Rochdale was the first society. From the end of the i8th century several societies could be mentioned. ^[9] In 1820 a league was formed "for the propagation of co-operation," and up to 1840, under the influence of Owen and his disciples, the propagandist movement for co-operation was very active. There were leagues, journals, congresses ; ^[10] small tracts were distributed by the million; nothing was left undone. Hundreds of societies were founded as a result of this campaign ; in 1832 there were 300; even a wholesale society was started about this time in Liverpool. Some of the societies existing at present, notably that of Sheerness, which dates from 1816, are older than the Rochdale one.

But all these consumers' societies (distributive societies, as they are called in England) had one fault which arrested their development and ended by causing their extinction: they were philanthropic movements of patronage, almost of charity. They were created out of a feeling of pity, because of a desire to relieve the miseries of the working classes, caused by the terribly low wages in the first half of the i gth century, when machinery was taking the place of manual labour, and aggravated by the high price of bread, which the protective duties on grain continued to increase for the benefit of the landlords duties which the noble campaign of Cobden and of John Bright, who was a native of Rochdale, was soon to abolish. Founded with the capital of philanthropists who only played the part of honorary members in the society and did not use the so-called co-operative store for themselves; not looking for anything but cheapness ; not seeking any profits which, if made, were distri- buted among the shareholders and not among the customers, or sometimes buried in an inalienable reserve fund which would only serve for visionary schemes for the benefit of future generations they did not attract new members and were therefore unable to develop, but revolved perpetually in a vicious circle. Somewhat later another method of employing the profits was tried, namely, that of an equal distribution among all the members ; but this was not more happy in its results. As a matter of fact, this system of equality put the enthusiastic members who conscientiously made all their purchases in the common store on the same footing as the indifferent ones who never came there at all.

However, the really fruitful idea of these Rochdale Pioneers, of Charles Howarth, ^[11] was that of distributing the profits, not according to the net receipts or number of shares or equally among all the members, but in proportion to the trade of each member, this trade being checked in the simplest manner by means of dockets given of equal value to the money received at the cash-desk. It appears that other societies had tried this system before ; it had even been tried in a benefit society in 1827; but this time the results were incalculable. It was the fillip which set in full motion the hitherto inactive machinery. ^[12] Presently we shall see the reason why this was so.

It is evident that through the adoption of this new system of distribution the co-operative movement assumed a more individual character than heretofore. It was no longer communistic or equalising as Owen had desired because everyone was recompensed according to services rendered. But it preserved one aspect of communism by asking members to leave their individual dividends as deposits in the common fund, which would thereby be increased and employed collectively, at first for the development of the society and then for propaganda and social education. It must be admitted that of these two tendencies both somewhat antagonistic to the co-operative movement it has been the latter, the individualist tendency, which has been most developed up to the present. But efforts are being made to revive the earlier tendency.

It seems then only right that history has awarded the title of " Fathers of Co-operation M to the twenty-eight weavers who formed the Society of the Equitable Pioneers of Rochdale. They have doubly merited this title :

First, by the broad prophetic manner in which they drew up the programme of co-operation for their time, and for all time. The following is their famous manifesto : ^[13]

" The objects and plans of this Society are to form arrangements for the pecuniary benefit and the improvement of the social arid domestic condition of its members, by raising a sufficient amount of capital, in shares of one pound each t to bring into operation the following plans and arrangements :

" The building, purchasing, or erecting of a number of houses in which those members, desiring to assist each other in improving their domestic and social condition, may reside.

" To commence the manufacture of such articles as the Society may determine upon, for the employment of such members as may be without employment, or who may be suffering in consequence of repeated reductions in their wages.

" As a further benefit and security to the members of this Society, the Society shall purchase or rent an estate or estates of land, which shall be cultivated by the members who may be out of employment, or whose labour may be badly remunerated.

" That, as soon as practicable, this Society shall proceed to arrange the powers of production, distribution, education and government; or, in other words, to establish a self-supporting liome colony of united interests, or assist other societies in establishing such colonies.

" That, for the promotion of sobriety, a Temperance Hotel be opened in one of the Society's houses as soon as convenient."

Secondly, because they were not content merely to formulate the programme and the ideal of co-operation and to demonstrate from afar the goal which it was slowly nearing, but found practical means of realising it. And when it is remembered that these rules were from the first so definitely established by these few working flannel weavers that the experience of three-quarters of a century has been unable to add much to them, and that thousands of societies since formed have bound themselves to copy them almost literally, we must recognise this as one of the most remarkable phenomena in economic history. Yet it passed quite unnoticed by economists of that time, even by Mill. The co-operative movement has not issued from the brain of a wise man or a reformer, but from the very life of the people themselves.

We now give the most striking events in the history of co-operation in England after the period of the Pioneers. In 1852 and 1862 laws called the Industrial and Provident Societies Acts were passed. The first Act in particular, which was the Magna Charta of co-operation, gave legal rights to the societies, hitherto without guarantees or corporate existence, and whose property could therefore be appropriated by the first member who wished to take possession of it. This law was largely due to the efforts of a small group of religious men, known as the Christian Socialists of whom one of the most celebrated was the clergyman and writer, Charles Kingsley, with the help of the great economist, John Stuart Mill, although these men sought their ideal in productive rather than distributive co-operation, and more among the French socialists than among the Rochdale Pioneers. For the English Christian Socialists, as for the French socialists, the evil to be fought was the wage-system, while for Owen and his school it was the system of profit. ^[14]Nevertheless, thanks to them co-operation in all its forms gained not only legislative sanction, but also the support of public opinion.

In 1864 we see the establishment in Manchester of the wholesale federation called the Co-operative Wholesale Society, or, more familiarly, the C.W.S., which has exercised a powerful influence on the English co-operative movement, an influence which is increasing from day to day (see Chapter X.). This step was mainly due to the initiative of Abraham Greenwood, one of the survivors of the Rochdale Pioneers. The C.W.S. represents the economic and practical side of co-operation. ^[15]

In 1869 the Co-operative Union was formed. The affairs of this body are administered by a central executive, known as the United Board, which acts on behalf of all English co-operators ; its authority, however, is purely moral. The Union holds annual congresses, which are like sessions of a cooperative parliament. The Co-operative Union is to the Co-operative Wholesale Society what the soul is to the body.

From this time onwards English co-operation has no longer a history as is said of happy countries because it moves forward of its own accord, and by its own strength. To-day, co-operation is one of the live forces of the country ; it is "a state within the State, M as Lord Rosebery said at the Co-operative Congress at Glasgow, in 1890. As we shall see in the following chapter, it embraces nearly one-third of the people of Great Britain. In fact, many people fear that it may degenerate in proportion as it grows and spreads. They say that the attempt to realise the ideal of a new state of society which, like the Millennium to the early Christians, exalted the minds of the Pioneers, is now-a-days confined to the search after more comfort or large dividends in a word, they say that co-operation, instead of being a religion, is no more than mere business. In fact, it is inevitable that the more a movement spreads the more its original virtues tend to disappear in the mass of the people ; nevertheless, education, for which English co-operators make considerable sacrifices, will help to keep co-operative enthusiasm alive in the coming generations.

We have given these details Necessarily somewhat cursory of the origin of co-operation in England, but we do not mean that these institutions are peculiar to England. They are to be found in every other country, in proportion as these countries come into the co-operative movement.

In Belgium.

Meantime, while English co-operation of the Rochdale type was being evolved, in Belgium another type was emerging, having quite a different aspect. It is to Belgium (or rather, to certain leaders, Cesar de Paepe, and after him, Anseele, Bertrand, and Vandervelde) that the merit i;' due of having united in one co-operative party the socialist school and the workmen's party, which, as we shall see later, had become separated. ^[16] Not that the co-operative movement has assumed such large proportions in Belgium as in England. It is of much more recent date, being traced from 1880 only, and, having taken from the beginning a socialistic and political character, it found itself checked by the antagonism of other political parties, Catholic and Liberal, which have rival societies in every town.

But, on the other hand, this struggle has acted as a stimulus to co-operation, each party using it as a means of influencing the people. Thus, the characteristic feature of Belgian co-operation is that it is mixed up with politics, which is not at all the case in other countries at any rate, up to the present.^[17] The socialist party has, above all, made the co-operative store not merely (as Anseele has said in his well-known phrase) ** a fortress whereby to bombard the capitalist society with potatoes and 4-lb. loaves/' but, better than this, a club house for the people, to serve them not only as a centre for supply, but for meetings, instruction, recreation, improvement. It has made co-operation a sort of patronage, different from capitalist patronage but employing the same methods, and we might even say using methods which no other patron would dare to do to-day ; for instance, the member has to pay for his bread in advance each week by buying counters, which means that the society borrows from the workman funds for its working expenses and, moreover, the member must pay an addition of one-third of its real price for his bread. But the workman will bear from his society what he would not bear from any other master.

He willingly allows himself to be drawn into a net-work of schemes of insurance, providence and mutual aid, which surrounds him completely from his birth to his death, and follows him into all the actions of his domestic, working, and political life. He is taught how to vote properly and not to drink alcohol. It is in order to keep in daily touch with him and to be able to control his actions more minutely that all Belgian co-operative societies make the selling of bread the basis of their operations.

In France.

France has been late in taking up distributive co-operation, though the social evil "competition " was being unceasingly anathematised by all French socialists in the first half of the igth century. Therefore, it would seem only natural that co-operation, being the antithesis of competition, would appear to them the solution sought for. But then, they were seeking the solution in co-operation from the productive, and not from the distributive side.

Indeed, thoroughly discouraged by their failures, the woiking classes turned their backs on co-operation in all its forms. They continued to dally with the idea, however, as a solution for the social question, in their congresses up to that held at Lyons in 1878; ^[18] but this was the last sign of interest shown by them. From the following year when, at the Marseilles Congress, under the initiative of Jules Guesde, and influenced by Marxian collectivism then in its infancy in France they changed completely and resolved that co-operative societies '* could by no means be considered a strong enough method for gaining the emancipation of the labouring classes," they voted tor the socialisation of the means of production.

Nevertheless, here and there distributive co-operative societies were founded. The oldest of these which appears in the Co-operative Almanac is the Ruche Stdphanoise, of St. Etienne, which dates from 1855. But there were others, even older, which have long since disappeared, leaving no traces. The idea of grouping together for purchase in common is too simple not to present itself often to the mind and not to be acted upon at times. We can cite from 1828 the existence of a co-operutive bakery called Caissc du Pain, in Alsace, at Guebwiller.

The great burst of co-operative enthusiasm in 1848, although it spent itself almost entirely in efforts to establish productive societies, did, nevertheless, bring some distribu- tive societies into existence; in particular, at Lyons, a great centre of social activity at that epoch, there was formed the S ocMt 6 des Castors. ^[19]

During the period 1867 to 1883, although public enthusiasm was more concerned with productive and credit associations, ^[20] there were about 100 distributive societies founded, among others, on the initiative of Benoit Malon, ^[21] the Revendication at Puteaux. At this time, co-operation was upheld by such well-known economists as Leon Say, Jules Simon, and Walras, but it had a more moderate programme than that of Rochdale; and the law of 1867, which we shall examine later, was due to this movement. Jules Simon made a very impassioned speech during the discussion on this law.

It was not until 1885 that distributive co-operation took a conscious existence in the town of Nimes thanks to the initiative of a little group of co-operators, which included dc Boyve, Fabre, ^[22] and several workmen. Since then its progress has been less broken, if not very rapid. The first congress, which assembled in Paris in 1885, laid the founda tions of an organisation somewhat similar to that which we have described in England. A Co-operative Union with a Central Committee, a federation for purchase, annual congresses, and a journal were started about this time. During some ten years, the societies which had joined the Co-operative Union remained loyal to the Rochdale programme. The Central Committee found a general secretary full of enthusiasm and experience in the person of Charles Robert, the apostle of profit-sharing; but a premature and unfortunate attempt to form a federation for purchase in common (see later chapter on " Co-operative Federations ") brought trouble and a certain amount of discouragement into the Union.

In the interval, the example of the Belgian co-operative societies and the counsel of their chiefs had brought back a certain number of French socialists to the co-operative movement. They found in co-operation, if not a solution of the social problem, at least a means of action, and these men began to form distributive societies. But those societies of socialist tendencies in Paris, which had at first belonged to the Co-operative Union, soon withdrew from it because they thought the Union too bourgeois in its tendency, and too provincial in its little parliament, and in 1895 another group was founded composed entirely of Parisian societies under the name of Bourse cooperative des societes socialistes de cons animation. (Co-operative Exchange of Socialist Consumers' Societies.) Socialists say that this secession marked the new co-operative era in France.

In this statement there is a measure of truth, and some ingratitude. As far as the co-operative programme is con- cerned, the socialist seceders have added nothing to that of the founders of the Union; but as far as its realisation is concerned it is true that their societies, being formed exclu- sively of workmen and animated by class prejudice, showed themselves more active, more disciplined, and possessed of more solidarity. Nevertheless, the period which followed (which lasted not less than seventeen years) was full of quarrels between the socialist group and the so-called bour- geois or neutral group which certainly did not help the progress of co-operation in France. But we shall postpone to another chapter these discussions about the various schools of co-operative thought.

Finally, mainly because of the efforts of some loyal co-operators of both parties, and also because of the pressure of co-operators in other countries especially Belgium and England which was exercised at every national and international congress, the co-operative movement in France succeeded in regaining its unity. In 1912 the two groups were in accord in a declaration drawn up by a member of the Nimes school. ^[23] This declaration, called the Covenant of Union, was ratified separately and simultaneously by each federation in congress unanimously at the Co-operative Union Congress, and at the Congress of the Socialist Exchange by a majority of 307 to 30 and the Covenant of Union was finally adopted at the General Congress at Tours, held from December 28th to 3oth, 1912, in the presence of numerous delegates of foreign co-operative federations who had come to witness this very happy union.

However, there were here and there a certain number of societies which refused to accept the Union, preferring to break away. ^[24] On the other hand, some which had hitherto refused to federate decided to do so from the time when they had not the embarrassment of choosing between the two federations.

It is fortunate that the Union was already established, although it had not borne any fruit at the time of the out break of war. It is owing to this Union that co-operation in France has been able to survive the great calamity, and even to render notable services to the country and the co-operative principle.

In Germany.

In Germany the working classes for a very long time refused to believe in the efficacy of distributive co-operation because they were imbued with the idea or theory of what Lassalle calls the brazen law, i.e., the ancient theory which teaches that any reduction in the cost of living inevitably brings with it an equal reduction in the rate of wages, and that, consequently, this would be the unfortunate result of the success of a distributive co-operative society. For this reason the co-operative movement in Germany was first started under Schulze Delitzsch about 1850 in the form of co-operative credit, and in this form it has had a wonderful development, more striking even than that of consumers' co-operation in England. There are, in fact, 20,000 cooperative credit societies, both rural and urban.

As co-operative credit is the most conservative of all forms of co-operation it has rallied together the liberal and the bourgeois parties, and even the small traders, who have gained great advantages therefrom. It was a sort of lightning conductor for quite a long time, a preventive against the extreme socialism of Lassalle and Karl Marx. Thus, credit societies had a high place in the federations notably in the General Union of Berlin, the most important one founded by Schulze Delitzsch while the distributive societies remained in a secondary position, their only function being (in the opinion of the Union) to help the workman to save and to be a source of supply for the credit societies. But the federation of credit and distributive societies under one banner was impeded by the fact that the small traders (who constituted the majority of the co-operative credit societies) declared that the development of distributive societies aimed at their extermination. Furthermore, the General Union, which, inspired always by the spirit of Schulze Delitzsch, stood for bourgeois liberalism, and defended the middle classes, was unable to accept the socialist labour programme of social reform which the distributive co-operative societies both in Germany and France were beginning to teach. At the Congress of Kreuznarh, in 1902, held under the presidency of Dr. Cruger, disciple and successor of Schulze Delitzsch, a resolution of the German Union condemned this programme as being too socialistic.

Consequent on this motion, the larger number of distributive societies resigned, in order to form an independent Union with its head-quarters at Hamburg. This Union, however, unlike the Belgian group, does not profess the socialist faith ; it has not allied itself with the large socialist democratic party, but by certain regulations such as prohibiting societies from selling to the public or paying interest on shares it gives to its societies a more " anti-capitalist and more mutual aid " character than that which obtains in any other country.

To-day, Germany, although very tardy in entering the domain of distributive co-operation, ^[25] advances with gigantic strides. In this field, as in the field of industry, she aimed at outstripping England, and, at her former rate of progress, would probably have succeeded, as we shall see by the figures in the following chapter. This is interesting, because the superiority of which Germany boasts, in the domain of organisation, was not generally recognised, except in so far as it concerned compulsory State, or military, organisation. Yet here we have a kind of organisation free and spontaneous co-operative association for which Germany displays an aptitude not less remarkable than that of the individualist English people. We must remember that the qualities, and even the faults of the German race the spirit of discipline which can subordinate private to general interests, the gregarious instinct which moves it to join together, the enormous capacity for carrying things through, the cult of organisation, even the very worship of the kolossal are all conditions eminently favourable to the success of co-operation in Germany. As we shall see in the following chapter, the largest distributive societies in the world are to be found in Germany.

Let us pause here. This is not the place for a history of distributive co-operation in every country during the second half of the i9th century. It would be very monotonous, because in every country except Belgium the Rochdale type has been more or less faithfully copied. It would be more interesting to continue this history later on, in trying to discover in which countries this form of co-operation has the greatest chance of success. It is not certain that the small seed imported from England will flourish in every country, and, at any rate, it is perfectly clear that its develop- ment will be unequal, as we shall explain in the following chapter.

Chapter IV. - Statistics and Geographical Distribution of the Co-operative Movement.

WHEN it is remembered that the type of association created by the Rochdale Pioneers was specially contrived to meet one particular need one cannot fail to admire the way in which this little seed of co-operative effort has been able to adapt itself to all countries, to modify itself to the special circumstances of its surroundings, and to give birth to a wonderful variety of different forms of activity. It flourishes in all countries alike in frozen Iceland and Labrador, and in the burning Islands of the Pacific. ^[26]

Unfortunately, statistics relating to consumers* co-operative societies are very incomplete. The number of societies in each country is fairly well known, but there are not many where the number of members is stated, and there are even fewer where that most important figure, the turnover, is known with any degree of accuracy. Thus in Italy, where co-operation has developed to a remarkable degree, there are, as yet, no exact statistics. Even in those countries where societies are grouped in federations there are a certain number of " wild men " who do not supply the returns sought, so that the figures given are below the actual figures and ought to be increased by an unknown quantity. It is only in Great Britain and Switzerland that co-operative statistics are more or less complete, because in these two countries alone almost all the societies are grouped in a national federation.

Subject to this reservation, the following figures may be given for 1914, the last normal^[27] year:

Country	Number of Societies	Number of Members (in Thousands)	Proportion per 1,000 inhabitants	Turnover (in Thousands)
British Isles	1,385	3,054	264	88,000
Germany	2,375	2,000 (?)	121	28,000
Russia	13,000	1,500	34	32,000
France	3,261	881	90	12,840
Austria	1,471	423	70	7,200
Italy	2,481	400	43	7,200
Switzerland	396	276	290	5,240
Denmark	1,560	250	350	6,000
Hungary	1,300	200	40	3,000
Belgium	205	170	90	1,270

These figures have been much affected by the war, though not generally, as might have been expected, adversely affected. On the contrary, in almost every country, belligerent or neutral, there is a considerable increase, and in some, notably Finland, Russia, Georgia, and Ukrania, the increase is enormous. This is an unexpected phenomenon. It can be explained as regards neutral countries by the fact that co-operative societies have shared in a general prosperity ; but one would have expected that in belligerent countries, where almost the whole adult population has been mobilised, a marked decrease in consumption would have been found. But those who remained at home increased their consumption on account of the increase in wages and allowances, and further, the number of members of the societies has increased, because the general raising of prices has forced the public towards co-operation. It is possible, however, that these increases will not be permanent.^[28]

Country	Societies	Members	Turnover in s.
British Isles	1,364	3,846,000	155,000,000
Russia	25,000	12,000,000	500,000,000
France	4,000	1,800,000	32,000,000
Germany	2,500	4,000,000	50,000,000
Switzerland	476	354,000	11,600,000
Finland	737	201,000	24,600,000
Italy	2,350	500,000	26,000,000

[In the figures fur Rn^ia the rouble was taken at par. If taken at the current rate of exchange it would have to be reduced by 09/100 ! In the case of France, the statistics of the invaded area have not yet been made out, so the totals given arc only approximate.]

We must add to our list some thousands of consumers' co-operative societies in the Balkan States and Portugal, and, outside Europe, about a thousand in the United States, Canada, Japan, India, Australia, and even in snowbound Iceland. The number of consumers' societies in the whole world is at least thirty thousand, ^[29] having about ten million members and a turnover of nearly 200 million pounds. Besides this, it must not be forgotten that each co-operator usually represents a family (since unmarried people have comparatively little reason for joining a co-operative society), and working-class families are generally large, so that these ten million co-operators represent a population of from 40 to 45 million persons, the equivalent of a large State.

As for the turnover, compared with the trade of the world, which runs into thousands of millions, it is clearly only an infinitesimal portion ; it hardly amounts to 8s. per head for Europe ! Still, if one remembers that the co-operative move- ment is not yet three-quarters of a century old and how short a time that is in the history of the world : less than the life of a man these results will not appear despicable, but rather of a kind to justify the hopes of co-operators,

A few words about the principal co-operative countries. They advance at very different speeds along the road to co-operation. Far and away in the first place comes Great Britain, and this is not surprising, after what we have seen in the preceding chapter on the history of co-operation. First of all, the United Kingdom excels by the number of its co-ope- rators more than four million families (4,131,477 in 1919) which represents about on&-third of the population of Great Britain, leaving out Ireland, where consumers' co-operation is of little account. There are certain counties where the proportion of co-operators rises to a half and even three- quarters of the population. There are big cities, such as Leeds, or small towns, such as Kettering or Desborough, where almost the whole population are co-operators.^[30]

All the societies are strong, for their average membership (1914) is over 2,200 (290 in France). There are 70 societies with more than 10,000 members, of which one, Leeds, has 70,000 members and a turnover of ^2,400,000. The turnover of these societies shows their strength, no less than their membership. In 1914 the turnover was more than 88 million pounds, which represents ^64,000 per society (^4,000 in France) and an average of ^29. los. per member. ^[31] This average is far above that of any other country (in France the average is about 14. 135.). This high average implies two things ; first of all, that the societies are not merely grocery shops, but supply every kind of goods, and, secondly, that the members are very loyal to their store. This is a rare quality, and is one of the surest tests of co-operative zeal. There are a good number of English workmen who bring all their wages to their own shop and spend scarcely any money outside it.

In the above figures, sales made by the English and Scottish federations to their societies (totalling more than 52 million pounds) are not included, as that would involve a duplication;^[32] neither are the figures for the co-operative bank, which has a turnover of more than 200 million pounds, nor those of the Co-operative Insurance Society, with its 40 million pounds' worth of risks. If the whole were added together they would reach a total of about 400 million pounds.

Germany, as we have said, is above all the home of co-operative credit societies (18,000 with more than 2,500,000 members), but still, as regards co-operation for consumption it takes second place, though it made great strides in the years before the war, at a rate of progress much higher than that of Great Britain, as may be seen from the following figures :

Great Britain

Year	Members	Sales
1902	1,709	50,040,000
1914	3,054	88,000,000

Germany

Year	Members	Sales
1902	575	7,040,000
1914	1,717	26,360,000

It is clear that during this last decade the German societies have just tripled their number of members, and almost quadrupled their turnover, while British societies have only increased in each case by about 75 per cent. It is true that in making this comparison we must take into consideration, first, that in every movement, as in every organism, increase is greater in early youth, and, secondly, that the population of Germany is half as big again as the population of Great Britain and therefore offers a bigger field for extension. Consumers' co-operation in Germany is still far behind that of Britain, for the total number of members is about half, and the turnover not a third of that in Britain. ^[33] Still there are many important societies there, to which the epithet 14 colossal" may be applied without exaggeration, notably that of Hamburg with 80,000 members, Leipzig with 65,000, and above all that of Breslau, which is the biggest society in the world, and has 100,000 members.

Moreover, generally speaking, the average of sales per member is much smaller in Germany than in Great Britain, being only ^15. us., which is explained less by the disloyalty of members than by the fact that these societies generally confine their trade to groceries, as in Breslau.

France, as we have already seen, comes first after Russia as regards the number of its societies, ^[34] but there is nothing for her to boast about in this, as the large number of societies is not a sign of strength, but of weakness; it is simply a sign of the scattered and overlapping nature of the societies.

The following tables show the comparative increase of the number of societies in Great Britain and France. First of all for Britain, the following table shows the increase in the number of societies and the number of their members :

Year	Number of Societies	number of Members	Number per Society
1862	331	89,000	269
1872
1882
1892
1902
1912
1914

It is seen that since the year 1902, which marks the maximum, the number of societies has decreased by nearly 100^[35] while the number of co-operators has increased by nearly two-thirds, and if one goes back to 1892, it is seen that the number of societies has diminished by 35, while the number of members has increased nearly three-fold. For France, we give a parallel table, except that we cannot go back further than 1900, as no trustworthy statistics exist before that date.

Year	Number of Societies	number of Members	Number per Society
1900	939	375,000	400
1907
1914

These figures show that since 1900 the number of societies has increased more than three-fold but that the average number of members per society has diminished by one-third, while the number of British societies in the same period diminished a little, and the average number of members per society has nearly doubled. Nothing is more significant than this parallel, which shows clearly the Anglo-Saxon tendency to concentration as opposed to the dispersive tendency of the French. It shows that in France the increase in the number of societies is far more rapid than the increase in members, which shows further that the societies are becoming smaller and smaller. ^[36] Therefore, with us, multiplication is synonymous with division ! That is why (without mentioning Paris, where there are 44 societies, of which only 6 or 7 are at all important), we find 54 societies in Lyons, 21 in Creusot, n in Montceau-les-Mines, 27 in Roubaix, 18 in Tourcoing, n in Bourges, &c., &c. ^[37]

The French societies are not only weak in the number of members, but also in turnover, ^[38] and the amount of purchases per member. This last is a very serious symptom of the lack of co-operative spirit, for, as we shall see further on, it shows but little enthusiasm on the part of the members. Still, there is another reason for it, which is that the greater number of societies in France deal in groceries only, and therefore the amount of purchases which the members can make at their co-operative shop is very limited. More than a third of the societies (1,300) confine themselves to baking, and their turnover is thus necessarily restricted. ^[39] Those societies which sell all classes of goods are rare. In France the average of sales per head is a little below that of Germany, but it is above all in the average membership per society and in the turnover, that we are inferior. If we compare the figures of the Federation Nationale francaise with those of the Hamburg federation we find for the latter an average of 1,560 members and ^24,000 turnover, and for the former only 315 members and ,5,360 turnover.

We have not huge societies like Germany only one French society (I' Union des Cooperatives, of Paris) has 70,000 members, and a turnover of ^3, 000,000. ^[40]

Switzerland takes a high place among the co-operative countries, for it has 400 consumers' societies with nearly 30,000 members, in a population which does not reach 4 millions. This is a proportion relatively higher than that oi (ireat Britain (78 co-operators per 1,000 inhabitants instead ot 74) ; and the turnover, close on six millions, is but little inferior to that of Britain (i. 125. per inhabitant instead of 2), and far above that of Germany and most other countries. Switzerland has five societies with over 10,000 members, of which the Bile society has 37,000 (that is to say counting members of families nearly the whole population of the town), and a turnover of ;i, 080,000. Still, the Swiss movement is of recent date. It did not really start until the formation of the Union Cooperative de Bale in 1890, which now has a membership of more than 400 societies and a turnover of over ^"2,000,000. One of the features of Swiss co-operation is the loyalty with which all the societies support the Union and bring to it their moral and financial help. Switzerland, being itself a federal democracy which bears on its shield the device, " Each for all, and all for each," is for this reason particularly inclined towards federation in its economic life. ^[41]

In Italy also the co-operative movement is very remarkable, though for different reasons. Italy is of all countries that in which the collaboration of the three great forms of working class association, namely, Trade Unions, Friendly Societies, and Co-operative Consumers' Societies, seems best realised. At Reggio Emilia, notably, these bodies are grouped in a very strong union. There are very few large societies except " professional " societies like I'Unione Militare at Rome (16,000 members), or societies of worjkmen and lower middle classes like I'Unione Cooperatives of Milan (15,000 members), and the socialist society at Turin (15,000 members) ; but the economic evolution of Italy is behind its political evolution, and it has not yet been able to realise its own unity in this field. Italy has with great difficulty been able to create a general wholesale federation, which is not making much progress. The lack of statistics makes any comparison with other countries impossible.

Belgium is the only country where the co-operative movement has taken a decidedly original form and a socialist and political colour; but for this the reader is referred to what has been said in the preceding chapter.

There is one small country where co-operation has developed to an extraordinary degree more than in any other country, not excepting England, and that is Denmark. In it there are 1,500 consumers' societies, a huge figure for a country with 3 million inhabitants that would represent more than 20,000 societies in France or England. It is true that the societies are very small, the total number of members being about 250,000, or barely 160 per society. That is because they are above all rural societies. It is in the country districts, unlike what has happened in other countries, that co-operation in all its forms has developed most.^[42]

At the other extremity of the scale passing from the smallest to the greatest country we find Russia. There the development of co-operation was very slow until the first years of this century, but during the last ten years it has made great strides, and the war has given it an unexpected impetus. Doubtless the Mir and the Artels had already shown the innate aptitude of the Russian people for association. It is therefore not surprising that as these antiquated forms disappear the spirit of association should manifest itself in a new form. The democratic movement here finds an outlet while the special progress due to the war is explained by the necessity of struggling against the increase of prices.

The number of consumers' societies in Russia is estimated at about 13,000, mostly rural, and the number of credit societies (with which we have no concern here) at over 15,000. These last are in process of transforming Siberia. ^[43]

There is nothing special to say about other countries. In Austria-Hungary there is a fair number of consumers' societies, but diversity of races, and the inequality of their economic development, make it impossible to form a united organisation. Austria properly so-called follows, though at a considerable distance, the example of Germany. Hungary, under the impulse of the great society of Budapest, Hangya (The Ant), has a great number of consumers' societies, 1,300, as reported by a correspondent of the " International Co-operative Bulletin." The Czechs in their turn have formed a Union at Prague. ^[44]

The Balkan countries have not yet got beyond co-operative agriculture, which is better adapted to their economic condition ; but they are to-day considering consumers' co-operation, and even Serbia was in process of starting a school, almost a university, for teaching co-operation.

Outside Europe there is a great country which, strangely enough, does not take a high place in this brief review, and that is the United States. There, co-operation has up to the present been almost negligible, as is also the case in other new countries and colonies. The explanation for this is that in countries where the workers are highly paid and contemptuous of small economies, and where they generally lead a somewhat roving life, economic and social conditions are altogether unfavourable to the success of co-operative associations. On the other hand, the struggle for life, which is an exact antithesis of co-operation, is nowhere so keen as in the United States. Nevertheless, there arc some nuclei of co-operation which are gradually forming, on the one hand in California, where the majority of co-operative societies are productive agricultural societies, and, on the other hand, in the oldest States, where the conditions of life are already beginning to resemble those of Europe as, for instance, Massachusetts, New Jersey, &c.

Co-operation also may find a favourable atmosphere in the chief centres of German, Italian, Slav, and above all Finnish, immigration, where the immigrants have brought with them and still keep the customs of their native lands. Minneapolis, where there are many Germans and Scandinavians, is already a co-operative centre. It seems likely that co-operation will tend to spread among the negroes, but, that, unfortunately, will not increase its popularity in America. ^[45]

CHAPTER V. - Various Systems of Sale.

SALE AT CURRENT PRICE.

THE general rule followed in all the distributive societies in the sale ^[46] of their goods is to sell them at the same retail prices as those current in the neighbourhood. The rule of selling at the current trade price does not seem to be consistent with our ideas of distributive co-operation, as a saving in expenditure is the first object of this type of co-operation, and it would seem to be more natural to go straight for the goal by selling at the lowest possible price, that is, at cost price. In fact, there are some societies which, faithless to the Rochdale rule, operate in this manner.

It is noteworthy that these societies are recruited from the two extremes of the social ladder :

• From the middle classes, Government officials, and employees who, having sufficiently high salaries, but being obliged to live up to a recognised standard, ask no more of co-operation than a means of best satisfying their needs at the least possible expense, and do not trouble at all about

realising any social transformation. To this class belong generally such stores as the Civil Service Stores and the Army and Navy Stores, which are among the largest shops in London. But, as we shall see later, these are looked upon by English co-operators as being really outside the ranks of co-operation.^[47]

• From among the very poor and needy whose wages are insufficient to supply the minimum of nourishment. In these cases it would be impossible as well as inhuman not to procure for them the largest amount of food supplies in return for the means at their disposal, as they should get

the maximum value for every halfpenny. In Russia, for example, where wages generally are very low, the distributive societies sell at the lowest possible price.

But this system of selling at net cost has very serious disadvantages :

1. It exasperates the traders of the neighbourhood by a price-cutting competition, which they are unable to sustain. And this is unnecessary, because if a reduction in expenditure were the only object of co-operation it would be much simpler for people not to trouble to form a society of con-

sumers but merely to make an arrangement with the various traders in the locality, whereby they could get a discount on all current prices. This would mean that the larger the number of buyers so much the greater advantage for the traders. This very simple system has often been tried and has been warmly recommended, particularly by those who wish to secure the benefits of co-operation for the public without interfering with retail trade. (See later, " The Conflict between Co-operative Societies and Traders. ")

1. It prevents the society from selling to outsiders, because, on the one hand, it would be absurd to confer on strangers the same benefits as on the members, namely, supplies of goods at cost price; and, on the other hand, it is impracticable to have two different prices for each article. It is true that selling to the public is not practised by all co-operative societies, and is even generally dis-

couraged, as we shall see. But, even though the society sells only to its members, the system of selling at cost price has another drawback, namely, it tempts certain members to buy goods for their friends and neighbours, and even perhaps to make a profit thereby as middlemen. This abuse has been fairly frequent, especially in the co-operative societies in Spain.

1. Above all, it prevents the society from attaining any of the objects which we shall examine later : indi- vidual or collective saving, insurance, production, education or propaganda work, or even the building up of capital, because this last can only be done by surplus profits being left in the society as deposits. (See p. 82, chapter Capital). We may say that all these objects are sacrificed; in fact, the whole co-operative programme is sacrificed for the sale at low prices. The societies that work on this system cut their corn while green, and they do not differ much from the philanthropic societies of the pre-Rochdale period. ^[48]

This is why in every country nearly all co-operative societies follow the Rochdale rule and sell, not at cost, but at current price. The profit thus realised on each purchase is credited to the purchasing member, and is returned to him at the end of the year, or generally at the end of every six months.

By adopting this method societies give up the idea of offering their members the advantage of a daily saving in their purchases, in order to be able to return to them a good round sum once or twice a year, a sort of dividend. This amounts to the same thing, no doubt, but the effect on the consumer is much greater. As a matter of fact, this system is extraordinarily appreciated by workmen, and still more by their wives. One might almost say that it is too much appreciated, because, of the millions of co-operators existing in the world, the large majority only become such owing to this system of dividends. Wherever we find workmen well enough paid to be able to spend freely, well enough educated in co-operation to look for big results from it, far-seeing enough to prefer the future advantage of an addition to their revenue for themselves, or an additional support to their society, to a daily saving of a few pence, there the Rochdale rule of sale at current price can be unhesitatingly applied.

It is worthy of note that in both England and Belgium a good number of societies raise the prices of their goods higher than the current market price in order to augment their dividends. Some societies are able by this means to declare a dividend of 20 per cent., or even 25 per cent. (45. or 55. in the ). Many co-operators, so far from objecting to this plan (which consists of taking an extra halfpenny out of their pockets in order to restore the same halfpenny six months later), rather take a pride in it, and press for its adoption in their general meetings. The fact is, as we shall see further on, they find in this plan a means of compulsory thrift^[49] . However, this system of raising prices has some serious disadvantages, which we shall indicate later, notably that of shutting the door of co-operation in the face of the poorest class. On the other hand, we must recognise that this exaggeration of the Rochdale principle implies a strong enthusiasm for co-operation. I see in it a robust faith in the power of co-operation. In countries where such a faith scarcely exists, as in France, a co-operative society which attempted to sell above the current price would hardly find a supporter, no matter what bonus were returned. Societies which practise a mixed system of selling at a price slightly lower than the current price in order to attract customers but nevertheless sufficient to allow a certain margin of profit, which can be employed in one or other of the ways which we shall indicate later, are much more numerous, particular!} 7 in France. The essential thing is to make co-operators understand that they must choose, and that they cannot have the advantages both of low prices and of large dividends. If they wish to extend their movement to the poor they must give up their big dividends and sell at cheap rates, always leaving, however, a small margin for profit, say 5 per cent.

The complaint has been made in England that consumers' co-operation is only intended for the well-to-do working classes, and remains inaccessible for the more needy, ^[50] and the Women's Co-operative Guild (of which more hereafter), is trying to lead the co-operative movement in the direction of lower prices. But this is not easy, because mere lowness of price is not sufficient to attract a poor clientele ; it is also imperative to stock goods of an inferior quality, because, unfortunately, these are the only goods which the casual and unskilled workers can afford to buy with their resources. And co-operative societies hold it as a point of honour to keep only goods of the first quality.

Sales for Cash

The second rule for sales is sale for cash. For this there are both economic and moral reasons : First, economic reasons, because every establishment which gives credit must raise its prices, or it risks failure. In fact, on the one hand, it is certain to lose some of its credit, and, on the other, being obliged by selling on credit to buy on credit from the wholesalers, it must buy under less advantageous conditions. It must have a larger capital, as it is unable to turn it over rapidly. A co-operative society ought not to put itself into such an inferior position. Secondly, moral reasons, because it is immoral to make the good customers, i.e., the scrupulous members, support the insolvency of those who do not pay their debts, under the guise of raised prices. Besides, the habit of buying on credit constitutes a veritable servitude for any workman's family which gets caught in its meshes. The word servitude is not exaggerated, for if a man is in debt to his grocer or his baker he cannot complain of the prices, the weights, or the quality of the goods supplied, nor can he go and deal elsewhere ; he must perforce accept everything for fear of his account being closed. And if he sees no chance of freeing himself from the debt he gives up hope, breaks up his home, and leaves the locality secretly.

Even for the well-to-do purchasers who always pay up in the end buying on the credit system is a detestable habit, for nothing encourages useless expenditure like the opportunity of being able to buy without money. Traders are well aware of this, and therefore are in favour of the credit system. True, they themselves are often the victims of the habits they have encouraged in their customers. We have often seen milliners, dressmakers, restaurant keepers, obliged to <r,Jose down their businesses, unable to meet their obligations, even with very rich clients on their books. ^[51] It is therefore not only in its own interest, but in that of the labouring population also, that the co-operative society should make a rule of sale on a ready cash basis, both as a means of education and of emancipating the poor from this wretched form of dependence.

Gladstone, the illustrious statesman, viewed this as the greatest virtue of the consumers' society. Nevertheless, it is necessary to say that this rule is not always observed and that a large number of societies, even in England, sell on credit, and this number is increasing. However, the total sums due only represent 1.5 per cent, of the gross sales, so there is no great cause for alarm. Undoubtedly the temptation is great. On the one hand, a feeling of humanity makes it difficult for the society to refuse bread to its necessitous member, and, on the other hand, there is always the hope of fighting the traders by attracting their clients through the same advantages. But it is a bad method of vanquishing an adversary to imitate or borrow his bad qualities ; such tactics may be commercial, they are certainly not co-operative. The worst evil is when a co-operative society uses the sale on credit as a means of enticing away the members of a society which sells only for cash. This is self-evident.

If the working population of a locality is really reduced to living from day to day, and has not the ready money to make its purchases, if it is obliged to wait for its fortnight's wage to be able to pay for its food, it would be better to form near the distributive society a loan society, either philanthropic, or preferably a mutual aid society, which could make advances to the necessitous workman. These loans could be made by taking the member's share pass-book as a guarantee, or by accepting the security of one or two of his friends, or even by making the loan a debt of honour, where the member is worthy of confidence. Some societies have tried these systems.

When a society starts on the perilous path of selling on credit it is absolutely essential to impose certain rules. It may limit the credit to a certain sum, generally to the amount of the shares held by the member, which will serve as a guarantee. Or it may only give credit for goods of a durable nature, such as furniture. In this case, selling on credit, or at least payment by installments, may be justifiable, the ultimate expenditure being greater. We know that one large business house in France has made a speciality of selling furniture on the instalment system, and the abuses of the system are not as great as we are told. ^[52] As regards bread, rather than sell it on credit it would be better to give it gratuitously, on the member's fulfilling certain conditions as specified in the rules when work is interrupted and when unforeseen misfortunes occur, &c. This is what the Belgian societies do; they give quantities of bread, proportionate in their value to the purchases previously made by the member.

We see that in Belgium the society not only refuses credit to its members, but that, on the contrary, it is the members themselves who give credit, by buying counters in advance, whereby they can obtain bread for a week or a fortnight. An excellent way of compelling the workmen to be provident !

Selling to the Public

The third question which arises a propos of sale is that of deciding whether a society should sell to its members only, or to the general public. There is no doubt that selling to the public is outside the sphere of co-operation. One might even say that it is outside its very definition, because when a society sells to the public it can no longer say that its object is " to provide for the needs of its members." Thus, German law, considering that sale to non-members is incompatible with the essential character of co-operation, has prohibited it under severe penalties. (Laws of ist May, 1889, and 1 2th August, 1896.) This regulation must be posted up in the societies' shops.

The Rochdale Pioneers sold to the public, but in order to avoid the reproach, which they themselves levelled at the private trader, namely, that of exploiting the public by making profit out of them, they adopted the method of giving the non-members who dealt with their society a bonus or divi- dend at half the rate of that returned to members, placing the surplus in the reserve fund. ^[53] Perhaps it may be said : Why do you not give the public the full amount of the dividend on their purchases, or at least a sum equal to that of the members, thereby abolishing all exploitation? But if this were done, the public enjoying the same advantages as the members without having their responsibilities (shares, administration, &c.) would have no inducement to join the society, and thus the aim of co-operation, which is to attract as many members as possible, would be manifestly diverted.

This ingenious Rochdale rule of sale to the non-member with limited participation in the dividends has been adopted by the majority of English consumers' societies. On the Continent there is more diversity. Sale to the public is generally practised in Russia, Spain, Switzerland, ^[54] Belgium, Holland, Italy, and in France, since in the last-named country the co-operative societies have been put on the same footing as the traders in the matter of the imposition of taxes. (See Chapter XIII.) ^[55]

The system of sale to the public is most generally preferred : ^[56] First, because it is believed that selling to the non-member is the most efficacious means of propaganda on behalf of co-operation ; secondly, because according as it increases the takings of the society so it enables the society to reduce its working expenses, to increase the rapidity of its turnover, and, finally, to enlarge its spheres of operation. If it is the ambition of co-operation to take the place of ordinary traders it will have to enter the lists by carrying war into the enemy's camp.

But it must be admitted that those co-operators who are hostile to the system of sale to the public are not without excellent arguments. In the first place they hold it as a point of honour not to be mistaken for traders, and for that reason wish to avoid doing as the latter do. And they believe that the habit of selling to the public would have the result of developing the mercantile spirit in co-operators, and the love of money, to which they are already too much inclined. Many co-operators even fear that selling to the public kills the co-operative spirit completely and transforms the co-operators into traders. These apprehensions would, doubtless, be justified if co-operators were in the habit of benefiting themselves by the profits accruing through sales to non-members. This reproach cannot be laid to their charge if they are faithful to the Rochdale rule, and give back to non-members a part of the dividends due to them and place the surplus in the society's reserve fund for the development of the society. ^[57] We must not forget, however, that the reserve fund belongs to the members and must return to them in the event of the dissolution of the society, and that, consequently, everything that is put into the reserve fund is to their indirect benefit. Even such advantages as works of solidarity, benefit clubs, education, recreation, &c., profit the members in the long run. To do away with all appearance of exploitation of the public it would be better to apply the profits accruing to the society from sales to non-members or at least tfce part which is not returned to them towards some work of public utility outside the society. But then, there should be a mutual arrangement for this, because if each society were to support some different public institution, such scattered expenditure would not have any appreciable results.

To sum up, selling to the public should be allowed only as a means of attracting members and making the society known to the public, and not as a permanent practice. Every purchaser should be, if not actually a member, at least a candidate for membership. In every place where this principle is understood and applied the sale to non-members is a negligible quantity 4 per cent, to 5 per cent, of the total sales in England, 7 per cent, to 8 per cent, in France. ^[58] In fact, these purchasers very soon pass from the category of non-members to that of members. This is even compulsory, for, instead of paying a part of the dividend to non-members (with which they would probably be content and not trouble about becoming members), this part of their bonus is retained in the society and registered to their credit, so that they automatically become members.

Unfortunately, there are societies which, so far from wishing to convert the non-member purchaser into a member, ask nothing better than to leave him outside the participation of dividends, so that the latter may become larger. Such is the case in a certain number of societies in France, ^[59] and still more so in Spain. At Bordeaux, the co-operative societies reckon that nearly one-third of their sales are to the general public. At Barcelona, in Spain, there are societies where one sees workmen-members receiving from 12 to 14 a year in dividends arising from the sales made to their non-member comrades, whom they induce to come to their shop as customers. It is somewhat the same system as that of workmen who sub-let a room or a bed to comrades poorer than themselves, and make a profit at their expense.

It may also be said that the conversion of a non-member into a member is hindered, not by the spirit of avarice on the part of the society, but by the indifference of the purchaser. In order to combat this grievous inertia of the public, a good number of French societies have created a category intermediate between non-members and members, that of "adherents." These are reckoned as members in all the statistics, although they are not legally so, not having paid for or even subscribed for shares. There is only a minimum entrance fee demanded of them, generally one of is. 6d. They cannot participate in the management of the society, and have no place at the meetings ; nevertheless, they generally receive the same percentage of bonus as the members. This is a method of attracting those workmen to the society who are not enthusiastic, or who have not means enough to subscribe for a share^[60] .

CHAPTER VI. The Division of Profits.

SINCE in accordance with the rules laid down in the preceding chapter, the co-operative society selling at current prices ought to make profits, it remains to be seen what is the best way of using these profits. This is one of the fundamental questions of co-operation. We have already said (see page 15) that the master stroke of genius of the Rochdale Pioneers was the discovery of exactly that method of using profits which has been the chief cause of the success of consumers* co-operation, namely, the division of profits among all the members in proportion to the amount of their individual purchases. ^[61]

We must recognise that it is the application of this rule which has ensured the successful development of consumers' societies, since it gives to each member a reward proportionate to his co-operative zeal, to his loyalty to his shop. Besides, it is founded on one of the most certain of economic laws, the law that the success of a business enter- prise depends less on its capital than on its customers. It is therefore just that the profits should belong to those who by their acts ensure the prosperity of the society.

But it must be admitted that the Rochdale co-operators, although disciples of Owen, showed themselves to be thorough individualists and made an appeal to personal interests the great motive force of their movement. Still, this rule is none the less a new and wholly revolutionary principle in our economic organisation, because it is no small thing, either in fact or in theory, to lay down a proposition that capital has never any right to profits. ^[62] It is nothing less than the destruction of capital, or at least its reduction to the position of a mere factor in production ; it amounts, in fact, to a decision that all of the profit which capital has regarded as its legitimate share should be restored to those from whom it is taken, and that share capital should be reduced to the position of debenture stock, with a rate of interest fixed at the minimum at which its services can be hired; that is to say, that it shall be treated exactly as capital itself has treated labour.

It goes even further than this; it is not merely taking profit from one person and giving it to others. The transfer of profits from the capitalist to the consumer is actually the abolition of profits, because to say that profits shall be returned to those from whom they were taken is obviously abolishing them. This is clearly expressed by the French term which is used to designate these so-called profits. They are never called by that name, but are called bonuses, repayments, or, better still, overcharges (trop perpus). In England they used to be called dividends, but are to-day called surpluses.^[63]

It is a way of saying to the consuming member : "We have charged a little too much, that is to say, more than the fair price, for various reasons, either to help you to save, or to give you a pleasant surprise, but the surplus we have taken we now return to you; here it is ! "

The elimination of profits means the establishment of a state of society where everything is sold at cost price, that is to say, at the price which exactly represents the sum of wealth and labour which it has absorbed; that would be nothing less than to realise the dream of all the socialists since Owen, the initiator of co-operation. It may also be said, without paradox, that it would be the realisation of the ideal of all the economists of the liberal school, for, did not these aim at a perfect state of free competition which could have no other result than to reduce the rate of profits to zero? In fact, all competition tends to bring the selling price closer to the cost price and consequently to reduce profits. The manufacturers know their business ! This law cannot act in the present economic conditions, because a thousand obstacles under the form of legal or actual monopolies obstruct it, but if under an imaginary regime of absolutely free competition all these obstacles were removed, the sale price and the cost price would be identical. So that, paradoxical as such an assertion appears, it may be said that if co-operation were universal the end which is vainly imagined under free competition would be attained. ^[64]

In order to calculate the amount returned to each member, it is necessary, first of all, to know exactly the amount of his purchases. For this purpose, either a special account is opened for each member, or all his purchases are entered in a pass book, which he has to bring each time he goes to the shop and to return at the time when the accounts are closed, or else each purchaser is given a docket on which the total price has been printed. We need not discuss the technical advantages of these different methods.

Once the total purchases are known the bonus remains to be calculated. Generally, the proportion between the gross total of sales and the net profits realised is taken, and this proportion is paid on the purchases of each member. Thus, if a society sold a million pounds' worth of goods and made ;i 50,000 net profit, or 15 per cent., the member who has bought 100 worth of goods has a right to 15 bonus. But the profits vary considerably according to the different articles sold. There are, for example, some goods, such as sugar, upon which little or no profit is made; others, such as meat, upon which there is often a loss ; and others, such as preserves, upon which the profit is high. As a result, the member who only bought the goods which were sold without profit or at a loss would be very much benefited by such a division of dividend.

To avoid this difficulty some societies make a rule of fixing the sale price of each article at, for example, 20 per cent, above the cost price in order to make the same profit on each article. In these circumstances the prices, being fixed automatically, are sometimes much above and sometimes much below the current local prices, and as a rule unscrupulous members yield to the temptation of buying from the co-operative store only those articles which are sold below current prices, leaving on its hands those which are sold above market rates, because they can buy these cheaper at the ordinary shop.

Is there any need for thus seeking to equalise the advantages which members derive from the division of the bonus? We think not. The apparent injustice is, on the contrary, a striking application of the law of solidarity which ought to govern the societies. In fact, it is generally on articles of luxury that the profits are highest, whilst they are lowest on articles of prime necessity. Thus the poor members benefit from the purchases of the rich, and this is as it should be.

In what form are the bonuses distributed amongst the members? In money, according to the Rochdale rule, which is generally followed. The Belgian societies have put into practice another system, which is that of paying the bonus in the form of dockets which may be exchanged for goods at the co-operative shop. The advantage of this system is that the member cannot go outside the society to its rivals or to the public-house to spend the money made by the society ; by this means the turnover of the society is increased each year.

Nevertheless this system is not to be recommended, ^[65] neither from the economic point of view, because it forces the member to increase his consumption, since he cannot use his bonus except by increasing his expenses, nor from the moral point of view, because it re-introduces for the benefit of the co-operative societies those very acts, such as the prac- tice of shopkeepers who give their clients " discount stamps," which are convertible into goods in their own shops, which have been so strongly blamed in private businesses. It compels the workman to spend all his wages in the social shop, and does not give him the satisfaction of being able to spend a single coin freely. Money implies the liberty of spending ; it can no doubt be misused, but like all liberty its use can be learned only by practice and not by a kind of tutelage.

The half-yearly dividend makes a very appreciable increase of revenue for a working-class family, and is greatly welcomed by the house-keeper. I know very well that those who disparage co-operation, and who mock at its ambitions, say, " What does it give? Taking what it can give, even where co-operation has had its greatest success in England the 13 millions of bonuses (with deduction made for interest, as it should be) divided among three million co-operators, is equal to ^4. 75. 6d. per family. That will not change the condition of the working classes. A rise of pay gained by a good trade union organisation or by collective bargaining could give as much. "

But this ^"4. 75. 6d. is only an average. It is not surprising that the average should be small if one considers :

1. That among the consumers' societies there are many which do not set themselves out to increase their members' incomes, but simply aim at selling at a low price, or have one of the various other aims which we shall consider later ;
2. That among the three million co-operators there are many who are only co-operators in name, and, since they never go to the shop, obtain no bonus. It is the nature and honour of free social institutions that they can be useful only to those who wish and know how to use them, and they cannot be asked to give their services to those who do not want them. But, if instead of taking the general average, we find how much increase in income certain members in certain societies can gain, we shall find results which are far from negligible.

Thus, according to an enquiry made a few years ago in Britain, we find in the Perth Society one member receiving ^264 in 26 years, which is equal to 10 a year, another in the same society receiving 208, also in 26 years, which is equal to 8 a year. In the Manchester and Salford Society a member received ^360 in 18 years, which is 20 a year. Probably this member was a highly-paid clerk, not an artizan, but that does not affect the question. ^[66]

The figures for France are not known, as the societies do not state their bonuses, but it must be admitted that in France for reasons which we shall give later the bonuses distributed are very much lower ; they hardly ever amount to ^4, and are often less. Still they are benefits to small households, as is proved by the discontent expressed by the members if in any year there should be no bonus. ^[67]

The amount of extra money divided among the members depends upon somewhat complex conditons :

1. It obviously depends upon the good management of the society. It is very evident that if the society is badly managed it will suffer the fate of all badly-managed businesses, it will not make any profits, and consequently will have nothing to distribute. When a society pays no dividend or a small dividend it may be on principle, as we shall see later; but it may be, and more often is, simply owing to incapacity, bad management, bad accountancy, dishonest employees, undue increase of running expenses, and lack of experience in buying, supplemented by the absence of a wholesale society, &c. (See the chapter on the causes of success and failure of societies.)
2. The rate of dividend also depends upon the loyalty of the member in using his co-operative shop. The loyalty of co-operators, above all that of their wives, who, in fact, have entire charge of the purchases of the household, varies greatly. Even in the most active societies there is a large number of members who only deal at rare intervals, either because of their distance from the shop, or from apathy, or, from the commonest of all motives, because their wives prefer to buy things from the " grocer round the corner." ^[68] There are societies which seek to make loyalty compulsory, by excluding any member who has not purchased during the year, or the half year, goods to a certain minimuir value. ^[69] But this rule, although it is statutory, is very seldom applied, because it would have the effect of excluding too many members in each year. The loyalty of members is a matter of education, not of coercion.
3. Further, success is dependent in part upon the capacity of the shop to supply all the needs of its members. If it only supplies bread or groceries it is obvious that the total consumption of the member however zealous he may be, though he buys up to the maximum of his possible con- sumption and therefore his total bonus, will be very limited. If, on the other hand, the co-operative shop sells all possible articles, it is clear that the member, having no temptation to go elsewhere, can spend in it nearly his whole income, and, in consequence of this, gain the benefit of extra income from all the branches of his family budget. It is partly for this reason that in Britain the average of purchases per member is far higher than that of any other country, while we know that in France nearly one-half of the societies only sell bread while the other half only sell groceries.
4. The absence of competition is another factor. If there is no shop other than the co-operative society in the locality as is sometimes the case where co-operative societies are attached to large w T orks or mines it is very clear that the worker will buy there everything he needs. Thus, in the Society of Anzin (a great French colliery) the average of members' purchases is more than double the general average, being about ^32, bringing back 6 in bonuses, or the equivalent of a month's pay.
5. It also depends partly on the prices at which goods are sold, for it is obvious that, other things being equal, the rate of the bonus to be distributed will depend upon sale prices. The question of the price at which goods should be sold has been raised in all the Co-operative Congresses.

The lowest price, that is to say, the cost price, is charged at the two extremities of the scale : First, in those societies whose members, coming from the very poorest classes, have first to think of eating before they can think of saving or bonuses, and, secondly, in the societies of professional men who have to be economical, but who do not bother about small bonuses.

High prices, that is to say, prices above prices current in outside establishments, are favoured in districts which are strongly co-operative, and which can equally well be socialist or bourgeois. The difference between the two types of society lies in the object of employment of the profit obtained by increasing prices. The object of the bourgeois societies is to give each member the maximum individual return, and they pride themselves in distributing 20 per cent., or, even like some British societies, 25 per cent, in bonuses. In the socialist societies, such as the Belgian co-operative societies, the object is to provide money for works of social solidarity, and even to contribute financial support to their political party without disdaining, as one may well believe, individual sharing. Still, there is to-day a tendency to re-act against high prices, and to be satisfied with moderate dividends. High prices make co-operation inaccessible to the poorest classes, and often have the effect of creating unfortunate rivalries between co-operative societies in the same town, since each one tries to attract members to itself through their appetites for a larger dividend, and finally pervert the co-operative spirit by bringing in the spirit of gain, and thus work altogether against co-operative education.

In England, the question of what is understood by " a good dividend," and by what standard it should be measured, is often debated. It must be answered that a good dividend is one which is obtained solely by good management, and on the contrary, that a dividend, however high it may be, is bad if it is only obtained by one of the four following means raising the prices above current prices, lowering wages below the trades union level, elimination of contributions to works of general utility, or the abolition or great reduction of the part which ought to be set aside for reserves and depreciations. ^[70]

What should the member do with this addition to his income? It is possible that he spends it, and in this case he draws from it no advantage other than a gratuitous increase in his consumption one can name societies in Paris where the bonus, as soon as received, has been used for a little " spree,*' but if it be a fairly round sum some bank notes, or at least a few pieces of gold and if the co-operative spirit is sufficiently developed, it is likely that this sum will not be spent in the public-house, but will be used for some extraordinary expense, such as the purchase of furniture ^[71] this is the commonest form among English co-operators, who are proud of their homes the payment of some old debt, the payment of the doctor's bill in case of sickness, the marriage of children, &c. " Extraordinary expenses " come into every life, however simple, just as into public finance, and in order to meet these a budget of extraordinary receipts should be kept, as well as one for ordinary expenses. Since the workman generally does not have any extraordinary receipts, his only resource is to run into debt.

Co-operation brings him this extraordinary income in the form of the bonus.

If he has the good fortune not to have to meet any extraordinary expenses he can add this extra money to his savings; ^[72] he finds it a ready means of saving, and this, therefore, is an important object of co-operation, and one which economists praise above all ; and for a long time in France, as in England, they have recommended that no other aim should be sought.

It should be remarked that this saving has the wonderful property that it has not been made at the cost of privation. It is the only means of saving of which this can be said. Economists consider saving under the word abstinence, and, in fact, it seems a contradiction in terms to say one can save without depriving oneself of anything. Such is, however, the squaring of the circle which co-operation has achieved, in the neatest possible manner, by that solution which is called " saving by spending." It should be noted that this saving is not only easy, but that it becomes compulsory and even automatic each time the bonus, instead of being paid in cash to the member, is retained and credited to his account until a certain sum is reached. That is the rule followed in nearly every co-operative society where the members have paid only one-tenth of the value of their shares on entering, or where they have merely paid an entrance fee. Their share of the bonus is retained from half- year to half-year until it has reached a sum equal to the value of the share subscribed for, or to be subscribed for. ^[73]

Once a member has got into the habit of seeing his bonus kept in the common fund he very easily forms the habit of leaving it there of his own free will, even after his shares are fully paid up and the retention of the bonus is no longer compulsory. In this way the consumers* society acts as a savings bank.

One of the methods of saving which is most appreciated by co-operators is that of acquiring a house by annual payment. We shall discuss this later on.

There is another form of saving which is particularly needed by workers, that is insurance against sickness, old age, and unemployment; I do not say insurance against accidents, because in most countries the employer is liable for compensation in such cases. The worker who wishes to guard against these risks has to join either a mutual aid society or a trade union, if not both at the same time, and to pay to each subscriptions which form a fairly heavy tax on the income of the worker. Well ! the bonus gained from the consumers' society will provide money enough to meet such misfortunes, for, by a happy compensation, while other forms of association cost money, this one brings it in. M. Cheysson has calculated that the premium to be paid for insurance against the five risks to which working-class families are exposed sickness, incapacity, old age, unemployment, premature death did not exceed £2 in all, but this sum of £2 can easily be obtained by affiliation to a consumers' society, even in France; it only represents a bonus of 5 per cent, on a total purchase of £40. M. Cheysson set himself to advocate this means of employing bonuses, as he saw in it the saving of mutual benefit societies. We do not object to this, provided that it is left to the co-operator himself to use his bonus in this way ; but if it is the co-operative society which, owing to lack of confidence in the spirit of foresight among its members, wishes to pay the bonuses to mutual aid societies directly, then we should have serious objections to the system, because in that case co-operative societies would only be cows to be milked by mutual aid societies ! It is the duty of co-operation to keep its resources for its own ends and not to serve as the instrument of other organisations.

It is also curious to note that on this point economists of the " saving " school meet socialists, who also condemn the division of bonuses among individuals, in theory at least, and wish to consecrate them to social ends. (See the last chapter, " Co-operation and Socialism.")

When a society divides the whole of its profits, except that portion which is by law devoted to a reserve, among its members, one may think that it pays too much attention to the interests of the individual and is not unlike a purely capitalist society. One expects that a co-operative society should give some attention to a loftier and more social purpose. The Rochdale Pioneers understood this well, as is testified by their excellent act in devoting by their rules 2 (1\2) per cent, of their bonus to education. If all the English societies had conformed to this rule it would have formed a fund for popular instruction which would be far from negligible, because, on a total of £13,200,000 of profits, this tax would have realised more than £320,000 a year. ^[74]

In reality, no English society, as far as we know, has had the courage to put into force the Pioneer's rate, not even the Society called the Rochdale Pioneers ! ^[75][76] The total sum devoted to education by British co-operators does not reach ;i 20,000 or less than j per cent. In all their Congresses, and in their papers, British co-operators complain of the small proportion of their funds which societies devote to education, which proportion, instead of growing, is diminishing.^[77] One of them has said that the dividend divided among the members ought not to exceed 6 or 7 per cent. , and that all the rest (that is, about an equal part, as the average rate of dividend is 13*5 per cent.) ought to go to the education fund. " Education," said Holyoake, " is the basis of all our progress. " Still, English societies do a great deal compared with those of other countries, and notably of France, where the education grant was zero in almost all the societies. ^[78]

Co-operative education begins among the children, but it also concerns itself with adults. It has for its object special co-operative education organisation, history, services rendered and also general instruction ; to make good co-operators one must first make men. ^[79] Prize competitions are organised among the children, and the best compositions are published in the co-operative papers. Educational committees are formed by the societies, or by the Co-operative Union, and scholarships are given enabling members to attend "summer meetings" at Oxford, Cambridge, or Edinburgh^[80] ($ to 6 for a stay of a fortnight), including a series of ten or twelve lectures on a given subject, or even scholarships tenable at one of the colleges of the University. But these scholarships do not give great satisfaction, since they have for their result the creation of " bourgeois " out of a few young workmen ; it would be preferable to attempt to found a college specially for the sons of co-operators, ^[81] There are also numerous conferences, and, it goes without saying, libraries, which are the more useful in that books are very expensive in England.

It is true that recreation the border line between which and education is not easily defined absorbs rather too large a part it is said more than a third of the education fund, notably in the form of teas, pic-nics, concerts, excursions, &c. But these very expenses themselves contribute to develop a good feeling of brotherhood among the members and help to make co-operative societies attractive to the women and the children, who will be the co-operators of to-morrow.

As to the expenditure on solidarity the English do not fear to say charity it appears as a not much less considerable amount in the budget of British co-operation (^96,000), although other institutions, such as friendly societies or trade unions, are more specially charged with this expenditure. One should mention the fine convalescent home established by the English Wholesale Society on its estate at Roden. ^[82][83]

In France the co-operative federation has established an education committee, " groups of pupils," and circles, as far as possible one for each society, ^[84] which have the charge of keeping the " sacred fire " burning. A few societies have established libraries, and sometimes halls, theatres, ^[85] conference rooms, consultation rooms, dispensaries and gymna- siums, and such societies are called Maisons du Peuple (People's Palaces). At the time of the great movement for the Popular Universities a few societies made them grants, but the results which some people expected from this alliance of the two movements have not been realised. In Spain, curious to relate, consumers' societies, although little developed, have done much to establish schools for children which are remarkably well kept up and thus to supply the deficiency of secular education in that country much as was done in England at the time of the Pioneers.

In the Belgian societies education has an important place ; it is not that a large part of the bonuses is devoted to it, but it is a general influence exercised over the lives of the members by means of meetings, newspapers, conferences, excursions for the members' children with entertainment in foreign socialist centres, &c. and also by the anti-drink propaganda, which is one of the most interesting features of Belgian co-operation. Brandy or distilled liquors are not sold in the Belgian co-operative societies. Unfortunately one cannot say the same for those of France; ^[86] they have not the same courage. They give as an excuse that if they stopped the sale of alcohol drinking would be in no way reduced, but their members would go to buy dearer and worse drink at public-houses, and this would be worse both for their health and their purses ; possibly they would even be lost to the society. Possibly, but if so, so much the worse for them, for to subordinate its moral and educative action to its commercial instinct is to degrade and kill the co-operative movement.

Among the means of education for co-operators, newspapers specially published by co-operative societies must be placed in the first rank. One may even say that the development of the co-operative movement in a country depends in part on the number of subscribers to its publications. In England are found the Co-operative News, a weekly paper with a circulation of 125,000, and the smaller monthly paper, The Wheatsheaf, with one of 593,000. Switzerland does better still, since this little country has 182,000 subscribers to its principal co-operative paper. There, it should be mentioned, all co-operators are automatically made subscribers by their respective societies, and the price of their subscription is deducted from their bonuses.

In France we are far behind these figures. The Action Cooperative, the organ of the Federation Nationale, does not yet sell 20,000 copies, and barely pays its expenses. ^[87]

Co-operative education, to have any effect, ought to be made available to women, not only for the general reason that it is they who educate the men, but also for the special reason that women have naturally little sympathy with co-operation, although co-operation cannot live without them. There are hardly ever any bachelors among the members of co-operative societies, as they nearly all live in boarding houses. It is therefore necessary to convert the women ; it is they who run the household, who make the purchases, who carry the market baskets. As has been stated with much insight, the woman with her basket is as much one of the great types of working humanity as the ploughman with his plough, or the smith with his hammer. But she generally prefers the shop round the corner to the co-operative shop, not only because it is nearer a matter of no small importance to the tired housekeeper or one who has little free time between her work but also because she finds there more attention and sometimes small personal discounts which the co-operative system does not permit.

In 1883, the English formed a Co-operative League for Women now the Women's Co-operative Guild which has 44,000 members, holds annual congresses, and has a special page in the Co-operative News. The Guild devotes itself to active propaganda, above all, to the fight against mercantilist and individualist tendencies inside the movement, and strives to make it easier for the poor to become co-operators. It also claims that women should have a larger part in the management of societies. ^[88] In Holland and in Hungary similar leagues have been formed, and not without success, but an attempt made in France a few years ago, under the auspices of the then Co-operative Union, was a failure.

References

1. It is almost impossible to give a precise definition of a co-operative society, on account of the great variety of objects aimed at. In any case, in our opinion, it is impossible to include a consumers' and a producers' society under the same definition, because, in spite of the apparent identity of their aims, these aims are really antagonistic, as we shall see later. However, in certain Italian books, by Wollenborg, Pantaleoni, Valenti, Mariani, &c., we find subtle and ingenious analyses which attempt to embrace all forms of co-operation under one synthetic formula.
2. In the United States there are hundreds of towns where consumers' co-operative association has for its object the creation and exploitation of a telephone system. In New York, Brussels, Berlin, and Milan the owners of motor cars have formed co-operative societies to supply themselves with petrol, tyres, and other accessories, in purchasing which the consumer has been scandalously exploited.
3. When it is a question of societies for the insurance of goods such as fire or live stock insurance or even credit societies, i.e., societies for the borrowing of capital, the words " mutual aid " and "co-operative" society are used almost indifferently.
4. The co-operative review of Hamburg (Konsumgenossenschafts Rundschau)^ in its number of i8th January, 1908, commented on the official statistics of failures in the German Empire for 1905-1906. In capitalist enterprises with share capital there were 24 failures, out of 4,952 companies, a proportion of 4*85 per 1,000, and there were 27 failures out of 25,714 co-operative societies, which is a proportion of 1-43 per 1,000 only. True, the majority of these co-operative failures were credit, and not consumers*, societies, which would make the average more favourable ; but, on the other hand, it should be noted that the statistical returns of the capitalist concerns refer to large businesses only, and not to small traders, and that the latter are the ones whose failures are most frequent.
5. Professor Marshall, the eminent economist, said in his speech as President of the Co-operative Congress, at Ipswich, in 1889 : "What distinguishes co-operation from every other movement is that it is at once a strong and calm and wise business, and a strong and fervent and proselytising faith."
6. For the differences between the so-called " middle-class " co-ope- ration and that called " socialist," see the last chapter of this book.
7. M. Pantaleoni puts this question : What new element can co-operation bring among those which influence supply and demand? We answer : None, we admit ; but it would enable the law of supply and demand to work under conditions which open competition has never been able to realise (see page 57). We answered M. Pantaleoni's question at length in an article in the Economic Journal for December, 1898.
8. This is the date on which the first store a mean little shop was apened in Toad Lane, but the date of the registration of the society is 24th October, 1844. The house where the first shop was opened is still in existence, and it is hardly credible that it does not belong to the society, which, although having become prosperous, does not own the house where it was born. At the Co-operative Congress, icld in 1914, a vote of credit (^2,000) was passed for this purpose, nit the war has so far put off this act of reparation.
9. The existence of a consumers' co-operative society has been discovered in a village in Oxfordshire, at Mongewell, where it had been started on the initiative of the Bishop of Durham, in 1794. Mr. Maxwell, in his History of Co-operation in Scotland, claims priority for a little society, which was existing in 1769 in the village of Fenwick, in Ayrshire.
10. There were several congresses of co-operative societies during this period (1830-1833), including one on October 4th, 1831, at Birmingham, at which the establishment of a wholesale society was decided upon, and the duty of education was impressed on co-operative societies. Another was held in London in the following year.
11. The centenary of Charles Howarth's birth (he was born in 1814, and died in 1868) was celebrated in England a few years ago. One of his biographers calls him the " Archimedes of Co-operation." He was a working weaver, quite uneducated, but familiar with the doctrines of Owen.
12. " The History of the Rochdale Pioneers" was written and published in 1858 by George Jacob Holyoake. This marvellous book, re-edited and translated into every language! has contributed not a little to the development of co-operation in many parts of the world.
13. At least, this is as it was reproduced in the Pioneers' Almanack for 1854. It seems, however, according to Miss B. Potter (Mrs. Sydney Webb) that this programme had already been formulated by co-operators at Brighton in 1827. In any case, if the Pioneers have not the merit of being the first to formulate it, they have had the greater honour of realising it in the greatest possible measure.
14. Undoubtedly, wage-earning and profit-making are, as it were, the two sides of the same coin. Both imply the subordination of labour to capital; but whereas producers' association seemed to be the only remedy whereby to abolish the wage system, it is consumers' co-operation which leads more directly to abolition of profit (see Chapter XV.).
15. This institution, which is now strikingly successful, only succeeded in keeping alive after repeated sets-back. Wholesale agencies had already been opened, following on the first Congress at Birmingham, in 1831, and later, in 1850, on the initiative of the Christian Socialists. But the ground had not been sufficiently prepared, and they collapsed. Besides, up till the Act of 1862, such federations were legally non-existent.
16. See, in the last chapter, the programme and the characteristics of socialist co-operation.
17. TRANSLATOR'S NOTE. In Italy to-day co-operation is almost wholly political. In some of the provinces of the old Austria-Hungarian Empire also agricultural co-operation was political and sectarian, but is now tending to become more united.
18. " Considering that the condition of wage-earners is but a transitory state between serfdom and a nameless condition, the Chambres Syndicates ought to put everything in train for the establishment of general societies for distribution, credit, and production." This was a resolution passed at Lyons.
19. Several works have been written on the history of co-operation at Lyons one by M. Flotard, in the Year Book of Association, published in 1867, and one more recently by M. Godard, entitled, " The Origin of Co-operation at Lyons " in 1904. A co-operative shop, with some curious features, was started in 1835, before the Rochdale Pioneers 1 Society was formed, under the name of " Commerce Veridique et Social" and was threatened with prosecution by the authorities.
20. In Paris, in 1867, there were only five or six distributive socie- ties, compared with 50 productive and more than 100 credit societies. All of these were affiliated to one of three credit organisations (People's Banks) : Le Credit au Travail, La Caisse des Associations Cooperatives, and La Caisse d'Escomfte des Associations -po-pulaires.
21. Benoit Malon was a socialist of the French School, that is, he was not very sympathetic towards Marxianism, but rather sympa- thised with co-operative ideals. He, nevertheless, denounced in vehement terms, " the quacks of orthodoxy in the economic school, who had driven the workman out into the blind alleys of co-operation." (Manual of Social Economy.)
22. Auguste Fabre is a disciple of Fourier, and worked for some time at the Familistere at Guise. The writer was a native, if not of the same town, at least of a small neighbouring town, and afterwards professor at Montpellier, and was the first recruit in the movement known by the rather ironical name of the School of Nimes.
23. For text of the declaration see the last chapter : " Co-operation and Socialism."
24. On the side of the old Co-operative Union, the irreconcilables were the semi-patron al co-operative societies. On the side of the socialist group the dissentients were the large societies of the North not allied with the " Guesdist " party, that is to say, the Marxian societies. (Jules Guesde was the representative of Marxian socialism in France.)
25. The oldest co-operative distributive society on the Rochdale system appears to have been formed in Neustadt, near Magdeburg, in 1864. T3ut it is only in the last years t/f the igth century German co-operation began to expand,
26. In Palestine, several colonies of Zionist Jews, finding themselves cut off from all supplies by the war, organised themselves into co-operative societies, in order to be able to live and await relief,
27. These figures are taken from co-operative journals, from the " International Co-operative Bulletin" and from reports presented by delegates to the Congress. The mark of interrogation in some cases indicate those whose details are uncertain and sometimes contradictory. We have classified the countries in the order of the figures in the second column, which gives the number of members. The number of societies indicated in the first column is not really a sign of superiority rather the contrary as it shows that the societies are very small. However, it has a certain value, as it shows how co-operation has spread over the country. The third column shows the number of co-operators per 1,000 inhabitants (multiplied by four, because each co-operator stands for a family, sometimes a very large family; there is very rarely more than one member in the same family). This column is the best proof of the penetration of the co-operative spirit in the country, which from this point of view ought to be taken as the touchstone of co-operative progress in any co-operative classification. The high place the small countries Denmark, Switzerland, and Finland take in this classification is worthy of remark. The fourth column, giving the total sales, is more or less equivalent to the second, because it is natural that the amount of sales should be proportionate to the number of customers. However, the parallel is not absolute, because, as we must not forget, in many countries co-operative societies sell not only to their members, but ai^o to the general public.
28. The following are the latest figures for those countries which furnished them, generally for 1918. They show the wonderful progress made during the war. It must, however, be noted that the apparent increase in turnover is largely due to the greater or lesser depreciation in the value of money according to countries and the rise in prices.
29. This list does not comprise the following categories of co-operative societies which, properly speaking, are not consumers 1 associations, although they really come under the definition we gave, namely :
    1. Co-operative building societies, that is to say, societies for the supply of houses, to the number of more than 10,000, of which the large majority (7,000) are in the United States and Kngland, nearly 300 being in France. We shall speak of these later on.
    1. Co-operative agricultural and urban societies for the purchase of fertilisers and raw materials, which number at least 20,000. There are 6,000 of these societies in France.
    Nor does it include co-operative credit societies, both rural and urban, which number about 50,000 to 60,000 (18,000 in Germany and as many in Russia), although their object is to satisfy a very pressing need of their members, namely, the need of money. In 1901, according to statistics published in that year by the International Co-operative Alliance, there were 56,023 co-operative societies of all kinds spread over the whole world. According to the Russian economist, Tugan Baranowski, who died 1919, there were at that date 160,000 co-operative societies of all classes with 30,000,000 members.
30. Report of General Co-operative Survey Committee, Co-operative Union, Manchester, 1916.
31. The figures for 1918 are much higher, owing to the rise in prices (as we have said ^155,000,000 in all, equal to ,113,000 per society, or ^43 per member).
32. See below, chapter on Purchasing Federations
33. The only trustworthy figures are those of the societies affiliated to the Hamburg Federation (see page 27). These are the ones which appear in the comparative table above. But this Federation only included 1,200 societies out of more than 2,000 existing in Germany at that date (1914). The figures in the table, therefore, do not represent the real total. At the same time we must guard against believing, that they might be doubled, because the societies belonging to the Hamburg Federation are the most powerful in Germany.
34. As far as France is concerned, for a long time past the only statistics published have been those compiled by M. Daude'-Bancel, Secretary of the late Union Cooperative which appeared since 1892 in V Almanack, now the Year-book of French co-operation. The Labour Bureau (at first for the Ministry of Commerce, but now for the Ministry of Labour) used to prepare statistics from information obtained from official sources. Since 1907 it has published annual statistics which are fairly complete.
35. EDITOR'S NOTE. At the end of 1919 the number of societies was 1,304. This decrease in the number of societies in membership with the Co-operative Union is due chiefly to the amalgamation of neighbouring* societies.
36. This gradual diminution in the average number of members can partly be explained by the fact that according as statistical investigation spreads more small societies are discovered. These figures are those given in the Bulletin of the Ministry of Labour. The Year-book of French Co-operation of 1914 gives slightly higher figures : 3,261 societies, and 881,000 members. The average number of members in the third column calculated by simply dividing the total number of members by the number of societies is slightly lower than in reality, because a certain number of societies have not given the number of their members, and therefore the divisor should be reduced by so much; but the difference is insignificant.
37. More than a quarter of the French societies (more than 900) have less than 100 members ; there are even some which have only 7, barely the legal minimum !
38. The total amount of sales (for the 2,988 societies which furnished information) in 1913 was ji 2,600,000, which represents an average of ,4,000 per society, while in Great Britain the average was ,64,000, 16 times more ! Even in Switzerland the average is much higher, namely, ^15,000 sales per society. Recently a striking tendency towards amalgamation has been shown in Paris and the principal cities of France.
39. It is hardly possible for a co-operative bakery, no matter how enthusiastic its members may be, to sell more than one 4 Ib. loaf to each member per day, which hardly makes more than 12 per member per annum at pre-war values.
40. This society was formed during, the war by the amalgamation of a dozen Parisian societies.
41. For actual figures, see above, page 30.
42. TRANSLATOR'S NOTE. Co-operation in Ireland is developing mtich on the Danish model.
43. See the numerous articles published in the *' Russian Co-operator" The advance of the Russian Co-operative movement during the war was prodigious. The Moscow Society has 210,000 members, which far exceeds the membership of any other existing society in the world. It is due to this movement that Russia did not die of hunger. The Bolshevik government respected the co-operative movement up to the date that it nationalised it.
44. In Czecho- Slovakia the co-operative movement has made wonderful progress since the country recovered its independence. In it there are now 450 societies, with 150,000 members.
45. In 1916, the American Co-operative League was created in New York. This has as its programme the grouping of all co-operative societies, as is done by the " Unions n in other countries. Lately the Rochdale type of co-operation has developed considerably in the United States. To-day (1920) there are more than 2,000 societies. American co-operators seem to have abandoned the system of independent local co-operative societies in favour of big organisations which form branches. This system they term the " chain store system."
46. The word " sale " is not absolutely accurate in this connection, as it is a question of an association which sells to its own members, or, rather, of an association of people who sell to themselves. The word " division " or " distribution " would really be more correct. Thus the English call these associations distributive societies, and in France the employees are often called " repartiteurs " (distributors). We shall see further on that the law and the Treasury do not generally regard the consumers' society as being in the same category as a trader who buys to re-s a ,ll. However, the word " sale " is sanctioned by custom, and it is legally accurate, as the society as a whole is an entity distinct from its members.
47. TRANSLATOR'S NOTE. The Army and Navy Stores can no longer be regarded as co-operative in any way, since it pays a dividend of several hundred per cent, on its share capital.
48. Another strong objection raised against this system of selling at cost price is that it tends to the lowering of wages. This was the greatest argument put forward by socialists against co-operation, when, during the second half of the igth century, they hindered the co-operative movement. They laid down the law that any permanent lowering of price in articles for consumption must bring with it a proportionate lowering of wages. This is what was called the " brazen law." To-day this argument does not hold good, as this law is no longer believed in. And even if it were true, it would have the same unfortunate consequences in the matter of sales with dividend as in that of sales at cost price.
49. On the subject of Belgian societies, M. Varlez writes in a report on " Social Economy in Belgium " for the Paris Exhibition of 1900, as follows : " The fantastic system of paying 30 centimes for an article (bread) which everyone knows to be only worth 20, has become so-ingrained a habit that the working classes in certain towns do not wish to give it up. On various occasions it has been proposed to the members of co-operative societies to lower the price of bread. They declined positively a they find this mode of saving both easy and efficacious, "
50. An Englishman has said, " The truth is that co-operation only saves those who are already converted." This may be, but there is now no longer the necessity of making co-operation a mere work of salvation. It is rather a work of mutual aid. For social institutions, as well as for individuals, there is a law of division of labour, which must be respected
51. Large fancy goods warehouses make a rule of cash sales only, but small shops can only hold their customers by offering them the bribe of credit.
52. They have even rendered a national service by enabling young people to marry and set up a home without having, to wait until they have saved enough money to buy furniture.
53. This rule is not absolute everywhere. Some societies give the non-member buyers a dividend at quarter rate only. Others, on the contrary, allow them a three-quarter rate. There are even some (at least that of Darwen) which give to non-member purchasers the same dividend as that given to members an entirely unwarrantable generosity, as we have said above.
54. It should be said, however, that in Switzerland societies are gradually giving up selling to the public. In Italy, the heads of the co-operative movement are trying, on the contrary, to encourage it.
55. In France up to the Act of 1905 co-operative societies were treated differently in the matter of taxation, according as to whether they did or did not sell to the public, only the former societies having to pay for their trade license, the latter being exempt. Hut, as we shall see later on, they are all now treated similarly at least, those which have retail stores.
56. Both in France and in Switzerland this question of sale to the public has been the subject of endless discussions. In France the two opinions are equally balanced. The Co-operative Congress at Limoges in 1907 allowed sale to the general public, but more as a matter of toleration, and under the condition that the surplus arising from sales to the public should not be distributed among the mem- bers, but be employed for propaganda, for education, or for any other work of general interest.
57. This system, however, entails a somewhat complicated system of book-keeping, because two separate accounts have to be kept, one for members and one for non-members, and an account must be opened for each purchase, even though it be a solitary one.
58. We say 8 per cent, on the total turnover or sales, that comprises all the societies, even those who do not sell to non-members ; but if we only take into consideration those which do, then the proportion of sales to the public is much higher. According to the investigation made by the Ministry of Labour, the proportion of societies selling to the public is 38 per cent., and the proportion of sales to the public in these societies is 21 per cent.
59. This explains a fact which at first sight seems disconcerting. We see, for example, in the Vosges district, a society of seven members which did a retail trade of ^1,964 in 1913. Is it possible that each member's trade is ^"280, that is, about 20 times the average of French co-operators? Ceitainly not, but 95 per cent, of these sales are made to strangers. They may not even come to the shop, but buy second-hand from the members. Such are societies of workmen-traders.
60. This system (which establishes two classes of members, superior and inferior), cannot be recommended, because it is anti-democratic and anti-co-operative. There are even some societies where the " adherent " cannot become a member as the number of shares is limited, as, for example, that of the Civil Employees of the Seine.
61. The principle of sale at current price, and consequently of a profit to be gained, was promulgated before the time of the Pioneers at a co-operative congress held during Owen's lifetime, in 1833. But the profits thus to be realised by the society ought to be retained by it nd dedicated exclusively to the development of the society itself. The original idea was to give the profits back to the members. (See " Industrial Co-operation" by Miss Catherine. Webb.)
62. So much the more severe, because capital is deprived thereby of truly enormous profits. (See Chapter VIII.)
63. TRANSLATOR'S NOTE. The word dividend is still widely used by English co-operators.
64. See the chapter Cooperation ou Competition in our book Cooperation. M. Walras declares emphatically that, under a regime of open competition the margin of profit is zero. There is, however, this difference between socialists and economists, as far as the abolition of profits is concerned, that the former include interest in this abolition, whereas economists see in interest a necessary element in the cost of production, which should survive the abolition of profit. As for co-operators, they hesitate between these two theories, but the majority are generally in agieement with the economists. (See later, Chapter VIII.)
65. A German law of 1896 prohibits co-operative shops, as well as iconomats and traders, from issuing tickets or counters payable in goods.
66. A recent number of the Co-operative News cites the case of a member of the Newmains (Lanark) Society, who in 26 years received 944. We in France are a long way behind these figures.
67. M. Barriol, a statistician, has published some particularly illuminating calculations. They deal with the supplying of a family of co-operators with provisions before the war. This family belonged to a Parisian co-operative society ; their total expenditure was 96. At the prices marked in Potin's catalogue the total cost of the articles in this domestic budget would have reached jio8. Therefore, the saving effected by this family amounted to 12. If we add to this the 5 per cent, dividend distributed by this co-operative society, namely, ^4. i6s. (and, if so desired, the 3 per cent, collected for the social work of the society, i.e., 2. 173 7d.), we see that there has been a saving to the amount of ^19. 135. 70". realised by this co-operative household. The difference would be still greater if instead of making* the comparison with the prices of the large Parisian grocery store we took those of the grocers in the working-class quarters. Of course, it is evident that in this case we are dealing with a very well-paid workman's household, as is proved by the figure of 96 in purchases, which must mean an income of at least /2oo in pre-war values.
68. According to calculations made by Cernesson as regards all the Parisian societies (Revue des Deux-Mondes, i5th October, 1908), the average purchases per member amounted to 10. 143. 4d. We went through these calculations, taking the four most important societies from those belonging to the Federation and of socialist tendency, and, as we foresaw, we obtained a remarkably higher result 23. 7s. 2d. (in 1913). Nevertheless, this figure is still much less than it ought to be because it hardly represents a quarter of the wages of a workman'? family in Paris, and the societies in Paris offer the most varied assortment of goods. If the members really did their duty loyally as members, they could double or treble the amount of their purchases. In the "professional" co-operative societies of workers' societies formed of clerks, &c. the average purchase per member is considered able, because their incomes are larger, and also because they are mon regular in their purchases. The following table shows the average purchases per member ir various countries before the war :

    Country	£	s.	d.
    England	29	4	0
    Finland	25	4	0
    Denmark	24	0	0
    Switzerland	20	17	0
    Germany	15	7	o
    France	14	12	o

    As these figures are obtained by dividing the amount of sales b) the number of members (see Table, page 30) it follows that in the countries where the societies sell to the public the average purchases per member is increased by the sum sold to the public, as the twc sums cannot be distinguished. These averages, then, are not strictly comparable. Thus, Germany where sale to non-members is pro- hibited would find herself handicapped, if she had not the advantage that only her most important societies were chosen as examples, those in the Table, page 34.

69. To become a member of the Central Council of the new French Federation one must be able to guarantee having made the required minimum amount of purchases at one's own society, that is, if there is a statutory minimum. The Siberian co-operative societies have a different form of compulsion. Any member who does not reach the required minimum of purchases is liable to a fine of i. In fact, the average purchases per member has, as was natural, risen since 1914 to ^41 in Britain, and 20 in France, c., but if the depreciation of money is taken into account it may be said that the average purchases, measured in quantities rather than values, has fallen.
70. In Britain the average of dividends is 13*5 per cent., but according to general opinion this is too high. In Switzerland the average is only 7 per cent. In France it generally does not reach 5 per cent. There is, however, a society at St. Remy sur Avre, in Normandy, which distributes 17 per cent., but it is composed almost exclusively of farmers.
71. When visiting the enormous warehouses of the Co-operative Wholesale Society in Manchester we were surprised to see relatively elegant and expensive furniture on sale, such as wardrobes with mirrors, cabinet dressing-tables, baths with gas heaters, and even pianos. Being astonished that such furniture could be within the reach of the income of a working-man, we were told that these things were bought at the time of the distribution of dividends. Of course, they are often bought by principal employees and other well-paid co-operators.
72. This is what prudent co-operators in Britain do. Among those we mentioned (page 60) the one who received 264 left ,88 in the society, and ho who had received 360 left 60 in the society. The capital which is left in the society in the form of loans or share subscriptions is estimated to be about one-third of the annual profits (which are £13,000,000). The gross total of these accumulated savings is now nearly £60,000,000.
73. This method of enforced thrift is most successful in the Schulze Delitzsch co-operative credit societies and the English and American co-operative building societies, because the value of the shares is usually fixed rather high (20 to 40) precisely with this intention.
74. It is true that when the Pioneers established their budget for educational purposes, public education did not exist in England; it was only given in private establishments, principally religious. Nowadays, funds for education are less urgent, as it is provided by the State. But the idea of the Pioneers was not merely that of general education, but one of co-operative instruction also : they wished to mould new generations of co-operators. Now this necessity is more urgent than ever, in England and elsewhere.
75. Out of nearly £80,000 profits in 1912 they only set aside £8oo (i.e., i per 1,000) and £240 for various undertakings, and distributed all the balance among the members, which was a proportion of from 16 to 17 per cent, on their purchases. Leeds is one of the societies which contributes most largely to education (more than £2,000). Of course, it is the largest society of all; but perhaps it is because it spends so much on education that it has become so strong. (* See page 69.)
76. EDITOR'S NOTE. The Rochdale Pioneers' Society reduced their grant for educational purposes from 2^ per cent, to i per cent, in 1904. In 1914, out of 802 societies making grants for educational purposes, 77 made regular grants, based on profits, of 2^ per cent, or more. (See Reports of the General Co-operative Survey Committee.)
77. EDITOR'S NOTE. This is no longer the case. See Reports of the General Co-operative Survey Committee.
78. If this was true of the societies it is not true of the Federation Nationale Francaise, which has lately made a grant of Fr. 8,000 to create a Chair of Co-operation at the College de France.
79. " We must not reduce education merely to teaching the history and principles of co-operation. It would be a narrow and selfish point of view to say that the money spent on education must be employed solely for the development of co-operation and to make good co-operators It is necessary that our members become honourable and useful men and women, and then we shall have no need to seek special agents for our defence in public bodies." (Speech of Mr. Taylor, member of the Leeds Society's Educational Committee, Co-operative News, 2ist October, 1899.)
80. EDITOR'S NOTE. These scholarships are now tenable at the special Summer Schools organised by the Central Education Committee of the Co-operative Union.
81. TRANSLATOR'S NOTE. The Co-operative Congress, at Carlisle, in 1919, passed a strong resolution in favour of such a course, and instructed the Central Board of the Co-operative Union to raise a fund of .50,000 for the purpose of establishing a college for co-operators.
82. The expenditure on "solidarity," on the other hand, is a considerable item in the balance sheets of the big French societies. A good proportion of the profits is devoted to it. The Union des Co-ooperatives of Paris gives ,3,000 per annum to works of solidarity.
83. EDITOR'S NOTE. Several convalescent homes have now been established by British co-operators.
84. There are only about thirty at present.
85. Co-operative societies in France willingly subsidise the choral societies or the musicians whom they engage for their festivals. A magnificent collection of photographic views for lantern slides (more than 1,000 views of many countries) was made by M. Fabre, one of the founders of the School of Nimes, and was put by him at the service of lecturers.
86. The Congresses of the Union Co-operative notably that of Limoges in 1906 have on various occasions passed the resolution : " That co-operative societies and federations should do all in their power to suppress the sale of alcohol ; " That drinking places where alcohol is sold should be suppressed; " That, acting- on the resolution of M. de Itoyve on co-operative education (a resolution adopted by our Congress), the educational committees make it one of their first cares to explain to co-operators the reasons for the prohibition of alcohol. " Unfortunately the decisions of these Congresses have no effective sanction. In Hungary, it appears that brandy is one of the chief articles of sale in co-operative stores; and this is what helps them to fight against the competition of Jewish traders ! However, they only sell it by the litre and for ready money, which to some extent may be a deterrent to drunkards.
87. There is also a monthly paper, L* Emancipation, founded by our friend de Boyve in 1885, organ of the School of Ntmes, of which we are now the editor, but this is not solely co-operative.
88. At the Congress of the International Co-operative Alliance held at Delft, in 1897, the following resolution was passed with acclamation : "The Congress, considering that women have as much interest as men in co-operation, that there are co-operative associations which exclude women as members, and that in others they are admitted as members, but may not be nominated as committee members ; "Resolve that any co-operative associations formed in future must be just to women, and that all those which refuse them membership or election as committee members do away with this interdiction the next time they are altering their rules." Sometimes, however, co-operative papers express themselves with bitterness about women, as is shown by the following quotation taken from one of them : " Woman is at once the strength and the weakness of the co-operative movement ; she has no more idea of the true aims of co-operation than has that most individualist of living creatures, the domestic cat."