Fnl 3AlNft-3V^ .^ iV3M ¥=^i O . , . ,f , conquest of steam, electricity, and other natural forctv.. while enormously increasing the wealth at the command of mankind, have only placed that wealth and the power and enjoyment that go with it more absolutely under the control of the few. So long as the strong are allowed to grow stronger, the rich richer, at the cost of the weak and the poor, this state of things will continue ; or rather the conditions of life will constantly become more and morp mtolerable. Therefore, they say, it must be swept away. Society must be reorganised in the interest and with a view to the well-being and well-doing of the many. To this end the State, which has hitherto been their oppressor, must be made their servant, and, as a first and necessary step, must become the owner and distributor of the national wealth, both real and personal. This, in a few words, is the contention of the people waking up as they are all over Europe to a consciousness at once of their own misery and of their own power. It is formulated most scientifically, as might be expected, in the State Communism of Germany, as advocated by Ferdinand Lassalle, and pushed to more extreme issues by Karl Marx and his followers. It involves confiscation of the possessions of the rich by the State, and the forcible repression of one great class of the community — probably the strongest, as would be proved in the throes of the revolution by which alone such a change could be brought about. How far then is our English Co-operative Union in sym- pathy with this vast and threatening continental movement, which no doubt would gladly claim us as fellow-workers, and with which many amongst ourselves who do not look below the surface have been ready to identify us ? It must be frankly admitted that the same motive power has been at work here in England as in Russia and Germany. It is the hopelessness of their condition under the present social and commercial system of England which has led tc the banding together of our 775 members in this Co-operativt Union. They see, as clearly as the followers of Lassalle oj of Karl Marx, that under that system they have no more chance in the future than in the past or present of raising Preface. xi. the condition of themselves or their children ; that the main- springs of commerce and manufactures, of producing, buying, and selling — in fact, that all the most potent material factors of modern life are here also getting into fewer and fewer governing hands ; that under this system the strong are year by year becoming stronger, the rich richer, at the cost of the weak and poor ; and they desire as ardently as any German Socialist or Russian Nihilist that this state of things should cease. Again, they hold as firmly as any continental Socialist the belief that this can only be brought about by association amongst the poor and weak, that the wider and deeper such association can be made, the more firmly it can take hold, not of this or that isolated portion, but of their whole lives, the sooner will the desired change be possible. Therefore they look forward to, and desire to promote in all ways, the organisation of labour as ardently as Fourier or Louis Blanc. Their successes hitherto, as well as their failures, have only confirmed them in this faith, the former being clearly due to adherence to, the latter to departures from, the true principles of association, as they understand them. And they have done their best to leave no doubt upon the question what these principles, as they understand them, are. They are set forth as the definition of objects on p. 25 of the Report of the Congress held in London, in an address to it by myself. The acceptance of them by the Congress is recorded on p. 41 ; and they are stated as the objects of the Union in the first of its Rules and Orders, to which every member assents by joining it. They are as follows : — " This Union is formed to promote the practice of truth- fulness, justice, and economy in production and exchange. " I. By the abolition of all false dealing, either (a) direct, by representing any article produced or sold to be other than what it is known to the producer or vendor to be, or (h) indirect, by concealing from the purchaser any fact known to the vendor, material to be known by the purchaser, to enable him to judge of the value of the article purchased : " 2. By conciliating the conflicting interests of the capi- talist, the worker, and the purchaser, through an equitable xii. Preface. division amongst them of the fuiwi.. commonly known as profit: '(f(!t'»(k?^ " 3. By preventing the waste of labour now caused by unregulated competition." They have been summarised by the General Secretary in the paper read by him, with general approval, at the Congress held at Newcastle in this year as twofold. I. Moral — to promote truth, just dealing, and equity. 2. Economical — to prevent waste in production and exchange. .\nd they are in truth only an application of the more comprehensive summary of principles laid down by thb Society for Promoting Working Men's Associations, of which the late Rev. F. D. Maurice was president, namely: — 1. That human society is a brotherhood, not a collection of warring atoms : 2. That true workers should be fellow- workers, not rivals : 3. That a principle of justice and not of selfishness should regulate exchanges. It would be difficult, probably, to find anyone who would have more deeply sympathised with the Socialists of the continent in the ideal of a higher social state after which they aspire, or more decidedly rejected the means by which they seek to attain it, than the late Mr. Maurice. I claim foi English co-operators generally that they share both these sentiments. The aim of our English Co-operative Union is, like that of continental Socialism, to change fundamentally the present social and commercial system. Its instrument for this purpose, as well as theirs, is association. Here, however, the likeness ends. Our co-operators, thanks to their English training, do not ask the State to do anything for them, beyond giving them a fair field, and standing aside while they do their own work in it in their own way. They want no State aid — they would be jealous of it if proffered. They do not ask that the State shall assert its right, and reclaim all land and other national wealth for the benefit of all ; they want no other man's property, but only that they shall not be hindered in creating new wealth for themselves. Preface. xiii. , In this lies the broad distinction, and here the ways branch off. The Continental Socialists and Nihilists would use asso- ciation for converting the State into the sole national land- owner, capitalist, and employer of labour. The English Co-operative Union would use it to control and bring into obedience to the highest moral law the processes of production and distribution of material things. The difference — and it is fundamental and irreconcileable — lies in the uses to which the same instrument — association — is to be put. It would be as fair to identify those who blow up a house full of people with those who blow up a rock which impedes traffic because both use gunpowder, as to identify the English co-operator with the continental State Socialist or Nihilist because they all use association. The fact is that Co-operation, as understood and practised by the Union, is the surest protection for England from those dangers to society and property which the democratic wave is threatening to bring on many other nations. The second misunderstanding above referred to is, how- ever, wider of the mark than that which would identify the Co-operative Union with State Socialism, and under present circumstances more plausible and more dangerous. It need not be concealed or denied that perilous times for co-operation are at hand. The commercial success which has resulted from the methods of trading always in use amongst our united societies has gained them a host of imitators, who seem to think that some charm lies in the word ** co-operative," and that the whole of their success was due to combining to purchase and enforcing ready-money payments for all goods dehvered. In all other respects these bastard associations, founded for the most part by gambling traders, follow in the old ruts. Their first objects are profit and cheapness, and they com- pete with each other as recklessly as any rival tradesmen. The scandalous failures which have already begun, and which will inevitably multiply, involving, it is to be feared,' much loss and misery to a number of innocent persons, will soon bring the name of co-operation into discredit, and meantime may have a malignant influence on the develop- xiv. Preface. ment of a movement which, widely as it has spread, and valuable as has been its influence, is still only in its infancy.' It is, then, the main object of the present publication to make clear to all whom it may concern that co-operation, as understood and practised by this Union, though it takeS hold, in the first instance, of buying and selling, as that department in human affairs which lies nearest to hand and most needs a new and reforming spirit, has aims outside and above trade. Even in this trading department it comes into direct conflict with prevailing practice and theory, sub- stituting "fair exchange" for "profit" and "fair payment" for "cheapness." These, it asserts, are attainable by well ordered fellowship in work, but have never been attained, and are proving themselves every day more unattainable, by the method of unrestricted competition. But while it seeks in the first instance to make the material business of men's lives — production, buying, and selling — wholesome and honest, it does not stop here. Its object is to work out in practice the true relations between man and man, which can only be done by frank acknowledgment of the ground upon which human society is based — that we .must be fellow- workers and not rivals, brethren of one famil)^, to whom indeed the great inheritance of this earth, has been given, but only on the condition that it shall be used and enjoyed in the spirit and according to the will of. Him who created it. In the effort to carry out these principles the Union has foimd itself face to face with the deepest problems of human life, those which are generally known, in fact, as religious. Our societies have come to acknowledge that the mere fact of membership in a retail store involves more than paying ready money, attending once a quarter, and drawing, dividends. As the years pass they find themselves con- stantly brought into new and more intimate relations with their fellow-members, in their own association and in the Union. In the primary sense of the word, id quod religat, "that which binds together," they have already found that co-operation has been a religion to them. It is well for the nation that it has been so, for the industrial history of Preface. xv. England during the past few years has made it clear enough that unless trade can be mastered and informed with a new spirit it will destroy the national life ; and no spirit is strong enough to master and reform it except the religious spirit in the highest sense, which is the spirit of Christianity. But religion is not only that which binds men together, but that which binds man to what is above him, to that which he looks up to and worships. It must not therefore be supposed from anything which has been said, either here or in this Manual, that the compilers, in claiming for co- operation a distinctly religious side, suppose that any co-operative union can be a substitute for the Church of Christ, or co-operative action for that conscious inward union between men and their Maker, which is religion at its highest power. There is truth, no doubt, in the saying, ^^lahorare est orare,'' but only potential truth. It should be written, not "est," but " potest esse"* What we do claim, then, is, that so far as outward things go — for us men, in contact with the visible things of this world, which we are meant to master, to use, to enjoy — this method of fellow- work is the right, and just, and true, and therefore the religious method, and the only one which will bind us to our fellow-men, and to the Father of men, and not divide us from one another and from Him. What we do say, further, is, that this method of dealing with visible things is only possible, in the long run, for men who keep before their minds the ideal of righteousness, truthfulness, and brotherly love in the daily round of their working lives — who, in other words, keep before themselves the setting up of the kingdom of God on earth as the practical goal of all their efforts. It has been, no doubt, ably maintained of late, that the worship of humanity is enough of itself to keep alive this ideal of righteousness, truthfulness, and brotherly love, and to satisfy men's spirits in their devotion to the service of mankind. The service of humanity, or, we prefer to say, of our brethren, is involved in co-oparation ; and we gladly Not "is," but "may be." xvi. Preface. admit that " he who serves men most" is the best co-operator and member of our Union. We prefer, however, to read something more into the formula, in order to make it hold at all times, and under all circumstances. We would read it, " he serves God best who serves man most." For the witness of all times — and of none more than our own time — the experience of all men's hearts and consciences, and of none more than our own hearts and consciences — proves that he who would not get weary of serving his brethren, whom he has seen, must become aware within himself of a spirit which he cannot see but may feel — a spirit higher than his own spirit — higher than the spirits of all other men — j'et working in those spirits, and with which he and they must become one before they can find and do their true work, or enter into their true rest. THOS. HUGHES. PART I. THE MORAL BASIS OF CO-OPERATION FOR A FULL TABLE OF CONTENTS, By means of which the course of the argument may be followed in its main outlines, see the end. PART I. Chapter i. THE RELATION OF CO-OPERATION TO RELIGIOUS FAITH. To trace the connection between co-operation and religion rnay seem to many persons at the present day injurious rather than beneficial to it, since they look on co-operation as a principle of union, while religion, notwithstanding the " binding " character implied in its name, they have, un- happily, been used to think of mainly as a cause of division. Nevertheless to point out this connection is a duty imposed on the editors of this Manual by the programme adopted at the Congress of Gloucester ; and the consideration of what is required in such a work as that committed to them will, I think, show that the Congress was right in making this requirement. Every important scheme of social reform hitherto pro- posed has been founded on some theory about the nature of man, his place in the universe, and destiny, which are precisely the subject matters of religion. To confine our- selves to the two most noted modern instances : — Robert Owen founded his system on a conception of the influence of circumstances in forming character, which was afterwards formally adopted as a creed by the body formed by him, called The Society of Rational Religionists. Again, Charles Fourier laid down as the basis of his system a theory of congenital impulses, named by him " passions," implanted in man by his Maker, which would find their satisfaction in his proposed 4 The Relation of Co-operation scheme of association, and ensure its success and the general well-being, by making labour universally attractive. Both these great reformers founded their systems on what was practically a new religion, whence the new order of society contemplated by them should arise. Co-operation, if it would be regarded as a reasonable scheme of social reform, must follow the like course, only in the manner peculiar to itself, that is, by showing that what is new in its proposals grows naturally out of what is old. It has been the special characteristic of co-operation to start from the present, and look to the future which it anticipates as a state to be slowly evolved out of the actual, by transforming without rudely destroying it. This process co-operators have presented as the only safe road to per- manent progress. If the conception is conformable to the true nature of things, it ought to hold good in regard to religion, of which, as has been said, it is the special function to deal with the fundamental relations subsisting between man and the universal power whereby he is sustained. That is, we ought to find in the religious faiths subsisting among men some one at least, and that not an insignificant, uninfluential faith, which will supply, in conceptions proper to itself, a solid basis for the modes of action through which we think that co-operation may effect the social reforms sought for by its means. Now what thus ought to be I shall endeavour to show is the fact — that the most living, influen- tial religious faith existing at the present time — the Christian religion, — in the conception which formed its historical foundation, and is common to every body of any numerical importance professing to belong to it, does supply such a basis — and that the history of this faith has brought to the fore that application of this conception which makes it serve as a basis for social reform, pointing it out as the true outcome of the religion. It is notorious that for many ages the great and highest aim of Christianity was considered to be the withdrawing of to Religious Faith. 5 men, so far as was consistent with their human existence, from all active part in the business or pleasures of earthly life, in order to fix their attention on an inner life of prayer, praise, and meditation, with acts of charity, as the fitting preparation for an unending future existence to follow this life. But the sixteenth century after the birth of Christ brought with it a great modification of these ideas, which, beginning among the nations pro- fessing a reformed Christianity, has gradually extended its influence over those who continued to adhere to the old faith. The opinion grew up that a life of active industry, accompanied by the natural pleasures of family union, if it be pervaded by the spirit of love to man, is more conformable to the will of God than a life withdrawn from such employments and pleasures, though spent in a round of prayer, praise, and meditation, diversified by acts of benevolence. Modern society, both in Europe and America, may be said to have been built on this idea, which has continually gained ground, through the enormous development of indus- try in recent times, strengthened by the vast increase of scientific knowledge, till it threatens to expel as a foolish superstition the mediaeval idea that the true object of indi- vidual life is to sink its individuality in union with the Divine Being. Yet modern society itself bears witness to the imperfection of its own ideal. Against this outburst of individualism the great and rapid growth in the present century of socialistic systems, carried, at least in theory, to the extent of sinking individual possession in common property, is a protest, full of significance to those who would trace in the involved course of human affairs the footsteps of a Divine guidance. The subject will be more fully considered in a subsequent chapter. But I would remark here, that this rebuke to the excess of individualism by the common feeling which leads to these social tendencies, has its deep root in the conviction *6 The Relation of Co-operation that man finds his true well-being in devotion to a being higher than his own, which pervaded the religious thought of the middle ages, and grew up under the shelter of a vast organised system, the precursor, I trust, of another organi- sation destined to bear, in these later days, for the benefit of mankind, fruits such as those unquiet days could not have produced. The ideas which I shall endeavour to trace to their logical issue in social institutions are, then, not an artificial growth forced on Christianity, but a natural outcome, whose connec- tion with it is shown by a long historical development. The Church of the middle ages manifested herself as a powerful spiritual influence for delivering man from the burden of his own selfishness in a way which, if it did not exhaust the Divine action, but fell short of what we hope to achieve, is yet to us an example of the principle on which institutions for the common good should be founded, and an encourage- ment in the difficult attempt to introduce them. She has been a pioneer, clearing away obstacles, cutting out paths, throwing bridges over rivers, and thus preparing the way for the advance of the main body, which may occupy the lands and utilise them for the general good. This preliminary work the Catholic organisation of the Middle Ages has done for us. It has taught us the enormous power possessed by voluntary associative effort, when concentrated in institutions adapted to give effect to it. It has shown us, in its great monastic orders, that large bodies of men can be held together, without any external compulsion, to live in common a life from which the ordinary motive of individual interest is excluded, and its place is supplied by motives entirely independent of this individual interest, resting upon hopes which look for their fulfilment to a future discerned only by the eye of faith. It has shown us that these remarkable results have been attained, not only in some particular ages, under some peculiar conditions of race, or climate, or locality, but in all to Religions Faith. 7 parts of the earth, among every variety of race or national character, and for a long succession of generations, each ready to take up and carry forward the work that its precursors had commenced or continued ; with no apparent exhaustion in the efficiency of this voluntary power, so long as the arbitrary interference of the State did not oppose it. It has been left for Christianity in our age to apply to ordinary human life — which Protestants have declared to be, in their opinion, more truly divine than the monastic life — that principle of organised combination for realising a life consistent with the objects accepted by us as its true end, which our Catholic ancestors systematically and successfully applied to establish the monastic or ascetic form of life, believed by them to be the most truly conformable to the Divine will. We need not bid for cloistered cell Our neighbour and the world farewell ; The common round, the daily task Will furnish all we ought to ask; Room to deny ourselves — a road To bring us daily nearer God ; says, in well-known words, a poet of the Church of England. He expresses the feeling common among the Protestant religious communities — a sentiment which I regard as pro- foundly true, but requiring to be qualified by the proposition that, in order to keep alive among men generally the practice of this divine principle of self-denial, it is indispensable that the current of their lives should not continually carry them in the opposite direction. In odcr words, there are wanted institutions adapted to do for religious principle in its application to daily life what churches have done for this principle in its application to the act of worship, and monastic institutions did for it in its application to that ascetic life, which formed the ideal of perfection for the middle ages, and still continues to do, in some measure, for the large body who adhere either to the Greek or the Roman communion. 8 The Relation of Co-operation The experience of the centuries which have passed since the Reformation furnishes what, to me at least, appears to be conclusive evidence that — however completely the liberty of individual action may be secured in any community, however generally the duty of everyone to " love his neigh- bour as himself" and " do unto others as he would be done by" may be admitted by the members of that community as indisputable, and however vast the increase of material advantages in that community may be, this liberty will not produce among the mass of the population a state cor- responding to the ideal set before us by the Lord's Prayer, which ought certainly to be the Christian's ideal, that " God's will shall be done on earth as it is in heaven." Or, if the contrary be affirmed, I can say only that the God whose will is supposed to be realised by such a social state as this individual struggle for existence produces, can be no better than the ** Unconscious Being" of Hartman ; and the sooner mankind can arrive at the solution of the problem of existence proposed by that high priest of pessimism, and, by a concentrated effort of their united wills, put an end alike to the fruit of individual life and its unconscious root, the better. But not so, I hope, have we learned the lesson of Calvary. Not this philosophy of despair are we, I trust, disposed to accept as the outcome of the unnumbered ages since the patient earth began her unwearied revolu- tions round the sun, setting us, according to Goethe's instructive epigram, an example of the spirit in which we should possess our souls, while she inaugurated that long development of ascending forms of being recorded in the leaves of the *' Stone Book."* Individual liberty is a precious * If e'er I'm impatient, I call to mind How patient the old Earth I find ; Who turns on her axis every day, And twirls round the sun her yearly way. Why am I here, but the like to do ? Dear Lady Mamma, I follow you. Free translation. to Religious Faith. 9^ possession — a late gift of Time to mankind; who, indeed, as yet, are far from having generally attained it, and when they have attained it, are for the most part very far from knowing how to make a good use of it — if by a good use we mean such a use as is consistent with that example which all Christians profess to set before themselves as showing the spirit by which human life should be guided. How then are we to make a better use of this great gift, of the power which, in Britain and many other countries that we call civilised, men now possess, to wield in entire security of person and property a command over natural forces unexampled in any former age, and yet increasing with every decade so rapidly that, but for old age and death, we might imagine ourselves about to be transformed into beings of some higher species than mankind ? I reply — by inspiring the body of science with the spirit of religion ; by using this material liberty as a means of lifting ourselves into the spiritual liberty of the "sons of God;" by substituting the genuine freedom of working together for the spurious freedom of working against each other ; and showing that man is as competent to con- struct instruments of general well-being, as he has unhappily proved himself competent to construct those fearful instru- ments of destruction — the iron-clad fleets, the gigantic armies, the hundred-ton guns, and weapons of precision, of modern warfare. The claim that I make for co-operative industry and associated life, to be the true outcome of the Christian religion, is not a claim antagonistic to, or condemnatory of, or a substitution for, any previous phase of that religion. It is simply a further development for which I think the time is now ripe ; a new manifestation of the counsels of God for the redemption of man out of the slavery of the flesh to the freedom of the spirit; no more opposed to what has gone before it than the fruit is to the flower, or the flower to the leaf, or than primitive Christianity was in itself opposed to the Judaism out of which it sprung. It is not a new form of lo The Relation of Co-operation worship, or a new phase of theological teaching, but a new application of the spirit which has uttered itself in worship and produced systems of theology. It is the application of this spirit to solve the great problems of practical life; how to fill up the gap between rich and poor; how to destroy the antagonism between capitalist and worker ; how to make the application of science to industry ease the toil of the worker, mstead of ousting him from his work ; how to prevent the fact that the labourer has made the existence of other men more full of enjoyment, from rendering his own livelihood more precarious. It is to ask Christianity to do for free labour, which it may be said to have created in the nations where it has taken root, what it did for slave labour by suppressing slavery. To appeal to it to correct the evils attendant on the good of its own creation is surely no unreasonable demand. The light of Christianity arose on a world of slave owners and slaves, a world where the free labour of men dependent for their subsistence on wages formed a very insignificant part of the toil which filled the cities of the Roman empire with their accumulated wealth. The New Testament contains no condemnation of slavery. But when the master 'had learned to look upon his slave as a "brother beloved in the Lord" the days of slavery were numbered. The maintenance of such a state of absolute dependence and arbitrary power was logically so inconsistent with the feeling of spiritual brotherhood involved in the idea of a new birth, by water and the spirit, into a " new moral world" of the sons of that God whose name is " Love," that, as this idea took hold on men's minds, it naturally put an end to what was thus irreconcilable with itself. Now, what Christianity has thus done in the past, those who regard it as the mighty agent provided by God to redeem men from that slavery of the spirit out of which the slavery of the body springs — the slavery to selfishness — may fittingly ask it to do for the present and the future. We to Religious Faith. ii who appeal to Christianity to evolve co-operative industry and associated life are, in truth, asking it to tame into obedience to the law of brotherhood, which is the law of reason, those energies that, left to the law of nature, can produce only " the struggle for existence" known to modern political economy under the name of free competition. Is this request unreasonable ? History, I think, may assure us that it is not. Man is at once a natural and a supernatural being. He belongs to nature by his passions and his strength, and, as a natural being, is involved in that struggle for existence dependent on the assertion of self, which is the law of all natural being — that is to say, of every creature which is unable to determine the ends of its existence for itself, but finds them determined for it by its constitution and its sur- roundings. The will of such a creature, when it has attained to consciousness, is guided in its actions by the pleasures or pains which stimulate it to do what is useful, or deter it from doing what is injurious to itself individually ; or where, as with bees and other social animals, the welfare of the great body of individuals depends on their association — stimulate it to do what is useful, or deter it from doing what is injurious, to the society, though the individual may be in some cases sacrificed in the process. But in man there appears a higher power, linked, it is true, by insensible gradations with natural being, and dependent upon it for its own capacity to act, but standing above it : a supernatural power of will which determines its ends for itself, and uses natural powers, in the freedom of choice and with the persistency of deliberation, to do that which it has so deter- mined. Man possesses not only Strength and Passions, but Reason. He is not only stimulated or deterred by Pleasure and Pain, but is capable of rejecting pleasures and accepting pain for the sake of objects so distant or so vast that, indi- vidually, he can scarcely hope to realise their accomplishment, yet deliberately works for them, because they are the choice 12 The Relaticn of Co-operation of his reason, and to him the satisfaction of his reason can become superior to the baits of any natural pleasures, or deterring impulses of any natural pains. Now this governing Reason is in itself essentially a principle of unity. It has built up sciences, by per- fecting conceptions which can give unity in idea to the endless diversity of appearances presented to us by natural beings, through the different ways in which they affect our bodies by what we call our senses; and rhus has given us a knowledge continually growing more complete of the modes of action of these beings. It has created States, in order, by the unity of political institutions, to set bounds to individual selfishness, and give protection to individual weakness. The great philosophers of Greece, while Greece was yet free to act as well as to theorise, saw in the per- fecting of these political institutions the instrumentality through which they hoped for the attainment by mankind, or at least by the privileged body of Hellens, of that complete social unity which was the avowed though un- attained object of the political institutions of Hellas in their own age. But they had selected a wrong road, though to a right end. Time unfolded, as the outcome of this political road to unity, the despotism of Rome. But at the epoch when the vast machinery of Roman power, consolidating its own action under the rule of Augustus, showed at once how mighty this sort of unity could become, and yet how little it satisfied what Greek philosophy demanded from the principle of unity applied to human affairs, there began to be heard a voice which, originating in a despised race, promulgated by men who made no pre- tensions either to the philosophical insight of Greece or the practical wisdom of Rome, and finding a response chiefly among those whom the great contemned, declared that the principle of unity was to be sought for from within, and not from without, and depended, not on political institutions, how- to Religious Faith. ' 13 ever wisely instituted, but on the union of the will of man with One who had submitted to be crucified as a malefactor, that he might resolve the discords of human selfishness into the harmony of the eternal divine love. From the faith in this manifestation of the infinite tenderness of God to man sprung up that rich crop of tender sympathy between man and man which marked the Church of the first centuries, and conquered the world, as the Emperor Julian declared, "by the ministry of tables;" by a social institution, resting on the free will of those who strove to realise in their own lives the truth that *' it is more blessed to give than to receive." It is to an extension of similar institutions, resting, like the " ministry of tables," on the free will of those who maintain them, that the social reformer who would deduce his reforms from the Christian spirit appeals, as the instrument to give effect to his desires. He looks to such institutions to put an end to the present antagonism between the owner of the accumulated labour called capital and the owner of the present labour, to which this capital is indispensable, while, in turn, it is indispensable to make that capital fruitful of benefit to its owners ; or, between the man who distributes what others want and those among whom the distribution is made — an antagonism than which nothing can be more entirely opposed to the spirit animating the New Testament, or more completely incapable of removal by legislative regulations, without the voluntary help of the persons for whom the legislation is made. Surely we are justified by history in believing that, in looking for the help required to this source, we shall not look in vain. No one, probably, will dispute that the Christian spirit, if it is brought to direct itself seriously to these objects, could accomplish them ; that is to say, no one who calmly takes count of what this spirit has done in the past, and is doing in the present — for the formation and support of 14 The Relation of Co-operation cathedrals, churches, monasteries, schools, colleges, hos- pitals, almshouses, for the promotion of temperance, the suppression of slavery, the mitigation of the horrors of war, and its ultimate removal, and other benevolent purposes, including the spread of Christianity among non-Christian nations. That without this spirit the task cannot be performed will probably be admitted, even by those who hold that the spirit may be separated from the name, and will do its work better from the separation. No doubt there are, at the present time, many — and among them very zealous advocates of social reforms — who repudiate the name of Christianity, which to them symbolises only intolerance, credulity, and superstition. But in so far as these men are really animated by the spirit that makes social reform possible, they are Christians without intending it ; men who have the spirit of Christ in them, by whatever name they choose to call themselves ; and whom those who hold the Catholic Faith in the Divine nature of their Lord must recognise as true children of Him from whom all life proceeds, by that mark ascribed in the gospels to his own teaching, '* By their fruits ye shall know them." As the ultimate result of Christianity, if it is to become universal, must be to merge the present distinctions oi Christian theology in the unity of a Christian life, so the opposition of the Christian and non-Christian name must merge in the harmony of a spirit which is not satisfied with any institutions but such as exhibit in action that profound solidarity of the whole with every part, and every part with the whole, which St. Paul held out to his Corinthian converts eighteen hundred years since as the relation that should subsist between the members of the body of Christ. But this anticipated universality of the time when Christianity and Humanity shall be seen to be interchangeable names for the same idea, does not make it the less important to point out the support which this idea has in the Catholic faith. The belief that the Eternal Father manifested to us in to Religious Faith. 15 the person of Christ what the power underlying all natural phenomena is in its essential character, and what we must be to become like Him, crowning, as this belief does for those who hold it, the long development of natural and intellectual forces, with the anticipation of an age when the will of man shall find its repose in voluntarily accepting the law of love, must be admitted to afford a solid basis for that idea of the universal brotherhood of mankind which historically arose out of this Catholic faith. Now we must not forget that this Catholic faith sums up the religious conceptions of all the cultivated races of mankind. Religion has appeared on the earth under two great phases : (i) The belief in the immanence of the Divine in the world and its incarnation in man : (2) The belief which sets God over against the world and man. These conceptions appear to have slumbered together in Egypt ; they diverged after- wards ; the first giving rise to the Aryan, the second to the Semitic religions. But they crossed and spontaneously united in the Catholic faith as to Christ ; where the sublime trust of the Jew wedded the philosophical insight of Greece, and, allying itself with the practical sagacity of Rome, constituted what must be called the scientific conception of religion. On those who would separate the development of Hu- manity from the development of Christianity, we venture, then, to urge, as fellow-strugglers with them in the hard battle against egotistic impulses, not hastily to reject the help which the history of Christianity offers ; lest in the endeavour to grasp the fruit whilst they spurn the tree that bore it, they should sink back from the law of love to the law of force ; and instead of founding universally liberty, equality, fraternity, and solidarity as they desire, should perpetuate that "struggle for existence" out of which the Christian Church emerged. 1 6 Th6 Keiatton of Co-operation Chapter 2. THE RELATION OF CO-OPERATION TO OTHER PHILANTHROPIC MOVEMENTS. Benevolence — goodwill to other men — is the common start ing-point of all plans of social reform, the rendezvous where all social reformers must meet. From whatever side they approach these ideas — whether they appeal to the concep- tion of Christianity presented in our first chapter, or to any other conception of it entertained, say, by members of the Greek or Roman communions, or of any other professedly Christian body; or' rest upon some general conception of religion; or, rejecting any religious ground, appeal to "a stream of tendency" shown in the history of mankind, or to any other notion of man's true nature and the conduct suitable to it, resting on philosophy, on science, or on our common sense — from whatever side they come, at this gate of Benevolence they must arrive, as the door through which the way lies to social reform. Without goodwill to men generally no one would ever trouble himself about the improvement of society. But Benevolence is no stranger among mankind. She is quite at home in our race, and has expressed, and does express herself, in a thousand plans of goodwill, with more or less successful issues. In what special relation, then, does the idea of co-operation stand to this widely active prin ciple? I think the reply must be taken from the motto of Lord Stafford — because it is "Thorough;" because it strikes at the root of all those evils of which Benevolence, in her unceasing efforts at the present day, is only endea- vouring to keep under this or that ever-fresh-growing off- shoot. To anticipate shortly what will be more fully dealt to other Philanthropic Movements. 17 with in subsequent chapters, I would say that while Benevo- lence has hitherto dealt only or principally with the use. of income by individuals, the co-operator sets before her the duty of dealing — ist, with that which creates income, in order to secure to all that share of income to which by their work they are equitably entitled ; 2nd, with the collective use of this income, with a view to form such general conditions of existence that the income of each individual may be able to produce to its possessor as great benefits as it is capable of affording, without interfering with the like enjoyment by others. In society as it is, the determination of what income each individual shall have, and what shall be the general conditions under which it has to be used, has been left, with exceptions, important, but yet only exceptions in the case of certain works of common utility undertaken at the common cost, to be determined by what, in modern political economy, is called free competition. The co-operator maintains that it is the duty of Benevolence to obtain this determination by reasonable agreement. It may be objected that competition is a law of nature to which all must be subject, and that, therefore, to call on Benevolence to fight against it is to impose upon her an impossible task, I admit the premiss, but deny the inference. That the tendencies which lead to competition must always exist I do not deny. They belong to that " struggle for existence" producing the " survival of the fittest," from which man can no more withdraw himself as a natural being than he can withdraw his body, or the materials he deals with, from the influence of gravity. But why should he abandon himself and his doings to the one form of natural action more than he does to the other ? He has taught iron to float on water, though gravity orders it to sink; and made the stones which would, at the bidding of gravity, fall through the air into a river below them, afford him a safe passage through the air above the water. This he has done not by getting rid of the force of gravity, i8 The Relation of Co-operation but by studying its action, and the nature of the bodies subject to it, till he has discovered how to make gravity secure his purposes in place of thwarting them. The fact that this principle of competition must be admitted to be a law of nature is, then, no ground for treating its operation as withdrawn from the control of reason. For it is character- istic of the action of reason to use natural powers for its own higher purposes, by subduing their natures into obedience to its own higher nature, without attempting to destroy them. Why should it not be able to do as much with the natural force of competition ? No doubt we pass in this case from the nature which acts on man to nature in man. We have to deal with the resistance of the impulses which naturally urge men to act to that power whose proper function is to govern these impulses by harmonising them. The need of that appeal to the influence of Christianity dwelt on in the ist Chap- ter arises, as I conceive, from the fact that reason, although able to point out how men ought to act, in order to harmonise the discords of conflicting impulses, and con- vert the scorching heat of competition into a life-giving, cheering warmth, the fosterer of invention and incentive to progress, requires the assistance of some power capable of moving the will by the influence of emotion, to choose to do what the reason points out as fitting to be done. But assuming that by this influence, or any other motive which those who have no faith in Christ may substitute for this faith, the wills of men are thus swayed — why, I ask again, should the natural law of competition prove less amenable to the control of reason than those other natural laws which Reason now uses, and is learning every day more completely how to use, so as to convert Nature from her master into the obedient ministe. to her desires ? What Benevolence has to do in order to satisfy the require- ments of the co-operator, as I conceive them, I have already stated — I hope with sufficient clearness for the purpose of to other Philanthropic Movements. 19 this chapter. But it may be desirable to make a few- observations, which, perhaps, may be useful, on some points bearing on the subject of the relation of co-operation to other philanthropic efforts. That which has been already done by Messrs. Leclaire and Godin in France, by the Rochdale Pioneers and other distributive societies in England, and what the various friendly societies and savings banks and other institutions of a self-supporting character among the poorer classes have done and are doing in Great Britain and elsewhere, proves that if the profits of production and distribution, beyond the necessary charge for capital, became applicable for the benefit of the workers by whom they are produced, and of the popu- lation among whom they are distributed, a small percentage of the total amount would be sufficient, as an assurance fund, to provide against all the contingencies (including old age) for which Benevolence at present, by a heavy burden on a comparatively few benevolent persons, inadequately provides in her manifold philanthropic institutions.* And yet those who now devote both time and money to the support and supervision of these institutions might find a more useful field for their benevolent activity in the administration of these common funds. For they would thus confer all the benefits attending almsgiving without its manifold evils, and turn what " blesses the giver more than the receiver " into that truly Divine quality which is twice blest — which blesses " him that gives and him that takes." In truth, although it may, perhaps, seem at first to some philanthropic persons, that in a reformed society such as co-operators look for they would feel that Othello's occupation's gone, true Benevolence would gain greatly by being relieved from all that part of her work which is open to doubt, and suspicion of imposture, and allowed to expand in acts of kindness of a nature to admit of no doubt — in imparting instruction or • Sec Appendix, Note i, for a furtjjer notice of Friendly Societies, and their influence in the United Kingdom. 20 The Relation of Co-operation affording pleasure, in the solace of suffering or sympathy with delight, in helping affliction to bear its burdens, or adding to the joyfulness of lighthearted innocence. That there is in all plans of social reform an element repulsive to benevolent feeling, as it is trained by our modern habits, I do not deny — namely, that they deal, and from the nature of the case cannot but deal, not merely with the use, but with the acquisition, of wealth; with matters of business; with buying and selling. They must face that " higgling -of the market," those keen attempts to take advantage of the necessities or ignorance of others, against which Benevolence bears energetic protest. But, in truth, these immoral practices furnish precisely one of the strongest reasons why Benevolence should interfere, in order to arrest this outgrowth of the spirit of competitive struggle, by stop- ping the source from whence it springs. That it can be stopped I see no reason to doubt. Even in the present day these practices do not affect all commercial transactions. The conduct of many businesses is free from them, either through their magnitude, which enables their managers to fix the conditions on which they will act, or through the general practice in the particular case, as with assurance companies, which work upon tables at fixed rates. In retail sales, the .habit of bargaining is most unequally diffused, existing generally in some countries, and scarcely at all in others. The most successful businesses have been carried on without it, such, for instance, as that of the late Mr. Stewart, ol ^lew York, who had one price only for each class of goods, and would dismiss, instead of rewarding, any employe who obtained more. What has thus been done partially might, it would appear, be easily done universally, among any body of men who should make it a rule to take no advantage of each other, but in every transaction to state exactly all that the other side could wish to know. In such a society all bargains would be made with full knowledge of the circum- stances ; and the abatement of price, inevitable if the rates to other Philanthropic Movements. 2\ Hxed by the seller in any case cannot be obtained, might be effected by methods not involving individual bargaining, such as an auction. When we consider the great effect on the character of any people inevitably produced by these daily transactions of buying and selling, it is difficult to name any matter better deserving the earnest attention of true Benevolence than the purification of the atmosphere of trade, by the general intro- duction of institutions where ordinary business 'shall be conducted in such a way as strict morality can approve. If these considerations are borne in mind, I cannot but hope that the indifference which many — I fear I must say most — modern philanthropists show to plans of social reform would give place to a prudent, but hearty and persevering, determination to aid them by every means in their power. The effect of such a determination would, I am satisfied, be most beneficial on the present advocates of social reform. The sort of ostracism suffered by their wide-reaching proposals, affecting the well-being of countless millions, if the future history of mankind is to be a sequel worthy of the enormous period during which the earth has ripened into fitness for being " ordered and dressed" by man, has thrown some of those who profess to call themselves co-operators off the rails, so to speak. Losing sight of the high aims and noble principles of social reform, which is notliiug if it be not regarded as the introduction of NobJer modes of life, With sweeter manners, purer laws — such as shall Ring out the darkness of the land, iCng in the Christ that is to be. they have represented co-operation simply as a safe and efficient machinery lor enaoung consumers to obtain, by union among themselves, such articles as they desire to possess, reliable in quality, at the lowest possible cost. It is not wonderful that Benevolence should turn away from 2-z, The Relation of Co-operation, etc. such a parody of true co-operation, with an impatience perhaps somewhat unjust to the intentions of those who have proposed it, and with great loss to herself. Since in advocating the self-help on which co-operation rests, and preventing it from degenerating into selfish help, Benevolence would conquer for herself a field of action entirely free from the suspicion of selfish motives which often attends upon the Benevolence of almsgiving. The examination in detail of the theory above noticed belongs to a subsequent part of the present Manual. I am concerned with it here only in reference to the motives of co-operative action, and to that estrangement of the body of philanthropists from this all-important work, which the con- siderations adduced in the present and the ist Chapter will, I hope, tend to remove. Then may we hope to see organised into a united phalanx those who ought to be working heart and hand in this cause as the great problem of humanity, the true task, in my judgment, to which Benevolence is called in the present age ; — a task to be carried on in reliance upon that Divine aid, which has never failed those who, comprehending the depth of meaning lying in the apostolic conception of the good man, as a " worker together with God," lay their hand to the plough, and do not look back. Chapter 3. THE RELATION OF CO-OPERATION TO SOCIALISM, COMMUNISM, AND OTHER POLITICO - SOCIAL MOVEMENTS. The preceding chapters have spoken of co-operation in language applying generally to plans of social reform. This they have clone, because it is only when regarded as a mode of action having the far-reaching scope which these words imply that the idea of co-operation acquires the importance claimed for it by the writers of this Manual, and therefore can excite the interest which, in their judgment, it ought to awaken. It may be asked. If your conceptions of the aim of co-operation are so extensive, how can it be distinguished from socialism ? What is socialism, but social reform ? I would reply. The diiference is this. Systems of socialism are essentially theories, embracing the whole range of relations subsisting among men, which, in one way or other, they propose to bring into conformity with these theories. But social reform, as it is presented in these pages, and is embodied in the name of Co-operation, is rather a practice than a theory. It is an attempt to introduce into the world, as we now find it, modes of action embodying principles, generally admitted among the nations called Christian, even by those who more or less completely separate themselves either from the Catholic faith in Christ, or from the Christian name, to be such as they ought to act upon : though, from various causes, they either do not act upon 24 Th^ Relation of Co-operation to Socialism, them at all, but only hope that they may do so in another world, or act upon them so imperfectly and inconsistently that their action has scarcely any effect in producing such results as ought to flow from their principles. Our English co-operation, so far, at least, as it has proceeded hitherto, i,s an attempt founded on the belief, that these principles, when generally applied in practice, will work out true relations among men by their own operation, and would be hampered rather than aided by the endeavour to build up a complete theory of them beforehand. Co-operation rests not on a new theory of human conduct, but on the development of the tendencies which it traces in past history, and seeks to give more en- tire expression to in the present and the future. The special connection claimed for it with Christianity is, in truth, only a claim for its historical filiation with the progress of humanity, which has been historically asso- ciated in the nations of Europe and America with this religion. While, as the previous chapters have argued, Christianity does present to us conceptions of the Divine action, and the mutual relations of man springing out of that action, eminently adapted to sustain our hopes and guide our steps in the arduous task which the idea of social reform opens before us. But, to the distinction drawn now between co-operation and socialism, this special historical connection, important though it is in itself, is not essential. The essential distinc- tion is that co-operators are those social reformers who approach the great problems of social reform with their eyes open and their hands free. Admitting the greatness of the end which the prophets of socialism have set before their disciples, they claim for the end to be greater than the insight of the prophets; and, refusing to be bound by the words of any master, investigate their social systems in the free spirit of scientific inquiry, not blindly adopting, nor having any prejudice against them. The freedom belonging Communism, and other Politico-Social Movements. 25 to co-operation enables the co-operator to use these systems, or any parts of them which appear to him useful, as means for the better giving effect to his ends ; only he does not set them up as systems to which he is to pin his faith, or by which he is bound to regulate his conduct. Fourier, for instance, unfolded, with all the antici pating minuteness of genius, the principles by which manual labour may be made attractive, instead of being so wearisome as it now usually is. Robert Owen has dwelt upon the vast influence of the surroundings of men (or circumstances as he said) on their characters. It is open to the co-operator to study the teachings of both these eminent thinkers; to adopt the suggested means oi rendering labour attractive ; to study carefully the influence of men's surroundings on their characters; without basing his action upon the assumption that "man's character is formed for him and not by him;" or substituting for the maxim, "Bear ye one another's burdens, so shall ye fulfil the law of love," the apophthegm " Destinies are propor- tionate to attractions," in which Fourier summed up his theory. The free spirit of social progress, proper to Christianity, whether it adopt the Christian name or not, will be at liberty " to prove all things, and hold fast that which is good," when it comprehends, as I trust it is begin- ning to comprehend, what work lies before it if it really would do God's will on earth. So it may "prove," but I cannot think that, as a general rule, it will " hold fast" that system of communism, which has continually appeared within the Christian Church, con- stituting the outward life of the monastic and conventual orders, and forming the external bond of union of a number of Protestant bodies existing in the United States.* * See " The Communistic Societies of the Uuited States," by C. Nordhoff, I vol. Oct., 432 pages, illustrated, i6s. 6d. ; and "American Communities,'" by W. A. Hinds, i vol. oct., 2s. 6d., paper, published in 1878, at the office of the American Socialist, at Oneida. I append a list of the names and situations of these communities, with the number of members, as stated bv 26 The Relation of Co-operation to Socialism, Indeed, with the exception of Oneida, all these communities are either, like the monastic and conven- tual institutions of Catholicism, founded upon, or tend to, a practice which makes their adoption by mankind generally impossible, because, to borrow Sterne's pithy Mr. Hinds, which may be useful to visitors to the U.S. or others who may desire to visit or communicate with any of these s societies : — COMMUNITY. ADDRESS. COUNTY. STATE. MEMBERS. Homestead . . . Aurora Iowa Iowa 1600 400 178 Oregon Bethel Bethel Shelby Missouri .... Brotherhood of the New Life — Fountain Grove Santa Rosa . . Sonora .... California .... 20 Salem-on-Erie.. Brocton Chatanque. . New York .... 60 Harmony Economy .... Beaver Pennsylvania.. lOO Perfectionists — Oneida Oneida Madison New York 268 Wallingford . . Wallingford . . Newhaven .. Connecticut . . 40 Zoar Tuscarawas . Ohio 254 SHAKER SETTLEMENTS Total without Shakers 2847 Alfred Allred Shaker Village York Merrimack.. Canterbury N. Hampshire. Enfield Enfield Thompsonville W. Gloucester. Sonyea Grafton «... Hartford ... N. Hampshire. Connecticut . . .... Enfield Gloucester Groveland Cumberland. Livingston. . Maine New York.. .. Hancock West Pittsfield Berkshire .. Massachusetts .... 1 Harvard Ayer Middlesex . . Massachusetts . • • • Mount Lebanon. . Mt. Lebanon.. Columbia... New York .... 2400 North Union Pleasant Hill Cleveland .... Pleasant Hill.. Cuyahoga . . Mercer Ohio .... .... Kentucky Shirley Shirley Village South Union .. South Union .... Logan Kentucky Union Village . . Waterfliet Lebanon Shaker Warren .... Albany Ohio New York Waterfliet While\/ater Preston Dayton Hamilton .. Montgomery Ohio .... Ohio .... Total ... 5227 Mr. Hinds enumerates (pp. 154-58) besides these communities " which have existed for a number of years and attracted the public attention by their prosperity," various " socialistic experiments " in different parts of the United States. Some of these are communistic, but none of them are of a size to give them importance. Of Icaria, founded by the followers of Etienne Cabet, at Icaria, in Adams County, Iowa, Mr. Hinds gives a detailed description. It had, when he wrote, 83 members, and is not celibate. But its history hitherto is not encouraging to the hopes of forming successful communistic societies on this basis. Communism, and other Politico-Social Movements. 27 antithesis, " If it peoples heaven it unpeoples earth" — the practice of celibacy. Otherwise, economically considered, the results of the mode of life are, according to Mr. Hind's description, generally satisfactory. Plenty appears to be their common character — a plenty obtained without burden- ing the inmates with any excess of work, and that not because all the members are able-bodied ; for, besides containing a large number of old people, these communities, at least in many cases, receive families of the children of persons join- ing them, who become a charge on the common fund. The notion that the stimulus of individual gain is necessary in order to produce industry is also negatived by these accounts, which imiformly describe the members as industrious. While at Oneida, where the advantages derivable from a united home are appreciated to an extent not shown in most oi these communities, the inventive faculties of the members are actively exercised to discover labour-saving contrivances, which, in an institution where all participate alike in the common produce, are obviously an unqualified advantage to all. The advantage is very great, but there is no sufficient reason why it should not equally exist under a system of associated labour, in any community which places at the command of its members a variety of occupations open to all, so that the labour saved in one employment may be taken up by another, without sacrificing the natural con- stitution of the family to the demands for union in work, made upon us by the progress of invention and the growth of capital. In truth, if we except Icaria, all these communistic societies, including Oneida, have the primary object of realising some special religious theory ; Oneida being distinguished by the peculiarity that the theory of what they call the system of Perfection does not involve the extinction of the human race as a necessary consequence of its general adoption. On the other hand, it does involve the same sort of sacrifice of the family to the community, 28 The Relation of Co-operation to Socialism, though not carried out with a consistency so complete, as Plato provides in his ideal republic. But Plato wrote as a Hellen for Hellens, having before his mental vision the conditions of life existing in the small republics of Greece, where a free State meant a free town. All his proposals have in view the so training a body of citizens, who would constitute the armed force necessary to protect the liberties of all against aggressive neighbours, as to prevent them from abusing, to their own private advantage, the absolute power over the lives and liberties of the other citizens, which their position gave them. With keen insight into human motives, Plato desired to free these " guards," as he calls them, from the subtle temptation to selfishness latent in that plausible excuse, "Don't think 1 am working for myself; but it is my duty to raise my family.'' Therefore, he said, the " guards " must have no individual families. All of them must be one family, supported by the body of citizens whom they protect, with whose welfare they will then be identified, and among whom, being themselves free from unjust motives, they can preserve just action. Given the conditions of Greek life, this theory of Plato has much to say for itself. Under the altered con- ditions of our days the case changes. In the great States which modern times have made familiar to us, where order has wedded freedom, and the overpowering strength r the whole united community is exerted, when necessaiy, to restrain the governing body in any association from abusing to their own advantage the powers committed to them for the good of all, there is no sufficient reason for merging the natural dualism of human life in an artificial universalism. The striking example of the Familistere, formed at Guise* by M. Godin, has shown that it is possible to attain all the social advantages of communistic institutions — the care and training of children from their earliest years ; their subsequent education ; the provision within the unitary • Department de VAtsne in France. Communism, and other Pohttco-Social Movements. 29 dwelling, to the degree permitted by the means of its inhabitants, of whatever can assist want, promote con^ venience, or facilitate enjoyment; the creation among its inmates of an active concern for each other's welfare, by the part which each is able and invited to take in this or that branch of the general administration ; — while yet the inmates possess a domestic privacy more complete than can be enjoyed by the occupants of ordinary town dwellings ; earn various incomes, according to their capacities ; have entire liberty of disposing of their own property ; and, in short, retain all the individuality of natural life, superadding to it an associated life which makes this individual life more full ol enjoyment as it becomes less selfish. It may be urged, perhaps, that if the last proposition is true, a system of complete communism would increase enjoyment to the highest degree possible, by extinguishing selfishness altogether. This was apparently the idea of Robert Owen, who, in consequence, believed that the attractions of a communistic life to all who ever experienced them would be so great, that the system, once introduced, would rapidly spread over the earth. But he overlooked the fact that the happiness which an unselfish spirit does produce to its possessor, according to the uniform experience of all who ever strove to attain it, comes from within, and cannot be imported from without, whence can come only, the occasions where this spirit may display itself and thus increase its energy by the opportunity for its exercise. Now, these occasions would be afforded by an associated dwelling, which left the homes of its inmates in their individual distinctness, but placed along-side of them, as objects of the common care, institutions conducive to the general welfare, not less completely than it can be by a system where this domestic life itself is made a matter of common regulation. Moreover, the danger would be avoided of that constant jarring which must be liable to arise between the general regulations and tb^ variety of individual tastes, 3© The Relation of Co-operation to Socialism, wherever the distinction between pubhc and private affairs has disappeared, by the public life having swallowed up the private life. Thus then, the relation between co-operation, as a system of association, and communism, resembles that subsisting between certain mathematical lines, which may indefinitely approach, but can never touch. The spirit of true co-operation will lead those on whom it has taken hold to feel dissatisfied with any appropriation to themselves of advantages capable, by their nature, of communication to others who are ex- cluded from them. Obviously, in proportion to the degree in which this spirit is the living principle of conduct among any associated body, its internal constitution will sponta- neously approach communism. All will feel themselves to be trustees of their natural or acquired powers for the general good, and ask only to share in this good equally with those to whom they impart it. But between communism, as a rule, and this communistic feeling, there must remain always the difference that there is between law and gospel, between thou shalt and thou wilt, between the freedom of the self- governing will and the yoke of submission to a majority. The regard for individual freedom which thus distinguishes co-operation from communism, distinguishes it also, though still more emphatically, from all attempts to attain the end of free association by the compulsory intervention of the State. Now, this is the aim of the theories of socialistic legislation which have, of late years, fascinated the sober judgment of large masses of the population in Germany, in whom long habit of subjection to State regulation may be pleaded in excuse for their notion that the State could do everything they desire if only it would. But the same idea appears to have taken hold also on the free life of the United States, perhaps, from the opposite habit of the people, to look on its own will uttered through the ballot box, as irresistible. The objection to this system, in the peaceful form proposed by Ferdinand Lassallc, who urged Communism, and other Politico-Social Movements. 31 only that the State should use the common purse to obtain for the mass of its members the means of self-employment, has been very clearly stated by Dr. Schulae-Delitzsch in his speeches and lectures. For, whence is the State purse, if it is not swelled by forced contributions from the rich, to be replenished except by the very persons to whom it is to give employment ?* If, however, to avoid this difficulty, the theory is carried to the length advocated by Karl Marx, who would confiscate the property of the richer classes for the benefit of the general body, into which they are to be compelled to sink by the might of the strongest, then, in opposition to such a tendency, however it may originate, it must be emphatically asserted, from the point of view taken in these pages, that only by free self-help can co-opera- tion procure for man the good claimed in them as capable of being produced by it. Because its whole power comes from the acceptance by the will of man of that Divine law of love, affirmed by us to be the true law of humanity, on which the well-being of mankind depends. If even in political life those "who take the sword shall perish by the sword," as the Gospel declares, and historical experience has confirmed, with an uniformity of result disguised only by the fact that in many nations the assertion of strength has been accompanied by the assertion of prin- ciples of eternal life which have qualified the action of this principle of death — assuredly, to think that the victory of reason is to be earned by the exercise of force, and the reign of love to be the natural fruit of a reign of terror, must be the maddest of mad delusions. Not by cutting the Gordian knot can the genius of social progress found its beneficent empire. At the present day, in England most certainly, and, I believe, in every Christian European country, except, perhaps, Russia, and assuredly in the United States, the road to a peaceful social revolution, fraught with unmeasurable benefits to the mass * See Appendix, Note 2. on Lassalle and his system. 3 - The Relation of Co jperation to Socialism, etc. of the population, and attended by injury to none: — except it can be called an injury to shut men out from the hope of future gains to be made out of other men's pockets — is open to the whole population, by free association, for objects which recent experience has proved that association can successfully effect, if only the masses, who may thus benefit themselves collectively and individually, are willing to associate. If the blindness of selfish interest prevents them from so associating, all the laws which could be passed, to give them the benefits of association while they are strangers to its spirit, would be as powerless to quicken true social life — As are the blasts of autumn wind, Which through the withered foliage sing, To call forth from the sapless boughs The bloom and verdure of the spring. Oneida Community. — Since this chapter was in type the community, on the proposition of its founder, Mr. J. D. Noyes, upon the 20th August, 1879, abolished its peculiar marriage institutions ; and is to consist in future of " two distinct classes, the married and the celibate, both legitimate but the last preferred." [American Socialist, 1879, No. 36.) Whether this new form of communism will prove as enduring as the one it has superseded must be left to time to show. Mr. Noyes expressed his confidence at the time of the change that it would be equally enduring. But he has since written: " Communism, in combination with complex marriage, was com- paratively a simple construction which we thought we had pretty well mastered. But communism, in combination with monogamic marriage, is a very complicated and delicate machine, which we will have to study and work upon a long while before we shall dare to recommend it, or to set up for public instructors in the management of it. It is substantially an untried problem. Even Paul's platform, to which we have committed ourselves, cannot help us in the details, because he had not absolute communism for one of the factors as we have." — American Socialist, 1879, p. 388. — The Revue du Mouvemcnt Social for May, 1881, p. 173, con- tains a statement of the recent transformation of the society into a company with a collective property represented by shares, held in separate ownersh-.p which justifies the doubt expressed above. PART II. THE ECONOMICAL BASIS OF CO-OPERATION PART II. Chapter 4. THE RELATION OF CO-OPERATION TO COMPETITION. Competition has been more than once admitted in these pages to be a law of nature, a part of the " struggle for existence," by which all nature is pervaded, applied especially to those conscious agents who can compete with each other for the occupation of any locality, or the enjoy- ment of any object which more than one of them may desire to occupy or enjoy. The more varied the faculties, the more diversified the surroundings of any such creatures, the stronger must be the tendencies to competition called forth in the beings thus circumstanced ; whose desires must in such a case in truth compete with each other, the stronger expelling, or, at least, overpowering the weaker. Man pos- sesses the most varied faculties of any inhabitant of the earth, and from his facilities of locomotion, and the ability gradually acquired by him through the progress of invention, to trans- port the produce of one part of the earth to other distant parts, can, in a certain sense, make the whole earth part of his surroundings. In man, therefore, this competition of desires naturally rises to greater intensity than in any other creature known to us. But, in itself, so long as any body of men remains in the natural state of every animal capable of existing, namely, the state of having access to the means of subsistence, the natural law works for good, by tending to diversify the pleasures, and through this diversity to stimulate the industrial activity of the human beings subject to it. 36 ' The Relation of In speaking of the good attending the natural competition of various desires among men who have at their command ready access to the means of subsistence, I assume the absence of violence. Of course, I am aware that the assump- tion is very far from borne out by the history of mankind. Only very slowly, and still imperfectly, has the natural dispo- sition of the stronger animal to seize on what it desires by pure strength been brought under such control as exists within the civilised States of the present day ; where, how- ever, the good is qualified by evil in another way soon to be stated. But, assuming the co-existence of these two conditions — the absence of violence and command of the means of subsistence — I say the competition of desires among men would be essentially beneficial ; because, admit- ting of satisfaction only by exchange, it stimulates the inventive faculties of one man to produce something desired by other men, that fie may De able, by satisfying their desires, to satisfy his own. For thus is overcome that apathetic indolence into which savage races are prone to fall, shutting themselves out by it from intellectual progress, and consequently, too, from moral progress, which is impossible when the intellect slumbers. Thus, too, with the growth of more numerous wants may arise also that greater refinement, which is the condition of aesthetic taste. Long periods may elapse in the history of a nation during which this natural competition of desires continues to operate to the general advantage of the citizens. It continues thus to operate so long as, at least in the great majority of cases, there is no question of the means of subsistence aepending on the power of individuals to exchange the produce of their own labour for that of other men ; so long as the competi- tion is between desires, affecting only the enjoyments of life, but not the means of living; which, therefore, cannot be said to exercise a pressure greater than that healthy stimulus to inventive action above noticed. But, as popula- tion multiplies, as the cultivation of the ground, followed as it Co-operation to Competttton, . 39 always has been in some shape or other by its appropriation, shuts out an ever-increasing number of the population from the direct natural means of obtaining their subsistence, and drives them to depend for their living upon their success in exchanging what they make only in order to exchange it, the natural law of competition begins to show its inadequacy to satisfy the requirements of reason. Instead of stimulating the industry of the worker to make it more fruitful of benefit to him, by the competition of his own desires against each other, it begins to lessen the benefits of that industry by the competition of one worker against another, to obtain the means of living by underselling each other's labour. The process once begun has a continual tendency to extend, and draw in perpetually an increasing proportion of the population under the wheels of a competition which has ceased to be beneficial to them, unless from any cause the demand for work should grow faster than the number of workers, when the competition for their work would begin to tell in their favour. Now, the chance here stated must mainly depend upon two circumstances — (i) the rate at which capital tends to accumulate in any country; (2) the degree of enterprise in its employment existing in that country ; while this very accu- mulation and enterprise, so long as they are employed — not on account of the whole body of workers, but by individuals who endeavour to make out of them a special advantage for themselves — have a constant tendency to destroy, by the competition among the employers, the benefits which, in another way, they tend to produce. When the channels to which the employment of capital shall be directed are determined, not with a view to the general interest by a careful study — of the existing demand for any class of articles, of the means of supplying it, of the pro- bability of an increase of consumption in that class of objects, and of the prevention of waste in making articles not wanted —but simply by the -expectation entertained by this or ^8 The Relation of that person, or group of persons, of reaping individually some special benefit from the enterprises, the determination what enterprise shall be selected is very likely to be based ijn the knowledge or belief that some one else has made large profits out of that particular work; and, therefore, that there is what is called an " opening for business " — in other words, a chance of snatching some of these profits away by offering to the purchaser somewhat lower terms. Now, in order to unite these cheaper rates with the desired profit, there is one easy way, — to diminish the cost of productio i. Hence there arises out of the struggle of the owners of capital amongst each other for possession of the branches of business believed to be the most profitable, a tendency to reduce the wages of labour, to which the workers, notwith- standing all attempts to arrest it by union for this purj:o5e, may find themselves driven to submit, after vainly using up all their own resources in a fruitless resistance, on the principle that half a loaf is better than no bread. The history of the coal, iron, and cotton industries, during the last four or five years, furnishes a striking illustration of the proposition advanced here; which must not be confused with a denial of the great benefits that have been conferred on mankind through individual enterprise, where it has been directed to perfecting and developmg new processes or discoveries, and thus has multiplied the means of human wellbeing, by employing the labour saved to produce some desirable object hitherto unknown. But this great triumph of human genius, the progress of invention, with its marvellous results, multiplied as they have been of late years with a rapidity unknown, I may say undreamt of, in former ages, furnishes an additional and very striking illustration how impracticable it is to found a human society satisfactory to the demands of reason, upon the action of the natural law of competitive struggle left to itself. It is almost impossible to estimate, with any approach to accuracy, the increase in the productive powers of the Co-operation to Competition. 39 inhabitants of Great Britain during the last 100 years, arising from the introduction of steam as a motive power, and the growth of machinery connected with its use. Still more difficult would it be to estimate what might have been done by the use of this "ministry of fire," to which, pace Mr. Ruskin, I look as 3^8 ^^- 9s<.ij icnt discus- ion, Ne\cs 1880, pp. 293-4. lOO The Application of storekeeper, or shared between them. The last plan is I think the best, because it creates a common interest in the matter, between the storekeeper and the members, which may dispose the latter to be lenient towards him if any losses above the stipulated limit are incurred from causes beyond his control, and to agree to such an allowance for leakage as will cover ordinary cases. The guarantee to the society that its storekeeper will perform his agreement may be given by means of a bond with one or more sureties in addition to the storekeeper himself. A better plan, however, when it can be arranged, is to get the storekeeper to deposit with the society a sum which shall carry interest at the usual rate, and be made applicable to meet any claims upon the storekeeper under his agreement as to leakage, as well as any losses arising from fraudulent acts. Against these last, however, societies may guard by fidelity guarantee policies, which are issued by the Co-opera- tive Insurance Company,* as well as by other guarantee companies. But these policies are limited to cases of dis- honesty. They dp not extend to losses arising from careless- ness, against which there is no remedy but in such an engagement as above-mentioned, secured either by personal responsibility or a money deposit. f * 3,4, & 5, City Buildings, Corporation Street, Manchester. t In a recently formed society where objections might be taken to the safety of a deposit in the hands of the societ y, the difficulty might be got over by the money being placed in the names of trustees, in some savings bank, or other society or company. Objection has been taken to the system recommended above, on the ground that it gives the storekeeper an interest opposed to that of the consumer, and thus endangers his falling into the fraudulent practises which have often disgraced private trade. To avoid this risk it has been suggested that instead of making the storekeeper directly responsible for loss by leakage, a stock-book which will clearly show this loss shall be kept, and carelessness be checked simply by requiring him to acrount for any excessive leakage shown by it, and dismissing him if he cannot ex^iijain the excess satisfactorily. But it is obvious that this system, even if it could be made an effective check in the hands of ordinary committee men, cannot bring back the money lost by any shortcomings which it may disclose. While if it is efficiently worked, and the situation of the storekeeper is one which he Co-operation to Distribution. loi But while guarding against loss by leakage, care must be taken also, not to sell less than the full weight, which besides the injury to the members buying, will subject the society to imputations very detrimental to its character, if it should be subject to any public prosecution for such practices. To prevent this danger, societies should have their scales examined by the district inspector from time to time, to see that they are accurately adjusted, since they are liable to wear away from use, and thus may expose the society to un- expected accusations. Four matters remain on which a few words of advice may be useful to societies. I. Their seal : II. The publication of their name : III. Their books : IV. The use of checks or other means for ascertaining the amount of dividend.* I. Every society registered under the I. and P. Societies Act, 1876, is required to make provision by its rules for the device to be engraved on its seal, which must always bear the full name of the society. The device may be whatever the society desires. Any characteristic word of its name, placed in the centre of its seal on a scroll or plate or within a ring, will suffice, the other words being placed round. It is not necessary to have any special device, as a symbol or motto, though this is often done, and is desirable because it leaves open the use of stamps bearing the name of the society, which may be a convenience, without risk of their being mistaken for the seal of the society. A seal of some kind is indispen- sable by the law of England for many acts, such as the issue desires to keep, the danger of his attempting to conceal his carelessness by dishonesty must remain. The objection therefore seems to me of less force than the arguments for the system, though it may be desirable to guard against the danger indicated, by making the security given by the storekeeper include a provision against any fraudulent practice. There is, in my judgment, more danger of loss to societies from the indifference of their storekeepers to the results of the business than from positive fraud on their part. The leakage system, combined with a share in the profits of the business given to the storekeeper, seems to me the best way of checking this serious evil. * For other matters relating to the law affecting co-operative societies, sec the chapter on that subject. 102 The Application of of bonds ; the conveyance of land ; the grant of a lease for any period of time longer than three years ; the appointment of a nominee under the Local Government Act, &c,, &c. It is regarded by the law as the solemn attestation of the acts of the persons or bodies by whom it is used. An instrument under seal has peculiar force attributed to it. The society would not be admitted to contest in a court of law any state- ment in such an instrument. Hence the importance of having the seal described in the rules, so that no one can be misled into taking for the seal of the society a mere stamp bearing its name. Hence, also, great care should be taken of the seal ; which should be always kept under lock and key, and carefully attested when used in the manner prescribed by the rules, that there may be no danger of the society finding itself bound by obligations entered into without its knowledge by instruments under its seal. The use of any seal purporting to be the seal of a society on which its name is not engraved as required by the Act, exposes the person using it to the penalty of £50- n. The Industrial and Provident Societies' Act requires every society to " paint or affix, and keep painted or affixed, its name on the outside of every office or place in which the business of the society is carried on, m a conspicuous position, in letters easily legible, and have its name mentioned in legible characters in all notices, advertisements, and other official publications of the society, and in all bills of exchange, pro- missory notes, endorsements, cheques, and orders for money or goods purporting to be signed by, or on behalf, of such society, and in all bills of parcels, invoices, receipts, and letters of credit of the society."* The neglect to comply with these provisions exposes any officer of the society guilty of the neglect, not only to a penalty of ;£^o, but also to personal liability to pay any bill of exchange, promissory note, or order for money or goods not signed as required by the Act, if 39 & 40 Vict., c. 45, s. la Co-operation to Distribution. 103 the society does not duly pay it. It should be borne in mind that the name thus required to be used is the full registered name of the society. I particularly insist on this, because, when the registered name of a society includes the name of the place where it is established, it is not uncommon for the society, at least in the heading of letters, to drop the place out of its own name, and intoduce it only in its address. The Blacktown Progressive Co-operative Society, Limited, of Blacktown, Lan-Yorkshire, for instance, will head its papers, The Progressive Co-operative Society, Limited, High-street, Blacktown. Now, such a title, though a sufficient postal address, and harmless as the heading of a common letter, would not be a sufficient compliance with the Act, so as to secure the officers of the society from liability, if the same practice were adopted in the heading of any of the documents above enumerated, and proceedings were taken under the Act to enforce the penalty. And it should be borne in mind that proceedings for this purpose may be taken, not only by the Registrar but " by any person aggrieved," as a person might be who was misled by such an imperfect statement of the name of a society into confusing it with another, suppose the Pioneer Co-operative Society, Limited, also established in High-street, Blacktown. HL Full information as to the books which should be used by a society, desirous of keeping its accounts so that the results of its trading shall always be clearly ascertained, and of the mode of keeping them, is given in the System of Book-keeping, for Industrial and Provident Co-operative Societies, published by the Central Board. Every newly- formed society, indeed, I would say, every society which does not use a form of account settled by some one familiar with book-keeping, should procure a copy of this book, as a guide to the form in which its accounts should be kept. The books required for keeping the accounts in the form thus recommended are kept in stock by the Co-operative I04 The Application of Printing Society,* and may be obtained also of the Edin- burgh Printing Company. t A statement of the cost of sets of these books, as well as the seals of societies, and the apparatus proper for their safe keeping and use, is contained in the Appendix. IV. It remains to speak of the mode by which societies can most easily reckon up the trade done by the members separately, in order to make a division of profits among them.§ In the commencement of a society, especially one formed in a place where its members are accustomed to the use of shop books, the method that will probably be most satisfactory to thery while it is the cheapest for the society, is to provide every member with a book in which the articles bought, witb their prices, and the amounts paid, are entered and cast up, from time to time ; the dividend being calculated on the amounts there shown ; and a record of all these purchases, or at least ol their total amount in each case, being made in a cash receipt book belonging to the society. A great advantage of this system is the power given by it to the committee of ascer- taining, should this appear desirable, what goods have been sold, as well as of checking the money takings by the accounts of the members when they are brought in for dividend. In the case of sales to non-members it would be necessary, in order to make the system complete, that the articles sold, with the prices of each, and not the totals only, should be entered. Indeed, unless this is done in all cases, the value of the plan as a check on the salesman is very nearly lost. But if these particulars are entered, the double entries, in the society's book and the books of the members, take up a great deal of time. To avoid this consumption of time, various plans have been adopted for the purpose, without so much writing, ist, of ascertaining the members' claims ; 2nd, of checking the money taken. * 92, Corporation-street, Manchester ; 40, High Bridge-street, Newcastle- on-Tyne ; and 6, Salisbury-court, Fleet-street, London. + Bristo-place, Edinburgh. A smaller work, prepared by authority of the Southern Section, called "Easy Book-keeping for Co-operative Societies," is also published by the Central Board. § The following account is principally taken from a paper read by Mr. W. Nutlall, at the Bolton Congress in 1870, and a paper by Mr. W. Swallow, read at Lancaster. — News, 1880, p. 439. A Ma.iual of Check Systems, price 4d., is published by the Central Board. Co-operatioh to Distribution. 105 I. The plan which has come, I tliink, if not into the most general yet at least very ordinary use, consists in providing a number of metal tokens, commonly called checks, stamped with the name of the society and a number indicating some current coin, from ^d. or even a \^. up to a £"i, which are issued from time to time to the salesmen, and given by them to the members according to their payments on articles admitted to participate in dividend. The tokens for values under ;^i are usually required to be exchanged for others of that nominal value, on which the claim for dividend is calculated. It is clear that this system cannot be any check upon the money taken, unless the amount of the tokens issued to the salesmen from time to time is accurately ascertained, and they are required to produce either these tokens or their equiv'alents in money. A very elaborate system of tokens of different forms has been adopted for this purpose at a cost stated to be nearly £1,000 by the Oldham Industrial Society, and is said to work satisfactorily. The fact that the Society has put itself to so considerable an expense, and considers this outlay to pay, is a strong evidence of the disadvantages attending the system as ordinarily practised, where the salesmen both give out the tokens and receive those brought in to be exchanged, and, in consequence, may, if so disposed, give out tokens largely in excess of the sales made without being detected. The complaints continually made by societies, that they find the claims for dividend permanently in excess of their receipts from sales to considerable amounts, indicate that this excessive issue often takes place, probably mainly from carelessness in the hurry of numerous transactions, coupled with a certain easiness of conscience in many members which allows them to appropriate without scruple a little extra dividend if they can.* Besides which, it appears that the tokens issued to non-members are sometimes purchased by members, who claim on them a larger dividend than the original holder is entitled to receive. Still these metal tokens • See appendix, Note 7, on other matters relating to these check tokens. io6 The Application of have come into very common use for three reasons— (i) That they save trouble, since no writing at all is required ; (2) That they do not rub to pieces or double up, and are therefore readily preserved ; (3) That, not being evidence of any particular payments, no receipt stamp need be used in respect of the payments represented by them, though, on any occasion, they should exceed j[^i. 2. The difficulty of making the metal tokens any check on the money takings, arises from their being used as, in some sense a circulating medium. By giving up this notion, and using other substances than metal, the tokens may be made to serve as such a check. Suppose them to be made of card board, like railway tickets, each bearing the name of the society and the coin denoted printed upon it, but being distinguished by continuous numbers. If the number of such tokens of each denomination required for the business in any given time say a week, is issued to a salesman, suppose on Monday, and he is required on the Monday following to produce these tokens or their value in money, a check on the money taken would be supplied, which could scarcely be evaded, without immediate detection, by any other means than the use of forged tickets numbered similarly to some of those comprised in the weekly issue. For, even if the salesman could, by connivance with some member, purchase tokens previously issued, he could not use them unless they belonged to the series in use during the week ; because the numbers would not be right ; and if the account were taken every evening, as might be easily done if any fraud were suspected, and probably would be done regularly in a large business, it would be scarcely possible for any salesman, without being detected, to buy back tokens issued during the same day. Tokens skilfully forged could be discovered only when the tokens brought in for dividend were compared with them. Then the duplicate numbers would bring the fraud to light. Hence it has been objected to this system, that frauds might easily escape detection, from the trouble of arranging the mass Co-operation to Distribution. 107 of tokens brought in for examination in the order of their numbers. But this difficulty may be got over by providing a means by which the tokens belonging to the same part of the series can be easily brought together. In one case, where such a system of tokens was adopted, this means of classification was supplied by dating the tokens as they were issued. But this operation implies a continual expenditure of time, as well as the cost of a dating machine. A less costly and equally efficient p'an would be to have each set of tokens made up into packets, containing say, 50 or 100, each packet having a distinctive nu Tiber conspicuously printed on each token con- tained in it. By noting the numbers of these packets issaed to any salesman from time to time, and the value of the tokens in each, the sums for which he was accountable and the dates of each issue would be ascertained ; while by group- ing the tokens as they were brought in under their common numbers, the labour of arranging them in continuous order would become light. The system of exchanging tokens of denominations smallei than ;^i, or any other minimum amount on which dividend is calculated under the rules of a society lor others of this nominal value, might be applied to these cardboard tokens, as well as to those of metal. And if these dividend tokens were issued only by the secretary or some person specially appointed by the committee to discharge this office, so that there would be no temptation to the salesman to issue the tokens over again, as might easily be the case, if any belonging to the series actually in use came into his hands. * 3. Cardboard is, however, a somewhat expensive material. A cheaper sort of tokens was formerly adopted at King's Lynn, in Norfolk.f It consisted of sheets of paper divided by perforated lines into spaces, on each of which some nominal value was • The labour of sorting the tokens might be considerably lightened if a box were provided with as many divisions as there are groups of any denomination of tokens in use at once. The tokens could then be sorted as they carce in, merely by throwing them into the appropriate divisions. \ By a society now defunct. toH The Application of printed, beginning with \(S.., and advancing by steps of fd., |d., &c., up to IS., and then by steps of is. up to los. Iiach sheet contained a large number (say 50 or 100) of the denomi- nation represented by it, and had an index number printed upon the margin on one side. The sheets were made up into books by means of two pieces of wood screwed together placed between the margin and the perforated spaces, and were used by turning by means of the index to the one containing the required sum, tearing off one of the tokens and giving it to the purchaser in exchange for his payments. Each of these sheets would represent one of the packets of tokens described above, and, like it, might have printed on each token a common number, and also a distinctive, continuous number, so that it would offer the same security against fraud as those already noticed. The most serious objection to the plan is the number of sheets used, and the loss of time consequent in pitching on, the right one.* But if the practice, adopted in the case of postage stamps, of letting the higher numbers be expressed by an addition of units, were adopted, the sheets required might be reduced to four, which might be made up into books, namely : — 1. For farthings up to ... ... |d. 2. ,, pence from id. to ... ... iid.^'^'^"^'^'^K" 3. ,, shillings from is. upwards. 4. ,, use in larger sums ... ... 5s. f It would be easy to distinguish the different sets of tokens expressing different values by differences of colour. Those issued to different salesmen in the same department would be distinguished by differences of numbers ; while those issued to different departments might bear distinctive letters ; as D for Drapery, B for Butchery, &c. * At King's Lynn each book consisted of 57 sheets, namely, 47 for farthings and pence, and 10 for shillings. t Since in every case except that of single farthing, penny or shilling, at least 2 tokens would be combined, these tokens might be made half the size of a post- age stamp without danger of their being lost. For further suggestions on this matter, connected with the use of check cards, see Appendix, Note 7. Co-operation to Distribution. 109 The case of sales to non-members would be met by furnish- ing the salesmen with stamps with which to mark the tokens issued. In the case of articles, such as sugar, not carrying dividend, they would simply keep and produce the tokens. In regard to both these classes of sales, however, the system is imperfect. A dishonest salesman might give out ordinary tokens, unstamped, upon sales of sugar or sales to non-members, on an understanding that he was to share in the dividend obtained by their use. Still, this roguery would not affect the check on the moneys taken, while, as it must involve the concert of other persons, and therefore incur the greater liability to detection, for a small gain, and that not immediate, it is not very likely to be practised. Apart from this danger, considered only as a means of con- trolling the money takings, the system appears to be very complete at a very small cost, namely, that of the tokens employed, and the trouble of examining them. To estimate this cost it is necessary to form an idea of the number of tokens required for any given amount of trade. The data for this purpose in the case of metal tokens were obtained by Mr. Morrison from the experience of the great Halifax Society, whence the following table is formed. Quantities required for every £1000 of goods sold, accord- ing to the experience of the Halifax Society : — Nominal value. Number ot checks required. On sale of ;^iooo. On sale of £,\o a week. IDS. IS. 6d. 3d. id. id. 228 1000 7000 5500 ... 5000 ... 10,000 7000 30 130 910 715 650 1,300 910 35.72&* 4.645 •If tokens for intermedinte Tuimbers were used the iniinb'r of id , ?<*. and 6d. tokeiiS might be diminished, but the total numbtr would pro\)al)lj \x somewhat increased, because theie wo'ild be more unused. 1 10 The Application of To these must be added, if the smaller tokens usually made of tin are to be turned into £"i tokens, usually made of copper, before they become entitled to dividend, looo ;;fi tokens. So that the total number for a trade of ;^iooo, will be 36,728. The calculation is based on the business of a quarter. Dividing ;fiooo by 13, it gives us £76 8s. 4d. as the amount of weekly sales, which would require this number of checks, to represent it. That is to say, if account is taken of the time which the tokens issued remain out en an average before they come back to the society, it will be found, that, for every ;!^io of weekly sales, there will be wanted 4645 tokens of the different denominations above stated, in addition to the 130 tokens of ^\ each, into which the smaller tokens have to be converted.* In comparing the cost of the different systems, it must be remembered that the metal tokens are continually re-issued while both the paper and cardboard tokens are supposed to be used once only ; so that though their cost must be considerably less at first it is constantly renewed ; but with the probable compensation of saving a great deal more than the cost, by the losses which it may prevent the society from sustaining, as well as the satisfaction of feeling that these tokens afford a real check on the money taken. At King's Lynn this con- sideration alone appears to have been regarded as a sufficient reason for adopting the method used there. For the system is stated to have been combined with the use of metal tokens, for which the paper tokens were required to be exchanged as soon as they were issued, f 4. The necessity of keeping the paper tokens as the basis of a claim for dividend was thus avoided. But paper tickets have been largely employed for this purpose, though in a somewhat different form, by a system of summarii'ed entries, * The terms on which these tokens will be supplied by different manufac« turers are stated in the Appendix, Note 6. t In this case, however, the tokens wer? not numbered. Co-operation to Dhtribiition. 1 1 1 • in which the amount of each purchase is required to be entered by the salesman, by what is called the carbon process. On this plan the salesman is furnished with a book containing duplicate divisions, similarly numbered, in sets so arranged that one set, which is separated by perforated lines, either lies under or over the other not so separated, or can be brought under or over it by folding the page. The salesman places a piece of carbon paper between these sets ; enters with a hard pencil on the upper one the totals of each pur- chase which are reproduced on the corresponding lower division, tears off the division separated by the perforated lines, and gives it to the purchaser to whom it serves as a warrant for dividend ; while the other part remains in the book as a record of the sales, and can at anytime be compared with the one given to the purchaser by means of the number printed on each. This system admits of many modifications depending on the number of spaces comprised in each page of the books used by the society, and the order in which these spaces are arranged, either side by side or under each other. For the convenience of casting, however, the entries should be made in divisions following each other from the top to the bottom of the page, and not placed side by side. And there should be several divisions on each page, Mr. Nuttall says at least twelve. It is also important that the division given to the purchaser should always be the lower one, for the following reason. The protection to the society in this plan depends on the watchfulness of the purchasers over their own interests. It is assumed that they will not accept a ticket on which less is entered than they have paid, while the salesman will not charge himself with more than he has received. But if the division given to the purchaser is that on which the salesman writes, he may contrive, by not placing the carbon paper underneath it, to make no distinct mark on the lower division, which, therefore, he may fill up with a figure representing a sum •mailer than that actually paid, pocketing the difference. 1 g r^ : TAe Application of have known this to be done in a case where the fraud waa discovered only by a purchaser who happened to be the daughter of a member of the committee, having noticed in the conduct of the salesman when making the entry of her pur- chases *' something odd," which she mentioned to her father. But if the purchaser receives the lower division, and the entry upon that is correct, it must have been distinctly made upon the upper division, and any attempt to alter it afterwards would be liable to immediate detection. 5. Asin the case of the paper tokens used at King's Lynn, so in these systems of tickets, the plan is sometimes combined with the issue of metal tokens, on which the claim for dividend is to be based. These are obtained from a clerk, commonly a lad, who files the tickets and issues the metal tokens for the amounts entered ; when, if every thing is right, the metal tokens, the duplicate purchase tickets, and the amount of cash ought to correspond. In this form the system approaches that commonly in use in large private shops, and carried to great perfection at the Civil Service Stores. There no sales- man is allowed to handle the cash at all. He makes out a bill of the goods sold on a slip of paper, which is given to the purchaser. The purchaser takes it to a clerk, who receives the money, enters the total and the name of the purchaser in a cash receipt book, stamps and initials the bill, and returns it to the purchaser, who gives it up in exchange for the goods to the salesman, by whom it is filed as a record of the transaction. In most departments of the stores, though not in all, the bills are written in duplicate by the carbon process. Both are stamped and initialed by the clerk who receives the money, and the purchaser keeps one. The stores also provide papers specially headed for customers who write out their own orders, and in some cases provide clerks distinct from the salesmen by whom orders may be written for the customers. When the goods are not taken away, the purchaser writes his address on the orders, which are separately filed. In the grocery depart- ment of the C.S.S.A. there are two sets cf clerus, one to Co-operation to Distribution, 113 examine the bills, and the other to receive the money, both of whom enter the amounts separately. That this system furnishes a very complete check, both on the money taken and the goods sold, will, I think, be admitted. It would be easy to combine it with the issue of tokens as the basis of a claim to dividend, and it may be worth considering whether some modification of it, requiring fewer clerks, might not be introduced in other stores, with the advantage of supplying a fuller record of the tran- sactions than is given by the plans above described. Since none of them fully meet either the cases of sales to non-members or that of articles not carrying full dividend, or aftbrd any means of checking the goods sold so as to furnish some help for ascertaining whether any are being improperly made away with. Some further suggestions on this matter, which I hope may prove useful, will be found in the Appendix. A few remarks, in conclusion, on some matters affecting the progress of societies, which sometimes fall into practices injurious to their growth. I. The first of these relates to the selection of their officers. A disposition occasionally appears to give every member a fair turn — as it is called — to let every member in succession have a seat on the committee, and every member of the committee in turn be president. Now that it is of advantage to a society that its members should become generally acquainted with its affairs more minutely, than they can well become only by attending the usual quarterly meetings, may be admitted. But the best way of producing this effect is by monthly meetings, where there may be ample time to ask questions, obtain explana- tions, and consider suggestions. It is of great importance for the growth of a society to have at its head, men who can manage its affairs well, and who will give to them the time and attention necessary for seeing that they are properly conducted. In the early life of societies it IS not unlikely that a good many changes may be required 114 TJie Application of before the men fittest to manage are got into the place fit for them. But if they are found, and the fruits of a prosperous business, show that they have been discovered, the sound rule is to continue them in the management. The considera- tion uppermost in the mind of every true co-operator must be that the society should prosper, not that he should be at its head. Societies should endeavour, by their practice, to foster the growth of this spirit, which they certainly will not do by the habit of frequent change.* 2. A second matter touching on the general management of a society to which much less importance is often attached than it deserves, is the cleanliness, neatness, and general good order of the shop. Co-operative societies having their customers ready found, do not want the attractions of mere show, by which private traders often try to create a business, and should avoid the waste of money occasioned by them. But they should carefully check any sort of slovenliness within. For not only does a dirt}', ill-arranged shop tend to drive customers away, but it tends to beget a careless, happy-go- lucky way of conducting the business, which must be very detrimental to it. There is a close connection between men's surroundings and their disposition. If the energetic man moulds his circumstances to his will, those circumstances in return, continually mould to their likeness the less active spirits subject to their influence. A society which would have its business thrive, should take care that the appearance of its shop is such as a thrivine: business commonly presents. 3. Connected with this good order in arrangements, but still more important, is the good order and careful auditing of the accounts. Probably more societies which have failed after getting under weigh, have been wrecked on the rock of * If, notwithstanding this danger, any society desires to vary the composi- tion of its committee, it would be well for them to adopt a regular rotation of the order in which the members shall be eligible, so that there shall be no risk of the society being split into fractions over the elections, and those not in office may not feel themselves unfairly treated. Co-operation to Distribution. 115 Dad bookkeeping and imperfect auditing, than have perished from any other cause. The extent to which carelessness in this respect is sometimes carried is scarcely credible. I have been furnished with the particulars of a case where the committee met only once in six weeks, leaving its affairs to the secretary. The secretary left them to the storekeeper, who made out his own balance sheet, which the secretary and auditors signed without verifying it. With such an absence of check on the expenditure, it cannot be surprising that the assets of the society were found at last, to the great astonish, ment of the members and committee, to have mysteriously disappeared. 4. In auditing it must be remembered that the duty of the auditors is two-fold : ist, to verify every item entered in the balance sheet, by requiring the production of the proper vouchers for it ; 2nd, to cast all the totals, and satisfy them- selves that they are correct; not to content themselves with seeing that they correspond with those entered in the sheet. This duty is expressly laid upon them by the Industrial and Provident Societies Act, 1876, which requires them, once at least in each year, to revise the general statement of the receipts and expenditure, funds and efifects of the society, and verify the same with the accounts and vouchers relating thereto, and cither sign the same as found by them to be correct, duly vouched, and in accordance with law, or specially report to the society in what respects they find it incorrect, unvouched or not in accordance with law. It is a duty which every society that values its own safety and prosperity should be unflinching in requiring to be properly performed. If it cannot find among its members any who will perform the duty properly it can always obtain, by applying to the Registrar's Office, the names of the public auditors appointed for the district where it is established, and will act far more wisely in paying the necessary cost, though it may perhaps appear high to the members, rather than expose itself to the danger of having untrustworthy accounts. 1 16 The Application of 5. Another matter bearing on the internal management of societies deserves notice, because very incorrect ideas often < prevail about it. This is the powers of general meetings, more particularly of special general meetings. It seems often to be supposed that the resolutions of such a meeting override the decision of the committee of management on matters expressly assigned to them by the rules with ji t any reservation to the members of a revising power. But this is a complete mistake. The rules bind all the members, and the acts of any officers of the society under the powers given them by the rules have the force of the rules, and can be set aside only in a way consistent with them. Where the rules are silent, a society, as a body corporate, has power to bind its members by resolutions passed at a meeting properly con- vened until some other meeting similarly authorized rescinds or varies them. But these resolutions have no power at all against the rules, which rest upon the authority of the Act of Parliament, and confer a like authority on those who are acting under the powers derived from them. 6. The last case is one where a minority, standing on the rules of a society, can control a majority which would act in opposi- tion to them. But other cases may arise of a more difficult kind, where a minority, finding itself over-ruled on some point which it feels strongly, it may be the discharge of a manager in whom they have confidence, or, perhaps, even one of so much importance as a determination to allow sales on credit, may be disposed to avail themselves of the power of withdrawal, if the society is so constituted as to allow of its exercise with- out restriction, to secede from the society and form a new one of their own. It is sometimes asked is such conduct justifi- able ? The answer must depend on the light in which we regard the functions of co-operation. If co-operative societies are regarded only as separate units, each striving to do the best it can for itself, there is no good reason to be alleged why these units should not split into lesser units if any of the members composing them think it more to their advantage so Co-operation to Distribution. 1 17 to do, than to remain part of the larger unity. But, if co- operation is what in these pages it has been represented to be, union for the purpose, by the joint strength of its members, systematically to work out for the mass of mankind a social state far higher than any hitherto attained, then whatever tends to weaken this spirit of union is treason to the great cause of humanity; and therefore all such secessions, since they unquestionably hiave this tendency, must stand condemned at the bar of those nobler aims which the co-operator is bound to keep in view. Men have been sometimes driven unwillingly to secede from those who have endeavoured to force upon them professions of belief, contrary to their convictions of what is true. But no such interference with the liberty of thought is to be feared by the members of co-operative bodies, whose differences resolve themselves into differences of means for producing a common end, and should therefore never be permitted to divert them from the principle of union with which the attainment of this end is bound ud. Chaitlu 3. CO-OPERATION IN ITS APPLICATION TO PRODUCTION. Mankind cannot generally live on distributing. Only a com- paratively small proportion of the population which it is the object of co-operative distribution to reduce to the smallest number required to do this work, can thus live upon the amount of produce that other men are willing to give up to them in consideration of the services they render in facilitating the use of the remainder. But on production the material well being ot the whole body of mankind depends. The sum of enjoyable things which can De distributed among any popula- tion necessarily depends upon the mass of enjoyable things produced. The degree of enjoyment placed within reach of the body of the people in any locality largely depends on the conditions under which the production constituting the means of their subsistence is carried on there. Even their moral character is influenced directly or indirectly by these conditions, which in countless ways continually affect every part of their lives from infancy to old age. Hence the vast importance of co-operative production. It is often said, and said truly, that the evils under which the poorer producers suffer arise rather from defects in the dis- tribution of the enjoyable things now produced than from the mode of their production ; but the imperfections in distributing alluded to in this saying, are scarcely touched, far less remedied by the system of co-operative distribution explained in the last chapter. For all that this system does for the poorer class, is to make their existing incomes go a little farther than they would otherwise do. It does nothing at all towards addinjj to Co-operation in its Application to Production. 1 19 these incomes except in so far as it offers inducements to save by making saving easy. "Tlie store, it has been said, is open to every one." Yes, every one v^rho can pay for what it sup- plies. " Its benefits are for all." True, in proportion to their independent means of appropriating them. " The larger a man's family, it is argued, the greater the advantages conferred on him by co-operative distribution." Certainly, if his income grows as fast as his family. But the family may starve with- out the store coming in any way to his assistance. Its gifts are strictly bounded by what it first receives. Its bounties are always for " him who has," not for " him who has not ;" to whom it denies, and, if it is conducted on sound principles, must deny even that amount of trust which he will often receive from the private trader. For he may hope to be recouped at some future day for all these advances, and has in the profits of his business a fund, which he can apply in making them, while in a distributive society this fund is strictly pledged to pay the dividends due to a body of purchasers who need no trust. That the distribution of profits on purchases has been of great advantage to large bodies of the working classes, from the savings which the system has led them to make, I do not for a moment question. That numbers who, before they became members of a store never had a shilling but what they forthwith spent, have found themselves the owners of many accumulated pounds through the savings made by the store for them out ot the shillings which thev spend at it, I am fully aware. I do not dispute tne value to them of this result. Still, I must say, the store will not give them the original shillings. They may grow rich, as the old Yorkshire- man said only by eating and drinking, but they must get else- where than at the store, wherewithal to pay for what they eat and drink. To obtain this "wherewithal" by co-operation, they must pass from co-operation for distribution, to co- operation for production. They must press into their service that more fundamental sort of distribution attached to pro- i20 Co-operation in its duction, which determines what men shall receive directly in exchange for their labour. They must not rest satisfied with the sort of distribution effected by the distributive society, which simply enables them to exchange what they have thus earned for other things which they happen to desire. Those who set the present distributive ball rolling, the justly celebrated founders of the Equitable Pioneers Society cf Rochdale, clearly defined this object of the system which they introduced, in words often repeated, but still well deserving repetition, because by the co-operators of the present day, they are far too much lost sight of. They declared the objects of their Society to be — To form arrangements for the pecuniary benefit and the improvement of the social and domestic condition of its members, by raising a sufficient amount of capital by shares of £\ each, to bring into operation the following plans and arrangements : — 1. The establishment of a store for the sale of provisions, clothes, &c. : 2. The building, purchasing or erecting a number of houses, in which those members desiring to assist each other in improving their domestic and social condition, may reside : 3. 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 ; 4. As a further benefit and security the members of 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 : 5. That as soon as practicable the society shall proceed to arrange the powers of production y distribution, education, and government, or in other words, to establish a self-supporting home colony of united interests, and assist other societies in establishing such colonies.* They were not afraid, these "owd" weavers, of the ridicule certain to be poured by the unbelieving world, if they thought them worth any notice, on the smallness of their means, twenty-eight shares of £1 each, contrasted with the greatness of their ends. Still less should co-operators draw back from them now. For these are the true ends to be set before them- • " Self-Help by the People : History of C o-operation in Rochdale," by G. J. Holyoake, Parts I. & II. Application to Production. 12 1 selves by all who desire to realise the ideal of co-operation — the gradual substitution of a state of society resting upon reason- able agreement determining the action of natural forces, in place of the present system which rests on the play of natural forces determined by the struggle for existence. Now in this scheme distributive co-operation appears in its proper place, as the road leading to production, which again is placed in its true position, of a means to the improvement of domestic and social conditions, by associated dwellings. The impotence of distribution, taken alone, for effecting the ends of co-operation, is clearly indicated in this memorable programme. But the idea embodied in the distributive store is not only thus impotent as an instrument of social progress, but if it gains a decisive hold on men's minds, it may even become an obstacle to that progress for the reasons following. The store deals essentially and primarily with things. Its function is to enable its members to obtain that of which they stand in need, better in quality or cheaper in price, or both, than they could do without its aid ; and there its proper office stops. Distribu- tive societies have indeed often gone beyond this point to employ their collective funds in various ways for the benefit of their members. They have formed libraries and reading-rooms, have published periodicals, have estab- lished science and art classes, have instituted musical and other entertainments for the advantage of their mem- bers, for whom prosperous societies commonly provide meeting places of their own in co-operative halls. They have gone even farther in the direction pointed out by the Rochdale Pioneers, by purchasing lands and building houses, to be sold to their members and paid for by instalments, spread over long periods so as to make the payment easy, or advancing money to enable them to purchase lands or houses, or to build houses, which shall be a security to the societies for the repayment of these advances in a similar way. But all these beginnings of collective action, useful as they are more or less in themselves, and valuable especially as evidence of an 122 Co-operation in its instinctive sense that co-operation has more to do for the good of mankind than that which the distributive society can supply, are but feeble expressions of that profound human sympathy, that mutual regard for each other, that higher spiritual life which, as they constitute the co-operative disposition, it should be the especial work of co-operative institutions to develope and spread, so far as this lies within the power of any institution. Now, what the distributive society cannot do in these respects it is the function of the productive society to do, or prepare the way for its being done by means of the social organization to be considered more fully in the next chapter. Thus co-operation will be raised from the ignoble office of a union merely in order to get things cheap and good, to the noble function of an institution by which men may be gradually made better, and therefore both happier and better off. The function of co-operative production in this respect is so powerfully stated in a paper entitled " Some Hints on the Problem of Co-operative Production," written by the present Registrar of Industrial and Provident Societies, and read at the Congress at Newcastle in 1873, that I make no apology for reproducing it here, accompanied by a few remarks to meet the objections raised to this idea of co-operative pro- duction by those who would make of it a mere handmaid to distribution. " I regret exceedingly," says Mr. Ludlow, " that I am not able to attend the present Newcastle Congress. Of all the practical questions which ro- operation has to solve, that of the organisation of production seems to me the most important. It is one that has been constantly before my mind for over the last twenty years, and I feel anxious to say a few words upon it. They may seem to many very vague and unsatisfactory, and yet perhaps may rot be without fruit to some. I think it may be said that by this time three distinct views on the subject have been more or less expressly formulated in the movement, with a great variety of intermediate opinions. According to the first, co-operative production should start entirely from the existing centre. The Wholesale should take up one by one all branches of produc- tion for which it can provide a sufficient demand, and carry them on as inci- dents to distributive business. This might be called the plan of organising production from above. According to the second view, held, I think, generally as second-best to the first, and which may be looked upon as the Application to Production. 123 first in a state of arrested development, production sliould at least be federa- tive ; societies alone should be members in a productive body, individual share holding being excluded. This may be called the organisation of pro- duction from within. Accordin;j to the third, productive co-operation should be solely or mainly individual. This would be the organisation of produc- tion from below. Now, the first thing I wish to say is that every one of these three plans, if urged to the exclusion of the others, appears to me likely to prove wrong and mischievous ; that every one of the three, if worked on right principles and in the right spirit is capable of being usefully carried out ; and that in the present stage of the movement at least, the circumstances of each particular case must decide wliich of the three is to be preferred. "Where manu- facturers of a particular article lefuse to sell it to the Wholesale, or to deal for it on fair terms, or to give it in a pure state, the Wholesale is perfectly justified in taking up any branch of production, provided it carry on such pro- duction in a true co-operative spirit. What the Wholesale is justified in doing, any number of federated societies are justified in doing in 1 ke manner. And surely any number of working men employed by another in producing a given article for the profit of that other are equally justified in saying, we will produce the article ourselves. The question, then, is one of the principles on which, and of the spiiit in which, not of the form in which, the work is carried on. And here, unfortunately, I have a most ungracious task to per- form. Agreeing entirely in the recommendations given by Mr. Holyoake, in the preface to his ' Logic of Co-operation,' that there should be 'a partner- ship of labour and custom in every society, and that labour should have adequate self-protecting representation,' I fear that the tendency of hi;; pamphlet, taken in conjunction with the views expressed in the Co-opeiative News, by a few other gentlemen of weight in the movement, threatens con- siderable danger to the movement. Mr. Holyoake's hero is the 'Poor Con- sumer.' ' Consideration for the Consumer,' he tells us, is the ' primary step- ping-stone ' in the path of co-operation. ' The consumer is, after all, the person to be most cared for,' is the comment on his paper in the Co-operative News ; ' if we look after the consumer we look after everybody, for every human be'ng is compised in the description.' And Bastiat is appropriately quoted — Bastiat the most brilliant votary of competitive plutonomy — as an authority for the banner under which co-operation has henceforth to march. Now, on the surface of them, all the above propositions are true to truism. No doubt, since the present English co-operative movement has its main source in the co-operative stores, ' consideration for the consumer ' was the first stepping-stone in its path. No doubt every human being is a consumer, and in looking after the consumer we look after everybody. But if we dig ever so little below the surface, a very different set of truths will discover themselves to us. Although the experiment might take the form of co-operative con- sumption, it was consideration for the producer that really was the first stcp- ping-sione in the path of co-operation. The co-operative store w.i«! primarily the attempt made by producers to make their earnings go further by savings on their consumption. The reason why it has rooted itself in the afTections of the people is that it rescues the producer from slavery to the truck shop, to 124 Co-opcratioji in its the publican, to tlic lallyuian, frees him from debt and from prison. It is the powerful bearing which it has thus upon his condition that constitutes the link between our own co-operative movement and that ni foreign ountries, start- ing, as the latter does in general, directly from the ground of production. Drop this out of view, treat the movement as one of which the consumer merely as such, and not the producer as consumer is the object, and whatever so-called bonus you may hold out to labour, you will estrange that movement from the sympathies of ihe working class ooth at home and abroad. But you will do more. You will degrade its cnaracter altogethe^ Instead of vin- dicating the true principles of human society against abuses which darken and pervert them, you will fall yourselves into the very net of those abuses. Considerat on for the consumer is no new thing in the world. Competition proclaims his interest to be bound up with its own. All popular plutonomy professes itself devoted to it. To divide profits quarterly or half-yearly with the consumer, as the result of a new social machinery called co-operation, may be a very good thing for him. But every ordinary trader who, by reason of some new invention, or of the opening of some new source of supply, or simply for the sake of cutting his neighbour trader's throat, lowers the price of an article to the public, does precisely the same thing by way of dis- count. Consideration for the consumer may be the tirst stepping-stone in the path of co-operation. But that stepping-stone is the first in a great many other paths too, which lead to very ugly goals — idleness, selfishness, tyranny above ; flunkeyism and slavery below. The world is only too willing to fall down and worship before the mere consumer, the consumer as such — before the man who can absorb into himself as large a portion as possible of the fruits of other men's labour. The world is only too ready to proclaim that consumption is honourable. The producer himself is but too apt to accept the sentence ; to think that he is inferior to the consumer, just because he labours, and the other enjoys ; to look forward to a stage of pure consump- tion without effort to produce as his supreme happiness. And if the great social and democratic movement of our age has any meaning and value at all, it is just so far as it tends to the very opposite of all this, to raise the producer to his true dignity, to subordinate mere consumption altogether to produc- tion ; for say what you will of the two elements in man, consumption and pro- duction, the latter is the higher. Consumption is primarily the animal element ; production the divine. He shares the former with the meanest of creatures; the latter with his Maker. If we take production in its widest sense, as com* prising all effort of a kind in anywise fruitful, all that acts not merely to dis- place or replace, but to develope, to niake more out of less, we may say that man only bopins to be man when he produces. Again, consumption, though it may be used for the highest purposes, is in itself a selfish act — the man appropriates something to himself. Production, even when its purpose is most selfish, is in itself, essentially unselfish ; whoever produces, whoever works, must begin by spending himself. Consumers, you say, are all the world ; yes, but from another point of view, all the world consists cf pro- ducers, and of those who are burthens upon production. As a mere consumer, that is except so far as he restores directly or mdirectly to production some- • Application to Production, 12 5 thing more than he takes from it, the human creature has a very minimum of right. If any six human beings are on an island together, how is social order to be introduced among them? In other words, how are they to co- operate ? All consumers, cries the Bastiat worshipper ! Consideration fo-: the consumer must be the first stepping-stone in the path, repeats another after Mr. Holyoake. Well, of the six, five are pure consumers, one is a child, one a madman, one a beggar, one a thief, one a murderer, and the last is a decent fellow, able and ready to work, in other words a producer. Now, the only consideration which, I maintain, is due to the five consumers, is this — that the one producer should obtain mastery over them all ; that he should exercise authority over the child, in order that he may learn to make himself useful ; so deal with the madman as to prevent his doing mischief to himself or to others, and, if possible, to enable him to recover his wits ; so coerce the beggar and the thief as to compel them to earn their bread ; and, finally, hang the murderer to the nearest convenient tree branch. Observe, that it matters little whether the consumers in question be poor or rich ; the beggar and the thief are presumably ' poor consumers ; ' all the three others may be so too. It is because they are mere consumers, who either cannot or will not restore to production what they take from it, that they have absolutely no right, though five to one, to exercise any control over the producer, but that the right to control them passes by the moral necessities of social life over to himself. I have said this much, in order to point out the dangers of the line of argument which I see pursued by several of our friends. I have no wish myself to sever production from consumption. In the body politic as in the human body, consumption without production, production without con- sumption, alike is death. The essential point is to keep up the due relation between the two — to remember that as men habitually produce that they may consume, so they should always consume that they may produce. Looked at from this point of view, consumption, which is in itself purely destructive, becomes the great conservative force of society — not antagonistic to production, which is its progressive force, but serving to it as a source of maintenance and development. What co-operation really aims at is to turn all producers into consumers, all consumers into producers ; to bring out the powers of acquisition and enjoyment among the millions hitherto absorbed in production alone ; to render all consumption fruitful, and so to speak, reproductive. I therefore entirely approve of the view that pro- duction should be chiefly favoured in those branches for which a suflicient demand can be found within the four corners of the movement itself. This is empliatically what I mean by making consumption reproductive. But from the moment production is entered upon, the producer, I consider, and not the consumer, be he poor or rich, should be the primary object of co-operation consideration to him the primary stepping-sfone in the path. The main question becomes one, not whether you or I as consumers should buy a given article so much per pound or per yard cheaper or dearer, but whether the men who spend themselves on the production of that article shall or shall not have the primary claim to the fruits of their labour. Let that claim be first 126 Co-operation in its admitted, and the claims of other men to share also in those fruits, on the ground of the help they have given, by capital, skill, or consumption, towards their being brought forth, will, I think, without difficulty, be admitted. But it follows from what I have said that it is not only the right of productive associations to constitute themselves on their own basis, but that a preference should be given, for productive purposes, to associations of producers. Surely, if the productive side of the co-operative movement were to issue only in the benevolent mastership either of the Wholesale or of any number of co-oper- ative bodies grouped in strict federations, we should have done very little, and that little wo-ild be in danger of becoming ever beautifully less. The momentous question of the future, as it seems to me, is not whether the pro- ducers are to be under better masters than heretofore, but whether they can be their own masters, and yet do the world's work manfully under the eye of God. Very little is done towards such a solution when you have merely turned them from the servants of particular men into the servants of particular bodies of men, whether with bonuses or without. I am glad to hear of any employer who gives bonus to labour, encourages his workmen to take shares in his concern, opens his books to them, admits them to a share in the management. I am glad when any co-operative body does the same by those whom it employs. But the good done by twenty such experiments is not, in my opinion, equivalent to that achieved by any single set of workers who can make for themselves a position as associated self-employers, and having made that position, can maintain it in no spirit of self-exclusiveness, but seek to impart its benefits to as large a number as possible of their fellow-workers. I think it likely that such men may find it to their advantage to draw their customers into closer relations with them by allowing them a share of profits. But it seems to me mere childish doctrtnaireism to insist upon this as a shibboleth to be swallowed by them before you admit their claim to be called co-operators. If they have succeeded in their business, it must be substantially because they have given the con- sumer already the article, either better for a given price, or at a lower price altogether, than he could have found it elsewhere." It will be seen that Mr. Ludlow contemplates in this power- ful paper that production should be carried on mainly by inde- pendent unions of workers, such as those which started into prolific life at Paris in 1848, and exist in considerable numbers in that city, and some other parts of France at this day ; as they have sprung up in Germany under the influences origi- nated in the People's Banks ; and have fought out their way, if not to great prosperity, yet, at least, to a healthy life, in various instances in England and Scotland," Now to all * See Note {<. Appendix. Applicatiou to Production. 127 plans tor this separate action, Dr. Watts, the most eminent advocate for subordinating in co-operation production to distribution objects — (i) That the system is partial, not universal for the good of each and of all ; (2) That it must drift back into competition in a more intense form. I reproduce his objections with the statement given by him of his views, taken from a paper prepared to be read to the Committee of the House of Commons on Co-operation, and a reply to strictures which had been made upon his evidence before the Committee, both published in the Co operative News.* " Co-operation," says Dr. Watts, " is a scheme for obtaining honest comnoo- dities at wholesale prices, and eventually at the cost of production, reserving the difference between the cost and the retail price for quarterly dividends, which the members are encouraged to have accumulated at ^f 5 per cent, in- terest, thus teaching provident habits, and preventing poverty and pauperism." Then, after explaining the constitution of : (i) The Retail Store. (2) The Wholesale Store. (3) The Bank. He continues — (4) The Manufactory. There are two theories at present in debate among co-operators as to the proper mode of extending manufactures : — (a). To encourage each retail store or a federation of retail stores, to em- ploy workmen for the production of such articles as their members can con- sume, and as can be profitably done in their varous localities, handing over any surplus products to the Wholesa'e Society, as commission agents, for sale amongst the other stores, or for export ; and leaving the Wholesale to engage in the production of such articles as need a large capital, and an extended market. Many retail stores do now employ workmen for manufacturing purposes, and this course is likely to be extended. In the cases of manufacture by the retail store, the profits go directly to increase the members' dividend on purchases. In manufactures by federated societies, the profits would first be divided amongst the stores themselves, according to the capital provided by each, and would then pass to the members in each store as dividend on purchases. (b). T}ie second plan is to furnish capital at interest to bodies of working men, who would work for themselves, and appropriate the profits. I prefer the first plan because it is of universal application, and would benefit all con- cerned ; while the second would leave bodies of working men competing with each other for the market, with all the present features of competitive trade intensified. * For 1879, pp. 504 .ind ^05. 128 Co-operation in its In his reply, Dr. Watts supplements and expands this statement as follows; I have always understood that co-operation is the opposite of competition; that it means working together for each other, instead of working against each other, individually, or in masses more or less compact. The co-operative store is open to everybody, and being capable of expansion to universality, works together for everybody who chooses to be connected with it ; and when productive co-operation runs upon the same lines as the store, there will be no misunderstanding and no dispute about it. Some retail stores are producers ; and such production, so long as it is sold to their own members, or handed over to the Wholesale for distribution, is tnily and wholly co-operative, since its advantages are open to all. But, il a productive store sends out its travellers into the open market or even toother stores, so as to establish a practice which cannot be followed by other pro- ducing stores without falling into competition with e^ch other, it loses its co- operative character, and is on the downward path which lands only in the old competitive rut. The Wholesale Society is wholly and truly co-operative, because member- ship of a store is membership of the Wholesale, and it is, therefore, like the stores themselves,. open to all, and it works for the benefit of all; and what' ever branches of manufacture it may set up and conduct, will therefore De conducted for the equal benefit of all the stores, in proportion to their loyalty to the Wholesale, and of all the members of all the stores in proportion to their loyalty to the various stores Evea an ordinary joint-stock company composed of workpeople, and especially of the workpeople in the establishment, is a great improvement on working for an individual employer. And, a company giving a bonus to the workpeople is a further advance to the system of true co-operation. But all these are mere temporary expedients, which, if it be attempted to universalise must nteds end in competition. Let me take, for example, the highest type of such companies, ' The Hebden Bridge Fustian Society,' which divides profits with the workmen, and also with the customers. It admits individual shareholders as well as stores, and to it« shareholders go the first fruits, beyond even the formal interest of capital. It passes by the Wholesale in its transactions, and even passes by the stores which hold shares in it, and sells to the general public. It there- fore competes with the Wholesale amongst the affiliated stores ; and it also competes with individual manufacturers in the open market. Now, suppose that Manchester and Oldham should each set up a Fustian Society on tht lines of the Hebden Bridge, and suppose that the managers of the Wholesale should find out that Fustian manufacturing is" one of the staples which it ought to take up, wheie shall we then be, and what will have become of our productive co-operation "i * * Dr. Watts conveys in this passage a somewhat imperfect idea of the Hebden Bridge Society, which limits the amount of payment on capital on shares not withdrawable tO;^7 los. percent., and continually obtains by iLe canvass of societies orders which pass through the Wholesale. Application to Production. 1 20 I do not question the wish of Dr. Watts and his followers to deal with the profits of production so as to " be for all/' But can this plan effect the end proposed ? It seems to me certain that it cannot. The benefits of distributing profits on purchases increase precisely in the degree in which they are not wanted. Even in the case of food, where to the poorer classes they are at their maximum, the skilful mechanic who earns his ten shillings a day will derive far more advan- tage than is obtained by the labourer whose wages are only 3s. 6d. Yet he would be a long way behind the foreman or clerk who may receive his £"200 to £1^0 a year ; as they in turn will be utterly distanced by the classes who fall under the three first divisions of Mr. Dudley Baxter's tables quoted in the Appendix, Note g; whose incomes are respectively over ;£5,ooo a year; between £5,000 and £1,000, and between ;^"i,ooo and £■300. This will be the case even with food, where the benefit to the poor man from returning him the profits on his own consumption is most felt, because by far the largest part of the poor man's income is necessarily spent in articles of food. But the case is far more striking when we come to manufactures. The notion of conferring a universal benefit on the working population by distributing among them the profits on their own consumption of new manufactured articles, is like a proposal to satisfy the thirst of a crowd by administering to them water in drops. The statistics of Mr. Dudley Baxter's tables, above noticed, as to the distribution of income in the United Kingdom, show clearly where the great mass of profits on manufacture, if they are distributed among the consumers in proportion to their consumption, would necessarily go— to those, whose over-large share of the material advantages pro- duced by the industry of the present day forms one of the crying evils which co- operation proposes to remedy. This evil the scheme of co-operative production advocated by Dr. Watts must make hopelessly irremediable. For it would give to the rich consumers, not only the vast mass of the products '" modern industry which now falls to their share, but also the K 130 Co-operation in its profits on production — that great instrument to which those who have studied co-operation as a system have hitherto looked, as the means of gradually raising the worker to the position which he ought to occupy. That this must be the case, so far as regards the home market, the statistics referred to prove on a large scale, and a little consideration of the circumstances of the mass of our population, and the objects to which their largest expenditure is unavoidably directed will show yet more conclusively, though in a way inaccessible to proof on the large scale of statistical returns. Take away from the earnings of the great body of the popula- tion who live by the wages of manual labour, all that they spend in food, drink, tobacco, rent, and second-hand clothes, there will remain a very small sum per head for expenditure on new manufactures. I suppose jQ^ a year would be a large allowance for the average expenditure on such articles, of the classes whose income is under £100 a year. But put it at ;^io, present ordinary retail prices. At what sum may we estimate the "poor consumer's" gains by absorbing the manufacturer's profit? To measure them we must first deduct from the price the retail addition to the cost of manufacture put on by the middlemen, an addition known in numerous instances to equal half the price, of which co-operative distribution gives to the artizan, as it will give to the rich consumer, all that belongs to their respective consumption after paying the actual cost. Then we have to consider the reduction of profit on each article due to the fact that the manufacturers of the present day rely for their income on small profits made upon large sales with a rapid turn over, rather than upon getting large profits out of fewer and slower sales. Taking all this into account I think we may conclude that sixpence in the pound is a liberal aver- age allowance to make to the consumer as the additional profit to be gained by him through adding the manufacturer's profits on his own consumption. In other words. Dr. Watts' scheme for raising the position of the working population by distri- Application to Prodtiction. 131 buting among them the profits of manufacture, would end in giving back on an average to each family a possible 5s., more probably 2s. 6d. a year. Dr. Watts may object that this computation takes no account of the profit on exported manufactures which his scheme sup- poses to be divided between the stores in proportion to the capital that they severally contribute to their production, and through them to be distributed among the consumers. Now, even if this scheme could be carried out as Dr. Watts supposes, it would not alter the fact that the largest share of these profits must go to the richer classes, because they were the largest buyers. But there is a hitch in the plan. So long as the distribution of profits on manufactures is con- fined to giving to every one the profits on his own consump- tion, it is all of one piece. Each store takes a share of profits according to what it buys on account of its members, and divides these profits among them according to what they buy. But the proposal to divide profits among the stores according to the capital contributed by them introduces a principle which must unavoidably plunge us into the old " competitive rut," whence I am as anxious as Dr. Watts can be that co-opera- tors should emerge. To divide profits on capital is the rule of competitive production. If it is introduced as the true rule for apportioning among the societies the profits on manufac- tures for foreign exportation, how can we escape the logical conclusion, that it must also be the true rule for apportioning the profits of this trade among the members of those societies to whom the capital individually belongs. Now they would cer- tainly be the wealthier members ; those who had most to spare, and were willing to run the risk of possible loss by these operations in the hope of large gains from the venture. The mass of the poorer investors who looked on the store mainly as a savings' bank, and had no prospect of deriving any large advantage from such investments, would assuredly decline to incur any risk through them. Experience has shown 132 Co-operation in its this. So that, if it were possible, for a system of manufacture carried on upon what Dr. Watts pronounces to be the " only thoroughly co-operative plan," to become general, the result must be, to give to the richer classes by far the largest part of the profits of our home trade in respect of their purchases, and all the profits of our foreign trade in respect of their capital- The difference from the existing mode of distribution would be, that the chance of any poor man rising into independence by his enterprise as a manufacturer would be destroyed, by the closely organized systt.o: of production which would replace the present system of free competition. But would not this organization be in itself a benefit so great as to constitute an object worthy of all the zeal and energy that co-operators can supply to bring it about. Dr. Watts apparently so thinks, but I cannot agree with him. An organization of industry which should simply substitute •ollective bodies of consumers in place of individuals, firms, or rompanies, as the active agents in production, which they carried on without giving the worker any special interest in the profits on his work, or applying them in any way directly to improve his position, therefore, without doing anything to remove that antagonism between labourer and capitalist which forms the chronic disease of modern industry, would in my judgment do harm rather than good. For it would hindei the growth of a better organization, whereby without giving up the economical advantages of co-operation or which Dr Watts justly lays stress, it may be possible to attain the mora and social advantages of which he says nothing. The scheme advocated by him, is, in fact, only an accident ot the form taken by co-operative activity in Great Britain expanded into a general principle. The distributive societies, as they prospered and accumu- lated capital, naturally set themselves to consider how they could use this capital so as to obtain the things they wanted on the best terms. They formed wholesale centres to do the business of buying for them to the greatest advantage. They Application to Production. 1 33 formed mills '.n order to grind corn for their own consumption.* And within their societies they have employed workmen to make shoes or other articles of clothing from the materials furnished to them. They couid scarcely be expected to place the work- men whom they employed in these domestic manufactures, on a different footing from those whom they employed in the work of distribution. While in the peculiar case of the corn mills, the fact that the labour employed in the current operations is insignificant if compared with that represented by the capital expended in the construction of the mill, or in the corn pur- chased, threw the question concerning ** men " into the back- ground, and gave to the question concerning " things " a pre- dominance of which it is quite undeserving. Hence, co-opera- tive union, instead of being regarded in its true light, as a scheme for making men better, and therefore both happier in themselves and better off, by learning to work together and study each the interests of others, instead of every one struggling to snatch at some special advantage for himself, came to be regarded, to use Dr. Watts' language, simply as "a scheme for obtaining honest commodities at wholesale prices, and eventually at the cost of production." The notion of so carrying on work that the worker may get the full benefit of his labour after providing for the cost of capital, was re- placed by that of so carrying it on that the consumers, whether producers or not, should get the greatest possible advantage out of it. This conception has the advantage of being more immedi- ately what is called " practical." Since it asked of the con- suniers no greater consideration for other men's welfare than • See Appendix, Note 4. In some instances, as at Hull, Leeds, and Sheemess these preceded the formation of societies for general distribution. Corn mills bei.ng directly concerned in supplying an article which enters largely into the food of the population, stand also in a peculiar position in regard to the application of profits to reduce the price of the articles, by which, all, including those who do the work, immediately benefit to a considerable extent. They are more properly classed under the head of distribution than that of production ; and the grinding com, &c., belongs to the art of cooking, rather than to manufacture. 134 Co-operation in its they had grown accustomed to in the store, namely, that of not trying to make a profit out of other purchasers, but giving to every one a benefit proportioned to his consumption — they had nothing to consider but whether any proposed manufac- ture was likely to pay, and easily satisfied themselves with the belief that they fulfilled the co-operative programme " To make the workers their own employers " when they paid them ordinary wages and allowed them the privilege of buying their own work, through any society to which they might belong, on as good terms as any other consumer. Now if co-operative production is to be restricted to the small body of workers to whom the working population could give em- ployment in supplying their own consumption of various manu- factured articles, it might be reasonably urged that the working consumer cannot be expected to do more for the working pro- ducer than to put him upon the same level with himself, by allowing him to obtain his own work, if he desires it, at the same reduction of price which the profit realised upon it is sufficient to allow to any other customer. But when the scheme is put forward as a general rule for regulating a system of co-operative industry, by which the present gigantic opera- tions of competitive industry are to be replaced, we come face to face with the objection noticed above, which Dr. Watts makes no attempt to meet, that the great bulk of the profits thus dealt with must go, not to the working producers in any shape, but to the wealthy consumers, without whose custom the workers would be unable to dispose of the articles on which these profits were realized. The argument used by Dr. Watts, that there is no course open between this sacrifice of the producer to the consumer, and the plan of encouraging the formation of disconnected productive societies, with the probable result of their increasing the intensity of competition by competing with each other for business, assumes an alternative which I cannot accept as necessary. No doubt, at the present day, these are the only shapes under which co-operative production exists. It does not follow that they are the only shapes which it can Application to Production. 135 adopt. That in a free country men cannot be hindered from ccuibining to carry on production on their own account, and obtain whatever advantages they can thus gain, I allow. But the consumers who, by the savings on their own consumption, can supply the capital required by the producer, and furnish by their own purchases a market for the goods produced, if they are willing to deal equitably with the workers, will, I think, be able to substi- tute concert for competition, to the mutual benefit of the producers and themselves. The advantages which they could offer to associated over isolated producers will operate somewhat as the attraction of gravitation, which, without preventing the freedom of our movements on the earth, keeps us close to it. Productive societies might be formed by means of capital pro- vided by the consumers, in order to secure for themselves articles on which they could rely at reasonable prices through a central association, by which all the guarantees against an injurious competition desired by Dr. Watts might be attained without any of the disastrous consequences that must follow his method of attaining them. At present the Wholesale withdraws all the profits of its Leicester Shoe Works from the workers in order to distribute them among the societies which buy the shoes in infinitesimal dividends, for which nobody thanks it* Suppose that, instead, it employed the surplus, after paying the ordinary charge for capital and making such provision as might be thought expe. dient for reserve, for the benefit of the workers ; either simply by converting them into shareholders; or with the addition of any plans for social good, such as those considered in the next chapter ; turning its factory into a living witness of what co-operation might do for the working population. What would there be in this action tending to competition more than in the present arrangements ? No doubt the works would be converted from an ordinary workshop into work- shops occupied by men who had a direct interest in /he * How small these dividends really are is shov/n in the next chapter. 136 Co-operation in its prosperity of the establishment, and were thus stimulated to do their best to increase by good and quick work the sales on which their own share of benefit depended. But the conditions under which this work was carried on might be such as would keep it always united with the Wholesale* even if those who carried it on constituted, as they should do, a separate society itself a member of the Wholesale. These conditions might be embodied in the rules of such a society, to any alteration of which the Wholesale might be made a necessary party, through its representatives, while they gave it such a voice in the management as would secure the per- formance of the stipulated conditions. Disputes as to prices might be settled by arbitration, which might be applied also to disputes as to wages. It would be as open to the Whole- sale as it is now to provide for any extension of the business, either by enlargement of the existing works or by forming new societies under similar conditions, or new branches of the same society in any other locality, if this appeared to be commercially preferable. And what they did for the shoe works, why should they not do equally well for any other manu- facture on which they might think it desirable to enter. That there would be difficulties in the way of such plan, I do not deny ; but they would not be difficulties of the kind contemplated by Dr. Watts, not difficulties arising from any tendency in the system to slip into " the rut of competition." On the contrary, to all such tendencies the system would practically oppose the most effectual bar, by inducing all bodies of workers who might be disposed to start any pro- ductive enterprise to come to the Wholesale for support, and accepting its control, to enlist under its banner in the great co- operative union. For this union would then give them all that they could hope to get from the m.ost successful independent attempt, with a probability of success increasing with every ad- dition to the number of productive ander<:akings brought into association, from the support that eve'-y member would be able to give in various ways to the others. At present all workers who Application to Production. 137 value their own independence and aspire to work out a higher position for themselves, must necessarily separate from the Wholesale system, which affords no satisfaction to such aspira- tions. But if the system were modified, so that while securing to the purchaser all that he has a right to ask— good work at reasonable prices — it secured to those who did this work the full measure of advantage which it was capable of yielding to them, I am persuaded that the workers would generally be ready to accept the degree of control which the preservation of union necessitated, in return for the many benefits that co- operative union ajfiforded them. They would be transformed from their present attitude of indifference, almost of hostility, to the Wholesale into one of hearty adhesion to it. Then might we reasonably hope to see co-operative produc- tion spread from one branch of industry to another, till it gradually embraced the whole circle of our industrial activitierj. The bodies of workers who now constitute the strength of our Trades' Unions would begin generally to see and believe as a practical reality, what at present only a few among them dream of as a remote possibility — that union for self-employ- ment is capable of giving the workers all, and far more than all, that their most sanguine hopes have looked for from union to impose conditions on their employers. They would bring in their energy, their resources, their organised funds, their long established influence, and the trained skill of the workers who form them, to swell the stream of co-operative production, and gain for the co-operative workshops, the just reputation of turning out the best and yet the cheapest work, because it would be the work into which the worker had thrown his whole might, from the consciousness that all that he did for others had a direct reflex action on his own welfare. While, on the other hand, the combined action of these many centres of in- dustrial activity, working together and not against each other, would make it possible to give such security to the capital in- zested in their united operations, by the formation of reserves, 4nd the principle of mutual assurance, that capital would 13^ Co'Operatio7i in its flow in upon the union from the great body of the public who seek for investments at once safe and profitable, as it has flowed in to the People's Banks in Germany from a similar cause. And so the problem of the relation between capitalist and worker would be solved in the only way in which, I think, it can be satisfactorily solved, namely, by reversing the present relation. Instead of the capitalist employing the worker, while he takes upon himself the risk of the work, the workers taking upon themselves the chances of loss which they may reduce to an average by the principles of insurance, would find employ- ment for capital, and, by giving it safety, obtain it on the most favourable terms.* I have said that there are difficulties in the way of such a plan of productive union ; but they are difficulties due, not to the plan, but to the way in which the problem of co-operative production has been presented on the scheme expounded by Dr. Watts. In effect, that plan assumes and says to the working population, "You have two modes of carrying on production, i. It may be carried on by a number of isolated socie. ties insufficiently provided with capital, or obtaining it under conditions little favourable to the worker, yielding each other no definite mutual support, and not connected by any common bond, which shall prevent them if they succeed from com- peting with each other. 2. Or it may be carried on by produc- tive establishments, closely united with each other by means of a common centre of distribution, commanding in conse- quence of this union an abundant supply of capital at the ordinary rate of charge, in which all the profit will be applied, not to enrich a few manufacturers, but for the benefit of all concerned. If you choose the first alternative you can judge for yourselves what chance there is of productive co- operation ever becoming universal. If you choose the second, you will each severally receive benefit in proportion to your consumption, and ultimately the working classes will become the great manufacturers and traders of the countr y." It cannot * See Appendix, Note 10, " On Work and the Workman." Application to Production. 139 be surprising that such representations should in^^luence those who believe in them to choose the second alternative. But let co-operators generally be brought to see what, I think, calm enquiry must show them — that the supposed alternative, and the results attributed to the adoption of the second course, are both delusions — that it is quite practicable to carry on pro- duction in close connection with a distributive centre, under conditions which will prevent any competitive conflict among the producers, without withdrawing from the workers any of the advantages derivable from their work — that by thus carrying on production it will be possible for the body of the population to appropriate for the general advantage, the profits now absorbed by private manufacturers or traders — but that on the scheme of federation advocated by Dr. Watts, these profits must be mainly handed over to the wealthy con- sumers ; while the reward of the workers will be only the insignificant share of any profits belonging to their own con- sumption. Let this be made clear to them ; and I think that no body of working men, federated or not federated, will be so foolishly selfish, as tor the sake of a possible present annual gain of a few shillings, if this gain ever got to shillings, to throw away the prospects of future good which co-operative pro- duction, conducted on the plan of securing the profits on work to those who do it, may bring to their children if not to them- selves, and to the whole mass of the working population. That the working consumers who may set on foot this sys- tem of production would be entitled to a special benefit from it, I allow. But this benefit might be secured to them without sacrificing the hope of permanently raising the condition of the workers. Without going into details which, under the present circumstances, must be purely speculative, no difficulty, I conceive, would be found in giving a preferential choice of employment in any manufacturing enterprise set on foot by the Wholesale Centre, to workmen of good character, recommended by the societies belonging to this Wholesale ,• the aid of the lot being invoked, if needed, to prevent com- 140 Co-operation in its plaints of partiality. As co-operative production extended, the workers thus recommended would come to include all co-operative workers whose claim to employment depended on the capital supplied by the societies constituting the central union, and not on that contributed by the workers themselves. All might have an equal chance of employment as soon as there was a possibility of employing them. * These observations on co-operative production may be charged with being too theoretical for the title of this chapter. But in the present position of this branch of co-operation the most practical considerations are those relating to the mode on which its practice can be best conducted. Now on this question I agree with the federalist. Since the in- dispensable condition of giving to the worker the full benefit derivable from his work is, that he shall obtain capital on the most favourable terms, and to obtain capital on these terms it must get a security, which the workers can give it only by means of their association as consumers — the close connec- tion of co-operative production with co-operative distribu- tion is, in my judgment, an essential element to its success on any considerable scale. For thus will it become possible for the worker to obtain capital on terms which will not so swallow up the profits as to destroy the margin left for the benefit of work. Further the federal system possesses more fully than any other form of constitution known to me the power of uniting freedom in the members with authority in the centre. It is therefore peculiarly adapted for combining the united action ii.dispensable to commercial success, with the individual liberty which the productive societies should secure. But while, for these reasons, I would urge upon all co- operators who desire to see productive co-operation take its fitting position, the great importance of giving to the pro- duction connected with the great centres of distribution that direction in the employment of profits which will make their action a permanent benefit to the workers, the heroic * See Appendix, Note 1 1, for a modification of this scheme. Application to Production. I4I band who, in the absence of such a system, throw themselves into the breach, and in the hope of promoting the common good, take the chances of the hard fight involved in the mde- pendent formation of a productive co-operative society, have a right to the best advice that the writers of this manual can give to aid them in their noble efforts. Now, so far as con- cerns the steps to be taken to form any society for this purpose, it is unnecessary to repeat the remarks already made in re- gard to distributive societies, since they apply equally to the for- mation of productive societies, with exception of the schemes for obtaining public support. If the idea of production were taken up by any influential members of a Trades' Union, there might be some use in an appeal to its members generally, by public meetings, to raise the required funds. But, except in such cases, or the rare instances where public sympathy may be awakened in favour of any particular body of workers, sub- scriptions will, I take it, generally be got only from those who hope to obtain employment through the society. The attractions which fill the lists of ordinary joint-stock companies, the hope of large dividends on the invested capital, or the speculative anticipation of premiums on the sale of shares, which has helped to float company after company, often to the disaster of those who find themselves left to man the vessel when it is floated, must necessarily be in-operative in cases where the anticipated profit is to be employed for the benefit of the wuikers. To those workers therefore, or to any persons who, from the desire to help the working classes to help them- selves, may be satisfied to receive moderate dividends on their capital if the business succeeds, and willing to run the chances of loss if it does not, to one or the other of these classes alone, can appeals for support be made with much hope of success in the beginning of the society. And as, with exception of the last class, few will be disposed to subscribe any consider- able amount of capital to an isolated enterprise, which can- not offer security to the capital subscribed, it is desirable in 142 Co-operation in its all such enterprises to give to capital, in the shape of profit, some compensation for the possibility of loss. How is this share to be determined ? I know no better method than one founded upon the principles laid down and adopted in prac- tice by M. Godin, in the foundry at Guise, created by him, and now legally transformed into an Association of Capital and Labour. M. Godin gives to capital first out of the gross profits, after carrying to reserve what may be considered neces- sary for the general security of the business, what he calls its wages, that is, the interest which capital employed in manu- facturing operations is expected to receive according to the rate prevalent in the locality where the business is established. Then he assigns to it a share in the profits remaining to be divided, rateably with work of every description, whether manual or intellectual, employed in the business, according to their respective wages. I take the balance sheet of the Association for the year ending 30th June, 1880, the first after its legal constitution, omitting shillings and pence.t £ £ Capital 184,000 Sales during year, gross 193,066 Less Trade allowances 52,035 141,031 Profits at Familistere 2,370 „ by work at Guise 24,367 „ „ Laecken 5,371 3.2,108 Wages and salaries of all descriptions In Familistere ... ... 2,580 In Works at Guise ... 53,594 „ Laecken ... 4,959 Extra services 5^520 66,653 Wages on Capital {£e^ per cent) 9,200 Total Claims to Share in Profits ... 75.832 * Sec Le Devoir for Feb. 6, 1881. The same idea li.ns been independently proposed by Mr. Peter Papin in a pamphlet called " Harmonious Co-operation between Capital, Intelligence, and Labour in Productive Industries," published 160, Franklin Street, near Washins]ton, Chicago, U.S. 10,065 2,749 2,o62 458 458 £"9.200 • 1.389 10,589 Application to Production. 143 Application of Profits ... £32,108 To Reserve .. ... ... £5.727 „ Share of Work (15. i per cent, on ;^66,653) „ Administration „ Administrative Council ... ,, Superintending Council ... For Reward of Exceptional Services ... To Capital — Wages ... ,, Share of Profit on ditto (15. 1 per cent.) ... £32,108 This rule has the advantage of interesting alike the capitalist and all who are in any way concerned in the work in the prosperity of the business. While it applies equally to all cases, whatever the proportions of labour to capital may be; and does not, as all plans for capitalizing \vages do, bring out a different scale of division according to the length of the period to which the division relates.* It should be observed, that in this case, though ;^29,730 ol the profits of the business was applied for the benefit of the producers, ;^52,035 had been previously allowed to the pur- chasers ; who, no doubt, were actually various intermediaries between the manufacturer and the consumer, but in a co- operative system of distribution would be the associated consumers, to whom the present customs of trade would thus have given more than six-tenths (63.62 per cent.) of the gross proceeds; leaving them little ground of complaint, if they were asked to leave tc those who produced all the profits, the remaining 36.38 per cent, of their earnings. To pass from this rule of division, which may be varied in- * Suppose ^50,000 capital, and ;^30,ooo wages paid in the course of a year,^ work would share — if the division is annual, in the proportion of if 30,000 tc ^80000 or of 3 to 8 ; if the division is half yearly, in the proportion of^ 15.000 to ^65,000, or of 3 to 15; if it is quarterly, in the proportion of ^7, 500 to /■5 7, 500, or of 3 to 25. 144 Co-operation in its definitely according to the rate of wages assigned to capital,* T would observe, that the profits, whether on the wages of capital or of work should be capitalized, so long as they can be advantageously employed in the business, at least until some minimum limit of capital required to be held by each member is attained. Private firms have commonly an advantage over companies in the growth of their capital out of its own profits, which the desire of its owners to roll up large fortunes induces them to accumulate. But as this desire cannot oe expected to have any powerful effect on a large body of per- sons, each individually entitled to a small part of the profits only, it is necessary to guard by the rules of the institution against the danger of dissipating profits in dividends ; which would affect co-operative societies more injuriously even than it affects joint- stock companies, from the greater difficulty in obtaining capital likely to be experiencd by them, than by in- stitutions where all gains are appropriated by the capitalist. Still more necessary would the application of this rule be if any attempt is made to obtain custom by admitting purchasers to participate in profits in respect of their purchases. For since the whole charge, for materials, wages, and capital, has to be paid out of the sales, the claim of the consumer, if it is based on comparative totals, will be apt to swallow up so large a portion of the whole amount divisible, that when paid away to persons who will be generally little concerned in the prosperity of the business, the result must be more injurious even than such pay- ments made on capital or work. But notwithstanding the high authority which has supported, as a truly co-operative plan, the notion of sharing with the consumer the profits on production, my advice to those who may unite to carry on productive co-operation on their own account at the present day is, to confine the participation in profits to the two factors that contribute to produce them— the accumulated past work called * If the rate of profi": given by this method of division is not considered sufficient in any case, & larger share of profit mijjht iiave to be given. But it is difficult to lay down any rule by which lo measure this share fairly. As j mailer of compromise, I may suggest an equal division between capital and work of th'; surphis over 5 per cent. Application to Production. 1 4=1 capital, and the present work, intellectual or manual, which is sustained by this capital and makes it productive — and to confine their consideration for the consumer to giving him good work at reasonable prices according to the scale of prices prevalent in the particular manufacture. So long, indeed, as there was ground for hoping that some scheme for dividing profits between capital, labour, and custom, such as one which should assign a third to each, would meet with general acceptance among the body of co-operators and serve to knit them to each other, the admission of the con- sumers to participate in profits could be fittingly recommended vbr adoption by any body of workers, as an evidence of their desire to act in this spirit of union. But since experience has negatived these hopes of comprehensive conciliation ; since no symptom appears of that readiness on the part of the co- operative consumer *' to sleep all night at the door of a co- operative manufactory that divided its profits with its cus- tomers," in order to be admitted among the number in the morning, with which Mr. Holyoake's imagination endowed his •anticipated purchasers ; but on the contrary, they push " the logic of co-operation'' to the point where it gives them all, it has become clear that this " logic " will only lead the worker into a bog, where all his hopes of benefit from co-operation must be swallowed up. Those who have persuaded themselves that consumption is one of the factors in production entitled to a place alongside of labour and capital as a third element will, of course, protest against this exclusion of the consumer as unjust to him. But if we revert to first principles we shall see that this claim has no solid foundation. It rests in truth on the mystification occasioned ly the general use of money as a medium ol exchange. If we restore in imagination the barter which lies at the bottom of commerce, and remember that all sales are essentially exchanges of one product for another product, it becomes ridiculous to argue that the man who has got the product which he desires, in exchange for the product which 146 Co-operation in its he has parted with, can have any claim on the man with whom he has made the exchange, to share in the advantage that may result to him from the transaction. If A has agreed with B to give him, say, 20 pairs of shoes in exchange for 100 pairs of stockings, there the matter ends. Neither A nor B can have any claim on the other in consequence of the way in which that other may dispose of the articles taken in exchange. A may give 39 pairs of stockings to C, from whom he had got the leather, and 40 more to D and E who made it up under agreements which he may have entered into with them, keep- ing 21 for himself. But this cannot give B a right to say ** Friend A, thou hast advantaged thyself to the extent of twenty-one pairs of stockings. Give me seven pairs back as my share of this advantage." A would have the right to reply, " Friend B, what thou sayest as to the advantage is true, but as to giving thee back the stockings I cannot do it unless thou givest me back a like quantity of shoes." Obviously, then, the claim asserted for the consumer to share in the profits of production must rest, not on any natural right, but simply on the wish to reconcile the conflicting interests existing between the buyer and seller on the one hand, and the capitalist and worker on the other hand. For this purpose it is much to be desired that the producers should mutually agree to share the advantages obtained by any of them trom any improvement in the production of the articles respectively produced, which, in the case of such a mutual understanding, each would make known to the other. The principle laid down as a basis of the Co-operative Union, that one of •its objects is "to unite the conflicting interests of the capitalist, the worker, and the consumer by the equitable division among them of the fund called profit," has, I conceive, such an agreement in view. But in order to make this equitable division the principle must be applied to the entire fund, not to a small part of it only. This " fund called profit" includes, in competitive trade, the w)wle difference between the sum paid by the purchaser and the cost (ist) 0/ Application to Production. 1.47 making what he buys, (2nd) of delivering it to him. This diflerence constitutes the profit of the manufacturer and the distributor, including under that name all the middlemen, merchant, shipper, carrier, wholesale dealer, retailer, who come between the producer and the purchaser. Of this fund, at the present day, the producer has by far the smallest share ; four- fifths of it at least, if not a still larger proportion, are divided among the different classes of middlemen. This large share the consumers have discovered the means of appropriating to themselves, in some cases entirely, in others to a very large extent, by association. How then can they claim any equitable right to participate with the producers in the small remainder while they retain that larger share to themselves ? He who asks for equity must do equity. Let the consumer concede to the worker the right to participate as a worker in the profits which the consumer gains on the distribution of the work produced, and he will have the right to call on the worker to admit him to participate as a consumer in the profits which the worker gets by producing that work. If he will not allow the worker to share as worker in the profits of distribution, he loses all right to ask that the worker should allow him to participate as a distributor in the profits of production. It has been alleged in support of the proposal to assign the profits of production to the consumer, that to give them to the producer will tend to perpetuate the system of caste, which it should be the object of the social reformer, as it has been of late years that of the legislative reformer, to destroy. The argument goes further than the present question, extending to that total withdrawal from the producer of the profit on his work proposed by the federal system discussed above. Still, were it tenable, it must tell against the claim to those profits asserted here for the worker. But in truth the tendency to caste is fostered, not lessened, by the withdrawal from the worker of the profit, which is the natural means of counteracting this tendency whenever it is not thwarted by 148 Co-operation in its arbitrary regulations. The man who has to live on fixed wages has no motive of interest for cheapening or improving his work. He stands, therefore, over against the rest of the community in that stiff, unsympathizing attitude belonging to a caste. But the man who feels that, by increasing the sale of his work through its greater cheapness or better quality, he might improve his condition from the increased profits which this larger sale may bring him, has a motive in his own interest to do that which benefits the public at large, with whom, therefore, he is brought into relations antagonistic to the feeling of caste. Without in any way departing from the position already taken up, that a thorough alliance of the worker with the con- sumer, by which the latter shall be assured of the goodness of the articles produced, and the fairness of the prices charged is of very great importance, while urging upon the worker to do in order to produce this alliance, whatever he can do without injuring himself, I must then caution him against admitting any claim on the part of the consumer, who does nothing to aid the producer but exchange one product for another — money for money's worth — to share in the profit which may arise to the producer through this exchange. If the co-operative consumers leave the worker as they have left him to fight his own battle in the field of competition, it is necessary that the worker should claim the right to fight it on equal terms with his competitors, by retaining that weapon of profit on manufacture which forms the ever-growing strength of successful manufacturing enterprise. On this basis, therefore, I advise all co-operative productive societies, independently formed hereafter, to take their stand ; opening their arms freely to the consumer who will join their ranks ; and giving to all, whether they accept this invitation or not, every guarantee in their power of the goodness of their work, and the fairness of their prices; but absolutely ignoring the claim of any one to share in profits which he does Application to Production. 149 nothing to produce beyond paying an equivalent for what he receives. I copy, in conclusion, from an excellent tract published by the Central Board on " Co-operative Production, and the Duty of the Distributive Stores in relation thereto," the following sensible remarks on the commercial means oj success : — " First of all we should produce what is required. Some socie- ties have entirely failed, through placing on the market articles which they wanted to produce, but which the Stores had no sale for. This often makes store managers disgusted with co- operative productions, and the producing society has to go into the general market with only a limited capital, which soon becomes smaller by degrees, and ultimate failure ensues. " Producing societies should, in the first place, look round for a general co-operative want, and then if good articles are pro- duced at as cheap a rate as they can be produced by private firms, the trade would in all probability be ensured, because there are innumerable articles which the stores distribute, that would give ample scope for yet very many productive under- takings." The writer obviously believes, and I believe with him, that the working consumers require no other motive than the desire to do full justice to work, in order to support societies where the worker is able to apply for the benefit of present work, the profit hitherto appropriated by past work rolled up into capital. The apparent selfishness manifested in this matter by distributive societies has been due, I believe, mainly to the theories, well intended, but quite deceptive in everything except the value of federal action, by which they have been misled. The time will come, I am persuaded, when the scales will fall from their eyes, and federal action will be directed to convert the accumulated savings of co-operative consumption into the fruitful source of innumerable benefits to the working producer. 150 Co-operation in its In the meantime we may, I trust, say truly, that for those workers whose self-reliant energy may create institutions where labour and capital stand in equitable relations, a field is opening among the distributive societies which will not be so difficult to cultivate, as hitherto it often has proved. But the working producer who would cultivate this field successfully must not forget the indispensable condition of his success that his produce shall stand comparison both in quality and in price with those of his competitive rivals. His claim upon the co-operative consumer must be limited to a fair trial. He cannot expect continued support if his products when tried are dearer than similar articles of equally good quality produced by other makers. I fear that this essential condition has not always been sufficiently borne in mind ; that the worker has sometimes transferred to his own workshop the feelings which he has been accustomed to cherish towards his employer, and has looked upon it as a quarry from which it was his business to extract as large an amount of wages as he could. But the businesses which at the present day could bear this treatment are, I believe, few and exceptional. The economical benefits to the worker of becoming his own employer will not commonly be found in the positive addition which he will thereby be able to make to his present wages. It will consist more in the power he may thus attain of regula- ting the conditions of his own life ; in the possibility of thus making his wages as fruitful of advantages to him, as they may be ; in the manly qualities of prudence, foresight and self- government, which union, for the purpose of mutual aid in self-employment, will cultivate in the individual, while they place him in a medium suited to call forth and facilitate their growth and exercise. The worker will find himself brought face to face with the unavoidable laws of supply and demand in their application to the questions of food and population. He will deal with them in a state of mind produced by a life Applicatio7i to Production. 151 where, through the results of association, the standard ol comfort is generally higher than it is at present. Is it unreason- able to expect that, under such circumstances, the workers will commonly learn to act in a way in which, were they commonly to act now, their condition would assume an aspect very different from what it now offers? While the same principle of association which works these effects, will give to them a far greater command than they actually possess over the resources applicable to increase the means of subsistence in proportion to the numbers to be fed. The workers who would not sacrifice a great future to an insignificant present must look for the improvement of their condition through self-employment, not to the immediate increase of their separate incomes, but to the gradual accumu- lation and wise application of the collective capital rolled up from their accumulated profits. While for the success of their businesses whence these profits are to be derived, they must rely on the good value which they give to those who deal with them. But here is open to them a road, which any body of workers bold enough to follow it would, I am con- vinced, find to lead directly to the desired end. That road is perfect honesty — honesty which admits of no concealment in respect to the quality of that which is produced. I lay emphasis on r/waZtTy, because the rule does not apply in the same way to profit. I could wish, indeed, that we had reached the goal to which co-operative production may some day bring us, when the rate of profit on different articles shall be substantially uniform — an agreed charge — varying only with the differences in cost due to the rapidity of the sales, and it will thus become possible to disclose it without fear of the consequences. But at present this would be impracticable* The prices of co-operative work must for a long time be regulated by the competitive market, — where the small profit on one class of goods is habitually made up by a much larger rate of prcffit on other classes. The producer, who should fix the rate of profit in both cases on a uniform scale, would be -52 Co-operation in its rewarded by finding that the purchasers took the articles where the price was reduced, and left those where it was raised. The co-operative producer who would not be ruined must therefore conform to the ordinary rules as to prices ; in which ne does no injustice to the purchaser, who can judge for himself whether the thing he buys is worth the price asked for it, if he can be sure that this thing is what it professes to be. Now here it is that the mischiefs of our actual competition specially show themselves, and make a great opening for the co-operative producer, who will seriously apply himself to remedy them. It has been sometimes maintained that co-operative societies should sell no articles but those of the first class. Since, probably, the largest part of the articles produced at the present time would not come under this description, to insist upon such a rule would be practically to shut out co-operative producers from making the articles which they would have the best chance of selling. I do not ask of them any sacrifice of this sort. What I would urge on them is, always to let the purchaser know exactly what he is purchasing. For instance, textile goods are continually thickened with size of various ingredients. Let the exact nature and quantity per yard of this size, and of each ingredient used, be stated on a ticket attached to each article. Again, substances of different sorts, silk and cotton, cotton and wool, &c., &c., are con- tinually intermixed. Let the precise quantities of each, and if the substances used are of different grades of quality, the differences of quality be declared. So in other cases, which it would be endless for me to attempt to specify, the principle being always the same, that the purchaser shall be informed by the producer of every fact material for him to know, in order that he may judge whether the thing purchased is worth the price given for it. That such a system of honest trade would be a great success, if the goods thus described were brought before the true Application to Prodtiction. 153 purchasers, those who buy to use and not to sell again, so soon as they were convinced that the statements were trustworthy, I am satisfied ; and if the statements were strictly accurate, and therefore capable of being verified by independent exami- nation, it ought not to require a long time to convince the public of this fact. Middlemen would doubtless laugh at the plan, considering themselves duly qualified to determine the value of any article they desired to buy without information as to its structure from the maker. Yet even these professional buyers might probably not be unwilling to be saved the trouble of careful examination, if they found that whatever it could tell them they could learn, without this trouble, from the statement of the producer. While the co-operative distributive societies which, if they buy to sell again, buy to sell to their own members, would supply a class of buyers disposed to value the system, who could be relied on to bring before their members any statements supplied by the producers in the form furnished by them, and would thus stand to the co- operative producer in the position of natural allies without being subjected to any unreasonable demand for their support.* * Some caution would be required in working such a system as is here suggested, against fraudulent attempts to extort money, made by purchasers on alleged discoveries after goods had been taken away that they did not correspond with the statements made. The danger is easily guarded against by proper notices when it is foreseen. I mention it here only that I may not oe supposed to have overlooked it. Chapteu ij. THE PRACTICE OF CO-OPERATION IN SOCIAL LIFE. Co-operation regarded as a systematic course of action by which the mass of the population may gradually raise them- selves out of the evils attending a society, where the great majority are engaged in a ceaseless struggle to promote their own interests without regard to those of other men, to the good attainable by a society where the great majority are united by reasonable agreement to carry on work and promote institutions for the common interest, naturally falls into two great divisions : 1. The formation of a collective income — of united resources, by which the weakness of the individuals who form the mass may derive strength from association : 2. The employment of this collective strength to create new conditions of life, adapted to foster the exercise of mutual help, and divert the spirit of competitive struggle into directions where it may become useful instead of injurious. The first of these functions has been fulfilled in England by the distributive system of retail and wholesale societies, which, if carried on upon the Rochdale plan, create collective income for their members ; while they serve as excellent savings' banks, where the economies produced by the suppression of unneces- sary middlemen, may be accumulated. In Germany this function has been discharged hitherto mainly by the People's Banks, of which more will be said in a subsequent chapter. But, in either case, if co-operative union should stop at this stage, it would have very imperfectly accomplished the task The Practice of Co-operation in Social Life. 155 here assigned to it. Distributive Societies and People's Banks may apply part of the profits of their business for the forma- tion of libraries or reading rooms for educational purposes, or the construction of halls where social as well as business gatherings may be held ; but these operations leave the ordi- nary lives of their members almost untouched. So they may facilitate for a few of their members the obtaining houses of their own, by acting as building societies for the outlay of the savings which they have helped them to accumulate. But those who occupy these houses, except they are themselves employed by any society, must look for the means of living in them else- where than to the society. And, as the societies must regulate their own situation by the places where their members rind the means of supporting themselves, they can, at the best, do very little towards bringing within their reach conditions of life, better suited than the life of our towns and cities is, to form men into beings worthy of their vocation as children of God, — as the highest manifestation on earth of spiritual life. Hence arises the importance of co-operative production. It is the indispensable intermediary between co-operation as an agent for giving to the mass of the population the power arising from their collective income and accumulated savings, and co- operation as an instrument through which this income and these savings may place within the reach of their possessors the largest amount of material advantages attainable by the use of their accumulated resources, combined with the conditions most favourable to the development of their moral and intel- lectual natures. The last chapter has shown how, by co-operative union, pro- duction may be carried on for the benefit alike of the con- sumer, to whom it would secure good articles at reasonable prices, and of the workers, to whom it would give the full profits on their work at a minimum charge for the capital needed in it. The secret of this double benefit is, that the productive work shall be carried on in connection with a distri- butive centre, which, by securing custom, may assure the 156 I'he Practice of Co-operation in Social Life. capitalist against loss and thus obtain capital on the most favourable terms, while, as the agent for supplying this capital, it may guarantee to the consumer the goodness and reasonable prices of the things produced. Now by means of this same central connection, the productive society can be converted into the source of innumerable social benefits. Modern industry, from the vast scale on which it is carried or. in its manufacturing centres, and the great facility of con- veyance produced by the extension of railroads, has become, to a great extent, independent of places. With the exception of mines and quarries, which must necessarily be worked in the localities where the substances to be extracted from the earth are found, it may be said generally of any manufacture for which there is a good sale, that the site of the manufactories may, in the present day, be almost wherever those who carry them on please, and the ground required can be obtained. Now, since this good sale is precisely that which co-operative union would have peculiar facility for securing to co-operative manu- factures, those who carried them on, might, without injury to their economical production of the articles manufactured, be guided in the choice of the sites for their buildings by reference to the general well being of the inhabitants. They might place these centres of work in pleasant situations. They might certainly surround them with gardens, in which the workers, or as many of them as were so disposed, might find an agreeable and profitable variety in their labours. And by taking advantage of favourable opportunities they might through the acquisition of larger estates, combine agriculture with manu- factures. So that they would begin to exercise, on an extended scale, that collective ownership of land, that close connection of the population with the source of their food, which, as has been already pointed Jut, would be the great security to the whole body of workers, that, if the progress of invention enabled one man to do what it required two to do before, this saving of labour shall work to the benefit of all without detriment to any. The Practice of Co-operation in Social Life. 157 But these conditions of permanent economical prosperity are also the conditions for securing social benefits. The establish- ments whose formation have been traced, would be co-operative self-supporting home colonies. The dwellings forming them might be so arranged as to insure to the inhabitants the greatest possible amount of convenience within their means, according to their ideas of what was to be desired. What these arrangements should be is a matter which may be very variousiiy settled under differing circumstances by those imme- diately concerned, and must be left for them to determine. The benevolence of Sir Titus Salt has given us a striking illustration of what might be done to improve the conditions of life of the working population, by the formation of co- operative villages round the centres of their work. But the great prophets of social reform in modern days, Robert Owen and Charles Fourier, more especially the latter, have developed an idea far more full of promise for the future than any mere improvement of isolated dwellings, namely — the idea of unitary homes, where the magic of association shall secure to the whole population whatever advantage isolated houses can give in com- bination with those greater advantages that collective action can provide. And we have now in actual operation a remark- able example of what may be thus effected. The admir- able results obtained by M. Godin in the Social Palace constructed by him at Guise, call upon all who desire to see the homes of the working population what the homes of mankind ought to be, to give their most serious attention to the ideas enunciated by one who has so strikingly illustrated in practice what he has luminously expounded in principle.* Individually I may say, that to the Social Palace, with its varied range of enjoyments and advantages, and the collective property in land naturally accompanying them, I look as the true key which will open the door to that higher life — the goal, and rich reward of co-operative effort. Viewing it in this light, I proceed to deal with some objections likely to be * For a fuller account of M. Godin's ideas and the Familistere at Guise, see 4 he tract on " Associated Homes," published by the Central Board. 158 The Practice of Co-operi'*^on m Social Life. nised to the idea of such common dwellings, by persons whose beau ideal of desirable domestic arrangements has hitherto been that of a house and land of their own. A residence in a unitary home, it may be said, would be like always living in lodgings. But, intruth, the relation of the residents in these dwellings to their abode would be quite unlike that of a lodger to his apartments. The associated home would be the property of an associated body ; who might indeed allow persons, not members of the association, to occupy part of their abode as passing tenants, but would themselves be jointly interested in the whole property ; holding the rooms in which they lived as their own, so long as they chose to retain their occupation, without liability to a rise of rent, or fear that the outlay on any improvements made by them would be lost to them if they removed ; but with greatly increased power either of increasing or diminishing the number of rooms that it might be convenient to them to occupy, and facilities for giving them up altogether if they desired to do so. All this the rules of the society might secure to the residents, in con" sideration of their paying rent, in proportion to the amount and character of the accommodation required by them, upon some fixed scale, which would form the income of the asso- ciation and make of its stock a safe investment. There would be no owners behind the residents to take advantage of them. They would be the collective owners, to whom all ad- vantages derived from the property wouid belong. They would regulate for themselves the conditions under which the occu" pation of their joint property could be made most beneficial to them. They would thus be able to unite the sense of security now attending individual ownership, with freedom from the burdens which the individual ownership of houses and lands often draws after it ; and would find in the stock of the asso- ciation a means of investment, practically recouping their rent.* • Tbe experiment of combining numerous separate family dwellings into a joint residence has been successfully tried in England among The Practice of Co-opcracion in Social Life. 159 To the objection that these homes would destroy the privacy of domestic Hfe, the experience of our ancient colleges, of the dwellings mentioned in the note at the bottom of this page, and of any one who has seen the Familistere at Guise, gives the best answer. It is an objection founded on ignorance of the fact. The unitary home makes intercourse easy, but it secures privacy greater than is generally possessed by the dwellers in town. It expresses the spirit of unity, and gives it full effect by preserving individuality. It is in truth the proper co-operative dress needed to make human life such as we may reasonably aim at making it, and accordingly, as has been noticed, it forms an essential part of the plans of Robert Owen, no less than of Charles Fourier. This circumstance confirms the conclusions arrived at in treating the question, how the profits on production should be dealt with. For clearly, if they are to be applied, not in the mass for the benefit of the workers who are engaged in carry- the richer classes in the suites of rooms in Queen Victoria-street, London. The mansion erected by Mr. Hankey at Queen Anne's Gate approaches more nearly to the idea of an associated home. At Richmond also a similar attempt has been successfully made. Among the poorer classes, again, the houses built by the Metropolitan Dwellings Association, the Peabody Dwellings, and the dwellings erected by the Improved Industrial Dwellings Company, may be referred to in proof of the superior accommodation capable of being brought by this means within reach of the bulk of the people. But none of these attempts come up to the notion of an associated home, such as M. Godin has produced. The aim of such a home is to unite all its residents into a self-governing body in all the measures required by their common interest ; so that those who are neighbours locally may become true associates, with a mutual disposition to promote each other's welfare, manifested among other ways in the management of whatever conduces to the common convenience. The home would have the uniting effect of a co-operative store applied to the daily affairs of life in a way which cannot be done among men scattered in separate and often distant residences. Hence, however near one associated home might be to another, the wholesome feelings of neighbourhood, which naturi ally exist in country places, but are lost in our great towns, would never cease. Each would be a little community of its own, where everybody, more or less, knew every one else ; and found in the help they could render to each other an inexhaustible field of morally healthy occupation. i6o The Practice of Co-operation in Social Life. ing on productive enterprises, but as minute dividends on purchases, distributed among a body of persons resident in widely separated localities, co-operative production will not in any way tend to the formation of associated dwellings. The workers will live as they do now, where and how they best can around the places where their work may be carried on, occupied probably, whenever they entertain the question of improving their dwellings, with plans of co-operative cottage building, which tend to strengthen the present tendency to domestic isolation rather than to replace it by those higher fbrms of associated life on which, if the "logic of co-operation '' is not quite at fault, human progress really depends. The idea which has been sometimes thrown out, that this social prin- ciple may be left to produce its own appropriate form of domestic life in the future, and that co-operators have only to look to the increase of their individual incomes by means of co-operation in the present, really means, that the poorer classes should throw away the thoroughly effective means of creating better domestic arrangements now within their reach, in order, at some indefinitely remote future, perhaps, under much greater difficulties, to make such arrangements by union among themselves. What they might do now, if they began to carry on pro- duction with a view to doing it, the statistics of the West End Leicester shoe works, moderate as is the profit which they yield, show. I quote them in preference to such results as M. Godin obtains at Guise, because the profit is moderate, and therefore at least as large an amount of benefit may be looked for generally ; while, as we possess also the statement of the business through which these profits are produced, it is possible to contrast the effects of the two modes of applying them — scat- tering them over consumption, or concentrating them on work. From a table contained in a paper on Co-operative Produc- tion, written by Mr. Joseph Greenwood,* and compiled from «"-■»- ■ — — — ' — p^— — — — - — ■ *Nevos for 1879. p. 192. The Practice of Co-operation in Social Life. i6l statistics furnished by Mr. T. Wood, of the Wholesale, it appears that in 1S78 — The sales at these works produced j^76,884 The number of hands employed was ... 672 The wages paid were ;^25,030 The capital employed was 22,490 And the net profit was ^€^573 or at the rate of £11 8s. lod. percent. This profit is the clear manufacturing gain, after allowing the usual discount for cash to meet the cost of distribution. It is what the capitalist would have got for himself if the work had been carried on upon his own account; and it leaves £"1,575 surplus, over ;^gg8 the interest on the capital at ^^ per cent. Now, suppose that instead of a business of some £"76,000, the sales from the shoe works should be four times the amount, ;f30o,ooo, which even now, the consumption of the present co-operative societies if it were all concentrated upon them would probably yield. We should have, at the same rate of profit some ;^"6,ooo applicable under prudent commercial condi- tions to improve the social position of the workers, who would be earning about £"100,000 in wages, and would probably num- ber if they all found full employment in these works, somewhere about 2,000. For it appears that about three-fifths of the workers, 357 out of 595 employed in November 1879, who earned 48*44 per cent, of the wages paid, £"320 out of £"662, were out-door workers, who take the work home, and of whom many work not only for the Wholesale but also for other employers in this business. So that the wages above men- tioned are less than the total earnings of those who do the work ; while the number of workers mentioned is larger than would be required to turn out the work done, if the whole time of all the workers was occupied in this work ; as must be the case, if they occupied such a social mansion as M. Godin has constructed, connected with a shoe factory built on -a site selected with a view to the welfare and enjoyment ib2 The Practice of Co-operation in Social Life. of the working population, for whose benefit the profits hitherto absorbed by the capitah'st were applied. What would the resources placed at the command of" the managers oi such an establishment enable them to do for its in- mates ? First, for defraying the cost of the social dwelling, they would have the sums paid as rent by its working inhabitants, which, according to the experience of M. Godin, if they paid at the same rate as they are used to give in manufacturing dis- tricts for accomrnodation very inferior to that provided by him, would yield upon the outlay required more than the customary £^ per cent. But this wages' fund would not only thus house the population as it should be housed — it would do a great deal more. It would maintain the gardens and orchards sur- rounding the dwelling, where utility might easily be combined with ornament, as may be seen in the kitchen gardens of many an old mansion whose flower beds border spaces appropriated to the production of fruits and vegetables, of which they might furnish to the inmates an abundant supply on the most reason- able terms. Again the benefits arising from a co-operative store might be secured to the inhabitants to a degree far more com- plete than is usually the case at present, from the fact that the store would form part of the mansion, and so be within a few yards of the rooms of all its inhabitants, who, if tha building was constructed on the model of that at Guise could obtain whatever they required without having to go out of doors. Whence their expenditure at the stores, if these were properly stocked, would probably be a good deal more nearly equal to the amount of wages and emoluments than is the case in our present co-operative experience, where we know that the store is continually exposed to a competition with the shops which in numerous cases prove, by the attraction of convenience, very formidable rivals to the attraction of dividend. Now, we know that prosperO>us stores with an income of from ;^io,ooo to ;^i 2,000 a year, at which the income of the The Practice of Co-operation in Social Life. 163 associated home store must be estimated under the circum- staiices, generally begin to maice outlays for libraries, reading- rooms, halls, &c., for the benefit of their members. That a similar disposition should be manifested by the members of a store placed within the mansion, where the ease of access would make these institutions so generally useful, cannot be con- sidered an improbable assumption. It might be extended probably to such purposes as washhouses and laundries. Here then we have a whole mass of social benefits brought directly within the reach of the body of workers by means of their own incomes only, before we begin to deal with the profits on their work ; simply because they would have acquired by association the power of applying their earn- ings so as to secure from them the maximr'n of advan- tage which they can yield, independently of any applica- tion of profits. Of these, I suppose, 15 percent., say^^iooo to be carried to reserve. There remains ;^5,ooo. How shall this be dealt with ? If we take as our guide the institutions established at Guise, and resting upon this example, consider what the profits of the manufacture would make it possible to do for the workers, beyond what the wages earned by them would enable them to do for themselves, we obtain the following basis for our calculation — Annual Outlay at the Familistere of Guise. * Administration, office expenses, cleaning, water service Gas lighting ... Repairs Subscription to Provident Funds, to meet an equal sum paid by the employes Nursery and Babies' School (see next page) Infants' and other Schools (see next page) Extra lectures Total ... ... ... 1,540 8 £ s. £ s. 209 12 52 16 58 320 8 ... 4.32 ... 432 • • • 316 ... 40 * These figures were carefully compiled from information obtained on the original issue of the Manual. They are retained as well as those relating to the Wholesale at that date, because the argument is independent of the particular figures. 164 The Practice of Co-operation in Social Life. Annual Cost. Institution, No. of children provided for. Per child. Total. £ s. d. £ Nursery... ... ... 40 10 400 Babies' School ... 40 16 32 Infants' School ... 80 100 80 3rd class „ 45 I 4 10 56 2nd class „ 65 I 8 91 1st class „ .,, .,. 55 I 16 88 Total 325 •• 748 The rate of contribution to the Provident Fund varies from 9^d. to 2s. (i fr. to 2.50) a month, while the fund created by the contributions and the addition made from the profits of the business suffices to give a right in case of illness : — 1. To the visits, at the choice of the patient, of one of the three regular medical attendants at the Familistdre : 2. To an allowance varying from p^d. to 4s. (i to 5 frs.) a day during the continuance of the illness : 3. To the use of bed linen, night shirts, and other apparatus conducive to comfort : 4. To medicines for all members of the family. For a fuller notice of the admirable system of attention bestowed on the infants and children in the Nursery and Babies' School at the Familistdre, I must refer to the tract on Associated Homes. The cost of them has been dis- tinguished in the summary above given from that of the schools for elder children, because, at the present day the expense of the latter might probably be defrayed from the general educa- tional rate, and so cease to be a special burden on the funds of the society. The charge above stated would thus be re- duced to ^1,224. In an establishment of the size of that assumed by me, the number of persons would be somewhat more than double that ot the residents in the Familistfere. The Practice of Co-operation in Social Life. 165 Put it at i\ times, we should get a charge of about £3,000 as the cost of providing for — 1. The general convenience of the inmates : 2. The perfect care of the children up to the age when the infant school receives them : 3. Superior teaching for those who, having gone through the regular school course, are desirous of building up a higher edifice of knowledge upon it : 4. The care and comfort of the sick and disabled. These benefits would be additional to the general advan- tages which the population would derive from using the savings on their own consumption for common purposes, in the way above-stated. There would remain £'2,000, which judi- ciously applied in premiums as the reward of intelligence and industry among the workers, or to give a general character of finish and neatness to the mansion and its surroundings, would produce an effect greater than the smallness of the means might lead us to expect ; because the action would be repeated year after year, and tell, as all impulses often renewed and not counteracting each other do tell, to an extent far beyond .what might be anticipated from their individual feebleness; and because they would insensibly produce in the inhabitants that pride in and attachment to their residence, which the presence of beauty in some form commonly creates. Contrast this pictui^ of what the profits of a work yielding but a moderate return on the capital employed may effect, even without reckoning on the probable increase if the workers were working for themselves, supposing these profits to be concen- trated upon the persons who do the work, with the result obtainable from dividing them on purchases. The sales of the Wholesale during the year 1878, to which the figures above given relate, were ;i^2,739,500. Now the profits realized by the Wholesale from its manufac- tures are, it appeals, not distributed specially among those who huy the particular arlicles, Dul form part of the general 1 66 TJie Practice of Co-operation in Social Life. fund arising from the charges put by it upon all the articles which it supplies, whether they are of its own manu- facture or are bought from other manufacturers. The Leicester Shoe Works are treated in this respect, with perfect fairness. The goods are charged with such a discount as other manufacturers would allow to the Wholesale for cash payment, and are credited with the whole surplus profit upon the prices obtained from their sale, without any deductions but those which prudent private manufacturers would make. The works, therefore, are fairly treated in estimating their earn- ings. But what is done with these earnings ? They are cast into the common pot au feu of the Wholesale business, and constitute part of the sum applicable to defray its general ex- penses and pay its dividends, to which in the year 1878 they contributed £"0*00570, just under one-eighth of a id. in the f^. No doubt these imperceptible sums are distributed over a correspondingly large number of persons. But the well-being of man does not admit of being reduced to a mathematical equation, where 1,000,000 times t.oo^ outt is equal to i. No one could feel himself the better off, for the half farthing sav- ing which the profits of the Leicester Shoe Works, dealt with in the way they are dealt with, may theoretically bring to him on an outlay of £1. I say theoretically, because, practically, the sum is so small, that if taken alone it would not be dis- tributed at all, but only carried to reserve with an ultimate possibility of forming part of some dividend to be declared thereafter. But, supposing it to be divided, I say its capacity for social good is reduced to a nullity by the process. Instead of helping to promote the well-being of a numerous body, as when concentrated upon work it might do in an important degree, and, by the desire to imitate such an example called iorth from the experience of this effect, creating an ever widening circle of benefit, it will be entirely wasted in an etlect which will not be perceived at all. Hence it appears that the scheme of dividing the profits oi The Practice of Co-operation in Social Life. 167 work among those who only purchase it, is open not only to the objection that it must give to the richer classes by far the largest part of the profits on manufactures, because they will be by far the largest buyers, but also to the objection that what it does give to the working classes, it will give them in a form in which the benefits of the gift will be thrown away ; dissipated into fractions so infinitesimally small that they benefit no one.* The illustration given above of the way to apply the profits on work, so that instead of thus uselessly dissipating their power this power may be made as effective for good as it can be, has been confined to one kind of work. If we imagine many varieties of manufacture, yielding various rates o( profit in proportion to the capital employed, to be carried on in federal connection, it would become possible so to com- bine those profits as, without throwing upon one man the bur- den of another man's acts, to remove, or at least greatly to miti gate the inequalities of payment at present attaching to • It may be objected that, in the text, the actual profit on the Wholesale Shoe Works in 1878, is compared with a profit assumed to be four times as large. But as this increased profit is supposed to be derived from a fourfold in- crease in the sales of shoes, which must be expected to correspond to an increase of sales generally, the proportion of profit to purchases would not be aflected. It must be also noted that the amount of sales is at wholesale prices. To see what a purchaser must pay in order to get out of the profits of the Leicester Shoe Works half a farthing, the retail charge, which cannot be put at less than 25 per cent, must be added. In other words in order to obtain id. by co-operative production in the shoe works carried on upon the Wholesale schejne the purchaser must spend j^io if the rate of profit is no greater than at Leicester in 1878, or ^f 6 8s. icd. if the profit were a clear^^io percent. This however, is on one kind of manufacture only. If we would estimate the total result of a system of production on the Wholesale plan, supposing it applied to supply all the demands of the working population for manufactured articles, we may form some idea of it thus: — The profit of the Leicester Shoe Works in 1878 distributed among the purchasers of the shoes only, would have given them ^^0-020,485 or a trifle under 5d. on each j^i bought at wholesale prices or 4d. on each ^ I at retail prices, rising to 6d. in the ;^i, if the net profit realized on the manufactures aftnr paying^"5 percent, on capital, rose to _^io per cent. On these data every one can calculate from the consumption cl ncTv manufactured articles by himself or his family during the year, what the possible advantage of such a system would be in his own case. See appendix Note 12, for some addilionsl calcuir.tions. 1 68 The Practice of Co-operation in Social Life. different kinds of work. For instance, the contributions to the Provident Fund from different estahhshments might be combined ; so that in all the trades thus associated the same rate of payment by any worker would entitle him to the same amount of benefit secured by his contribu- tions whatever the particular work in which he was employed. So the provisions for the care or instruction of children might be relieved from any uncertainty attending the varying profits of different businesses in different years, by the institution of common funds, to which each society should contribute some fixed proportion of its profits, and thus bring out an average charge, where the stronger would help the weaker without feeling any burden.* The combination of different manufacturing operations might also afford facility for what would be in itself a great social advantage, the carrying on of more than one kind of work in connection v/ith the same associated home ; so as to prevent the splitting up of the population into separate castes of per- sons locally separated, of whom each set was busied only with one kind of work. Thus it would conduce to that fusion of classes which it should be the social object of associated dwel- lings to bring about, by the insensible influence of neighbour- hood combined with the refined influence of education. While the response, which any such plans of the work- ing classes for their own social elevation would certainly call forth among large bodies of the richer classes, would give to the latter, through the influences connected with the common dwelling, the means of doing effectually what they are now trying to do in a thousand ways often productive of more harm than good. Their wealth would be converted into a real blessing to those around them, while it became to themselves a permanent source of happiness from the consciousness that it was thus used. In such circumstances the associated homes wouM cease to * F"( r furlber consideration of this subject see Appendix, Note II. The Practice of Co-operation in Social Life. 169 be restricted to the dwellings of persons maintained by the industrial occupations by which the bulk of the population must always be sustained. Each house would form a society within itself, whose occupiers might often derive their in- comes from sources distinct from any work carried on in immediate connection with it, and, if their resources per- mitted might be members of many such associations in various districts, moving from one to another at their pleasure. So, groups of such homes might spring up in localities which for any reason attracted a numerous population, who might find occupation in industrial establishments distinct from any of them, and form residences possessing the semi-rural enjoyments lavished by the imagination of Dr. Richardson on his City of Health. And here it might be found that large central bazaars, independent of either houses or industrial establishments, though affiliated with them, might furnish depots for the distribution of many articles more convenient than the stores within the homes where articles of food would naturally be supplied. So that Production, Distribu- tion, and Home residence would again acquire the independence now belonging to them, without the evils now attending it. It is tempting to continue a picture of a world free from those social evils which now aggravate to an incalculable extent the difficulty of that con-test with selfish desires, the expression in ourselves of the struggle for existence pervading all natural being, which all of us must fight out in our own breasts. But to yield to this temptation must carry us so far away from the existing state of society, that the pic- ture would be in danger of losing all practical usefulness. It would be a dream banished to that golden age which must always flee before the experience of life, till men learn that the heaven from which the Divine vision shall descend is to be sought within themselves ; and that the kingdom of God on earth will come, as soon as they heartily will that it shall be realized, by the simple method of uniting to give generally to :hose around them the advantages which they seek to secure personally tor themselves. Chapter io. THE APPLICATION OF CO OPERATION TO BANKING. It is well known that in various parts of Europe, especially in Austria, Belgium, Germany and Italy, the system of People's Banks, introduced into Germany by that eminent social reformer Dr. Schulze Delitzsch, has formed the first step of co-operative union, — out of which a great variety of other co-operative enterprise has arisen in the country of their origin. A somewhat detailed account of these institutions is given in the Appendix to the Report of the Congress for 1879. Since that time there have appeared two of the annual statements by which their progress in Germany is described with a profusion of figures, such as, though emanating from a purely voluntary union put our annual returns quite out oi countenance. From the first of these I take the following sum- mary of the state of these associations at the end of 1886 : — * Total Number. • Numbers Making Returns. Banks 2,135 Members (estimate) 1,500,000 Business „ ;^i 50,000,000 Capitalofmembers^ 1 5,000,000 Deposits and loans ;^25, 000^000 881 451,452 ^74,128,571 ^6,606,266 ;!^2o,587,o56 The principle upon which these banks are founded is that of creating confidence in the public by means of the joint unlimited engagement entered into by each of the members of any bank for all its debts, and thus obtaining deposits, or loans from the ordinary banks as well as from individual depositors, by means of which the members can make themselves ad- * I take this return insto.Tl of tlio one for 1.S79 because il contains 49 more returns. The number of banks had increaseJ in iho 3 car (roni 1841 to 1S66. Ine Application of Co-operation to Banking. 171 vances to an extent greatly beyond what their own capital would enable them to do. Whence they gradually accumulate — out of the profits of this larger business, as well as from that arising through their own subscriptions, funds out of which they can in various ways aid themselves ; as they have done, among other things, by founding the variety of societies of different sorts enumerated in the Annual Reports — 1879, pp. 75, 92, 97, and 1886, pp. 83, 90.* This effect of confidence produced and advances of capital in consequence, showed itself very early in the history of these banks. Indeed, this confidence if measured by the amount of money lent, would appear to have been even greater then than at present ; for, though the total sums dealt with are much larger than they were at first, the proportion of deposits to the capital held by the members has decreased, as appears by the following figures for each five years from 1859 to 1886 : — Banks ded in Returns. Percentage of Inclu Own Capital. Deposits and Loans. 1859 80 27.50 72.50 1863 333 22.30 77.70 1868 660 30.40 70.70 1873 834 27-33 72.69 1878 943 33-68 66.32 1883 922 32-05 67-93 1886 88t 32.09 67.91 * For the supply of Raw Materials Agricultural Purposes Magazines (Industrial) ,, (Agricultural) ... Productive Purposes (Industrial) ,, ,, (Agricultural) Assurance and Various Purposes Distribution (Consumvereine) lUiilding 211 704 135 202 54 62 — 7 133 154 6s 388 37 SS 621 696 49 35 Total 1305 1337 172 TJie Application of Co-operation to Banking. The operation is of the same kind as that on which the suc- cess of our own great banks depends. For their large dividends are derived not from large profits made on their own capital, but from small profits on the very large amount of other men's money beyond the amount of their own capital, with which they have to deal. The original capital serves mainly to create the confidence which attracts these moneys, and is kept up by the amount of the reserves invested in Government Securities, constituting the ever available assets of those great institu- tions. It will be seen that the People's Banks somewhat sur- pass our distributive societies in facilitating the first step o.' co-operative work, the accumulation of capital by the poorer classes — 451,452 persons having accumulated in twenty-seven years an average of ;^i5 9s. 5d. in share capital, while in England the amount of share capital accumulated up to the end of 1886, in forty-three years after the foundation of the Rochdale Equitable Pioneers' Society, by 702,974 persons, averaged only j[^\\ i8s. I id. There was indeed also ;^i,4oi,ooo of loan capital. But this cannot properly be brought into account unless we knew how much of the ;^2o,587,o56 deposits in the German banks belongs to the owners of the share capital. The energetic protest of Dr. Schulze Delitzsch against any measure tending to shake the confidence which has enabled the members of these societies to use for their own elevation a capital more than three times larger than that possessed by them individually, is justified by these results. They must awaken the desire that an institution productive of them could be introduced among us. That the limitation of liability, which would no doubt be called for by the feeling prevailing in England in this respect, and is made imperative in the case of Industrial and Provident Societies by the law relating to them, does not prevent the growth of such institutions, is shown by the example of Italy, where the People's Banks have taken firm root and flourish greatly under this limitation. In fact, however, our Industrial and Provident Societies Act The Application of Co-operation to Banking. 173 does apply, in the case of societies transacting banking business, provisions for the protection of creditors which give them, in a different way, a security probably practically as effective as that assured to them by the indefinite liability of the mem- bers in the banks created under the present German law. For by this law every member of a society formed under it has a right to leave the society, at the end of any year, on a four weeks' notice, unless the rules of the society especially provide otherwise, and to demand payment of the sum standing to his credit within three months thereafter ; remaining liable for the debts due at the time when he ceases to be a member, for two years. While by our law, since bank- ing business cannot be carried on by a society with withdraw- able capital, a member must remain liable to lose the whole of his investment, whether arising from his own contributions or the profits of the business, unless he obtain some one to whom his shares are transferred. And even if he does effect the transfer he would remain liable for any amount unpaid upon his shares for a year after he has ceased to be a mem- ber, if the actual holder did not pay this sum, and the amount were needed to satisfy the claims of any creditors for debts subsisting at the time when he ceased to be a member. If a reserve of uncalled capital is required in order to produce confidence in a banking society, it is possible to create this reserve to any desired extent, by provisions in the rules of the society under which any determined proportion of the capital may be left unpaid as a guarantee to creditors. It seems then that it ought to be practicable to form under our Industrial and Provident Societies Act, People's Banks, which might give to their members that power of accumulating capital out of the profits of banking business, given by the People's Banks of the Continent to so large an extent, to the populations of Austria, Belgium, Germany, and Italy, if the desire to form these institutions should take root among cur population. 174 The Application of Co-operation to Banking. For, although the greater number of small manufacturers and traders in Germany, compared with that in Great Britain, and the large number of small farmers and peasant occupiers or owners Members. Per Centages (Men & Women) to whole number. Occupation. 1878. 1886. Men. Women. Men. Women. 1878. 1886. I. Independent landowners, gar- deners, foresters, and fishers 77,342 3,059 103,569 4,920 23- 13 26.77 II. Assistants and workmen in Class I 10,154 687 11,603 977 311 3.10 III. Manufacturers, ni i n e-o w n e r s. and builders ... 12,668 277 13,558 376 3-72 3-45 IV. Independent hand-workers and craftsmen ... 107,972 3,664 "4,556 4,494 32.0S 29.38 V. "Workmen in manufactories, mines, and trades 16,232 547 18,919 669 4. So 4.83 VI. Independent merchants and traders 32,894 2,257 35,579 2,843 10.12 9.48 VII. Clerks and assistants 2,374 117 2,678 103 0.78 0.68 VIII. Carriers by land and water, and innkeepers 17,377 884 18,883 1,260 5-^4 4-97 IX. Letter carriers, r'l way, telegraph. and post em- ployes and work- men, sailors and waiters 7,033 84 7,803 148 2.94 1.98 X. Servants 2,449 909 2,601 1,415 0.96 0.99 XL Physicians, apothecaries. teachers, artists, Church and State officials 23,602 946 25,427 1,136 7-05, 6.55 XII. Fund-holders, pensioners, and other persons with no occupa- tion 10,388 13,984 11,806 19,758 7.01 7.79 320,479* 27,421* 367,042* 38,099 99-97 99.97 * These are the corrected totals of the Summary. The figures in the tables for 1878 make the men 320,485, and the women 27,415. The Application of Co-operation ic Banking, i/t; of land offer a wider opening for the introduction of the system there than exists among us, the statistics of the members of the German banks prove, that they include very large numbers of persons of occupations analogous to many abounding in our country, as is shown by the preceding table of the occupations of the members of 706 banks in 1878, and 747 in 1886 contained in the Annual Reports for 1878 and 1886. It will be seen that of all these classes, the only one represented in Germany much more extensively than in Great Britain, is No. IV., hand-workers and craftsmen working on their own account. But this class forms, on the average of the two years, 30.73 per cent, of the whole body; 69.27 per cent, remain of persons who certainly must exist in very large numbers in our own country, where Class IV. would at all events find some persons answering to it. The difference between Great Britain and the Continent in this respect can therefore scarcely be such as to make impossible the working of an institution from which results so beneficial to the poorer classes, in that first step to their elevation the accumulation of capital, have followed to so large a degree as has followed among the Germans, if they were formed and carried on with the same object as that pursued id Germany ; — namely, to enable these poorer classes, by means of the credit obtained through their collective responsibility, tci become depositories of the savings of the classes richer than themselves ; and by employing these sums in advances in the way of banking business at rates of interest higher than those which they give for them, to realize on their own investments profits which they may apply in the formation of a capital for themselves. The idea is different from that hitherto for the most part asso- ciated among us with the notion of co-operative banking. We have been used to look upon it only as a means of providing from the surplus moneys of co-operative societies, apart from its use as a convenience of making payments, a fund which, being managed by persons desirous of promoting co-operative business, may be thus employed, instead ot being used, as the I7''> The Application of Co operation to Banking. moneys in the hands of ordinary bankers largely are used, in supplying the demands of private traders. The object is excellent, and if there existed a number of productive co-operative enterprises carrying on their business upon the terms of credit customary with private traders, and receiving payment by acceptances from customers in good repute, which they desired to discount and place the proceeds to their own account, according to the custom usual in private trade, it would be of great advantage to have a central bank disposed to make the accumulated balances of its customers available for giving to the co-operative producer the same sort of facilities which the non-co-operative producer obtains through the ordinary banking chanels. But at present this advantage is little felt. The business is conducted as a department of the Wholesale, and its balance-sheets for the two years ending March, 1888, show the following results, omitting shillings and pence : — Quarters. Total Assets. Bills not Due. Loans, Arrears Acct. Advances. £> I £. £> 1886 March 1,258,387 5.405 93,137 18,599 June 1,297,008 3,165 101,178 19,601 September 1,319,413 8,773 97,901 25,768 December 1,283,000 4,568 101,671 26,000 1887 Tune 1,367,908 5,082 90,281 26,804 September 1,394,459 6,320 104,344 25,898 : December 1,365,842 8,600 106,176 26,350 1 l88i? March i 1,451,340 4,132 108,216 27,383 How small is the amount of that staple of ordinary commercial banking business, — bills discounted, is apparent. The bulk of the assets beyond cash in hand and balances in other banks, ccujiists of advances on loans and overdrafts. I say nothing about the safety of these advances. In some cases they are made to societies, which hold, in the shape of loans to the Wholesale, amounts larger than the over-drafts allowed them. But it is obvious that advances by way of overdrafts, since they do not represent particular transactions which come to a natural terminatirn when ihe bills are The Application of Co-operation to Banking. 177 due, as the discounts of ordinary commercial business do, must always be in danger of slipping into the character of ad- vances which cannot be called in without serious inconvenience to the parties to whom they are made. Whence they may gravely compromise the position of a banker, who, being liable to repay the money in his hands on demand, or on very short notice, should have the assets out of which they are to be met in a position such, that he can readily make them available to meet such demands as they arise.* Yet, from the little use of commercial securities in the businesses of co-operative societies it is difficult to see in what other way the deposits of the societies, not employed in the business of the Wholesale itself, could be productively employed by it except in this kind of business, and permanent loans, which if made on the security of commercial properties are peculiarly exposed to risk. The habit of ready money dealings, which is a tower of strength to co-operative transactions in so many ways, is, in this province of banking, a source of difficulty. It reduces the function of the banker almost to that of taking care of the moneys entrusted to him, and giving his customers the ad- vantage arising from making their payments by cheques. Even for investments in over -drafts and loans the Whole- sale banking business is largely indebted to societies which do not properly belong to the co-operative fold. While for a large proportion of the moneys in its hands it seems, so far as appears by its balance sheets, unable to find employment, as is shown by the following table, which includes advances or loans of every sort, to Manufacturing and Mining Companies, Building, Distributive, and Productive Societies. Loans. Advances. With other Banks. Quarters. •Amount. Per Cent, of Total Assets. 1887 June September December 1888 March ;^90,28l 101,344 106,176 108,216 ;,f26,28l 25,898 26,358 27,383 ;^254,l63 146,171 97,380 205,539 18.58 10.48 7.12 14.16 This is after the investment of £\ooyOoo in Consols. That this danger may exist on over-drafts by the customers of the Wholesale 1/8 The Application of Co-operation to Banking. It seems clear from these figures that although the connec- tion of the banking business with the Wholesale was originally necessary in order to create the confidence without which the business would not have been commenced, this connection has now become injurious to its progress. If a co-operative bank is to become a general depository of the income of co- operative societies and co-operators ; if it is to do " not only the business of the Wholesale, but all the banking business of the co-operative movement, distributive and productive, also of joint stock companies, trade and friendly societies," as the resolution of the Wholesale Committee of June, 1872, contem plates ; if, in fact, it is to become an important banking institution, it must cease to confine its operations to the classes to which they have been limited up to the present time. It must open its doors to every customer, individuals, firms, companies or societies, and deal generally with the commercial securities in which other banks find the great means of profitably employing the balance of deposits in their hands. While the management of the institution is carefully retained in the hands of co-operative societies, it must carry on its business so as to secure the largest returns attainable upon a solid basis, and under a prudent management. Such a change would necessarily involve a complete separa- tion of the bank from the Wholesale Society, whose constitution is not elastic enough to take in as members those whose ad- mission is indispensable if the bank is to prosper. But it was shown m Mr. Hughes' paper, read at the Leicester Con- gress, and the discussion following upon it, that this separation would really be a great benefit to the Wholesale, which loses one of the principal advantages that it should derive from a co-operative bank, the power of paying its loan holders by acceptances which they would have no difficulty in discounting, appears from the fact that, of the advances mentioned in the original issue of the Manual, there were due from the same 27 societies or companies : — Dates. Amount. ^^'^^^^ Dates. Amount. P/^^^^-J^; \^io June £,^o,<:^2 79-75 1880 December ;^97,226 71-55 „» .Sept. 96,834 85.13 1881 March 96,149 83.84 The Application of Co-operatton to Banking. 179 through this bank being only a department of its own business ; while the position now attained by this business would make it possible to introduce a co-operative bank free from the fetters which now prevent its growth, under conditions such as would give it a peculiar claim to public favour. The total number of societies and companies which have banking accounts with the Wholesale, according to its state- ment in March, 1880, including its own trading department, was 136, and the net income of 87 of these societies, included in the Registrar's return for the year ending December 31, 1878, was ^279,698. Adding the net income of the 49 societies or companies not included in this return, and that of the Wholesale itself, we may take the net income of the customers of the Wholesale bank, on a moderate estimate, as at least ;^4oo,ooo. At present the only guarantee for the moneys deposited in the bank beyond the bank assets is the Wholesale itself. Now, the net income of the Wholesale according to its annual return for 1879 was ;f48,i67, or about ^ of the whole income of the other customers of the bank : and the ex- cess of its assets over the demands upon them, including the balances on its trade account, was, according to its March Balance Sheet, £188,471 which constituted the guarantee to the bank depositors at that moment. Suppose then a bank to be formed, upon the principle of using its share capital only as a' guarantee for the safetv of its deposits, to be gradually replaced by the accumulated profits arising out of its business, and that the guarantee of the Wholesale were limited to ;^i50,ooo, pro- duced by its holding, say, 30,000 £5 shares with is. per share paid up, surely it would not be difficult to find among the other 136 depositors, whose net collective incomes must be eight times that of the Wholesale, a number sufficient to raise ^150,000 of additional guarantee. Whence, while the Wholesale was relieved to a considerable extent, the depositors would obtain an additional security beyond that at present given them of somewhere about £110,000, with the great ad- vantage of its resting upon the stability, not only oi tne I So The Application of Co-operation to Banking. Wholesale, but also of a number of societies independent of it. While, practically, they could obtain a great additional security, in the amount of Government stocks, which it would be pos- sible for the co-operative bank when disentangled from the Wholesale to hold, as other banks habitually do, though, as is shown in Mr, Hughes' paper, so long as the great trading establishment is united with the bank, such an operation would involve a heavy loss with no corresponding advantage. Let us suppose now, that, by the constitution of this co- operative bank, its profits were divided between shareholders, and customers; every customer who held an average balance of some fixed amount, being entitled to take up shares in pro- portion to the average amount of his balance ; and that the share- holder's profits were accumulated till the shares were paid up wholly, ortoanylimitdetermined. We should have a bank unique.; in its character, since it would practically be mutual. For no capital would be required to start it beyond the is. per share, which would, no doubt, be absorbed in the original outfit. The actual business of the present customers of the Wholesale would be sufficient to make it self-supporting from the first. So that every customer would be able to assure himself of a share in the profits proportioned to the business brought by him, by taking upon himself a corresponding proportion of guarantee liability ; while the share of profits of those who declined this risk would go to augment the benefits of all who under- took it. To preserve the character of the direction, it would, I con- ceive, be sufficient to limit the choice of directors to candi- dates nominated by the society-members, for whom all the members might vote as they pleased. So that they would not feel themselves shut out from a share in the government, while yet they could not transfer the management to hands opposed to the progress of co-operation. Thus might an institution be formed, which having full freedom to direct its resources to any channel where they could be safely and remuneratively employed, according to the wants of trade,, might serve to xtt^Vq^ available for the benefit of co-operators, the large re- The Application of Co-operation to Banking, l8l pourccs which a well-manafijed bnnk, able to draw in the busi- ness of all who were favourable to co-operative progress, would gradually command. iNo doubt such an institution would have to run the risks attending banking operations generally. It could not reason- ably expect a greater immunity from losses by fraudulent transactions than its well - managed contemporaries, the London and Westminster Bank, for example, which we know has suffered heavily in one case from this cause. But the London and Westminster Bank has nevertheless done a very large and profitable banking business. If we compare its losses with those actually sustained up to the present time by the Wholesale in its banking department, from the system of overdrafts and advances on securities of a commercial nature, in which its operations have mainly consisted, bearing in mind the proportion of loss sustained to the total amount of funds employed, we shall not find much reason for congratulating ourselves on the greater security of this mode of using deposits over that more generally employed ; while if the business is confined to such operations, it appears clear that the Co-operative Bank must be contented to take up' the position of a somewhat insignificant Finance and Loan Association. The question really is, Shall this be its history ? or, Shall it be transformed into an institution which may give to the co-opera- tive body a large command over capital, with a correspond- ing power of aiding co-operative institutions, as they grow up, by the facihties for transacting business which banks can properly offer, and by affording to the competitive pro- ducer and trader very greatly contribute to their pros- perity. Looking forward to the increasing opposition likely to be raised to the spread of co-operation sucn a uansforma- tion of the Co-operative Bank as may convert it into a powerful centre of bankvrjg operations, appears Very desirable in the interests of the whole movement. Without it, the time may come when co-operators may find therr action embarrassed 'KJ various wavs from the want of a strong and widely-spread «ysterii ot banking busmess. iSa The Law Relating to iMusinai ^HVkPTIW 1I« THE LAW RELATING TO INDUSTRIAL AND " PROVIDENT SOCIETIES. Various legal provisions affecting societies registered undc/ the Industrial and Provident Societies Act, 1876, have been noticed in the chapter on Distributive Co-operation. But these relate to the mode of forming the societies and the registra- tion of their rules, or amendments, with a few notices of matters directly bearing upon their business. I propose here to give an abstract of the whole law specially relating to them. Where no other reference is expressed, the reference is to the Act above named, the Customs and Inland Revenue Act, 1880, and the Provident Nominations and Smali Intestacies Act, 1883. I. The constitution and obligations of a society — 1. Members. — A society cannot be registered unless it consists of at least seven members, besides the secretary, who need not be a member, but must join in signing the application for registration and the rules. Sec. 7 (i and 2). It may comprise any body corporate, including any other registered society. Sec. 12 (5), and Schedule II. Minors, if over sixteen, may be members, and have all the legal powers of members, except that of being officers. Sec. II (9). No member except a registered society can hold any greater interest in its shares than ;^2oo. Sec. 6. 2. Objects. — A society must be formed to carry on some labour, trade, or handicraft. It may carry on more than one. The buying and selling of land is expressly included. Sec. 6. Therefore a society cannot be formed for any lawful purpose as a company may be, but as the profits of its business may be applied for any such purpose, Sec. 12 (7); a society which has some other purpose to ana ProtiUent Societies- 183 which a trade may be subservient, such as the forming a club, may include in its rules a power to its managers to apply to this purpose the profits of any business specified as its object, with any other funds subscribed for that purpose, and may give them all necessary powers for so doing. 3. Registered Office. — Every society must have a registered office to which all communications and notices may be addressed, and notify to the registrar for the country where it is situate, its situation, and any change in it. Sec. 10 (i a). If it carries on business in more than one country it is to be registered in the country where its registered office is situate, but copies of its rules must be recorded in the other countries. 4. The name of the society must have " Limited" as its last word. Sec. 7 (5). The last word but one need not be society, but cannot be company. (Practice of the Registrar's office.) The name must not so nearly resemble the name of any other society, as in the judgment of the Registrar to be likely to deceive the public. Sec. 7 (3). It can be changed with the approval of the Chief Registrar, in writing, by a process described below. Sec. 7 (3), Schedule II., 12. The provisions as to its publication, Sec. 10 (i, b), are stated in the chapter on Distribution. 5. Audit and Accounts, Sec. 10 (i, c). — Once at least in every year a society must have its accounts audited — Either by a public auditor, Or by two or more persons appointed under its rules : Who are — To have access to all its books and accounts ; To examine the general statement of the receipts and expenditure, funds and effects ; To verify it with the receipts and vouchers relating thereto ; And either to sign it as correct, duly vouched, and in accordance with law, Or to report to the society in what respects they find it incorrect, unvouched. or not in accordance with law. 184 T^- Law Relatin£; to Industrial 6. Balance Sheets. — The society must keep a copy of its last balance sheet, and the auditors' report, always hung up conspicuously in its registered office. Sec. 10 (i, g). 7. Annual Return. — The society iiiatst make to the Registrar, in the form required by the Chief Registrar, before the ist of June 111 every year, a return of its receipts and expendi- ture, funds, and effects. Sec. 10 (i, d). And it must supply a copy of its last return to every member or person interested, gratuitously on application. Sec. 10 (i,/). 8. Copies of Rules. — A society must supply a copy of its rules to every person on demand, at a price not exceeding one shilling. Sec. 9 (5). g. Inspection of Books, Sec. 10 (i, e). — A society must permit every member or person interested in its funds to inspect — The names of the members ; And the books, other than the loan or deposit account of any other member ; At the registered office of the society ; At all reasonable hours ; Subject to any regulations made by it as to the time and manner of inspection. 10. The Rules of the society must provide for the matters following. Sec. 9 (i) and Schedule II. (i) Name, date, and registered office: (2) The terms of admission of members : (3) Meetings and the alteration of rules : (4) The governing body : (5) The shares which a member may hold. (6) The terms of loans and deposits, subject to Sec. 10 (2): (7) Shares, whether to be transferable or withdrawable, or both, and corresponding provisions: (8) Audit of accounts : (g) Withdrawals, death, and bankruptcy of members: (10) The application of profits: (11) The seal of the society. and Provident Societies. 185 (12) Partial investment of capital : A few additional rules, which are in fact only repetitions ot provisions of the Act to which it has been thought desirable that the attention of societies should be especially directed, are required to be inserted. With the subjects above mentioned, they form twenty matters set out in the forms of application referred to in the chapter on Distribution, and for which, as is there stated, model forms may be obtained from the Registrar's office, and are contained in the General Rules. Except in those cases where the rules are repetitions of the Act and follow its words, societies are at liberty to word their rules as they please on the matters where rules are required, as they are at liberty to add rules on any other matter they may wish, subject to the power of the Registrar to rrfuse to register any such rule. II. Appeals, Sees. 7 (8) and (9) and 9 (3). — This power, however, is not arbitrary. An appeal lies against a refusal to register any rule of a society, original or amended ; In England, to the Queen's Bench Division of the Supreme Court ; In Scotland to the Court of Session ; And in Ireland, to the Court of Queen's Bench at Dublin. II. The rights of a registered society — 1. Incorporation, Sec. 11 (i) and 7 (10). — By registration, which is imperative where the provisions of the Act are complied with. Sec. 7 (7), and of which an acknowledgment by the Registrar for the country is made conclusive evidence, unless the registry is proved to have been suspended or cancelled, a society becomes a body corporate by the name described in this acknowledgment, by which it may sue and be sued by its own members or anyone else : With a common seal : And liability of its members limited as stated in V. 2. The Rules of the Society bind its members and all persons claiming through them to the same extent as if each member had subscribed his name and affixed his seal thereto, and there were contained in such rules a covenant on the part of himself, his heirs, executors, and administrators to conform thereto. Sec. 11 (2). 3. Who are the members of a society is prima facie provable by any register or list of members kept by a society. Sec. II (11). 1 86 The Law Relating to Industrial This supposes that the list or register is not so kept as to contravene any rule of the society. For if it is so kept the rule would probably be held to invalidate the proof founded on the register. This enactment makes quite useless the provision, often found in the rules of societies, that applicants for admission shall sign a declaration agreeing to be bound by the rules before they can become members. All that is required to make the rules as binding upon any person as they can be made by any agreement, is the proof that the person is a member. Now this proof the Act makes easy if no special formality is required by the rules. But if such a formality is required, and it has not been complied with, as is often the case with declaration books which circumstances prevent many supposed members of a society from signing, grave questions may arise dependent on whether these persons can be considered to be members or not. Hence it is better to dispense altogether with such books. If they are used they should be made to conform to the practice of joint-stock com- panies, where the agreement to be bound by the memorandum and articles of association is made part of the original application for shares. It must be observed, also, that the Act, while giving to the rules of a society their binding character, does not give the members any power of binding persons not members. I mention this because it seems sometimes to be supposed that a rule of a society as to what is to be done with the share* of a member who dies intestate will override the claims of next of kin under the statute for the distribution of the property of intestates. But this is a mistake. The members may bind themselves, but they cannot take away the rights of their next of kin except by a nomination or a will properly executed. 4. No alteration of the rules of a society is of any force until it is registered, of which the acknowledgment is conclusive evidence. Sec. 9 (4). Sees. 9 (2) and 7 (6) as to societies carrying on business in more than one country. Hence a society cannot reserve to itself the power to modify its rules by any by-law. Neither can it by the resolutions of any general meeting, whether ordinary or special, take away or qualify any right or power given by its rules to any of its officers. But a society as a body corporate may, by the resolutions of a general meeting duly convened, make any regulations relating to its affairs not inconsistent with its registered rules, which will bind all its members so long as they are not altered by a similar authority. 5. All moneys due from a member to the society may be sued for, at its option, in the County Court,* either for the district where the registered office of the society is situate, or that where the member resides. Section 1 1 (3). * In Scotland the Sheriff's Court, and in Ireland the Civil Bi!/ Court. Sec. 3. and Provident Societies. 187 6. Income Tax. — A society is exempt from charge to income tax under Schedules C, relating to investments in government securities; and D, to the profits of the business of the society, Sec. " (4); Unless it sells to non-members, and^ either by its rules or its practice, limits the number of its shares. — B., Sec. 8. This enactment simply places any society subject to it in the position of a joint-stock company. That is to say, the society will be liable to pay income tax on its profits, unless these are so small as to entitle it to exemp- tion ; but any member of it who individually is wliolly or partly exempt from the tax will be entitled to a return of the sum deducted from his share of the profits of the society, or so much as corresponds to the proportion of his income on which he is entitled to claim exemption. This is the only exemption from taxation enjoyed by societies. In all other respects they stand on the same footing as other persons ; therefore, they must put stamps on receipts of sums of ^ 2 and upwards for any moneys paid to them, if these receipts are to be of use to prove the payment ; and the transfers of shares must be stamped with the proper stamp aocoiding to the value transferred, in order to be used in proof of the transfer. 7. CommtYcial Instruments. — A society is empov^ered to make, accept, or endorse promissory notes or bills of exchange by the act, under its authority, of any person who makes, accepts, or endorses such instruments in its name, or by or on its behalf or account. Sec. 11 (10). 8. Contracts. — Generally, a society is entitled to make any contracts in the like forms to those in which such contracts may be made by individuals, either under seal, or by writing signed by some person acting under its authority, or verbally by some person similarly acting. Sec. 11 (12). The Act also contains provisions for facilitating the proof of the authority given. Sec. 11 (12, c). 9. Land. — A society, if its rules do not forbid it, may acquire in its own name lands of any tenure, and deal with them or any buildings on them as it pleases. Sec. 12 (i). And special provisions are made in the case of copyholds for enabling the society to be free from any future claim by the lord of the manor, so long as they remain the property of the society. Sec 12 (3). 1 88 The Law Relating to Industrial Wc have sepn, in I., 2, that the buying and selling of land is among the objects for which a society may be formed. 10. Loans and Deposits. — The terms on which a society may contract loans are left to be regulated by its rules, the Act re- quiring only that the rules shall state them, Schedule I., 10 (6). In regard to deposits the case is different, depending on the nature of its shares. Sec. 6 and 10, 2 [a, b). The society may, if it pleases, carry on the business of banking, if its shares are wholly transferable ; And since this business rests on the receipt of deposits, is at liberty to receive them to any amount permitted by its rules, subject to the publication of a statement of its assets in the form contained in Schedule III. But if the society has any withdrawable capital. Or having only transferable capital, does not include the business of banking among its objects; It is limited in the receipt of deposits to sums within the total limit stated not exceeding 5s. at any one time, or j^20 for any one depositor, and requiring not less than two clear days' notice of withdrawal ; And it is prohibited from making any payment of with- drawable capital so long as any claim due on account of any such deposit is unsatisfied. Sec. 10 (2, c). Disputed claims are, I conceive, not included in this prohibition. It must be observed also that the deposits referred to are such as would ordinarily come under banking business. Payments made on account of loans to the society secured in any way allowed by the rules would there- fore not come under this rule, though they may be received in small sums, but may be regulated as the documents by which they are secured provide. II. Loans and Investments — (i) Loans. — The power of a society to lend is more limited than its power to borrow, being confined to advances to members on the security of real or personal property, if its rules allow of this. Sec. 12 (2). The repayment of such loans is faciHtated by provisions; For re- vesting any property mortgaged to the society in its owners by the endorsement on the mortgage of a receipt for the amount. Sec. 12 (8) ; and Provtaeiit Societies. 189 And for the entry of notice of satisfaction on court rolls or any other register. Sec. 12 (9). (2) In investments a greater latitude is permitted. Sec. 12 (4). Subject to the provisions of the rules of any spciety, such investments may be made in the registered nama of the society, in or on the security — Of any other society registered under the Act., or the Building Societies Acts ; Or of any company registered under the Companies Acts, or incorporated by Act of Parliament or charter; Provided that if the investment is in, and not on, the security of any society or company, it is one with limited liability. These provisions in respect both to loans and investments appear to apply only to the partial employment of capital in ways other than the con- duct of any business which the society is formed to carry on. For this the Act gives no special authority, apparently because the legislature considered this power to be implied in the permission to form a society for the particular business. Hence in the case of a society formed to carry on the " business of banking," the employment of its capital in any way customary in such a business must, I conceive, be allowed. Investments in Government securities, though not mentioned in this section, must therefore be within the power of such a society, since they form one of the regular modes of employing capital in banking. So must advances of money on the security of bills of exchange or promissory notes by discounting them. For the banking vusmess of the society would be seriously hampered if it were limited to such advances as are permitted by Sec. 12 (2). This conclusion is strengthened by the following considerations : — The statement which Sec. 10 (2, b) and Schedule IV. requires every society which carries on this business to make out half-yearly, enumerates as two heads of assets — Government securities, and bills of exchange and promissory notes. Again, Sec. 11 (8) provides in various cases therein mentioned for the transfer of stock transferable at the Bank of England or Ireland belonging to societies, and held in the only way in which such stock could be held, in the names of trustees. Now, both these provisions would be unmeaning if no society could make any advances or investments other than such as are mentioned in Sec. 12 (2) and (4). They become intelligible only if these sections are considered to be confined to the partial investment of capital by societies whose business does not require them to use it in the way customary in banking. I may observe also, in regard to Government securities, that the Chief Registrar appears to consider this mode of investment to be allowable to any society which takes power to make it by its rules. igo The Law Relating to Industrial 12. Acts requiring a special resolution. Sec. i6. A society may, by the following process, — Change its name ; Amalgamate with any other society ; Transfer its engagements to any other society oi company ; Convert itself into or amalgamate with a company. (i) It must pass a resolution for the purpose desired, by a majority of three-fourths of the members present at a general meeting, of which notice specifying the intention to propose this resolution has been duly given. Sec. i6 (i). That resolution must be confirmed by a majority of the members present at a meeting, of v.-hich notice has been similarly given, held not later than fourteen nor more than thirty days after the first ; Sec. i6 (i). And it must be registered at the central office. Sec. 16 (6). (2) To change its name, the society must also obtain the approval of the Chief, or in Scotland or Ireland the Assistant Registrar, in writing, to the new name. Sec. 16 (2). (3) To an amalgamation, the consent of every society amalgamated, by resolutions so passed and registered is requisite. Sec. 16 (2). (4) To convert a society into a company, the resolution must contain the particulars required by the Com- panies Act to be contained in the Memorandum of Association of a Company. The Registrar will then issue, under the seal of the office, a copy, which may be registered as a Memo- randum of Association under the Companies Act on being duly stamped. And thereupon the registry of the society will become void. Sec. 16 (7 and 8), The effect of this registration being to bind together as a company under the Companies Act, the same persons who at the moment of registra- tion formed the society, they will continue to hold as a company whatever and Frovident Societies. 191 property they held previously as a society. The alteration resembles a change of dress — the name of the society falls off and that of the company is drawn on ; but the body clothed is unaltered. Hence no provision for transferring the property of the society to the company is required or con- tained in the Act ; though to prevent the possibility of any legal juggle it keeps alive a society converted into a company for the purpose of enforcing in its name against the company any right or claim on the society subsisting at the conversion. Sec. i5 (8). The Act does not confer on a company any power of amalgamation which it does not possess independently. It may perhaps be held to place a society in the position of a company, so as to authorise its amalgamation with any company which, under its own articles, could have amalgamated the society with itself had it been a company. But, as this is doubtful, any society which may desire to amalgamate itself with a company should ascer- tain before it passes the resolution for amalgamation, that the amalgamation is authorised by the articles of association of the company in force at the time when the resolution is registered. A society which desires to convert itself into a company, should also ascertain before it passes any resolution for that purpose, that the Registrar of joint-stock companies does not object to register it, as he is bound to do if the proposed name should be identical, or likely to be confused, with that of any other company. In general, a refusal to register on this ground is unimportant, because the signatories of the memorandum of association can substitute another memorandum with an altered name. But in the case of a society the refusal would involve the repetition of the proceedings for con- verting itself into a company, which might cause great inconvenience ; against which the Registrar of Industrial and Provident Societies is unable to give any protection, since he has no information as to the names on the register of companies. It is necessary, therefore, for the society to protect itself by previous inquiry at the companies' registry office. Forms of proceedings for all the cases above-mentioned have been pro- vided by the Treasur>' Regulations made under the Act, and may be ascer- tained by application at the Central Office. 13. Administration to intestate members. If the amount of the shares held by any member does not exceed ;^ioo ; And he dies intestate and without having made a sub- sisting nomination under the power after-mentioned ; The Act gives the committee of management of the society the power, without letters of administration,* and charges it with the duty of distributing these shares among the persons who appear to them entitled thereto. Sec. 11 (6) ; * Or confirmation in Scotland. Sec. 3. 192 The Law Relating to Industrial And it confirms this distribution against any demand upon the committee or society by any other person. Sec. 11 (7). 14. Tlie profits of the business may be appUed to any lawful purpose. III. The rights of members individually — I. Nomination. Sec. 11 (5). (i) A member not under the age of 16 is entitled — To dispose of his interest either in shares, loans, or de- posits (6), up to the hmit of ^100, by any writing under his hand, delivered at or sent to the registered office of the society. And to revoke or vary this nomination similarly. (2) This right may be exercised in favour of — Any person not an officer of the society ; An officer who is husband, wife, father, mother, brother, sister, nephew, or niece of the nominator. (3) Every society is required — To keep a book where the nominations made by its mem- bers shall be recorded ; And, on receiving proof of the death of a member, either to pay the amount due or transfer the shares comprised in the nomination to the nominees. Sec. n (5). Sub- ject, if the amount is over ;^ioo, to the production of a stamped receipt for the succession or legacy duty payable thereon, or a certificate from the Commissioners of Inland Revenue that none such is payable. C. 10 (i). a. Inspection — (i) Of the books of the society. See I., 9. (2) Of the affairs generally. — One-fifth of the members, if not more than 1,000, or 200, if over t,ooo but not more than 10,000, or 500 if more than 10,000, may, by application to the Registrar,* supported by such evidence as he requires of a good reason for the application, obtain : The appointment of an inspector to examine and report on the affairs of the society to the Registrar,* * i.e.y in England the Chief, in Scotland or Ireland the Assistant Registrar. and Provident Societies. 193 Or the calling a special meeting to discuss and deter- mine such matters as he directs, under a chairman appointed by it ; and, if the Registrar* so directs, at the cost of the society, both as respects the in- spection and special proceedings. Sec. 15 (1,4). 3. The decision of disputes between a member, or any person claiming through him or under the rules, and the society or any of its officers is provided for as follows : — (i) If the rules contain any direction for their deter- mination, and they are so decided, the decision is final. Sec. 14(1). (2) Sec. 14 (5). — If they contain no such direction ; Or if no decision is made within forty days after appli- cation to the society for a reference ; The case may be decided on the application of the member or person aggrieved — By the County Court (for Scotland and Ireland. see II., 5) ; Or by a court of summary jurisdiction.! (3) If the rules direct disputes to be referred to the justices they are to be determined by a court of sum- mary jurisdiction. Sec. 14 (4). (4) By the consent of the parties the matters may be referred — To the County Court in any case cognisable under the rules by a court of summary jurisdiction.! Sec. 14 (4); If the rules do not expressly forbid it, to the Chief, or in Scotland or Ireland the Assistant Registrar; to whom the Act gives all necessary powers for * i.e., in England, the Chief, in Scotland or Ireland the Assistant Registrar. t That is, in the City of London, the Lord Mayor or any alderman ; In any place in England within the jurisdiction of a metropolitan or other stipendiary magistrate, such magistrate or his substitute ; In the police district of Dublin a divisional justice ; In any other place in England or Ireland two or more justices of the peace sitting in petty sessions ; In Scotland the Sherift's Court. Sec. 10 (^ and 4). 194 ^^'^ Laze/ Relating to Industrial examining witnesses and enforcing the production of books and documents. Sec. 14 (2 and 3). (5) The Court or Registrar are authorised to obtain the decision of the higher courts on any points of law involved in any matter referred to them, as well as to grant discovery of documents to either party in the dispute. Sec. 14 (6). IV. The protection of the society. I. General misappropriation of property of the society. — Any person — Who obtains possession by false representation or imposition of any property of the society ; Or having the same in his possession, withholds or mis- applies it, or wilfully applies any part to purposes other than those expressed or directed by the rules or authorised by the Act — Is liable to be proceeded against summarily — On the complaint of — The society, or any member authorised by it, or the committee of management, or by the Central Office. Or of the Chief Registrar, or any Assistant Registrar by his authority ; And on conviction is liable to a penalty not exceeding £20, with costs not exceeding 20s. ; And to be ordered to deliver up all such property or repay all such moneys improperly applied ; And in default of payment in compliance with the order, to imprisonment for any time not exceeding three calendar months with or without hard labour. Sec. 12 (10). Or if the offence is indictable under the general law he may be proceeded against by indictment. Sec. 12 (10). 2. In the case of officers of the society having charge of money the Act contains two provisions, of which the second makes the first of little use. (l) Every such officer must, if the rules of the society so require, give such security as the committee approve for and Provident Socutus. 195 July accounting for and paying over all moneys due from him to the society. Sec. 13 (i). (2) Every such officer, his executors or administrators, must — at such times as the rules of the society require; Or on demand made by a notice, in writing, given or left at his last or usual place of abode ; Give in his account as may be required by the society or committee thereof, to be examined and allowed or disallowed by them ; And pay over all moneys, and deliver over all pro- perty, for the time being in his hands or custody, to such person as the society or committee appoint ; And if he neglects or refuses to comply with any such demand, the society may — Either sue him on his bond or security [if he has given one] , or may apply either to — The County Court, which is authorised to proceed in a summary manner ; Or to any court of summary jurisdiction ; And the order of either of such courts is made final and conclusive. Sec. 13 (2). As the directions of the Act are positive, I apprehend, though this is not positively declared, that a failure to comply with them would be an offence against the Act, carrying with it the liability to fine under the provisions relating to offences mentioned subsequently. 3. In the case of the members generally. — A society may protect itself against any breach of its rules by thereby imposing on its members penalties which would become binding upon them by the force given generally to the rules {See II., 2) ; and are recoverable in the same manner as penalties for offences against the Act. Sec. 18 (4). V. The protection of the members. Sec. 17 (2). I. Contribution to debts of the society. — The members of a society cannot be required to contribute to the payment of its debts any larger sum than the amount remaining unpaid — (i) Upon any shares held by them at the date when the winding up begins ; 196 The Law Relating to Industrial (2) Upon any transferable shares held by them within one year previous to this date ; (3) Upon any withdrawable shares withdrawn within one year previous to the date. 2. Case (2) applies only to persons who have ceased to be members previous to the winding up ; And to debts then subsisting. Case (3) applies only to debts subsisting at the time when the share was withdrawn. And in both (2) and (3) the contributions can be required only where the assets of the society, independent of such contributions, are insufficient to pay the just claims on it. In case (3) the provisions of the Companies Act as to the liabilities of members upon shares no longer held by them, which in that Act apply only to persons who have ceased to be members, are extended so as to apply to withdrawable shares, although the former holder continues a member. The effect is that the holders of such shares continue liable to contribute on all the shares held by them within one year previous to the commencement of the winding up, to the whole amount received by them; but only in respect of the debts subsisting at the time of the withdrawal of the share, and in case they cannot be paid without this contribution. ^^I. The Audit of Accounts and Evidence — 1. Audit. — Under the authority ol the Act, Sec. 21, the Treasury has appointed public auditors for its purposes, and fixed the rates of remuneration to be paid to them by societies. The employment of such auditors is not obligatory, but a society employing them has the advantage that the certificate of one such auditor is sufficient, while otherwise two auditors are required. Sec. 10 (i c and d). 2. Evidence. — The seal of the Central Office is made evidence of every instrument, document, copy, or extract to which it is attached. And any document purporting to be signed by any regis- trar, inspector, or public auditor under the Act is receivable in evidence without proof of the signature. Sec. 24. VII. Dissolution of Societies — and trovtdent Societies. 197 The Act provides three modes in which a society may be brought to an end. A. — It may be wound up by a process similar to that by which a company may be wound up under the Companies Acts ; that is — (i.) By the resolution of the members to put an end to it ; (2) By a voluntary winding up, in order to provide for debts which it cannot otherwise meet ; (3) By an order to wind it up made by the County Court (for Scotland and Ireland, see II., 5). (4) By a voluntary winding up under the supervision of the court. 1. In case (i) a special resolution is necessary; {See II., 12). In case (2) there is required one meeting only, at which there is carried by a majority of three-fourths of the members present a resolution — " That it has been proved to the satis- faction of this society that the society is unable, by reason of its liabilities, to continue its business, and that it is advisable to wind up the same ;" In case (3) a variety of circumstances under which the order may be made are enumerated in the Companies Act, 1862, Sec. 80, with the general power to make it whenever the court is of opinion that it is just and equitable that the society should be wound up ; Case (4) may arise on a voluntary liquidation ; Either if it becomes necessary to apply to the court to restrain the proceedings of any creditor ; Or if some dissatisfied creditor invokes the interference of the court, which, however, does not think fit to take the liquidation wholly out of the hands of the members. 2. In every case a liquidator must be appointed, either by the shareholders or the court, whose business it is to get in the assets, including all sums due from contributories, and to apply them in or towards the discharge of the debts, and to divide the balance, if any, after payment 0I all ig8 The Law Relating to Industrial such debts and the costs of the liquidation among the shareholders. The liquidator takes the place of the committee of manage- ment of the society, and is armed with all the powers necessary for enabling him to complete the liquidation, including that of carrying on the business if it appears to him desirable for this purpose, subject in a voluntary liquida- tion, to the obligation of laying a statement of accounts before a meeting of the shareholders once a year so long as the liquidation goes on. Where the liquidation is conducted by order or under supervision of the court, all operations of this kind require its sanction. 3. In a voluntary liquidation it is necessary to advertise the liquidation in the Gazette,^' though the liquidation begins from the passing of the resolution or its confirmation where it requires to be confirmed. 4. When the liquidation is brought to an end, notice of its termination must be given by a meeting similarly adver- tised, of which the liquidator is to make a return to the Registrar. Three months after the date of registration of this return the society will be dissolved. A penalty not exceeding ^5 a day is imposed on any default in making this retutn for every day during which it continues. — Companies Act, 1862, Sec. 143. And as the Registrar of Industrial and Provident Societies may fix the form in which any return to him has to be made, Sec. 10, 2 (5), and, therefore may require it to contain a statement of the advertisement in the Gazette, he may secure the insertion of this advertisement. There is no penalty attached to the non-insertion of the original advertisement ; but the want of such a notice would be a suspicious circumstance, which might tell gravely against the liquidator if any attempt should be made to set the liquidation aside. 5. The provisions above stated are contained in the Companies Act, 1862, and made applicable to Industrial and Provident Societies by the Act, sec. 17 (i), with the substitution of the County Court and Registrars of Indus- trial and Provident Societies in place of the Court of Chan- cery and Registrar of Joint Stock Companies, as the court * London, Edinburgh, or Dublin, as the case may be. The Act, Sec. 3. and Jt^rovtdent Societies. 199 and officers having authority in the matter. But to carry the account of these proceedings beyond this short notice of their general character would introduce subjects too ex- tensive for the present Manual. B. — The second mode of bringing a society to an end is by an instrument of dissolution. 1. This instrument must be prepared in duplicate in a form prescribed by the Treasury regulations, and must set forth— (i) The liabilities and assets of the society; (2) The number of members, and the nature of their respective interests ; (3) The claims of creditors (if any), and the provisions made for their payment; (4) The intended appropriation or division of the funds and property of the society, which, however, may be left to be determined by the Chief Registrar. Sec. 17 (3 '»)• 2. Such instrument must be signed by three-fourths of the members. Sec. 17 (i) ; And it must be accompanied by a statutory declaration that the provisions of the Act have been complied with, made by three members and the secretary of the society, and sent up to the Registrar with the instrument. Sec. 17 (3 c). Alterations in the instrument (if any) must be similarly consented to and attested. Sec. 17 (3 b). 3. The instrument, with all alterations (if any), must be registered in the same way as the rules of the society, and will thus become binding on all the members. Sec. 17 (3 d); It is to be advertised by the Registrar at the expense of the society in the Gazette, and some newspaper circulating in the county where the registered office of the society is situate. Sec. 17 (3 «) ; Forms of the notice relative to this advertisement may be obtaiti/ja from ihe Central Office. 200 The Law Relating to Industrial And at the end of three months from the date of the Gazette in which the advertisement appears the society will be dissolved — Unless the instrument is set aside by a proceeding com- menced previously in a court which has jurisdiction to wind up the society. Sec. 17 (3 e). Of which notice is to be given — By the person who makes the application seven days before making it ; And by the society if it succeeds. Sec. 17 (3/). C. — A society may also be put an end to by cancelling its registry at its own request if the Registrar thinks fit so to do, Sec. 8 (i a), with the consequences stated in VIII. VI 11. Provisions for enforcing the Act — I. The Cancelling or Suspension of Registration. Sec. 8 (i i). (i) If an acknowledgment of registration has been obtained by fraud ; Or a society exists for any unlawful purpose ; Or it has wilfully, and after notice from the Registrar,* violated any of the provisions of the Act ; The Registrar* may, by his own authority, suspend its registry for any time not exceeding three months ; And with the consent of the Treasury, May continue such suspension from time to time for any similar period. Or may cancel the registry. (2) Two months' notice is to be given to a society whose registry is proposed to be suspended or cancelled on the ground thereof. Sec. 8 (3). And the society has the like right of appeal as in the case of a refusal to register a rule. Sec. 8 (4). But on a suspension only when it exceeds six months. Sec. 8 (4). (3) Notice of every cancellation or suspension is to be given as on an Instrument of Dissolution. Sec. 8 (3). * i.e., in England, the Chief, in Scotland or Ireland the Assistant Registrar. and Provident Societies. 201 (4) Sec. 8 (5). — A society Avhose registry is cancelled — Absolutely ceases to enjoy as such the privileges of a registered society ; But remains subject to any liability incurred by it. (5) The like effect is produced by any suspension of registry during the time that it lasts. Sec. 8 (5). Hence, during the suspense of its registry, a society could not do any corporate act, such as suing for a debt or making a conveyance, though it may be sued and the corporate property seized on a judgment. On the cancelling of the registry of a society, its property would, I conceive, become the joint property of all the members at the date of the order, and would devolve to the survivor unless by a conveyance, executed by all of them, or under an order of partition it is otherwise disposed of. The reduction of the number of members below seven would be a ground for an order to wind up the society. — Companies Act, 1862, Sec. 242. But the case might also be properly met by cancelling the registry. 2. Pecuniary Penalties. — (i) A fine of not less than ^i nor more than £^ is imposed — On every society, officer, or member of a society, or other person guilty of any offence under the Act, for which no penalty is expressly provided. Sec. 18 (3). (2) It is declared, Sec. 10, 3 (a-d), to be an offence against the Act if any society — Fails to give any notice or send any document, or do or allow to be done any act or thing which it is by the Act required to give, send, do, or allow ; Wilfully neglects or refuses to do any act, or to furnish any information required for the purposes of the Act, by the Registrar or other person authorised by it ; Does any act or thing forbidden by the Act ; Makes a return or wilfully furnishes information in any respect false or insufficient ; Carries on the business of banking, haring any with- drawable share capital ; Or, in carrying on such business, does not make out and keep conspicuously hung up such statement as is required by the Act. Schedule II.; 202 The Law Relating to Industriai Makes any payment of withdrawable capital while any claim due for deposits received under Sec. lo (2 c) is unsatisfied. (3) And every offence committed by a society is deemed to have been committed — By every officer bound by the rules to fulfil the duty of which it is a breach ; Or if there is no such officer, by every member of the committee who is not proved to have been ignorant of, or to have endeavoured to prevent it ; And if continued for more than a week, is taken to be a fresh offence in every week during which it is continued. Sec. 10 (4). (4) Sec. 18 (i). — A penalty not exceeding £5*^ is imposed, on — Every person who wilfully makes, orders, or allows any entry or erasure in, or omission from, any balance sheet of a society, or any document required by the Act with intent — To falsify the same ; Or to evade any provision of the Act. Sec. 18 (i). Any officer of a society, or person on its behalf, who transgresses the provisions of the Act mentioned in p. 102, as to the use of its seal, or the issuing documents not bearing its registered name; Sec. 18 (2). Together with the personal liability to payment there stated. Sec. 18 (3). (5) The pecuniary penalties are recoverable by summary process (See III., 3) at the suit either of — The Registrar ; Sec. 18 (4). Or any person aggrieved. Sec. 18 (4). 3. Criminal Penalties. — (1) It is made, Sec. 9 (6), a mis- demeanour, in Scotland a crime and offence (Sec. 3), for any person, — To give to any other person, with intent to mislead or defraud, a copy of any rules, laws, regulations, or other documents other than the rules for the time being, regis- tered under the Act, on the pretence — and Provident Societies. 203 That the same are the existing rules of a registered society; Or that there are no other rules of such society. To give to any person a copy of any rules on the pretence that such rules are the rules of a registered society when the society is not registered. (2) An appeal lies from any order or conviction made by a court of summary jurisdiction on any complaint or informa- tion under the Act ; In England and Ireland, Sec. 19 (6 a,f) — To some court of general or quarter sessions for the county or place where the cause of appeal has arisen, held not less than fifteen days nor more than four months after the decision appealed from. In Scotland, Sec. 19 (7) — To the Court of Justiciary or any other circuit court thereof, under the 20 Geo. II. (4) ; Or to the Court of Justiciary in Edinburgh, under the Summary Prosecution Appeals (Scotland) Act, 1875. IX. The provisions above stated comprise all the parts of the Act of general importance, with exception of the clauses relating to societies registered before it was passed. 1. These societies are taken to be registered under it. Sec. 5. And provision is made for preventing the repeal of the Acts under which they were registered, affecting any rights arising under them. Sec. 4. And their rules, so far as they are not contrary to any express provision of the Act, are kept in force till altered or rescinded. Sec. 5. 2. But in regard to the powers given by the Act, and not made to depend upon the rules of a society, the Act relaxes the operation of the rules, by providing that either the society or its members may exercise any of such powers, notwith- standing any provision contained in any rule thereof, certified before the Act passed. Sec. 11 (2). 204 The Law Relating to Industrial and Provident Societies. X. The provisions of the Act not noticed above relate to- Sec. I. The Short Title. Sec. 2. The extent of the Act. Sec. 3. The definition of the various terms employed in it. Sec. 7 (4). Societies Registered under the Industrial and Provident Societies Act, 1852, and not under the Industrial and Provident Societies Acts, 1862 and 1867. Sec. 10 (5). The Forms of Return. Sec. 10 (6). The Registration of Documents required to be sent to the Registrar. Sec. 12. (6). Setting forth Forms of Mortgage, &c., in the Rules. Sec. 1 9 (i and 2). Mode of Prosecuting Offences and Recovering Penalties. (5). How Offences are to be Described. Sec. 20. Regulation of Proceedings in the County Court. Sees. 21 and 22. Power to Treasury to determine Scales of Fees and Regulate Forms. Sec. 25. Duties of the Registrar. Sec. 26. Application of the Act to the Channel Islands. PART IV. THE HELPS AND HINDRANCES TO CO-OPERATION. PART IV. Chapter 12, THE PERILS OF CO-OPERATION, AND HOW TO ESCAPE THEM. To enter at any length into the matters forming the title of this part would be to repeat much of what the other three parts have contained. It is not my intention to weary the reader by carrying him again over the ground we have traversed, but in a matter of such vital importance to the mass of the population as co-operative action must be, if it be regarded from the point of view presented in these pages, a few words to sum up the teaching of this manual may not be thrown away. Like the barbed head of the arrow, they may help to make the thoughts, which constitute its shaft and give force to the blow, stick. Co-operation, as described in this manual, is a serious effort to unite in the business of life the ideal with the real, or, in the language of the New Testament, to realise on earth the "kingdom of God and His righteousness," in the assured conviction that all else shall be added to those who thus place themselves in harmony with the all-sustaining power, that Divine unity on which the infinite differences of individual existence rest, and of which they are the ex- pression. Co-operation will be helped by whatever promotes this disposition. It will be hindered by whatever checks it. Its danger and its safety depend on the absence or presence of this spirit of unity. It has been the object of this work to trace how that spirit can realise itself in the busy world of industry which, in modern times, has assumed such gigantic and ever-growing proportions, its writers have endeavoured to point out that 2o8 The Perils of Co-operation, the means for effecting this reaHsation lie ready to our hands ; that, in our days and our country, they require no sweeping changes in existing institutions ; no violent revolu- tions ; no reigns of terror ; no alteration of the law, extorted by the many from the fears of the few. On the contrary, it has been argued that any attempt o'r this nature would interfere with and thwart the progress of co-operation, by destroying that peaceful atmosphere of law-abiding activity, in which alone the institutions, whence we look for these results, can grow up and thrive. We have pointed out that, beginning with that which is in the power of every body of men in the United Kingdom — union to obtain for their own use what they require every day — they may pass on to union by which they may give to those who produce what they want the benefits now absorbed by those who employ them, while they find in such unions an evergrowing field of investment for their own savings. That, by the wise employment of these funds, in bettering the dwellings of the producers, and providing against the contingencies of life, they may make the profits of pro- duction secure for one group of workers after another the comforts and advantages which, as now used, they can bestow only on a few, but bestow on them in a superabundance detrimental to the higher life of the spirit rather than con- ducive to it. And that thus, by the gradual accumulation of wealth and the ownership of land which naturally follows it, they may attain, by a process of peaceful evolution, that collective property of the soil and the instruments of labour which the party calling themselves Social Democrats and Collectivists, propose to attain by throwing themselves headlong into a current certain to carry them farther and farther from it — the stream of violent change. Looked at in its successive steps, the path to the eman- cipation of labour by converting the capital indispensable to its activity from an exactmg master mto an obedient servant seems, and indeed is, easy ; but only on condition that it be and How to Escape them. 209 followed in a spirit thoroughly co-operative. For, doubtless, the way is long, far longer than will allow any of the genera- tion now alive ever to see more than the beginning of the end. Only a comparatively few, and these exceptionally favoured, may succeed by their unassisted efforts in reaching the desired goal. It may be lost for the many, through that selfish impatience for immediate results, which refuses to sow the seed because it cannot expect to reap the corn. And precisely here lies the greatest danger to co-operative effort. Co-operation has prospered hitherto in Britain under the form of union for distribution, as it has prospered in Ger- many under the form of union for people's banks, greatly because so many persons have found their immediate indivi- dual advantage in the effects of the union originated by those who had higher objects in view. The distributive store has given to all who joined it not only articles on which they can rely that they are what they profess to be, but an increased power of buying these articles. When they are formed on the Rochdale plan they have given them, besides, admirable savings banks, banks which save for them without trouble, and can afford to pay at least one-third more interest than ordinary savings banks, with a security which, in societies that have outlived the perils of infancy, may justly claim comparison with that of any other banks. So the people's banks of Germany have prospered, because the confidence inspired by them has enabled their members to deal with loan capital much larger than their own capital, for the use of which they paid much less than they received from this use ; and thus have added to the savings from their own income the earnings of a business at once safe and profitable. Each of these institu- tions, therefore, found support in that principle of direct self-interest, to follow which it costs us no effort, because it belongs to our nature as animals, and is kept in constant training by the struggles of competitive society. 2IO The Perils of Co-operation, To confine ourselves to our own case, — That, under these circumstances, this first step in co-operative progress — union for the accumulation of capital — should have been taken by the large number who have taken it is not more than might have been reasonably expected to happen, as soon as the eyes of the consuming public became opened to what the late John Stuart Mill saw very clearly, namely, the very large share of the total produce of labour actually used up by the charge for distributing the remainder. But the case entirely changes when we pass from distribution to production. No doubt here, too, the formation of societies which should carry on the co-operative programme sketched above in its completeness, as M. Godin has nobly carried it out at Guise, would be to the very great advantage of the workers collec- tively. But individually, to the few whom superior ability or some happy accident may enable to " get on " the backs of their fellows in the competitive struggle, it may seem a disadvantage, hindering them in this " getting on," of which they are ambitious. While the men who have no chance of ever " getting on " anybody's legs but their own, whose only well grounded hope of materially improving their posi- tion individually is by raising it collectively, are apt to be, if not opposed to this collective action, yet indifferent to it, because, while only a few can be lifted up at once, the help oi a great many is required to lift them. So that the cry of " every one for himself" makes itself felt if not heard, here, where it means, "let none of us be raised unless all of us are equally raised at the same time," as there, where it means " don't stop me from rising." ' How extensively this feeling works is shown by the readi- ness with which the large body of working men who compose the English Wholesale have acquiesced in the scheme of diverting all the profits of their Leicester shoe works from the workers there employed, and applying them as part of the general fund distributed as dividends on purchase; though, as has been shown in a former chapter, the sum added to these and How to Escape them. 21 1 dividends when the profits are thus dealt with is so small — a fraction of a farthing on every pound of outlay — that even the societies which directly receive it cannot derive from it any appreciable advantage ; while to the individual buyer that advantage, small as it is, vanishes by being strained through the profits of the society ; so that no one can feel his position to have been sensibly improved by this division. In this case there is no temptation to withdraw the profits on work from the workers through that fear of diminished dividends, which led the members of the so-called Co- operative Cotton Manufacturing Company at Rochdale to withdraw the small share of profit they had originally conceded to them, as it has prevented the Oldham spinning companies from permitting them to participate in their profits. And I question whether there are fifty men in the Wholesale Society who believe in the possibility of carrying on production generally on the system known as Federal, described in the chapter on Production, and there- fore defend this subordination of production to consumption on theoretical grounds, in the view of a great general good ultimately anticipated from it. Yet the mass acquiesce in thus destroying the hopes of the producer, without gaining a benefit felt by the consumer. More improvident than Esau, these modern hunters after profit throw away their birthright as workers, without getting their mess of pottage, and clap their liands over their success. Here lies the great danger to the progress of co-operation as a systematised plan of social reform. The bridge which the profits on production would allow the workers to build over the river of poverty that now separates them from the advantages of wealth, is barred by the twin giants, Indi- vidual Self-seeking and Collective Indifference, the last-named being the most formidable. The working producer requires the alliance of the working consumer, both to obtain the capital required for his work and to organise for his produce a market by which the risk of loss may be minimised ; but •212 The Perils of Co-operation, the working consumer refuses his assistance except upon conditions which make it useless for the purpose of bettering the position of the producer, and useful only in giiaranteeing the quality of the things produced. How can this great danger be averted ? In other words, How can we overcome the indifference of the masses to that employment of capital which is indispensable to the improvement of their position, without attempting the impracticable task of supplying them with the fruit before the tree is grown ? There appear to be two possible ways to this end — one inward and the other outward ; the second dependent on the first. By unwearied persevering appeals to the principle of unity it may be possible to diffuse among men more generally the feeling that a life of perpetual struggle after objects which perish in the using must be petty, ignoble, and unsatisfying; but that life may become great and noble if it is brought into constant harmony with that Divine spirit which dwells in those who are animated by love to their fellow-men. By the appeal to reason and ex- perience it may at the same time be possible to spread the conviction that only by means of institutions suitable to the exercise of this spirit can it become a pervading influence in the ordinary lives of ordinary men. The problems of social reform depend for their solution upon the joint operation of both these principles. Without the last men cannot see what to do; without the first they cannot obtain the strength to do what they have learned to see should be done. That the work of diffusing this double conviction will be easy, I do not say. But there is in the i-uling tendency of the present age — its scientific spirit — a characteristic which may make this work easier. Man has always been urged by the demands of his spiritual being to seek for certainty — for that which may be surely known and relied on. But throughout vast regions and during long ages he has sought this reliable and How to Escape them. 213 knowledge in affirmations about unseen worlds, where no testimony of sense exists to qualify the assertions of his imagination ; whence he could assign to these imaginary creations qualities of grandeur and permanence, capacity of conferring infinite happiness or unending pain, before which earth, with its transitory joys and sorrows, necessarily fades into insignificance. European life has been no exception to this disposition. On the contrary, in what we call the Middle Ages it exercised over all European thought the profoundest influence, as anyone may realise who will read the Divina Comniedia of Dante, and remember that the universe depicted there is the universe in which Dante and his contemporaries firmly believed. In Europe, then, no less than in Asia, among Brahmins, Buddhists, or Mahometans, the all-important inquiry with those who rose above slavery to animal passions was, What shall I do to attain the infinite joys or escape the infinite pains of this true reality — the lasting existence which is to succeed my present fugitive being ? The peculiarity of the Christian answer, on which my hopes for the future of mankind rest, has been that it always included the position. You must strive to become in spirit like that Divine Being of whom the Gospel tells us. Hence arose, as is observed in the first chapter of this manual, those countless works of benevolence by which the nations professedly Christian have been and are distinguished from all other nations of whose history we have any record. Hence must come, according to my conviction, that per- severing determination to work out the deliverance of man- kind from the evils produced by competitive selfishness, which constitutes the ideal of co-operation. The moral strength required to do this work thoroughly must, in my judgment, be derived from that faith in the manifestation of the Divine, from which the good works of the Christian world liave either directly proceeded, or to which they may be traced through the indirect influence of the mental atmos- phere which this faith has created. But for the direction of 214 ^^^^ Perils of Co-operation, this moral force to work out the collective benefit of mankind, we shall be indebted, I conceive, mainly, to the results of modern scientific research. This scientific thought desires to attain certainty as ardently as the thought of any previous age. But it has laid down as a maxim not to be questioned that certainty can be attained only through the verification of the ideal by the real ; only in proportion to our power of testing what we imagine by what we can observe, training ourselves up to the difficult task of explaining what is, instead of launching out into the free construction of what we only suppose to be. It is clear that to such a disposition the invisible world of the Middle Ages, instead of being, as it was to the thinkers of those ages, the true reality, must become unreal and worthless. It is a matter about which the scientific thinker can have no in- clination to busy himself, since his researches have destroyed the only motive that could have led him to pay attention to affirmations which he cannot test — the conviction that those who made them had access to some source of know- ledge denied to himself, — for these researches have proved to him that those who made the assertions were entirely ignorant of thp constitution of the world in which they actually lived. Astronomy and geology, to say nothing of other sciences, have swept away the universe of the Divina Commedia. " It lives no longer in the faith of reason." How is it possible for the scientific thinker to place any confidence: in affirmations about an invisible world made by men who can be proved to have been entirely mistaken in what they affirmed about the visible world ? Necessarily the scientific thinker must dismiss the whole subject from his mind, and concentrate his thoughts upon that about which alone he has the hope of attaining to any certainty — the earth and the universe in which it has a place. But does it, therefore, follow that the tendencies of scien- tific thought are only "of the earth earthy." By no means. It is the object of the scientific inquirer to apprehend the and How to Escape them. 215 universe in which he finds himself as it is ; to trace back its phenomena to the powers that actually underlie them, of which they are really the expression. If, as is maintained in these pages, the human race, as it is certainly the latest stage of an enormous series of developments, so is also that form of individual being in which the universal life returns, so to speak, into itself, by the voluntary act of the individual will, merging the animal desire for selfish gratification in an unselfish desire for the general good, we must expect that the patient and honest search after the key to the series, will lead the searchers to this true solution of their investigations. And as might be anticipated so it has been. From various thinkers who take their stand on the scientific basis, refusing to listen to the voice of any master but that of their own reason, dealing with the materials given her by observation — thinkers who must be classed among the most fearless-assail- ants of traditional beliefs— comes the concurrent testimony that in the negation of selfishness, in altruism, in the placing our own good not in what we receive from others, but in what we can do for them, lies the true welfare of man, individually as well as collectively; his real work upon earth; the true end* of his being. How is he to attain this end, to do this work, to grasp this well-being ? Can any other answer be given bearing even a show of probability than this — by union, in order to make the enormous and yet constantly increasing command over natural forces now possessed by men, produc- tive to the whole body of mankind of the greatest attainable amount of those advantages which the earth can offer to them ; while through this same principle of union, thr ex- ternal element may become the nursery and training school of those noble inner qualities, whose growth the present com- petitive struggle for individual possession tends to stifle. I have noticed the change in mediaeval modes of concep- tion made by modern science, in the extent to which it turns *Telos, in the language of Greek philosophy. ii6 The Perils of Co-operation, men's thoughts away from the world not manifested to oui senses to fix them on that which is thus manifested. Let me observe also that, in so doing, scientific thought really brings us back to that mode of thought by which the Bible, Old and New Testament alike, is pervaded, though, no doubt, with the modifications, belonging to the difference between our conception, that the Divine action, or what we call nature, is essentially unchanging under all circumstances, and the Biblical conception, that it changes as human action does, according to circumstances. The Bible is full from begin- ning to end of the deepest trust in the unseen presence with man of that great Being, to whose will it traces all phenomena. But this will is, according to the Bible, a will to be realised on earth. The Jewish prophets look forward, with ever-brightening hope, to the glories of the reign of the Messiah. But this reign is to have its seat at Jerusalem, whence its blessings are to flow over all nations. The New Testament takes up the same strain. The Lord's Prayer calls on us to hope, and desire that the will of God be done on earth as in heaven. The Apocalypse, after a pre- liminary thousand years' reign of the saints, preceding the final struggle of evil against good, brings down the Heavenly Jerusalem, the Temple of the living God, to earth, among the nations, for whose "healing" the "leaves" of the trees which grow along the banks of the river of life flowing from the Divine throne are destined.* Looking, as I do. Upon the whole development of existence upon earth, crowned by the history of man, as the continuous manifesta- tion of the Eternal Invisible Power, who would lead men to that co-working with Himself in which alone their activity will find entire satisfaction, I cannot but consider this earth- ward track of science, as destined to bring piety back to the sphere of Biblical thoughts and aspirations, and teach it to find its abiding reward in earnest efforts to spread the •Revelations xxii., 2. and How to Escape them. 2iy kingdom of God over the earth, by creating such conditions of human life, as good men can feel to be worthy of this kingdom; the fit expression of the spirit of Him whose name is Love. How they might realise these conditions, and that in a very few years, if only they will, these pages have endeavoured to show. May they help to forward that great consummation by showing to the will a practi- cable way. 2. This is the internal road to association on which the external road necessarily depends. For, unquestionably, the outward must grow out of the inward ; the will to act must pre- cede the action ; and the will to work with persevering energy for the creation of a truly Messianic condition on earth, must be determined to undertake this work by the conviction that such a condition can be realised. But assuming that this inner power is brought into persevering activity among a body of men numerous enough to make their action perceptible, there would come into play a second force, not to be despised, which I have called the external road to association, namely — the help given to the progress of the idea by those who never would have originated it, who have, strictly speaking, no faith in it ; men who aid it only because it aids them, and whose conduct is, in truth, an illustration of the saying, •' Nothing succeeds like success." What M. Leclaire has done at Paris, what M. Godin did, and what is still doing at Guise, illustrate this position. Men's minds, for the most part, resemble soil; they respond to skilful cultivation. This is the truth that Robert Owen laid hold of, and embodied in his doctrine of men's characters being formed by circum- stances, which at New Lanark, where he really did mould these circumstances in a great measure after his own ideas, produced marvellous results ; failing afterwards, because, in fact, while he talked about controlling circumstances they controlled him, and made, if not himself, yet at least his insti- tutions, illustrate his own theory. The house painters, says Mr. Sedley Taylor, in an interesting article on M. Leclaire's 2i8 The Perils oj Co-operation, work, in the Nineteenth Century for September, 1880,* were, " when Leclah-e commenced his efforts on their behalf, noto- riously the most dilatory, intemperate, debauched, and intractable workmen in Paris. Now, the members of the Noyeaut are greatly in request among architects, from their exceptional possession of precisely the opposite qualities." The experience of the Familistere at Guise, often alluded to in these pages as to the effect of the system of association introduced there upon the very miscellaneous body of workers, drawn from all parts of France to obtain employ- ment in the foundry connected with that establishment, is not less gratifying. It is an evidence of the beneficent in- fluence exercised by the habits of associated life upon the characters of those who come under its influence, though they retain a freedom of individual action as complete as they could have in the isolated life of separate homes. The result of these experiences justifies the affirmation that association well conducted by those who comprehend its possibilities, and avail themselves of the lessons offered by institutions such as those of MM. Leclaire and Godin,J will gradually produce among the mass who come under its influence that subordination of selfish desires to a common end, without which the high aims belonging to co-operative effort, con- templated from the point of view taken in this work, must be unattainable. Associated work and life will thus create around itself the atmosphere requisite for its own extension. Though few may attain to that absorption of the individual in his work •p. 382. t Then comprising 122 workers, chosen by election of their fellow- workmen. J A full statement of M. Godin's plans is given in his " Mutualite Sociale," containing the regulations of the association which is now the proprietor of the Familistere and the foundry connected with it. A description of the FamilistSre, principally taken from M. Godin's earlier works, " Solutions Socialcs,'' and " La Richesse au Service du Peuple" will be found in a tract on " Associated Homes," published by the Central Board. and How to Escape thetn. 219 which complete unity of the human will with the Divine appears to imply, and reap the blessings attending it, many will more or less partake of these blessings.* To this operation I look as the secret of the general diffu- sion of associated life which I anticipate. It may spread originally more from its physical than its moral benefits; because the masses will find, in association, the way of general access to advantages which, in the isolated life of competitive society, are necessarily the portion of compara- tively a few. But it will maintain itself permanently, because those who live under its sway will find in it an influence which, checking the growth of the " thorns and thistles,'" and favouring that of the " good seed," will enable the latter to spring up abundantly, and bring forth the rich fruit of well-being, external and internal, collective and individual, for the blessing of mankind. To sum up what has been here argued, co-operation, re- garded as a system of social reform, has two great perils, on either of which it may be wrecked. I. The impatience of the masses for some form of society less oppressive to them than the system of industry based on competitive struggles must be, may lead them to waste their energies in vain attempts at reaching this better state by a * If we examine the common causes of mental unhappiness, I think we shall find that it mainly arises from men allowing their minds to be diverted from that which they seek to do, to something which they hope to enjoy, or perhaps have enjoyed and lost ; and that the more entirely we can busy ourselves only about our own acts and their direct effects, and cease to care about their reaction on ourselves, the more lasting and thorough peace we shall attain. For this is in truth "the meek and lowly spirit " which can give " rest to our souls." — Matt, xi., 2j, 29. Asceticism endeavours to attain the peace belonging to a mind occupied with its acts and not with their results by directing its action to God alone. But to suppose that we become conformed to the will of the Great Worker by withdrawing from work, seems to me, apart from the impossibility of its general application, to be thoroughly illogical. The true means of preserving our activity as workers, while we cease to think of the effect of the work on ourselves would, I conceive, be to carry on work in a complete system of association, where we may always feel that we are working for the body, which assigns to us individually a share of the proceeds proportioned to our work, without requiring us to scramble for it. Hence arises the great value of associated life to our spiritual well-being. 220 The Perils of Co-operation, short cut, through the mere will of the greater number, ex- pressed in political or social changes. 2. Indifference may stifle, or scepticism paralyse the attempt to build up this better state by higher forms of social institutions freely developed. The way of escape from both dangers is really the same, namely — to persuade men into choosing this better way by clearly pointing out where it lies ; showing the facilities which existing circumstances offer for entering upon it ; and the clear indications on many sides of the success that must follow the attempt if it is made wisely and perseveringly. Let me conclude these remarks by briefly retracing the great lines of this course. The hope of permanently and effectually raising the con- dition of the mass of the population by co-operative action depends — 1. Upon so carrying on production that its profits, aftei paying the charges of capital, shall be applied for the benefit of those whose work creates them ; 2. Upon so using these profits that they shall secure the workers and their families against the destitution liable to overtake them when isolated, from the contingencies of human life, and shall place within their reach, by associa- tion, the advantages which, in a competitive society, must be the exclusive privilege of wealth. To attain these ends there is only one practicable road, namely — the use of the accumulated labour called capital to create the conditions of existence required for lifting up those whose present labour makes that capital productive of enjoy- ment to its owners. How can the capital required be obtained ? There are only two possible methods, i. The use of the capital accumulated already. 2. The use of the fresh capital which is perpetually being accumulated through the opera- tions of industry. Now of these two methods the second is the one which appears most hopeful. The capital already accumulated, or and How to Escape them, 221 in continual course of accumulation through the savings ol income, will flow in fast enough to give extension to co- operative enterprise so soon as that enterprise establishes for itself the character of solid security, to offer which lies within its reach. The experience of the people's banks in Germany and elsewhere abundantly proves this. But until co-operative enterprise does offer such security, the aid to be looked for from this accumulated capital will, I fear, be rarely forthcoming and scanty when it is offered.* It is otherwise with the capital in the process of creation. In many quarters an earnest desire appears to be spring- ing up among our modern captains of industry to make the wealth produced under their leadership conducive to the moral and physical elevation of those whom they lead to these peaceful triumphs of labour. The remarkable in- stances of this disposition offered by the institutions founded by MM. Leclaire and Godin, often referred to in these pages, are the most striking, but by no means isolated cases in re- cent years of what those who are rolling up capital out of work have been able and willing to do for the benefit of the workers, through whose assistance it is rolled up. I trust that a not remote future has in store for us an ever increasing number of such examples. Alongside of these must be placed the efforts of bodies of working men to raise their own position by associated work. These, if the idea of the method through which the profits of this work can be made really useful for that end can ob- tain a firm hold on the minds of the workers, may in time become a very powerful influence in their social -elevation. But I fear that at present such unions, even when they succeed commercially, will rarely produce the effect that might result from them, because the profits on their work will be usually dissipated in inconsiderable additions to the incomes of the workers, and will not be systematically employed as • This is an old experience. Compare Matt, xix., v. 23 ; and Luko xviii., V. 23. 222 The Perils of Co-operation^ they have been by M. Godin to create for them generally better conditions of life. But in each of these methods of dealing with the great social problems we must wait for the " hour and the man." By neither method can we command them. Not so with co-operative production, if it be systematically conducted as the fruit of co-operative distribution. Here it is within the power of any considerable body of men to create, without loss to themselves, the capital required for production, out of the savings on their own consumption, merely by associating to supply themselves and accumulating the gains ; while by the same operation they produce the conditions proper for securing the advantageous employment of that capital, by utilising their own consumption of manufactured articles, in introducing the manufactures which by the use of this capital they may set up.* Now, suppose these centres of production to be formed on such a scheme as M. Godin carried out at Guise, they would have over the existing centres the advantages — (j) That the workers being directly interested in the profits of their work, would be likely to work with an energy and economy which cannot be expected from those who have no interest but in their wages : (2) That the best workers would be attracted to establishments where their work secured to them advantages much beyond what they could procure elsewhere : * I may observe that this is a peculiarity of the form taken by co-operation in Great Britain, whence it offers a more direct passage to a higher social state than does its great rival, the people's banks of Germany and other foreign countries. These banks have been quite as effective in increasing the incomes of the poorer classes and enabling them to accumulate capital as our distributive societies have been. They have been far more effective in producing unions for productive purposes than our societies. The Annual Report for the year ending 31st December, 1886, enumerates 202 such associations, 130 manu- facturing, and 72 agricultural. But the banks do not facilitate the formation of these societies by serving as dep6ts for the sale of their produce as our distributive societies may do. To develop co-operative production out of the people's banks intermediate institutions in the nature of unions for consumption are needed, and are indeed beginning to multiply, though still holding only a secondary place. The Report mentions 642, against 1,866 banks. and How to Escape them. 223 (3) That the consumers, suppljang the capital through which the work was carried on, would be able to secure also that the articles produced were always what they pro- fessed to be, and were sold to them at reasonable prices. Hence the manufactures might reasonably be expected to prosper ; and if they prospered the principle of association out of which they arose might be applied to ensure their ex- pansion, by giving to capital that sense of security which in our age and country will command any amount of it needed for investment in the enterprises which give this security. So that the plan, beginning with capital in course of accumu- lation, would end by drawing in that already accumulated. Here then, I say, is a systematic scheme of action by which any body of consumers whose consumption of any particular article would enable them to support a factory for its produc- tion, and thus ensure for these products the economical advantages belonging to industry carried on upon the large scale of modern manufacture might, without risk to themselves, raise the condition of bodies of workers by their own help; through institutions which would make the incomes of these workers as productive to them of material advantage as they could be made ; while they favoured the growth of those moral qualities, without which these material advantages would add little to their well-being. Successfully carried out in a few instances, the plan would find an indefinite power of growth in its application to the enormous mass of wealth annually pro- duced by our active population, till, by degrees, the whole body of the people came under its beneficent influence, and capital and labour celebrated their permanent reconciliation in the general prosperity. Surely, even if the workers of Great Britain are too short-sighted to inaugurate this method for their own emancipation, the wealth and benevolence of Great Britain will not allow so easy a means of introducing so promising a remedy for our many social evils to remain untried. APPENDIX. S. — NoTB TO Page ig. FRIENDLY SOCIETIES AND THEIR INFLUENCE IN THE UNITED KINGDOM. I quote from a letter by the present Chief Registrar of these societies the following observations, which are, I think, both new and very valuable : — " What I most miss in your section as to the relation of co-operation to other philanthropic movements is — what probably not half a dozen other men in the British Empire would miss like myself. Since I have been at this office I have been compelled to look at the different forms of societies in their mutual relations, and see that the friendly society is the common stock out of which all have sprung, and without which, for instance, neither co-operation nor trade-unionism can really be understood. Spreading throughout the length and breadth of the country, to every trade and occu- pation, the humdrum friendly society has been the school of social self- government for our working class. It has not only supplied the machinery in the first instance for the building society, the co-operative society, the trade union, it has supplied the free spirit and the tendency to federation. France and Germany supply instances of the same influence differently exerted. In France the Socicte de Secours Mutuels, although a distinct entity, is perpetually interfered with by the State, now petted, now pun- ished. So French Socialism always looks for State help. In Germany the self-governing friendly society scarcely exists, its place is taken by the Government insurance of the Zwangs-Kasse. Hence German social democracy, which thinks only of acting through the State, and pooh-poohs as well trade-unionism as free co-operation." The following table, compiled from the Registrar's Reports for 1875 to 1878, illustrates the extent to which this form of self-help by mutual insurance prevails in the United Kingdom*: — ENGLAND, WALES, CHANNEL ISLANDS, AND ISLE OF MAN. Years. Forms Issued. Returns Received. Number of Members. Amount of Funds. 1875 1876* i877« 1878 26,087 25.234 24,409 24.137 11,282 12,338 12,270 12,300 3,404,187 4.367.772 4,608,794 4,692,175 £ 9,336,948 10,226,883 11,109,571 12,148,609 • These returns include cattle insurance, benevolent societies, working men's clubs, W)4 loccially authorised societies; in 1876, .88; in 1877, 137; and in 1878, 114. Appendix. 225 SCOTLAND. Years. Forms Issued. Returns Received. Number of Members. Amount of Funds. 1875 835 834 753 753 442 485 543 550 554,551 563,463 618,416 569,275 £ 548,805 587,630 702,962 667,366 1876 1877 1878 IRELAND. IN ENGLAND AND WALES: Building Societies under the Act of 1874, Loan Societies, and Trade Unions show the following results in the latest returns : — Societies. Year. Number of Societies. Number of Returns. Number of Members. Amount of Funds. Building.. Loan .... Trades... 1878 1879 1878 987 380 177 830 387 124 269,400 33,520 202,984 £ 28,228,153 122,160 309,223 2. — Note to Page 33. FERDINAND LASSALLE AND GERMAN SOCIALISM. I take from an able article in the number of the Contemporary Review for June, i88r, by Mr. John Rae, the following account of the life and theory of Ferdinand Lassalle, who, says Mr. Rae, " first really brought Socialism from the clouds, and made it a living historical force in the common politics of the day," thus giving it a character at once the source of its apparent strength and its real weakness. Lassalle combined with almost equal intensity the capacity for, and impulse to, profound study and exciting action. He was at once a profound philosophical thinker, a fearless political agitator, and a fashionable dandy, noted for his dress, his dinners, and his addiction to pleasure. A sketch of his life is almost indispensable to the appreciation of the social philosophy of a man on whose tomb is inscribed the epitaph " Thinker and Fighter." Z26 Appendix. Ferdinand Lassalle was born in 1825,31 Breslau,andwas the son of a wealthy Jewish wholesale merchant. In 1842 he went to the University of Berlin, then full of revolutionary theories, resting on the celebrated philosophical system of Hegel, ot which Lassalle became an ardent disciple, sharing, no doubt in the belief very common among its adherents, that they had the key to all the mysteries of existence. He had intended to follow the career of a teacher of philosophy at Berlin, but was diverted from this design by his sympathy for the wrongs of a lady, the Countess Hatzfeld, who, married at the age of sixteen to a great German noble, had for twenty years been subjected to cruel persecution by her husband, without being able to obtain the aid of her own relations in escaping from him. Lassalle, though not a lawyer, undertook her case, which he is stated to have carried before thirty-six different courts; till, in 1851, he obtained for her a divorce, and in 1854 a princely fortune, out of which she gave him a considerable annuity for life. In the meantime, in 1849, he had been tried for treason, in urging the citizens of Dusseldorf to refuse the payment of taxes, after the forcible dissolution of the Prussian National Assembly in 1848; and though acquitted by the jury, he was imprisoned for six months by the police magis- trates. Oil a charge of resisting the police officers, and forbidden to come to Berlin. Thus shut out from his intended career as teacher, he threw him- self with the more ardour into study, and in 1857 produced the work which fouijded his philosophical reputation, his commentary on the writings oi Heraclitus, a Greek philosopher, surnamed " the Dark," from the obscurity of his utterances. The reputation procured for him by this work emboldened him to come to Berlin, where he gained admission under the disguise of a waggoner, and was allowed to remain, through the personal intercession with the King of Alexander von Humbolt, who had known Lassalle from his boyhooa, and greatly admired his abilities.* Literary work, including a satirical commentary on Julius Schmidt's " History of German Literature," which created much attention and amusement on its publication, occupied him for the next five years, during which he was engaged also in controversy with Dr. Schulze-Delitzsch. In 1862 he was again prosecuted by the Government, and imprisoned for the opinions put forth in a lecture on " The Connection between the Present Epoch of History and the Idea of the Working Class;" and, as a result of these proceedings, threw himself into the socio-political agitation, which, for the reasons to be stated presently, he regarded as the gate leading to social reform. To open this gate by convincing the population of the importance of opening it, became thence- forth his main object. For this purpose he founded, in May, 1863, the General Working Mens Association for the Promotion of Universal Suffrage ; and, in aid of this association, says Mr. Rae, " he passed from place to place delis'ering speeches, establishing branches — he started news- papers, wrote pamphlets and even larger works, published tracts by Rodbertus, songs by Herwegh, romances by Von Schwizer; but it was up-hill work." Lassalle hoped to obtain a membership of 100,000, without which, he said, called him a wunder kind (a marvellors child). Appendix. 227 nothing could be done. But in August, 1863, he had enrolled only i.ooo, and at his death, twelve months later, " after another year's hard work," the numbers had risen only to 4,610. They increased afterwards much more rapidly, partly from the interest aroused by the romance connected with his death ; partly, it is stated, from a delusion not very creditable either to the intelligence of the German population or the honesty of their social leaders, that Lassalle was not dead, but only translated to a higher and surer leadership. A Lassalle cultus was instituted and kept up by periodical celebrations down at least to the anti-Socialist law of 1878. B. Becker, Lassalle's successor in the presidency of the association, states that many working men believed that Lassalle had died for them, and would come again to save them. The real manner of his death was this. He had fallen in love with Helena, the daughter of Herr von Donningsen, the Bavarian envoy at Berlin, "the courtliest of the courtly, a conservative seven times refined." Helena returned Lassalle's passion, and in August, 1864, met Lassalle on theRighi. and arranged that he should come to Geneva, where her father then lived, to press his suit in person. He came, but the parents refused to see him, and the young lady, in despair, fled from her father's house and urged him to elope with her. Lassalle calmly led her back to her home, probably, says Mr. Rae, from the belief " that he would be able to talk the parents round, if he got the chance, and the desire to try constitutional means before resorting to revolutionary. Helena was locked in her room for days, alone, with her excited brain and panting heart. For days father, mother, sister, brother, all came and laid before her what ruin she was bringing on her family for a mere selfish whim of her own. If she married a man so objectionable to people in power, her father would be obliged to resign his post ; her brother could never look for one ; and her sister, who had just been engaged to a count, would have, of course, to give up her engagement." Helena was in despair, but ultimately submitted to marry a young Wallachian Boyar, Herr von Racovitza, to whom she had been previously engaged, and whom she liked and respected without loving him as she loved Lassalle; and this she told, with a request that Lassalle's suit might be no more urged, to two of his friends who obtained an interview with her in the presence of her father. Lassalle, in the meantime, had worked himself up into a fury of excitement in efforts to prevent the mar- riage, and though he always held that a democrat should not fight duels, and had got Robespierre's stick as a present for having declined one, challenged both the father and the bridegroom. " The latter accepted. The duel was fought; Lassalle was fatally wounded, and died two days after on the 3i8t August, 1864, at the age of 39. Helena married Herr von Racovitza shortly afterwards; but he was already seized with consumption, and she, as she says, found great comfort, after the tumult and excitement of the Lassalle episode, in nursing her husband during the few months that he lived after this marriage." Such was the life of Lassalle. His system is contained mainly in the lecture above-mentioned, and in a work published at Berlin in 1864, called " Mr. Bastiat Schulze von Delitzsch, the Economistical Julian ; or, Capital and 228 Appendix. Labour."* It is, according to the account given of it by Mr. Rae, a battle against Ricardo, whom he describes as the last and most representative development of bourgeois economy, fought with Ricardo's own weapons, and on Ricardo's own ground. Ricardo has laid down that the value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour, mental and manual, necessary for its production, which must be measured by the time consumed in that labour. This reduction of value to quantity of time, Lassalle considered to be the one great merit of the school of economists represented by Ricardo. But he gave it an exten- sion not contemplated by them. Ricardo confined his theory to commo- dities admitting of indefinite multiplication, so that their value is not aff'ected by their scarcity, and to their normal value independently of the fluctuations of market price. Lassalle sought to apply the principle to these cases, also, by the argument that this value was constituted, not by labour pure and simple, but by labour modified by the general condition of society — powers of production — rarity — demand depending on social necessity — which, as they have not been created by any one in particular, should not be permitted to benefit any one in particular. Hence he concluded that so far as the problem of the distribution of value goes, the one factor which needs to be taken into account is only labour. All value comes from it, represents so much time of labour, is in fact so much " labour jelly," so much preserved labour. But while this full value is simply the sweat, brain, and sinew of the labourer, incorporated in the product, the mass of labourers, whatever they produce, earn only the same wages — bare subsistence. The labourer who, according to the previous argument, is entitled to everything, actually gets, on the economist's own showing, just enough to keep body and soul together, and on the present system can never get any more. The value of labour, says Ricardo, like the value of everything else, is determined by the cost of its production, that is the cost of the labourer's subsistence, according to the standard of living customary among his class at the time. Wages may rise for a while above this level, or fall below it, but they always tend to return again to it, and cannot permanently settle anywhere else. When they are higher, the labouring class are encouraged by their increased pros- perity to marry, and eventually their numbers multiply, so that by the force of ordinary competition the rate of wages is brought down again. When they fall lower, marriages diminish, and mortality increases among the working classes, till their numbers are so reduced that the rate of wages rises again to its old level. This is the economical law of natural, or necessary wages, " the iron and cruel law," which, said Lassalle, absolutely prohibited all wage labourers — that is, 96 per cent of the population — from the possibility of ever improving their condition, or benefiting from the growing productivity of their work. This law converted industrial free- dom into an aggravated slavery. The labourer was sent like a commodity, to be bought in the cheapest market, and there deprived by the force of * Herr Bastiat Schutzc von Delitzsch der ^konomische Hulian odcr Capital und Arbeit. Appendix, 229 competition of the value of the property which his own hands had made. His property is given over to a stranger.* How was this evil to be removed ? The answer of Lassalle is, by the abolition of the commercial system of which this injustice constitutes the essence. The question can be solved only by a socialistic reconstruction which shall make of the instruments of production collective property, and subordinate capital to labour; the solution will, of course, be the work of generations, but the easiest mode of transition from the old state of things to the new. lies in establishing productive associations of working men on State credit. They would form the living seed corn of the new era. Lassalle did not assume that the State should introduce a new organisation of labour all at once, or that it should make its advances gratuitously. They were to be made to such associations only as appeared to rest on a sound basis, and at ordinary commercial interest. The State, he argued, would really run no risk of loss, since the associations in the same trade would not cut each other's throats, as, in fact, there would be only one in each town ; and, besides, they would establish a mutual insurance against loss, trade by trade; while they would lead to an increase of production, without which Lassalle admitted that his scheme would not be economically justifiable, because " an increase of production is an indispensable condition of every improvement of the social state." This increase would be effected, he alleged, by the saving of loss through abolishing local competition, domg away with middle-men and private capitalists, and better adapting produc- tion to needs. The business books of the associations would form the basis of trustworthy commercial statistics, so requisite for the purpose of avoiding over production. And the change would improve the character of produc- tion, by substituting in place of the taste of the bourgeois for the cheap and nasty, the sounder taste of the working class for the substantial and beautiful. Such was Lassalle's system. To introduce it, he said that he asked of the State " not so much help as a whole hand, but only that of a little finger," Still, as he had no hope of inducing the German States, as they were then constituted, to put out this little finger, he threw himself into the political agitation, described above, for obtaining universal suffrage, and thus giving to that 96 per cent of the population, in whose behalf he claimed to act, the power of inducing the State to stretch out at least its little finger in the required direction. A large part of Mr. Rae's interesting article is devoted to a statement of the arguments by which Lassalle justified this political agitation, or supported the proposition that the time for the advent of the working population to political power had arrived in the necessary course of the evolution of humanity; and that it would not be attended by the evils which had accompanied the advent of the bourgeois class to power through the French Revolution of 1789 and its consequences. From the point of view taken in this work, Lassalle's system is open to the criticism that it asks the State to do what it should be asked only * Das Eigenthum ist Frendthiim gewordeii. 230 Appendix. to give facilities for the doing, and to affirm when it is done. The People's Banks, set on foot by Dr. Schulze-Delitzsch, may be admitted to be as ineffective for radically reforming social evils, as Lassalle maintained that they were, and as our distributive societies would be, if co-operation is to stop at them ; but not the less do they embody the true principle on which alone a permanent social reform can be introduced — the principle of voluntary union, for a self-help which is not selfish help. Not the less do they indicate the true method on which this unselfish self- help must set about its work, namely, by accumulating a collective fund, by whose wise use the worker may convert capital from the master of labour into its servant. Only the guarantee against loss which such funds would create, could justify the appropriation ofthe credit of the State, which necessarily rests on the incomes of all the members, for the purpose of aiding part of them, as Lassalle proposed. While, if by such unions, the requisite guarantees were provided, the use of the State credit would become unnecessary ; because the ever-accumulating private capital which is always looking out for safe investments producing a somewhat higher rate of interest than can be got from the State, would flow in spontaneously to supply the wants of the co-operators, as it has done on the German banks, and tends to do on our distributive societies. On the other hand, experience has abundantly shown, that no application of money is more liable to abuse than that of grants out of the public purse for private purposes, which are almost certain to get into the hands of precisely those persons who are the least likely to make a good use of them. So that, however effective the polemic of Lassalle was in stirring up the masses by its powerful descrip- tion of the effect on the working population of the modern commercial competition ; and however fascinating the notion of gliding into a better condition, without the trouble of self-sacrifice, by the magic of credit voted by universal suffrage ; yet the system of Lassalle, if it ever got tried, would in all probability impede the progress of social reform, instead of helping it, by blocking up the road with a mass of ruins. The rosy light of imagination may clothe the State-born associations with an ideal perfection, in which the protean shapes of selfishness disappear. But in the actual world they would crowd in to convert to their own purposes what was, in truth, a creation of their own spirit. 3. — Note to Page 48. AGRICULTURAL POPULATION OF FRANCE. It is not easy to ascertain accurately the number of landed proprietors. The " Slatistique Generate de la France" gives as the result of the census of 1876:— Number. Per cent. Proprietors cultivating their own lands. .. . 10,620,000 .. SS'gg Farmers, Cultivators, and Metayers 5,708,000 .. 30-09 Vinedressers, Woodmen, and Gardeners . . 2,639,000 .. 13-91 Total 18,967,000 99-99 Appendix 231 I'ut these numbers include the members of their families. M. A. Le Roy I'eaulieu, following Mr. G. de Lavergne, estimates the families Ihas: — Independent Proprietors living on their own lands 2,000,000 Farmers and Metayers i,ooo,oco Workmen living on wages, but who also are generally proprietors 2,ooo,000 — Revtie des Deux Mondes^ i^79. vol. 30, '■^ Sodalisvie Agi aire,^* 4. — Note to Page 90. LIST OF CORN MILLS, Tahen from the Registrar's Returns for \ 886. The societies in this list confine themselves to supplying flour. Several not included in the list deal in flour and provisions ; others, such as the Carlisle, Cleator Moor, Crook, Leigh Friendly, Leeds, and Lincoln, grind flour foi their own members. C means Co-operative ; Cn, Corn ; and M, Mill. Society, Name, and Address. Devonshire — Devonport Union Durham — Derwent C. Cn. M., Shotley Bridge , Kent — Sheerness Economical, 2, Broad-street, Mile End, Sheerness , , Lancashire — Rochdale C. Cn. M., Weir-street, Rochdale Star C. Cn. Millers, Star Cn. M., Oldham.., Yorkshire — Easingwold Union Steam Flour M., Easingwold Halifax Flour, Bailey Mall M., Halifax Hull Anti-M., 31, Scale-lane, Hull ,, Subscription M., 3, George-street, Hull... Northallerton Provident Cn. M., Noithallrrton Sowerby Bridge United District Flour, Union- street, Soweriiy Bridge Business, 1886. Sales. 3,843 77,571 22,857 167,657 153,914 5,945 •93,349 31,016 4,664 7,091 344,569 Net Profits. 328 813 1,801 372 19 8,205 676 78 362 20,047 C.^pital, Share and V/aan. £ 3,3'8 19,649 9,412 95:j20 65,663 1,133 122,878 12,895 3,568 1,615 104,554 232 Appendix. i Q < Q Z < 73 g ' u z - w Q S <: M O Q ^ t^oo MO »0 M 00 ro O t^oo 1-1 ro ■^ civo 00 w vO w ro S? c^ M -r «■ " vO coo -1- M f> tv "^ ro -1-vO ■+ ■* P) CO to lO© •0 PH tv. dv <> Cfi m_ COvO_ 00_ OS " ci ci (N pT «" : vO M PI f^ t^ On PI < s? w O tx\6 00 vO p< o\^" ^" CO ci M -f PI CO t^vO lO C0\0 00 CO 1- > VO w O COOO tv OS COSO « ■^"iw O t^O\t>. ) n-^i/1-i-pi ovo o coso CO o lo fo c< vo ^. I -too" "ioovo" CO Ov 'o cf CO t^ PI vO rf PI t^OO O>00 1/1 s? I i-i PI ■* CO^O CO O ON CO H CO PI Qs'^iO Pl_ 00_ Pl_ CI CI ef CO "i-sd oo"od"oo" (> w" i^\o" ^" cf. h h o" to -t^o' od o- (>• >- MHMHMPICINPICIPtPIPtMCO s? PI CO N CO CO "I- POQ 00 CO ( "1 •^ PI ^ M COvO tx w O " u^ i/^ t^ osso t^pivo PI PI i^qs"5 0_ Tt o> CO pT i^ I . ■* CO OS rvoo so 'to t^ lO -t KsO • lO t-xOO O HI COOO C5 OS M -t OsOO V^ MMMHr-IIHPICO't"" s? LOCO osooo ^co-t^'o tNOO M W PI t^ O OssO O H H K PI 00 \ coco 00 so " OS t^O so u^ C^sO " - - ^o PI ~ " ~ PI tv i/^ M ro CO ' > O CO -t OssO "■) t^o Os C^ OssO i/) i^ pT CO -t t^ PI O CO O 00 Q OS OsOO M CO ■+ OS VO CO COSO Os M I/-) PH Tt OsOO u~/ CO Pv >0 O Os O OS PI 00 O M COOO O t^ "1 Q'-ttCo'rCprt^dsQ'Locf^t^ s? .t^CO^t^t^PI OsPI "IPI t^PI M pTn pT pT pT CO CO •o lo lt, ioso"so" tC rCoo'oo' Os «? ■>t PI 00 OssO CO t^CO ! PI Tt K P« CO Tt CO COOO H lO t^ ( n00COOsM-t( M^M Ost^PI PIOO LOt^O O t^OsOsO t^CI loo" o-oo" Tt m'oo'cT cfs pf q" rC i-T c?s tCocT o" co «t pT Tt i-T o! co w") I SO so so 00 00 00 O Q >OKvopi dC "ISO O so M IT) -tC Tt -t "100 OS O PI C "ISO 00 OsO CO"lTtw OsCOO "TO TtOO so t^ Tt -too N so so -1-00 so 00 CO 'tsO so 00 OS COt^KOsGJHMHMMMPlMMMPIPI « CI fp -t "iso t^oo Os o ►- pt CO -t "osc rxoo o o Appendix. 233 0) % h O W W h <: t t: r^ C7^ ^ 00 ro c IT. 00 'T ro NO N t <« 5 fO iri 00 T ■<*• 00 •^88 1 'sasod N 00 00 00 -incTo|(iL'iui-'iQ joj paiicldy s? ON 10 00 •^8^1 Siiuiip t^ • NO N t^ M r>. t->. 00 ro M o^-lls s? VO t^ ^ ro ro !-»;=•§- fO w-> N ON r^ On z u^ NO NO ~00 VO f^ ~00~ fo ~~Tf"~ i> y b* r^ ro NO p) •c M.f ti s? t>. (^ "1 l^ 10 00 On H-^-^ « 10 NO »A On nS On 8 ui Q < r-(j-c NO ^ — ui 5f ^'^ ^"^~ hH~ ■* io~ NO 10 \rs ro ro 00 f^ r^ H ^0'^ - Tj- •* ro r^ NO «^ |'S-3S s? 8 10 00 ON NO ON 00 u 1.2 " W) 00 NO SS'^ Tt 00 NO ro •* m 10 M ■* t^ •* •* NO /, tt^ ON ro On M NO irt NO i" •/> ° ri ■* N 00 l^ NO > = £§ s? vS r^ N 10 ro VO m N ON XT, 00 li-i „.u ■* 00 PI to ■-• •^ •c ' . w. VT) t^ ■<1- •* M NO 00 " = ■§ = = - 00 N 00 N NO fO l-l s? 00 t^ N ir, 1^ ro ■* rr> 00 t^ 3" u5 <£c. -c" *t N N N N4 u IM N <- i'j*'- ON M t^ M 00 •^ o_- . - ■=" N 00 vO t>. N t^ 10 < C^ifi^-Cti s? ro N M ro ir> ^ ^ = S 3 S l-t ro 00 rn N ON i^ li^ 00 •* fo 00 NO ^"ils'' f<^ -^ NO v\ 10 NO <— 'A '■' P4 -r 00 M n- M On LO ON S|ii,°^ 00 li-1 fO ro ro VO 00 iM N u^ fo J S 3 eg "n? t^ VO N4 ■* "^ »o rtltTl ** -^ ro On S' 00 I'J «o >t« rt N CO NO NO M •* w *?; vo "~NO~ t^' M 1^ _^ N £•5-2 ti ^* ro '^ N |xs§ ■n? 8 IT) N ■* ON \n N Tt ■* t^ r^ t>. in N N '^•i- i>, " - ^ "cio~ ~~cr>~ N u _ *'<*- f^ N NO N 00 P C— (^ 10 N »o •* 00 ^•S'HS s? Tj- Tf N «^ On ■ s? \o rO ^ NO Q N 00 00 ro ^ •<1- O) re 5 - tn NO ON o> N 8 »-* _' ro NO »o ro rO On ON •«J- t^ ■* N '*• On 00 00 00 NO NO l^ 10 ro ro 10 zjis " i^ N ro ■<1- N r^ ■* ^ •- •* »-< *-• ON »^ o\ NO 1- 1^ N N •so jaiDos JO OM N 1^ ro N r^» ? z; Q Z Ui X 55 OS Z K k: u C/5 u X <°e X > X u, a IS 3J 5? b en ^34 Appendix. w M H W o (/) w a H > D W H W P -«^J r^ 8 in „ N ro 1 00 1 ro >-i Tl- 00 »^ mt s? ro U-) VO Tl- t^ ro M w OS "^ VO ON 1.4 ro n- iri i^ VO VO On Z 3 C\ T3 N ro 5 l_ iri Tl- VO On 00 N vn ,9 !m "^ rj- VO t-. Tl- 1 - 1 VI xf ^ s? ^ M ^ M ,1 1 t^ fN ro ■* Tf 00 VO VO 00 1 ON Ti- r^ \r\ ^N ON VO rj- 1 00 1 ro u-i r^ VO 1-1 t^ o N HH M VO Tf N ro c**^ li-1 Ov N H* ON vO CO t^ 'J- ro t^ vO III- s? 00 ON ON N VO VO fO cs VO ro 4) ^ 11 w^ VO 1/% 00 VO C « N ■<1- Tl- ^ 1 ■S-cS8 o\ 1^ 00 On « ro r> 00 Mis 10 00 ro VO t> s? ro VO N Tf VO Tl - r-. »^ ON to N T}- ^ o ^ 3 10 N * -a i^ M of luild- nd tock 1887. ■* ON Q 10 r^ VO VO VO ro On P< VO ««<»«„" s? t^ W% fO 00 00 ro 00 VO Valt and, ings, ixed a nd 0: VO 00 CO I- On ■* On t>. CO ro 00 VO tr% ro M ro VO ►J B. " _ro_ •"I- " w CT> r^ ■* t^ 10 t> On »>-2j^° • a^ 00 t-< VO vO ro •i^sls s? 5 ro ro ro — 1 ro 1 r~ 1 VO 1 >tfiU) " " i^ VO Tl- 1^ "0 " 1^ M \r\ ■* « N 1 ^ S_o 1^ 0\ Ov 00 On 1 -« t^ c:n S:j 00 r^ VO 00 ON 00 VO t^ r>. ro u Ov N t-H VO N »p4 N « 2 00 ON ro i-i ro ro " 00 "0.0 00 VO 10 VO On N vO ■* "2=s 00 ro On CO ^ -^ s? t-t VO p< OJ VO VO pj u ""iS VO u-i ro M I^ tT 1-1 H4 |« 00 VO u-l N 8 « e'3 r^ „ r^ Ti- 1 On No. 01 Meinbe at end 1887. ro c^ 'I- r< ro N rf 00 00 c VO CO M ro 10 "-1 00 N VO Tt- On 1. of cie- sat nd .887. 00 1^ "^ _ 1 Tj- VO HH ro Ztn-c "-r ro Tt- • J. "5 J. '0 H 0. > J3 > > a lA ^ r <- l> X **2 > < ?■ *C "' - r2 t c 4:; 'r- c 1. 17) c t C 1 Q p. <. in. W Wj Appendix. 235 ^ . ! o'no « o o • :5^ t^* O O 000 00 O 000 cOMOOOO^t-'OO ■-^03 00 00 >0 O O 00 l^«0"-i w M N00^O O v3s ■^00 vo a* o t>. ln^o f^- o\ c O ■^ IN. M 0\ "* O O IH vO »0 M ^ (^ n „ ^ « m ^ IN s? ?"2 ": t T "t t ■* t (^00 O «-" N 00 ^o r^^vo rr-^O OOO-^O OoD mi-" 000 > S? M 00 ro -^oo Mvooo »-t «*o rsOvi-" ot>»Ooovooo '*"0 m » McT'^'-f'^iCtCw''? i>*o vo <>■*«' ci" xo" c5s r^ -^ iC f*^ » 1 1000 ^ fO ro M is.NO »0»0 O ( -_ _, ,.. __ ,_, -, .jo»*sfnmfno\ ■ •-< ^ m m rO'O OO "lO -^lO-^O mts. S? m 0*0 M ro^o 1000 00 M 'ij-m-ff-M o fO" mroo f^ fO>o Ov w" ro ro ^ m\0 « M 00 M n" fo rn M rC M rC»o O ^ t-T en w « W ro^-i^^'.j-'^u^ \r%o t>» tN.00 O 10 u>0O ^ ^ •-< f0»0 m 10 « o^*o J i-i M lOCO O I \ moo ts ut t^. fo t>. m tH o t^ ^ < \o o « -o c . ft. o tL ^ rt ^ ~ w c 00 ^ .00 .sOO « .k t/5 "C O- M .2 1 S5 B s :B't& Cambr and C< Unity e Brigi 1 B .0. IS . ^- i S ii Goole. H'km'ndwik Copenhagen Steamship " London Tea Steamship " " Mariann c r^ ON 0000 - 1880 1881 1882 1883 i ) Q 00 (N « ^\ i *fc» I ■* VO ts M I- - OXO 00 ro O^O ■* •* • m ■* ■^ '^ ■* »o »'>^o so tvOO 0\ o ^«.lOO orsinoooso 1000 v - - fO ^ fO ^00 00 rs,oo O » rn ro\o M 't- ( O fo t>. « 00 in w c^vo »o u-,so •-<^o »nosO •-> rst^Moo 00 ^M o-^onOs-^ ^00 00 00 -^ »o tN. ■^ m o tN.00 « CO »o ts. tsoo •-" ^.o os "♦ IN. tN. o fo^o vo o m tn o - *■ - ro m ro fO -*■ '^ ^ I" 1 o 0^*0 ^ tN- Os'O 00 fO M cr m c -a K t/^— "-^ " o- T = o u rt a^* ,;-f-, e c!_o ggs^uo"*' CO ^ ^'^^O I 00 00 •• •• "oo OD •» •■ " •a o 4mo>o « ^ O j^ « m ♦ «« r-OT oyg-g S gg gg g g g g 000000000000000000000000000000 ** ** '* " ^ "^ " ^ "^ 3a . 03 j.a3 o-.- E 5 « 2 e «-53.c 236 Appendix. H H W u w <: W > H W PU o a 0) H H U ih a u"? 6 Q 11 u^o^"^"^lO't•^^r^•*vrl^^ O O ►« O fON r^ be a. u ° >->-<-> 2S? 1/5 r^vO r^vO vo VO r*1 ro ro r^vO ■* "It^vovO •*vO >. > u 1-4 l-.|).HI-(l-)NHt-INNt-l|.^^-l t^ t^ ^^ -i\00 — "NVO "^\0 li-l w^ N (^ u *2 CTv '^■OO ^O "% ro On tJ-vO r^ ro O On r^ i^^O r^ N ic 000 r^i^rof^" N v^N >- ir^r^0v0>0 "^"- >-i 1^ -i""""NONNNNMNP4N & N^ vot^ONOOr^O^r^ >+CO "^ " ro " ►- 00 w VO ►" N >- Tj-vo OnOO t^ On N t^vO 00 lO O^ Ov On r^ t^ t^ Tj- N rOOO VO M-vO On M CO 00 \0 ^O OnOO r^ rt ^ M Tj-ro r-•<*-" rn "100 ON On t>. ■ii-i^NC^NNC^rOlOT}- ^ in On "^no t^ 30 w-1 t^ i^nO I^ ■^ N r^ Tj-oo r^i^ON'^-^rf-ON" N moo N O ►-' •* O fi i d S^ "^ -" ■* NO --i "^NO ►-■ t^NO 1- ro r'l OnOO HH M N ro iono r^ t^oo !-• r^ "^ On M •^ r^NO vo (1 MMH^N-^NMNCOCl Tf ONOO OONr^ONONi-Ot^""NOODT}-"iON"% On ■^ "^ rnOO rf NO N N ON On M tJ-OO »rv n N "1 ►" . , NnO iOtJ-Oni- lOM "^O MnO m"" r<^N >-i ^ .J" in ff 'f rf 0^ 0* r^ On d~ d" lo^o'' 0' rn g'oo rC 0" 00 NO NO 00 r'l u->CO On m Tj-OO mo fO in >- 1 11 " N CO Tt •>4- ■<*• invO NO 00 On." M ro -"^OO 00 V iT « # j: ii '^ rfroONH- rO" OOOCO mND On r^OO no no in m On i^ Tj- m ■*oo in~NO t^t^t^ii fs onoo rj- in C/3 -0 < ^ "s2 ^ mx) ON-^ONt^N u-)" " r^'^ro" Onno m "1*3 •^ ■I M m in '^ mNO t^oo on ►h mvo On rroo mNO ►-"-■-i«MN=:&'=^''SS'»»»?'**>> H nNO r^oo On O — N r^ ■* mNO t^ NO r^r^r^t^i^i^r^i^t^ t^oo 00 00 00 00 00 00 00 oooooocooococooooooooooooooooooooooooo 1 * Appendix. 237 6. — Note to Page iio. PRICES AT WHICH METAL TOKENS CAN BE OBTAINED. The following lists were obtained from the undermentioned firms, in answer to inquiries made in November, 1879: — Messrs. jfohn Ardhill and Co., St. George's Works, Little Woodhouse Street, near Leeds. THIN TOKENS. — PER THOUSAND. Diameter. Tin. Brass. Copper. J inch ; \ 6/0 6/6 6/6 7/- 7/0 7/6 -2/6 7/6 8/- 8/- 8/5 8/6 g/- 9/- 9/6 inch. THICK TOKENS. Tin-Milled White Metal Edges. Thickness of Coin. J inch 7/6 14/- I , 8/- 18/- 14 9/- 22/- Thickness of Coin. Brass. Copper. J inch (Half Sovereigns) 14/- 16/- I „ (Sovereigns) 16/- 18/- I » 22/- 24/- 4.. 30/- 35/- Messrs. yames Hinks and Son Limited, Birmingham and London, 80, Holborn Viaduct, E.C. Round Dies, engraved to order * -/6 each net. Tin Tokens „ ,, from i/- per gross net. Copper „ ,, „ from 1/6 „ „ Seven gross the smallest amount supplied from each die. T/ie A fid/a fid Co-operative Tinplate Workers' Prodticlive Society, 25, Masshouse-lane, Birmingham, will be glad to send estimates for metal checks to any Society. 7. — Note to Page 112. SUGGESTION FOR AN IMPROVED SYSTEM OF CHECK ON SALES AND MONEY TAKINGS. 1 . A complete system of check on the business of societies should possess the following qualities : — (i) It should effectually check the actual amount of money taken. (2) If the society does not pay dividend on all articles, it should distinguish those on which dividend is paid from those on which it is not. 238 Appendix. (3) If non-members are entitled to dividend at a less rate than members, It should distinguish the two sets of claims, so that it may not be possible for a member to buy up the claims of non-members and get a dividend larger than the seller was entitled to by claiming in his own name. (4) It should enable the managers of the society to have a complete record of the articles stated to have been sold, if it appeared to be desirable, either generally or in any particular case. (5) It must be workable without such a consumption of time and money to the members or the society as may outweigh its advantages. 2. None of the systems explained in the chapter on Distribution fulfil all these conditions. The system of metal tokens ordinarily used fulfils none, except the last. But since the chapter on Distribution was written, a plan has been suggested, which appears very completely to combine (i), (2), (3), and (5) of the conditions above-named, while it may be easily extended so as to embrace (4), if this is desired in any case. This plan consists in issuing paper tokens, similar to postage stamps, made up into books for shillings, pence, and farthings, if checks are issued for such small sums. Each token in each set would be of the same value, i.e,, for sums under los., id. or IS. ; and for sums of los. and upwards, los. The tokens should be separated by perforated lines, like postal stamps, and each set should be numbered continuously. Sums of more than Jd., id. ; is. or los. respectively would be indicated, as is done with postal stamps, by using more than one without separating them. The tokens should be gummed at the back, and purchasers should be supplied with cards, divided by lines so as to leave spaces corresponding to the size of the tokens, in which they might be fastened ; columns for £. s. d. being added on one side into which the money value of each set of tokens might be carried out. These cards would be the basis for calculating dividends. When one was fiUed up, the sum in the columns of figures would be added up, and the total carried on to the top of the column of a new card, which would be supplied to the purchasers on giving up the first. Each card should be distinguished by either the name of the holder, or a number by which the holder could be identified. The continuous numbers would aff'ord a very easy method of verification. It would be necessary only to provide for each set of tokens a check book containing a similar set of numbers. As the cards were brought in, the numbers on the tokens would be ticked off in these books ; when, if any duplicate numbers appeared, there would be direct proof that one or the other of these duplicate tokens was forged ; while the question which one v/ould be reduced to the simplest possible elements of inquiry, since the two persons between whom the fraud must lie would be ascertained by the names or numbers on the cards. As the check cards would be constantly coming in during each quarter, the verification might be always going on, so as to prevent there being a great pressure in this operation at the end of the quarter. Appendix. 239 On the salesman the system v/ould provide a very effectual check, by recording the number of the last token whenever any book given to him was examined. For the difference between the two numbers would represent the exact sum for which he had to account in respect of the tokens taken from that book. Of course, this assumes that the purchasers would require in every case tokens equal to the amount of their purchases. If this were not done, in any instance, there would be a possibility of fraud to the extent of that purchase. Probably, however, it would be confined to very narrow limits. But this possibility apart, if tokens were required to be given in every case, any discrepancy between the actual takings and the money produced must immediately come to light. For sales to non-members and sales of articles on which no dividend was paid, provision might be made by a stamp with the letters N M or N D, which the salesman should be required to mark on the token on issuing it. It may, perhaps be objected that these tokens would take up so much space that the cards would require to be renewed inconveniently often. But considering the provision made for preserving them by the cards, and that for all sums over one of each denomination, more than one token would be used in connection, there would probably be no inconvenience in reducing the tokens for shillings to J and for pence to J of a postage stamp divided by lines parallel to the top and bottom; so that the space occupied by iid. orgs, would be only equal respectively to af or 3 postage stamps. But books might be used for intermediate values, say 3 and 6 pence or shillings, if this were thought desirable. The system here described would supply an effective check on money takings without requiring any entry of the purchases. If an entry of these particulars is desired, it may be made by such a system of books, in which the bills are written on the carbon process, as is described in the body of the work to be in use in the Civil Service Stores. If such a method of entry were combined, with a separation of the cash takings from the dealing with the goods, and it were connected with the system of tokens here explained, there would be produced a very com- plete check on the salesmen, but at a considerably additional cost for labour, which societies, who have a large business in tiansactiona indi- vidually small, may not think it wcrth their while to incur 240 Appendix 00 00 th m W I— ( H W u w > H U D Q P^ 0. \^ H r/1 ^ o '■'1 SO c^ r^ •* t^ «■ d O '^ o o N o t^ a\ Tf 1^ Th • 0\ ir^ r^ 1- ^•^ ■ u-1 ro O CI 'O i~-c/r 1^ »n ■ O N O O ;^ 'TiO On ►H N C) !-• •-< M -•:< ■^ S? ly-i H-i On ro "-> O ro On O On Th ri , CO r^ Tj- r^ . vO ro ro O vO O CO Tl- On ON .On U-) ro U-) • vO *t On • M m O "^ r^ OnOO in "^ 1^ 1- M in . r<^00 rn On On On mmN -N u-i'^ONt^ O vONO •* N : ■«*■ « -"I- ^^ m O in Tt- On m Tf m Ti-o 00 c E ^ bZ s? . " N t^ . " P» l^NO ^O 00 Jl^og • r^ r» • t^ m in • p) n VO rr m in ■ N m mNO ■ N m 00 t^ ►t O rt-C O in moo inoo O moo M . 00 m . m^i- rl- . t^ 1^ fn 1^ 1 00 2 5.5Sgg ■^ • 00 00 • -NO 00 •On O vO >0 •-• to 1> v2 o O fc/J fc/l c S 2 2 o rt O o J? C S C o a; -3 'T^ '' '-' y j3 • 3 3 q r; 3 C "vH ,ci C tfl -^ "^ .2 C G « rt c S rt rt ■ ,>-f^ ^b! hJiJ ■ - " '^ ^, b/3 e <5 ,J^ CT.Ji H ^ o - t£'c« "m o vi2 ■> "5 !2 T30oa;^s5 2> C K JJ j3 »^. ~ _3J Q 1^ ^ ^ I ° w e 5 M b Uh S U H "O to •■3?=. Appendix. 241 W^ T}- M O "-< r4 r^.vO \0 i^co 00 0\ O M M O ■* ■<1- O N O 00 o (S 00 >-> 0^vO Q ro •-■ — N r- . "- M r<-)^o O O 00 T}- M On r^ 1^ "*■ O NO ■*00 ro O I-" NO «- Tf roi^ . iri T^ 10 « M On O ro ro "I On M N i/^OO i-i NO On CI NO O ►" 00 ►- •^00 ►- On O i< il !^ x a -on • > M^ o _ A.:£ •5 r~ o ^ - < 2 ;5 D ^ X. O -^O •-■ M -^ Tj- ro M O fO 10 f I "1 M « ti o ba u c .5 J: : bo .S .5 Z oZ 5 g 5^ g ^ >— j; y S t; : rt .5 u o o -I- c ^ ■^ c C " CS c « " £2^ 2 "> c c « 5-5S ^ ;^ o E.^' t^ t: 1:' : rt-s^ tTN-; >N— S i^— aj ^ 2 S^c 5-c §►"■ •^ ca 9 If <. ►^ .S '" nJ ^ jTc/r-s-^ 5 *^ 3 «.t; 242 Appendix. s? 2 vO &0 t^ rJ-OO ; O tri --i CO Tl- u-) rt- 10 10 O 00 0^^0 P w p h u I 00 00 0) w H w u w > H U P Q a; \^ H 0) O -c S? N O O r-» •H- o 0\ ro 10 Tj- r<^ O 0\ N N t^ 0^ "^ s? r^vO N N N mvo M ro . vO ro t^ I- ■* •1 • 1- M N « 5 22 * o§ S? vO »-■ m 10 O t^ •-• •^CO ■I u-i 1-1 ►1 M 00 OWN o £ ~ 2„o^ S? s? • • ■ • w iri • T^ : : : . « 00 . lo r o M ►- OS O "^ « fO >-> CO M t^ ir> o '-' . . 10 M N S? t^OO rooo 00 r^ ro O -' 0001^ rO'^Tl-00\ OS '^f ro t-^CO O 1-1 tn Oi^ O " N fO N l-H IT) M 1-1 r^ Tj- CT\ 11 CO !-• 0) c5 C .> C i" i< ^ o S 1J ,>-■ „ 1-1 o. c s g " rt . oj : so,'- „ 1-1 rv . ^ . =y -lil J£ OJ ui . "S 1) C 2 « 3 5 6)2;^ ,.„ >- > s p r ii -i: M c2 .: - 5^" >> t; t5/)S 9 o ^ ^ C >5 S 0) S (-) is c 13 House Cigar Needl 1 IS "rt C c cT M i3 flj o . /■ 1, 000 and £300. 4- »» ♦» i> . ;^30o and £100. ' 5" •» •• below ... . ^lOO. Class II. contains — 6. Highly Skilled Labour. 7. Lower Skilled Labour. 8. Unskilled Labour ^A Agrtcuiture, 244 Appendix. From these divisions Mr. Baxter obtains for 1868 the results following ; ENGLAND. Class. Numbers. 1 Income. Percentage of Total. Annual Average. Numbers. Incomes. I. I.. 7,500 42,500 150,000 850,000 1,003,000 L 111,104,000 69,440,000 72,910,000 93,746,000 60,000,000 £ S. D. 14,813 17 4 1,633 17 7 486 I 4 no 5 9 59 16 7 .0761 .4269 1.5246 8.6455 10. 1950 £ 16.7849 10.4905 II. 0148 14.1625 9.0644 2 -I A c Total of I 2,053,000 i 407,200,000 198 6 10 20.8681 61.5171 n. 6 1,123,000 ! 56,149,000 2,819,000 1 127,921,000 3,843,000 1 70,659,000 50 45 7 6 18 7 8 II.4149 28.6542 39.0627 8.4826 19-3251 10.6751 7 8 Total of II. ... 7,785,000 1 254,729,000 32 14 5 79.1318 38.4828 I. and II ' 9,838,000 661,929,000 67 5 7 99-9999 99-9999 SCOTLAND. I. I 2 600 4,100 13,900 97,400 156,000 10,068,000 8,505,000 7,464,000 8,679,000 7,800,000 16,780 2,074 9 5.36 19 6 89 2 50 .0430 .2941 •9971 6.9870 11.1908 13-5572 ".4525 10.0507 II. 6868 •J 4. c 10.5032 Total of I 272,000 42,516,000 1 156 6 2 19.5120 57.2504 n. 6 137,000 558,000 427,000 6,454,000 16,543,000 8,750,000 47 2 3 29 12 II 20 9 10 9.8278 8.6907 40.0286 22.2760 30.6312 11.7824 7 8 Total of IL ... 1,122,000 31,747,000 28 5 10 80.4876 42.7491 L and II 1,394,000 74,263,000 1 53 5 6 99.9996 99.9995 IRELAND, I. I 400 2,700 14,400 78,500 338,000 4,985,000 5,379,000 7,347,000 8,527,000 13,520,000 12,462 10 1,992 4 5i 510 4 2 108 12 5 40 •0160 6.3970 6.9026 9.4280 10.9422 17-3495 2 .1085 .5787 3-1551 13-5852 ■I A. C- Total of I 434,000 39,758,000 91 12 2 17.5435 51-0193 IL6 85,000 710,000 1,259,000 3,750,000 16,188,000 18,231,000 44 2 4 22 16 14 9 7 4.4164 28. 5369 50.602S 4.8221 20.7732 23.3848 7 8 Total of II 2,054,000 38,169,000 ; 18 II 7 82.5561 48.9801 I. and II 2,488,000 77,927,000 i 31 6 5 99.9996 99.9994 Appendix. 245 Taking the two extremes of this table, we have two countries — England and Ireland — differing so much in their collective wealth than the income per head of the whole income-receiving population is, in the former, more than double that in the latter, £(i'j. 5s. yd. per head of every income receiver in England, against ;i^3i. 6s. 5d. in Ireland. How is the surplus income of England distributed? The table shows that it goes mainly to increase the incomes of the richer classes. Of the ;^77,927,ooo total income of Ireland, nearly half, 48.98 per cent., is absorbed by the earnings of the class who depend on manual labour for their support. 51.019 per cent, only goes into the pockets of those who are independent of this source. It yields them an average income of ;^9i. 12s. per head. But of the ;^66i, 929,000 o' English income, ;^407, 200,000 (61.5171 per cent. ) of the whole is appropriated by the owners of revenue independent of manual labour, to whom it gives an average income oi £\cl&. 6s. lod. a year, leaving to the classes dependent on manual labour ;i^254, 729,000 (38.4829 per cent, of the whole income), with an average receipt of £1"^. 14s. 5d., against ;^i8. lis. 7d., the average for the same classes in Ireland. Scotland, as it occupies a middle place in wealth, so it has a middle position in its distribution. Of the ;^74,263,ooo total income ascribed to it in the table, ;^3i,747,ooo (42.7491 per cent.) goes among the classes who live by their manual labour, to whom it gives an average income of ;^28. 5s. lod., while ;^42, 516,000 (57.2504 per cent.) belongs to the richer classes, yielding them an average income of ;^I56. 6s. 2d. Taking the two great divisions collectively, we find that while the average income of the classes supported by manual labour in England is higher than that of the same classes in Ireland and Scotland in the proportion of ;if32.720 to ;i^i8.562 in the first case, and ;^28.266 in the second, or an increase of 77.77 per cent, over the Irish, and 15.75 over the Scotch rate, the average incomes of the richer class in England have increased in the proportion <:>{ £\o,%.l£,o to £()\.^o% over the Irish, and of ;^i50.3o8 over the Scotch average, or 115.87 per cent, in the first case, and 64.62 in the second. That is to say, while the poorer classes in England are, on an average, a good deal short of being twice as well off as the poorer classes in Ireland, and less than one-sixth part better off than the same classes in Scotland, the richer classes are, on a like average, a good deal more than twice as wealthy as the corresponding classes in Ireland, and one and a half times as rich as those of Scotland. It must be observed, however, that this increased average arises not from the incomes of the richer classes taken individually being larger, so much as from these classes being so much more numerous in proportion to the whole population. Mr. Baxter's tables give for the incomes of classes i, 2, and 3 individually, a higher average in Scotland than in England ; and in Ireland, for the ist class, an average not far short of the English average, while for the 2nd and 3rd the average is actually higher. But, then, while class I is only .0160 of the Irish income receivers, it is .0438 of the Scotch, and .0762 of the English, nearly five times as large in England, and three times as large in Scotland. Classes 2 and 3, which form together only 246 Appendix. •6872 per cent of the Irish income receivers, form 1-2192 of the Scotch, and 1-9524 per cent of the EngHsh; numbers which, when compared with the proportion for the highest class, are a further illustration of the tendency in the present system to throw the increase of income into the hands of the richest class, since they show that the increase in number of the richest class in England is proportionately greater than that of the two classes next to them in wealth. I began by stating that Mr. Baxter's tables relate to a period nearly twelve years distant from us. But the more recent researches of Mr. Giffen may assure us that the tendency disclosed by these tables has not at all ceased to operate since they were compiled. On the contrary, there is every reason for thinking that if the tables were carried down to the present time, they would show the richer classes, at least in England and in Scotland, in pos- session of a proportion of the national income still larger than that held by them twelve years since, and distributed so that the shares belonging to the richest class among the rich has increased in the largest proportions; while the poorer classes, if collectively they possess a larger income than Mr. Baxter assigns to them, as they probably may do from their increased number, would own a smaller proportion of the whole amount, with an individual average diminished by the results of the long depression of trade. If a more satisfactory state of things is to be introduced, it is clear that we must look for it in something very different from that struggle, perpetually increasing in intensity, which assumes the pretentious, but very deceitful name, of Free Trade. 10. — Note to Page 138. WORK AND THE WORKMAN. A remarkable paper, read by Dr. Ingram, Fellow of Trinity College, at the Trades Union Congress, at Dublin, on " Work and the Workman," contains observations upon the effects of co-operation upon the working population which I am unwilling to leave without notice. " Much stress," says Dr. Ingram, "has been laid by the advocates of the co-operative system on the enlightenment and the moral benefits which must arise from its practice. It is said that it will bring working men to under- stand the grave difficulties with which employers have to contend in the conduct of their business, and will make them more reasonable in their dealings with employers, by showing them in a practical way the bearing on production and prices of the regulations they desire to enforce on the masters. It is to be observed that this implies only a partial or temporary trial of the system, and looks to the organisation of employer and employes as the really permanent and normal one. The instruction so received might be useful enough, but it would be dearly purchased by extensive and repeated failures, and I believe the same lesson can be sufficiently inculcated through study and observation without compromising the interests of families. It is also alleged that the working of the co-operative system, regarded in its reaction on character, will call forth many of the highest Appendix, 247 qualities of our nature. All combined action of men for honest ends doubtless develops some useful elements of character; but the degree of the elevation of these elements depends on the nature and objects of the combination, which may be of a kind to starve other better traits. I be^eve in no moral regeneration founded on appeals to private interest. Social motives alone can truly moralise ; and I cannot help thinking that upon the whole the tendency of the co-operative system would be to spoil the best qualities of the working man. Large sympathies and generous impulses which are natural to the one would be supplanted by the com- parative deadness to social interests, and the constant gain regarding the attitude of the other. I believe thus the immense majority of working men must remain to the end working men, and that only. I further believe that this necessity admits of being fully reconciled with their happiness and their dignity. They would, in my opinion, best consult their best interests by recognising these truths as soon as may be, and sincerely renouncing the pursuit of a different position. What they ought to aim at is the elevation of their class, as such, without seeking to alter the bases of the existing organisation of industry." On the way in which the workers should seek the elevation of their class, Dr. Ingram proceeds to give much excellent advice, concluding with a passage which, notwithstanding its length, I extract, both for the intrinsic value of the teachings contained in it, and because they supply the best refutation of the opinions expressed by the Dr. in opposition to co- operative union, if that union is looked at from the point of view presented in this work. " I have not," he says," you will observe, presented the view that the intellectual improvement of the workman," of which he had urged the importance, " will assist him in rising out of his class into a higher sphere of life. I do not, either for him or his employer, contemplate what is called 'getting on in life' as the great end of existence. In much of the popular literature of self-help, the hero held out to our admiration is the man who, beginning as a workman, scales the ladder of social elevation, and closes his career as a master; and it is almost implied, that the great question is not how to improve and ennoble the workman's life, but how to enable the ambitious and energetic to escape from it. I think current ideas on this matter want a good deal of correction. The causes which determine the rise of some to the rank of directors of industry, while others remain in the position of workmen, are not always easy to trace; most frequently accidental elements of situation or opportunity are involved. But, so far as personal qualities are operative, it is a great mistake to suppose, as is too often taken for granted, that a rise of this sort is always or ordinarily con- nected with superiority of nature. A man who remains a workman all his life may be, and often is, in all the essential qualities of manhood, of far greater intrinsic value than another who raises himself to wealth and rank. The practical qualities which most lead to what is called success — tough- ness, dexterity, and caution — valuable, no doubt, in themselves, may be combined with a poor intellect and a narrow heart. The very process by 248 Appendix. which industrial ascendancy is reached, even when the means used are per- fectly legitimate, involve grave dangers to man's nature. The constant habit of self-regard; the temptation to put aside the claims of others; the intense preoccupation with the possibilities of profit, have a tendency to produce on the intellectual side narrowness of view, and on the moral side hardness and want of sympathy. These qualities have often been observed in self-made men, and particularly in the smaller capitalists, who are still suffering from the deteriorating effects of the struggle. It is only just, however, to add, that in nature's fundamentally good, when the strain of acquisition is relaxed, the possession of wealth and the power it bestows often develop the better elements, and bring out the nobler instincts of the genuine chief. More frequently, perhaps, social fruit is not derived from these elevations till the second generation ; and then only where vanity and a weak imitation of the old aristocracy do not lead to a life of luxury and ostentation. But, be this as it may, there is no reason why we should think less of a man because ambition and the desire to be rich are weak in his nature. They are weak, I believe, in most healthy natures, and it is well that they should be so. Morality and religion have always deprecated any intense degree of them. We cannot, indeed, dispense with a strong dose of them in some members of the industrial world, for they are necessary to bring about the formation of large capital, and to provide efficient directors of industry. But the development of these elements of character is required only for the actual or destined capitalist. They are foreign to the vocation of the ordinary working man, and, if indulged, produce from the necessary limitation of his circumstances a miserable restlessness and spirit of revolt. What is really important for working men is, not that a few should rise out of their class — this sometimes rather injures the class by depriving it of its more energetic members. The truly vital interest is that the whole class should rise in material comfort and security, and still more in moral and intellectual attainments." The italics in the closing sentence are mine ; I have added them because the words so well express the aim of co-operation as it has been presented in these pages, at least with the addition of a proviso, which I am confident that Dr. Ingram would heartily endorse — that this rise of the working classes in material comfort and moral and intellectual attainment should be made, not in antagonism to any other class but in the joint interest of all. The defect in Dr. Ingram's positions appears to me to be that he overlooks the means through which alone the result which he desires can be attained. How can we suppose that this high minded indifference to material advantages and devotion to intellectual and moral improvement are to be generally, or even largely, produced among bodies of men whom the circumstances of their position condemn to a perpetual struggle, against employers who are themselves impelled, by the ever-increasing keenness of the competition to which they are exposed, to seek for the means of holding their own position by the reduction of their payments to those whom they employ. Surely if the calm devotion to the pursuit of the higher ends of human existence, on which Dr. Ingram justly sets such high store, is to spring up anywhere Appendix, 249 abundantly among the working population, this would be within the shelter of such institutions as the great Co-operative Society now founded by M. Godin, at Guise; where every worker could feel that the future of himself and his family was assured by the permanence of the association which gave them employment; where there was no body of men to profit by a reduction of his earnings ; and where he was liable to no loss of employment by the arbitrary will of any employer ; but if this employment were ever lost it must be through a wilful breach on his part of rules in the forming of which he as a member of the society had himself a part. Again, admitting the truth of Dr. Ingram's assertion as to the specialite of the qualities which go to form a successful manufacturer, I claim it as a great and unique advantage of co-operative action that it can make use of these energetic characters for the good of the whole body, without that individual deterioration, which Dr. Ingram admits to be the general con- sequence of the struggle forming at present the ordinary accompaniment of the progress to success. For that "constant habit of self-regard," and "temptation to put aside the claims of others," to which Dr. Ingram justlj ascribes the " tendency to produce, on the intellectual side narrowness of view, on the moral side hardness and want of sympathy," what more appro- priate medicine could be prescribed than that the practical energies, of which these tendencies are a misdirection, should find their readiest and most natural employment in the service of a society, which, by its internal constitution, and external association, as a member in a great union whose motto was "one and all," perpetually inculcated as the true ends of human actions, the supreme rule of individual conduct — regard for others. The more completely we enter into Dr. Ingram's ideal of life for the worker, the more thorough, I think, must be our conviction that only by co-operative union, for such purposes as have been set forth in these pages, is there any reasonable hope of this ideal becoming in any considerable measure, a reality. Necessarily the attainment of this end requires that the associations through which it is to be brought about should not be commercially failures. The education of the working population to the higher level, on which I claim for co-operation the power to place them, could not be attained by the " ruin of families." But when the danger of the loss of earnings in co- operative enterprises is adduced as an objection to their being undertaken by bodies of workers, we must not forget the enormous amount of these earnings which have been spent in maintaining men out of work; I will not say with no beneficial result, but certainly with results attained at a cost . which it is hard to imaginethat any amount of loss sustained in co-operative manufactures, supported by contributions equally large and carried on with equal persistency could have occasioned. That this danger of ruin really exists at all in co-operative enterprises, as conducted on the associative bases advocated in this Manual, I do not admit. But, at the worst, the sort of ruin which such efforts would bring upon families would be a very advan- tageous exchange for the misery which, if the accounts given us of the effects of long strikes are true, have been entailed on hundreds and thousands of families by these deplorable conflicts. 250 Appendix. II. — Note to Page 140. THE DISTRIBUTION OF PROFITS IN FEDERATIVE PRODUCTION. The scheme sketched out on pages 135 to 140 assumes, on the part oi the workers, a disposition to seek systematically the elevation of their class as workers; and, for this purpose, to do whatever is in their power to increase the earnings of work by diminishing the charge of capital, from the conviction that the rapidity with which the whole working population can be lifted up to a higher social level, must depend upon the results obtained in the co-operative workshops first set up. It is a result to be attained, not at the cost of the consumer, by increasing prices against him, but by applying for the benefit of those who do the work, and therefore ultimately of the whole working population, the surplus now absorbed by the class of capitalists alone. Prices would remain, so long as competitive production ruled the market, what this competition made then. If co-operative pro- duction superseded it, they would be fixed by an agreement between tht consumers whose savings formed the basis of the system, and the producers whose labour made those savings into increased wealth. And the surplus employed for the benefit of work would not be paid away to the workers to be dealt with as they please. It would benefit the workers by whom it had been accumulated, through the share guaranteed them in the products ol the ever-growing number of productive establishments, by which the whole body of workers would be gradually raised from the position of mere wage receivers to that of joint owners of the workshops, through which these wages were earned. For these reasons I have suggested the plan as the best suited for adoption by societies of working consumers who wish to use Co-operative Distribution as a safe road to Co-operative Production. But if the members of such societies consider that some direct advantage should be secured to those who may not find employment in the productive establishments, this might be efiected by an ingenious modification of the self-acting rule adopted at Guise by M. Godin, for the equitable division of profits between .capital and labour, suggested by Mr. Gray in the paper on " Co-operative Production," read by him at the Plymouth Congress, namely, to use as the factors of division the sums represented by — (i) the wages of work capitalised at 5 per cent. ; (2) the wages of capital similarly capitalised ; (3) the amount of sales. The following figures .illustrate the application of this system to the West End Leicester Shoe Works, using the statistics given on page 161. Factors of Division. Profits. Actual. Capitalised. Total. Apportioned. Per Cent. Wages — Work Capital Sales ;^25,030 1,120 76,884 ;,^5oo,6oo 22,400 ;^2,573 ;{:2,I48 96 329 83-45 3-73 12.81 Appendix. 251 12. — Note to Page 167. THE APPLICATION OF THE PROFITS OF PRODUCTION. We may consider this question with reference to the total amount of the income of which the working population could obtain the command by means of the profits on their own consumption of manufactured articles. The total income of this class in the United Kingdom has recently been estimated by Mr. Leone Levi, at ^400,000,000 out of ^1,000,000,000 estimated income of all classes, taking, as the line of division, incomes below and above ;^ioo a year. It is, I conceive, a high average to assume the consumption of new manufactured goods by persons whose incomes are not over this sum to be 10 per cent of their total expenditure, or ;^40,ooo,ooo for the whole body. But this is at retail prices. To obtain the manu- facturer's charge, we must deduct at least 20 per cent, or ^8,000,000. Now, this ;£"8,ooo,ooo, less the actual cost of retail distribution, the workers may put into their own pockets, by association, without interfering with the earnings of work. What more could they get by absorbing them ? Taking the Leicester Shoe Works as our guide, we obtain as average profit, on the turn- over of ;^32,ooo,ooo, 3-5 per cent, or ;£"i, 230,000 ; for the capital required to produce it, ;£'g,ooo,ooo ; and for the charge on this capital at 5 per cent, ;^45o,ooo. Deducting this charge from the £'1,230,000, we arrive at ;^78o,ooo as the total addition, which could be thus made. Suppose it raised to £1,000,000. Can anyone imagine that this £1,000,000, if simply dis- tributed over the individual incomes of £400,000,000, could make any material difference in the position of the receivers of these incomes ? Is it not clear that if any important effect is to be produced from the use of such small means, this must arise from using them so as to show what can be done for the workers, by the wise use of the earnings of their work for the benefit of those who make them — that is to say, by the system advocated in this Manual, and in actual operation at Guise ? Note 13. LIST OF THE PUBLICATIONS OF THE CENTRAL- CO-OPERATIVE BOARD. Per 100. s. d Aci.AND, A. H. D.— The Education of Citizens 7 6 Allan, John — Productive Cooperation ! 9 Anonymous — Banbury Co-operative Tract i o " Co-operation a Cure for Poverty o 5 " Co-operation z/. Private Traders o 5 » Five Reasons Why I am a Co-operator o 5 » Opinions of Eminent Men on Co-operation, No. I ... 03 H H H It No. 2 ... 03 " Self-Help and Help to our Neighbour o 5 • The Co-operative Wholesale Society — What is it? ... Graft's. » Working Together , and Helping One Another I o 252 Appendix. PUBLICATIONS— av/////?/^'/. P r loo. s. d. Booth, Nelson — How Bob became a Co-operator o g BoYVE, M. DE — International Co-operation I o Carter, W. T. — Unbelievers in Co-operation, and How to Win Them 3 6 Copland, E. — Ought Productive Works to be carried on as Depart- ments of Wholesale Societies ? I 9 Crooks, W. — Co-operative Education 2 o » Dividend : What it is, and How it is made I o Davies, Miss M. Llewelyn — The Co-operative Movement o 9 Fales, Miss I. C. — The Industrial Conditions of the United States i 9 GODIN — The Association of the Familistere at Guise 2 o Gray, J. C. — How to Start Co-operative Stores Gratis. n Co-operative Production 2 o » Co-operative Production in Great Britain 2 6 Greenwood, A. — The Educational Department of Rochdale Pioneers' Society Limited : Its Origin and Development 2 6 » The Fundamental Principles of Co-operation 2 o Hall, W. H. — Leclaire : " A Real Saviour of Society " 4 o Havercroft, C. — How can a Man become his own Landlord? 2 o HiNES, G. — Co-operation and the Perils of Credit 2 o ff The Full and Fair Reward of Labour o 5 Holmes, J, — The Second Great Step — Co-operative Beneficence ... 26 Holyoake, G. J. — Logic of Co-operation 5 6 » The Policy of Commercial Co-operation 3 o » The Growth of Co-operation in England 4 o HOPKINSON, G. H. — The Best System of Leakage for a Country Co-operative Store 2 o Hughes, Thos., Q.C.— An Address i 9 • Lecture on the History and Objects of Co- operation 4 o Johnson, D. — Association Farming i 9 Jones, B. — Lecture: What is Meant by Co-operation 4 » Co-operation z/. Socialism 4 o - Possibilities of Co-operation, with Diagrams o 6 Jones, J. H. — Co-operative Education i 9 LoVEDAY, W. G. — Co-operative Agriculture 2 o M'Innes, D. — Co-operative Agriculture 2 6 M'VlTTlE, J.— Riding the Marches Round Labour's Estate 2 o Marcroft, W. — A Co-operative Village : Plow to Conduct it, and Where to Form it 3 6 Maxwell, W. — Wholesale Co-operation 4 o Nash, Vaughan — The Relation of Co-operative to Competitive Trading 2 6 Neale, E. V. — Association and Education : What they may do for the People 4 o m Co-operation z'. Joint-Stockism i 9 • Co-operative Production I o Appendix. 253 PUBLICATIONS— Co«/m«^^. Per TOO. s. d. Neale, E. V. — Co-operative Societies and the Income Tax Gratis. i> Copyhold Enfranchisement 2 o » Housekeeping under Difficulties : A Dialogue for Young People I o » Land, Labour, and Machinery 5 o If The Central Board : Its Use, Work, and Cost Gratis. H The Common Sense of Co-operation i 9 » The Co-operative News, and Why Co-operators should Support it Gratis. H The Economics of Co-operation 5 o " The Economic Aspect of Co-operation 2 o " The Principle of Unity i 9 " The Three C's : Co-operative Triologue i o « True Refinement 2 6 » What is Co-operation ? I 9 » , What Co-operation can do for the Labourer o 5 » Why should the Rich interest themselves in Co-opera- tion ? And How can they Promote it ? I o NuTTALL, W. — Co-operative Share Capital : Transferable or With- drawable? 2 6 P. H.— What's the Good of It? I o Quirk, G. E. — The True Relation between Wholesale and Productive Societies i 9 Randle, A. — A District Co-operative Farm ; 2 o Ripper, Professor — Technical Education 3 6 Ritchie, T. — The Relation of Co-operative to Competitive Trading 2 o ScoTTON, A. — Cottage Purchasing 2 o Sharp, Miss — Co-operative Education 2 o n What has a Woman to do with Co-operation ? 2 6 Shufflebotham, C. — The True Relation between Wholesale and Productive Societies I 9 9 Ought Productive Works to be carried on as Departments of Wholesale Societies ? I 9 Slatter, H. R. — The Advantages of an Alliance between Co-opera- tors and Trade-unionists I o Smith, Joseph — Educational Funds : Their Value, and How to use them I o » How to take a Town (Co-operatively) by Storm... o 5 n Some of the Weaknesses of Co-operation i o Swallow, W. — Co-operative Production 2 o Thomson, D. — The Relation of Co-operative to Competitive Trading 2 6 Watts, Dr. J.— Co-operation an Economic Element in Society 5 o H The Working Man : A Problem 4 o WiiSON, J-— The Wholesale Society and our Relation to it_ 2 c Woodcock, J> — Copyhold Enfranchisement 2 c W. E.— Sham Co-operation I o TABLE OF CONTENTS. PAGE Preface i. to xvi. PART I. THE MORAL BASIS OF CO-OPERATION i CHAPTER I. The Relation of Co-operation to Religious Faith 3 Religious foundation common to page all schemes of social reform — instances in R. Owen and C. Fourier 3 Co-operation must seek its re- ligious foundation in some existing religion 3 Christianity offers such a founda- tion, which has historically come to light 4 Mediaeval Christianity essentially ascetic 5 Change of ideas in the i6th cen- tury to the conception of active life as the true ideal. Modern society built on this idea 6 Socialism, and reaction against the exaggerated individualism attending it 6 The institutions of the Middle Ages are an evidence of the possibilities and power of asso- ciated life 7 Duty of the present age to apply this principle to active life .... 7 Experience since the Reformation shows that the liberty of indi- vidual action does not suffice to secure the general good 8 But no occasion to despair, or adopt Hartman's philosophy of Pessimism 8 We may learn patience from the earth, as Goethe teaches 8 The power given us by science, taught by the lesson of Calvary, could produce general wellbeing 9 This claim is not antagonistic to any previous phase of Christian- ity, but supplementary to its past action le It asks Christianity to do for the modern free worker what it did for the ancient slave 11 This demand is not unreason- able I] Man is at once a natural being by his passions, and a supernatural being by his reason which is essentially a principle of unity. . 1 2 The Greeks sought to apply this principle of unity in order to limit the selfishness of passion by political institutions 12 But this method ended in the despotism of Rome 12 Then appeared the teaching, that the principle of unity is to be sought within, in love called forth in man by the love of God manifested in Christ 13 This idea conquered the world by the Ministry of Tables, as the Emperor Julian declared 13 The same spirit may be appealed to now, by an extension of similar institutions, to solve modern social questions 13 The present action of the Chrifetian Spirit is a proof that it could effect this object if systemati- cally applied to it 14 Many zealous advocates of social reforms do indeed repudiate the Christian name 14 But if they are true social re- formers they are Christians without intending it 14 Still the support given by the Catholic idea as to Christ is of great value to sustain the feel- ing of brotherhood which his- torically grew out of it 15 This idea is the scientific con- ception of religion 15 It is a support which we need individually, and should not hastily reject 15 Table of Contents. 255 CHAPTER 2. PAGh The Relation of Co-operation to other Philanthropic Movements 16 19 16 Benevolence is the indispensable paqb condition of all plans of social reform on whatever grounds they are based But benevolence is no stranger on earth; the peculiarity of co-operative benevolence lies in its being " Thorough " .... It goes to the root of social evils by regulating the general con- ditions of the acquisition and employment of income 17 If it is urged that this is to run counter to the natural law of competition, the reply is — that it is the general function of reason to control natural laws by studying their action 18 True we deal here with an internal not an external force, whence the need of the influence of religion to give strength to reason by emotion 18 But reason thus strengthened is as competent to deal with the law of competition as with other natural laws 19 The power of association to re- lieve social miseries has been shown in numerous cases both in England and on the Con- tinent 19 The universal introduction of such associations would give to Benevolence a higher sphere of action than at present 20 Commercial transactions may be so dealt with as not to repel benevolent sentiment; and the systematic recognition of social reforms by philanthropists as a true sphere of action would be beneficial to social reformers, by preventing the self-help of co-operation from degenerating into selfish-help 21 Thus may all good men be brought to work heart and hand together in solving the great problem of Humanity 22 CHAPTER 3. The Relation of Co-operation to Socialism, Communism, and other Politico-Social Movements 23 If co-operation have aims as large as those stated above, how is it distinguished from socialism?.. 23 By being a practice founded on principles generally admitted in nations professedly Christian, not a new theory of human conduct 24 Co-operators investigate the sys- tems proposed by the great social reformers in scientific freedom as means to their ends 24 Illustration of this position — In regard to the systems of C. Fourier and R. Owen .... 25 And in the case of the American communities, of which a list is given from Hind's work. . . 26 These communities show that communism does not destroy industry or invention, which in it is a benefit to everyone .... 27 But the sacrifice of the family to the community is not neces- sary in order to secure this benefit 27 Plato, indeed, treats this sacrifice as requisite to check selfish instincts 28 But this conclusion arose from the peculiarities of Greek life. It does not apply to the modern States 28 The Familistere at Guise shows that all the advantages of the common life may be obtained without sacrificing individual property or freedom 29 To extend association beyond this point in the hope of securing general happiness by extinguish- ing selfishness, as R. Owen believed, is to misconceive the true source of happiness 29 Communistic feeling, and com- munism as a rule, resemble mathematical lines which ap- proach indefinitely, without touching 30 So, also, the regard for individual freedom distinguishes co-opera- tion from political socialism ... 30 256 fable of Contents. Either in the form proposed by Lassalle of State-sup- ported industries 31 Or that of the compulsory collectivism taught by Karl Marx and his followers ... 31 The Gordian knot of social con- quest cannot be cut 31 Only by love, not by violence, can permanent social reforms be effected 31 If the blindness of self-interest prevents men from forming free associations of a higher social order than the present, no lav/ could secure them the benefit. . 32 Note on the Oneida community in its recent transformation 32 PART II. THE ECONOMICAL BASIS OF CO-OPERATION 33 CHAPTER 4. The Rei^ation of Co-operation to Competition 35 Competition arises as a natural law from the diversity of human desires and surroundings .... 35 So long as man remains in his natural relations to the means of subsistence it works for good, assuming the absence of vio- lence 36 The evils attending it arise when from the change of the natural state by the appropriation of the earth, the workers begin to compete for the means of sub- sistence 37 They are intensified by the com- petition of the possessors of 'capital for its profitable em- ployment 38 And have been increased by the recent rapid progress of inven- tion, and the superseding of manual by mechanical power. . 39 Illustrations of these propositions in a paper prepared by a Com- mittee of the American Social Science Association, read at Cincinnati, in 1878, on the effects of the application of machinery to agriculture and domestic manu- facture in the United States.39 to 45 These results prove that human society must be based on some principle other than the uni- versal freedom to struggle .... 46 They come from the appropriation of land by individual owner- ship, and cannot be prevented even by an interference with this right, as great as exists in France; though the sub- division of land is carried there to an extent which seriously lessens the produce as com- pared with England 47 Now, co-operation has a natural tendency to cure these results of competitive struggle 48 It begins by substituting reason- able accord for this struggle in the ordinary transactions of life through associations for self-help 49 On this union it rears, by a federa- tion of such associations, whole- sale centres, which may extend till they embrace land and water transit 49, 50 By this federation it makes possible the creation of a market for the production of any articles required by the co- operators 51 While, by the saving on the cost of distribution, it supplies a direct means of acquiring the capital needed for production . . 51 And if this saving is made by Table of Contents. 257 means of dividends on pur- chases, It creates a sure income, available for obtaining any capital required for productive purposes by guaranteeing the interest on it 51 Thus, while the producers secured to themselves good work for unadulterated produce, they might stop all waste in forming unnecessary centres, and carry on that work so as to destroy the antagonism between labour and capital, and to make the wealth created by work do all that can be done by it for the worker 52 Thus manufacturing operations might be reunited with agri- culture, by an action similar to that which now covers the country with the residences of wealthy manufacturers 53, 54 But by an action directed to make the homes of the mass of the people, which could also be the dwellings of the richer classes, full of enjo\ ment .... 54 Towns might continue to exist, but they would form groups of smokeless palaces, consti- tuting cities of health 53 While the joint abodes and the common institutions connected with them would keep up that general sympathy, and absence of caste feeling, which ought to mark the followers of the " Carpenter's Son " 55 And all this may grow naturally out of union to buy and sell on the most economical terms.. 56 Note on Natural Law 56 CHAPTER .<;. The Relation of Co-operation to Current Economic Theories... 57 Co-operation and political economy have different subject matters, therefore cannot be antagon- istic 57 Co-operation is a better practice applied to the ordinary course of life. Political economy, of the ordinary English school, is an inquiry into the actual prac- tice of men in acquiring wealth 57 Now, if this practice agrees with the co-operative ideal, the co- operator has nothing to quarrel with 58 If it differs from the ideal, the doctrines relating to it do not touch co-operators 58 if it be urged , Your system requires better men than exist, we reply, Not better than many who now exist, while its introduction would improve the mass up to the degree required for success. 58 The majority must always benefit by institutions planned for the general good ; the minority, the strong men able to get on other men's backs, are the difficulty . 59 But this we may resonably hope to get over 59 Political economists often assume that selfish interest is the only efficient motive to human action 60 But science, art, religion, benevo- lence refute this assumption . . 60 The State obtains good work for moderate pay, from its cer- tainty and the hope of advance 61 Now, these conditions co-opera- tion is specially adapted to secure Pi And it would have, in the great saving of waste made by it, ample means for rewarding efficient workers 62 Illustrations of the waste of com- petition by the London shops. 62 to 66 So that co-operation may raise the masses and yet pay its chiefs sufficiently 66 To this consideration must be added the superior advantages of unitary homes 67 Note on the assumption that the struggle for existence mupt, be a law of spiritual being because it is a law of physical being . . 67 25B Table of Contents. CHAPTER 6. The Relation of Co-operation to the State PAGE 68 Co-operation is essentially a mani- page Testation of the power of reason- able will, which has come out as the result of the struggle for existence 68 And, when roused to a conscious- ness of its own harmony by the manifestation of Divine love, created for itself a state over against the Empire of Rome, which it ultimately swallowed. 69 Thus it was able to mould legal power after its own views, and prepare the way for a higher social state by eliminating slavery 70 This higher state the co-operator has to realise, by a process similar to that which created the Church, by voluntary action 71 A great confusion has prevailed in supposing that because reformed society would create laws suited to it ; therefore there is a short cut to the reform by legal change 72 But if the co-operative spirit can- not form such a state, the State would be quite powerless to create this spirit 72 PART III. THE PRACTICE OF CO-OPERATION .. CHAPTER 7. The Application of Co-operation to Distribution. 73 75 I. The econorr.ical strength of co- operative distribution rests on the needless cost of competi- tive distribution 75 This amounts to from 2S. to 2S. 6d. in the £ over the ex- penses and interest at 5 per cent, in a society formed on the Rochdale plan of selling at ordinary prices and return- 'ng dividends on purchases. . 76 . To get up a society — Circulate co-operative tracts ; Appoint committee of trusted men ; Get up meetings 77 Apply to men of local influ- ence ; Appeal to the ministers of religion 78 Apply for aid to the Central Board and, if near London, to the Guild of Co-operators 79 3. Use the General Rules pub- lished by the Central Board. They may be adopted, with any change desired by Special Rules which the General Secretary will prepare on ap- plication 80 And are kept in stock and sold at 2d. a copy for as many as are ordered ; : And are adapted for the wants of a society as it grows, while costing less than the imperfect rules often employed 81 Advice as to transferable shares 81 4. Steps to be taken in order to get the rules registered 82 Steps on the registration of an amendment 83 5. Amount of capital desirable on starting, in towns and country 84 Amount which each member should be required to hold . . 85 6. Advantage derived by existing societies from the existence of the English and Scottish Wholesales 8€ Rules and conditions of joining the business of these societies 87 7. Importance of ready money dealings both to the Whole- sales and the societies 88, 8g 8. Flour mills 90 9. Rules for good management — The committee; Complaints to the Wholesale go Table of Contents. 259 Value of a quick turnover; hence the importance of beginning with the articles of the readiest sale gi 10. Considerations on the rate of dividend to be aimed at ... . 92 The Civil Service system of selling as nearly as possible at cost price is, at first sight, the most reasonable 93 These stores have done great good in calling attention to co-operation, and may further the highest aims of co-opera- tive action, if directed to them 94 But for the poorer classes the plan is undesirable, because it does not promote the accu- mulation of capital 95 And therefore weakens the col- lective action on which the power of raising their social position depends 65 Note on educational work of distributive societies 95 Further, the Rochdale plan really secures a complete re- turn of profits on purchases to the purchasers better than the Civil Service 96 The objection that the higher prices check dealings at the stores is not well founded . . 97 On the whole, the best rule is to sell at such prices as are cus- tomary among respectable private dealers of the locality 98 Note on the fallacy of thinking that a quick turnover adds to the dividend on purchases. . . 98 [I. Advisability of rules for giving a share of profits to employes 99 Scheme for this purpose sug- gested by the General Rules. 99 12. Leakage — The risk to societies of loss by it 99 Desirability of checking it by making the storekeeper re- sponsible for loss over a fixed limit 100 With a share of benefit if the limit is not reached. — Note on objection raised to this plan.. 100 13. Different modes of guarantee against loss from storekeepers lOo Fidelity policies issued by the Co-operative Insurance Com- pany IOC 14. Scales and weights — Import- ance of having them duly tested loi 15. The seals of societies — Law as to and requisites of. 102 16. The announcement of the name of the societies — Law as to, and error often com- mitted 103 17. The books wanted for business 103 18. The different systems of checks on sales and money takings. 104 The book entry system — Its use and objections to 105 The metal token system — Its merits and disadvantage. . . . 106 The cardboard token — Sug- gestion for lessening the trouble of examining these tokens loj The printed sheets of tokens used at King's Lynn, with suggestions for their improve- ment 108 Number of tokens required for a given amount of business as a means of estimating the cost 109 The carbon entry system .... no Arrangements for convenient casting, and precautions against fraudulent alterations by salesmen in 19. The employment of boys to issue the tokens 112 30. The Civil Service system of cash takings separate from sales 113 21. Suggestions on matters affect- ing the progress of societies . 113 Changes of the committee-men 113 Want of cleanliness and neat- ness in the shops 114 Bad bookkeeping and auditing. 115 Neglect of their proper duties by the auditors 115 Attempts of general meetings to usurp powers not given them by the rules 116 The disposition to secede on mat- ters not of vital importance. . 117 26o Table of Contents. CHAPTER 8. Co-operation in its Application to Production 1. The greater importance of pro- page duction than distribution .. ii8 Exaggeration as to the benefits of co-operative distribution . . iig The original Rochdale pro- gramme places these factors in their true relations 120 The store deals mainly with things; though pointing to higher objects in the use often made of its funds 121 Therefore, to dwell mainly on this side of co-operation may lead to placing things above men 121 The productive society can do, or prepare the way for the doing, what the distributive store cannot ; hence its value 122 2. Considerations on the relations of producers and consumers, by the present Chief Registrar, in a paper read at Newcastle- on-Tyne, in 1873 .... 123 to 126 3. Objection taken by Dr. Watts to the notion of separate pro- ductive societies, as leading to competition, and advocacy of a division of the profits on production on purchases through the Wholesale Societies 127, 128 His criticism of the Hebden Bridge Fustian Society, and correction of his statement. . 128 4. But the present distribution of property in the United King- dom makes the notion of materially benefiting the poor by dividing the profits on pro- I duction among the consumers absurd 129 It must give the bulk of these profits to the richer classes. . 130 The result would probably not give more than 2s. 6d. a year to each family whose earnings are below ;^ioo 130 Nor could this amount be in- creased by the profits on foreign trade, which must be divided on capital 131 5. Hence Dr. Watts's scheme would mainly benefit the richer classes 132 FAGB 118 And the organisation estab- lished by it would be in- jurious, by hindering the growth of a better form. . . . 132 The scheme is the expansion into a general plan of an acci- dent in the form taken by co-operative union in Great Britain, which gave to dis- tribution a prominence not naturally belonging to it. ... 133 Note on corn mills 133 6. The system is popular, be- cause it suits the immediate wants of workers, who are sup- plying only their own wants. 134 But it is not sound as a general plan for giving the workers the profits on production ... 134 7. The alternative of either sac- rificing the producer to the consumer, or falling back into competition, is not necessary 135 Productive societies might be formed on a federal plan by which the consumers would secure to themselves good articles at reasonable prices, and to the workers the full benefit of this 135 Illustration from the Leicester West End Shoe Works .... 136 8. Such a scheme would have no tendency to slip into com- petition, but the converse, • because it would naturally draw the producers into con- nection with the consumers.. 137 And woiMd thus enable them to obtain capital on the cheapest terms 138 8. The difficulty in introducing the system lies mainly in the alternative of federation or competition presented to the workers by the federalists. . . 138 It may be expected to disappear when the workers see the real effect of the plan, and that the alternative is not necessary 139 g. The workers who set the scheme on foot may receive a special benefit, without giving up the hope of per- Table of Contents. 261 PAGE manently raising the condition of the class 140 10. Value of the federal system thus applied as a means (i) of obtaining capital on the cheapest terms by giving it security ; (2) of uniting liberty with authority 140 11. But where this system cannot be introduced, how may pro- ductive societies be best formed ? 141 They must interest the capi- talist by giving him a share in profits, which is best done by apportioning them between capital and work according to the wages of each 143 Illustrations of this system from the balance sheet of the Familestere at Guise 143 Note on the arbitrary character of a division by capitalising wages 143 12. They should capitalise profits to prevent their being dis- sipated 144 13. But they should not give the profits on work to the pur- chaser 145 Experience has shown that the hopes of getting hearty sup- port by that plan are a delu- sion 145 And the notion that the pur- chaser has any natural right to them is a mystification, inconsistent with the idea of exchange 146 The rule that co-operation should unite the conflicting interests of the capitalist, the worker, and the consumer, by an equitable division among them of the fund called profit, applies to the whole profit on distribution as well as pro- duction. The consumer who claims to share as such in the profits of production must let in the worker to share as such in the profits of distribution. . 148 The allegation that to give the profits on production to the workers tends to produce caste is an error; it is the pitting them as mere wage receivers against the con- sumer which has this tendency 148 14. The workers, therefore, while acting with entire fairness to the consumer, should avoid the error of giving them the earnings on which their own progress must depend 148 15. Advice to the founders of pro- ductive societies on the means of commercial success 149 Grounds for hope and cautions. 150 The way in which productive societies may be expected to improve the condition of the population 151 The prospect of success opened by supplying work on which the purchaser can rely that he knows exactly what is supplied to him 152 Peculiar facilities for intro- ducing such a system afforded by the co-operative stores . . 153 CHAPTER 9. The Practice of Co-opebation in Social Life 154 1. Co-operation, as a system for raising the population to a higher state has two main phases — the formation of united resources, and their application to create new conditions of life 154 2. The first function has been dis- charged — in England by the distributive society ; in Ger- many by the People's Banks, i ss But neither of these institutions can materially affect the con- ditions of life of the masses. . 155 Hence the importance of co-operative production as intermediary between the col- lective savings and their ap- plication 155 3. Now, the central connection which is needed for carrying on work in the best way would 262 Table of Contents. facilitate also the carrying it on in sites, which would con- duce to the general wellbeing of the worker 156 Thus co-operative home colonies would be formed, it might be such as Saltaire 157 But if we follow the ideas of R. Owen and C. Fourier, they should be connected with unitary homes, social palaces, of which the Familistere at Guise is an existing example. 157 Answer to the objections likely to be made to such homes, with illustrations from Eng- lish experiments of united dwellings 158 Distinction between such homes and these dwellings. .. . 158,159 , The importance of the Unitary Home confirms the arguments for securing the earnings of work for the benefit of those who do it 160 Illustration of this from what might be done in the Leices- ter West End Shoe Works on an assumed sale of ;£"3oo,ooo a year, according to the statistics of the actual profits for 1878, and the experience of what is done at Guise 161 to 165 Contrast of the result produced by dividing the profits on pur- chases 166 Conclusion, that on this plan, not only must the largest share go to the richer classes, but the share given to the poorer classes would be frit- tered away 167 Possibility of combining profits in joint funds so as to lessen the present inequalities in the remuneration of work 16S Also that of diiTerent manufac- turingoperationsbeing carried on in the same home, thus preventing the population being split up into castes ... 16.S The Associated Homes might thus come to form groups resembling Dr. Richardson's City of Health, without ceas- ing to be distinct societies . . 169 CHAPTER 10. The Application of Co-operation to Banking 170 1. The People's Banks introduced by Dr. Schulze-Delitzsch have formed in Germany and other European countries the first step of co-operative union 170 Statement of their progress up to the end of 1878 170 2. The banks founded on the prin- ciple of enabling the members to obtain, through the con- fidence produced by their joint union, moneys from the public with which to make loans to themselves, and thus accu- mulate from the profits of the business capital available for different social objects 171 List of associations formed in connection with these banks. 171 Table showing how soon the public confidence displayed Itself 171 The operation similar to that on which our great banks depend 172 Comparative statement showing that the rate of accumulating capital in these banks sur- passes that of our societies. . 172 3. Why, then, cannot such banks be introduced into England ? 172 The Industrial and Provident Societies Act might be made to furnish guarantees practi- cally equal to those given by the German banks 173 And the statistics of their mem- bers show that at least 68 per cent of those assisted are represented by similar classes among us. Why then should our poorer classes not enjoy the benefits of a similar system ? 175 Table of Contents. 263 4. Co-operative banking among us has hitherto been only a means of collecting the sur- plus funds of societies to make advances to other societies or companies 176 This would be of value if there were many productive so- cieties requiring ordinary banking accommodation to assist them in the course of their trade 176 But in the absence of such in- vestments the fund is employed mainly in advances to com- panies and building societies, very little being wanted by the distributive societies. . . . 176 While for a considerable pro- portion of its funds the Wholesale is unable to find investments 177 Tables illustrating these posi- tions 177 5. Therefore the separation of the bank from the Wholesale, so that it may be open to do busi- ness generally, is desirable.. 178 And this change could be now made without requiring any payment of capital, on a principle of mutuality likely to be popular 179 6. Explanation of plan 179, 180 The bank might incur losses, as other banks have done; but on the present system far greater losses have been in- curred in proportion to the business than in other well- managed banks ,.... 181 And the formation of a powerful banking centre may be of great value to co-operators. . i8i CHAPTER II. The Law Relating to Industrial and Provident Societies 182 I. The constitution and objects of a society 182 1. Its members. 2. Its objects — Purposes which may be in- directly included 183 3. Its registered office — where it carries on business in more than one country. 4. Its name. 5. Its audit and accounts. 6. Its balance sheets 184 7. Its annual returns. 8. The supplying copies of its rules. 9. The inspection of its books. 10. Its rules — What must be and what may be inserted 185 11. Appeals against the Registrar. II. The rights of a registered society. 1. Incorporation with limited liability. 2. Binding effect of rules. 3. Proof of membership. Inutility of declaration books 186 No power to alter the dis- position of property by the rules in cases of intestacy. 4. Registration of alterations of rules. Right of a society to make regulations not incon- sistent with its rules. 5. Suits against members. 6. Exemption from income tax under Schedule D 187 Qualification of this exemp- tion by the Customs and Inland Revenue Act 1880, and effect of this qualifi- cation. No exemption from stamp duties or any other tax is given to societies. 7. Bills of exchange and pro- missory notes. 8. Contracts — Mode of making. 9. Holding and dealing with land. 10. Deposits and banking busi- ness — where the shares are all transferable — where they or any of them are with- drawable 188 Loans which would not come under the descrip- tion of banking business, (i) Loans — Limited to mem- bers. (2) Investments — Latitude permitted i8g 264 Table of Contents. Considerations on invest- ments in Government securities. 12. Acts requiring a special resolution and what is neces- sary to such a resolution . . 190 Change of name. Amalgamation. Conversion into a company. The effect of this conversion. Caution as to the name of the new company 191 13. Power of administering to intestate members. III. The rights of members indi- vidually 192 1. The power of nomination. 2. Inspection — Of the books. Of the affairs of the society generally. 3. The decision of disputes . . . 193 (i) Where the rules contain a direction. (2) Where they contain no direction, or a decision cannot be obtained. (3) Where they refer dis- putes to the justices. (4) By consent of the parties. (5) Powers of the County Courts and Registrar 194 IV. The protection of the society. 1. Generally in cases of fraudu- lent appropriation of its property. Note, on courts of summary jurisdiction. 2. In the case of officers of the society having charge of . money. (i) Provision for giving se- curity. (2) Provision for accounting on demand 195 3. Penalties on members for breaches of the rules. V. The protection of the members. I. Extent to which they are liable to contribute to the payment of debts of the society. VI. The audit of accounts and evidence 196 X. Public auditors. 2. Documents proceeding from the central office, or signed by any registrar, inspector, or public auditor. VII. The dissolution of societies. A. — I. By liquidation — volun- tary or compulsory 197 Different cases stated. 2. The appointment and power of the liquidator. 3. Advertisement in the Grt2<;««. 198 4. Termination of the liquida- tion. Penalties on not making returns. B. — By an instrument of dis- solution 199 Statement of the forms and mode of proceeding under such an instrument. C. — By cancelling the registra- tion of the society at its request 200 VIII. Provisions for enforcing the Act. I. The cancelling or suspension of the registration. (2) Notice and right of appeal. (3) Notice of the cancellation, &c. (4 and 5) Effect of the can- cellation or suspension. . 20i Case of the number of mem- bers being reduced to less than seven. 3. Pecuniary penalties. (1,2,3) Generally for offences under the Act 202 (4) Special on falsification of balance sheets or trans- gression of the provisions as to the use of the seal or registered name. (5) How the penalties are recoverable. 3. Criminal penalties. On issuing false or imperfect rules. 4. Appeals against orders or convictions 203 IX. Provisions as to societies registered before the Act was passed. X. Statement of the provisions of the Act not noticed 204 Fable of Contents. 265 PART IV. PAGE THE HELPS AND HINDRANCES TO CO-OPERATION .... 205 CHAPTER 12. The Perils of Co-operation, and How to Escaie them 207 Short recapitulative view taken in page the Manual as to the foundation and course of co-operation. .. . 208 Why co-operation has prospered in England and Germany .... 209 Change when we pass from dis- tribution to production 210 Illustrated by the Leicester West End Shoe Works 211 The twin giants — Individual Self- seeking and Collective Indif- ference , 211 Two modes of overcoming them. 212 1. The internal mode — Aid to be looked for from the scientific tendencies of the age 213,215 Analogy of this tendency to the old Biblical conception 216 2. The external mode — The effect of association on those subject to its influences. 217, 219 Note, on causes of mental un- happiness 2ig Summary of the argument and sketch of the modes of action open to us 220, 223 APPENDIX. Note I. — Friendly Societies in the United Kingdom 224 Note 2. — Ferdinand Lassalle and German Socialism 225 Note 3. — The Agricultural Popu- lation of France 230 Note 4. — Co-operative Corn Mills 231 Note 5. — Tables of the Progress of Co-operative Societies .... 232 Note 6. — Prices at which Metal Tokens can be obtained 239 Note 7. — Suggestions for an Im- proved System of Check on Sales and Money Takings .... 235 Note 8. — List of Productive So- cieties 242 Note g.— The Effects of the Sys- tem of Competition on the Distribution of Property 243 Noteio. — Work and the Workman 246 Note II. — The Distribution of Profitsin Federative Production 250 Note 12. — The Application of the Profits of Production 25 1 Note 13. — List of the Publica- tions of the Central Co-operative I'card 2^1 -I' H iHllililillllilllllliililill 000 115 662 9 %J19MNa-3V^^ ^tUBRARYQc. ^OFCAllFORi^ o (•I "^^JAavaaiH^ ^\WEUNIVERS/4 ^tfOJIlVDJO'^ ', ^EUNIVERS^ ^10SA« § Q W J i;» Q -5>^tUBRARYQc. ^.»ojnv3jo^ >^OFCAl!F0ff^ ^ ,—'1 I' § ^:lOSANCft^ .^HlBRARYOc, '•> -«•, ,^0FCAIIF0% i*OFCAllF0% t5i yj -= ... ?* i^ ■>r i^ .4\ffUNIVER% ^lOSANCHfj^ %a3AINIl-3«^ ,^! -5jftEDNfV!R% ^TinONYSOl^ '^/saaAiNn-iwv^ ^^WEUNIVER% ^lOS-ANCFlfj^