Cooperative Movement IN Great Britain BEATRICE POTTER. 4 4 THE CO-OPERATIVE MOVEMENT IN GREAT BRITAIN Opir^ions of tt^e ^pbsb. "Tint literature of Co-operation is already Toluminoas, and perhaps some might doubt whether its volume can for the present be profit- ably increased. That doubt will very Boon be abandoned by any- one who takes up Miss Beatrice Potter's luminous and suggestive \ittle volume, contributed to the ' Social Science Series,' and en- titled, 'The Co-operative Movement in Great Britain.' Miss Potter writes with a strong social faith ; we might, indeed, call it, in a sense, socialistic, if the word were not ambiguous, and, therefore, liable to misconstruction, and apt to create a prejudice. But she writes also with a profound knowledge of the industrial movement of her time, with a clear-sighted capacity to distinguish its essence from its accidence, and with a firm grasp of essential economic principle. Her study of the co-operative movement ' as one form of democratic association — as one aspect of that larger movement towards an Industrial Democracy, which has characterised the history of the British working-class of the 19th century,' — is, therefore, not a mere bald, historical chronicle, but a thoughtful and pregnant study of tendencies, causes, and effects." — The Times, " The whole volume is full of suggestion, both to co-operators and to politicians. It does not express the final word, but it is without doubt the ablest and most philosophical analysis of the cooperative movement which has yet been produced," — The Speaker. "A book written by a vigorous thinker, brimming over with ideas and suggestions." — 7%e Westminster Review. " Miss Potter's work is searching and scientific, bearing witness throughout of patient study and vigorous and independent thought." — The Daily Chronicle. " Co-operation has suffered a good deal from the somewhat indii- criminate enthusiasm of its admirers, and there was much need for a calm and sympathetic account of its history, its present position, and its prospects. Such an aocount Miss Potter has given." — The Academy. "• A first-rate piece of work."— T'^* Trade UnioniH "Fascinating and readable, and throws a great flood of lighl upon a movement that is . SU>N£y WSBB) LONDON: GEO. ALLEN & UNWIN LTD. RUSKIN HOUSE, 40 MUSEUM STREET, W.C. ({^0 First Edition, June 1891 ; Sbcokd Edition, March 1893 Third Edition, March 1895 ; Fourth Edition, April 1899 Reprinted, January 1904 ; March 1907 ; JanHary igi* March 1914 ; February 1920 THE RIVERSIDE PRESS LIMITED BDINBUROH " opinions govern men." Robert Owhn. PREFACE. IV /TY object in the following pages has been to describe briefly the origin and growth of the British Co-operative Movement as one form of democratic association — as one aspect of that larger movement towards an Industrial Democracy which has character- ized the history of the British working class of the 19th century. Hence it was essential to my purpose to present the reader with a general view of the condition of the working class in the first decades of this century brought about by the Industrial Revolution, and with a general idea of the spirit of association which resulted therefrom. The two first chapters are therefore, to a certain extent, introductory ; the history of the British Co-operative Movement beginning, at page 39, with an account of the early Co-operative Corn Milling Societies or the Union shops. viii Preface. I have to acknowledge the extreme kindness with which Mr. Benjamin Jones (Manager of the London Branch of the Wholesale Society) and Mr. J. C. Gray (Secretary of the Co- operative Union) have overlooked my proofs and have supplied me with information which could not have been otherwise obtained. I am also indebted to the secretaries of various Co-operative Societies for the readiness with which they have answered questions addressed to them. The table of the " Relative Progress of the Co-operative Movement" has been prepared by Mr. Frederick Oldman, and the percentages of Co-operative sales, per hundred of popu- lation, for the maps, worked out by him on figures supplied by Mr. Whitehead, of the Co- operative Union. BEATRICE POTTER. May ^th, 1891. PREFACE TO THE SECOND EDITION. TTOR this second edition I have done no more than correct a few verbal inac- curacies, and add an index kindly prepared by Mr. George Turner of the Working Men's College. I have made no attempt to bring the in- formation relating to the Associations of Producers up to date. Since the returns of 1889-90, upon which my classification is based, I believe that about eight out of the fifty-four societies therein analysed have ceased to exist On the other hand, a new crop of young societies has sprung up. Amid the kaleidoscopic changes which are characteristic IX X Preface to the Second Edition of this phai>c of the Co-operative Movement, I have preferred to leave unaltered my at- tempted portraiture of the position as it was in 1889-90. The coloured maps represent the business of Co-operative Societies (total sales) of England and Scotland respectively in 1889, calculated in pounds per 100 of the population of the parlia- mentary constituencies. Thus the dark green marked " 500 and upwards," mdicates that on an average each individual in that district purchased upwards of £$ worth of goods from Co-operative Societies in the year. a W. Decetnbery 1892 The coloured maps referred to above are not included in the present re-issue (1920). CONTENTS. CHAPTER I. FAGE The Co-operative Idea .,.,.' i CHAPTER II. The Spirit of Association . . , , , 32 CHAPTER III. The Store , . . . , , , 59 CHAPTER IV, Federation , . 84 CHAPTER V. Association of Producers . . , « i 117 CHAPTER VI. A State within a State . . , ^ ,170 CHAPTER VII. The Ideal and the Fact 205 CHAPTER VIII. Conclusion . 224 x{{ ConUnis APPENDIX. FAO* I- Classified Tables of Associations of Pro- ducers ...... 242 II. — Extract from Letter from D. F. Schloss 246 III. — Table of Percentages of Co-operative Sales per Hundred of Population, WORKED out in VARIOUS COUNTIES AND Parliamentary Divisions of Counties OF Great Britain. The Failures of Co-operative Stores for Twenty Years given in Counties . . . 246 IV. — Table of the Relative Progress of the Co-operative Movement , .251 Index ...,,. 257 THE CO-OPERATIVE MOVEMENT. CHAPTER I. THE CO-OPERATIVE IDEA. IT is satisfactory for Englishmen to observe, that the Co-operative Idea, the faith which inspired the first English Socialists and which became the life- blood of the Co-operative movement was purely British in its origin. The belief in a co-operative system of industry arose in the untutored mind of Robert Owen, and, doubtless, in the minds of other Englishmen, as they watched the doings of the stu- pendous revolution in industry and commerce which engrossed the energies, stimulated and governed the activity, of the middle and working class from 1770 and onwards. The initial effect of this social con- vulsion became apparent in the first fifteen years of this century. Whole districts were transformed from a country of homesteads, bordering commons and scattered far and wide among pastures and corn-fields, into a land thickly planted with cities, towns, and suburbs : a whole class of middling folk, small owners and tiny capitalists, had been changed into opposing B 3 The Co-operative Movement. armies — the rich and the poor. The Napoleonic i wars (that other great event of the early part of this century) had ended successfully for us in 1815. Towards the end of that year the Tory Ministry signed the treaty of Paris which banished Napoleon to St. Helena and established English maritime supremacy. The fear of foreign invasion was at an end, but civil war seemed imminent Mobs of starving factory hands paraded the manufacturing towns ; secret societies honeycombed with sedition and conspiracy sprang up with amazing rapidity among ■ the better paid artisans. Early in 18 17 the Ministry, triumphant abroad, virtually declared, by suspending the Habeas Corpus Act, and passing virulent coercion bills through Parliament, England in a state of civil war. Excited by these events, thoughtful men of all classes turned their attention from foreign politics to the state of their country and the condition of their countrymen. Now the changes which were the outcome of the industrial revolution were many sided and clothed themselves in multitudinous forms. Each man ap- proached the question from his own point of view, and summed up the total effect as good or bad according to the facts he chose to observe. Broadly speaking, two leading theories resulted from these various observations, depending on the beholder's satisfac- tion with, or dissapproval of, the effects of the industrial revolution, the creed of universal competi- tion on the one hand, and the faith in a possible co-operative system, to replace competition, on the other. Let us listen to these rival students, examine their facts, and test their theories. Tke Co-operative Idea. 3 First, the political economist would note the broad facts of increased population and increased wealth. The English people in 1760 numbered some six millions ; in 1820 they had increased to fourteen millions ; and they were adding one million every five years to their numbers. Next, glancing at the Custom House returns, he would see that whereas in 1760 our imports were valued at ;£^ 10,000,000 and our exports at ;;^ 15,000,000, in 1820 our imports were valued at ;^3 1,000,000 and exports at ;i^4 1,000,000. England had, therefore, in the.course of two genera- tions, doubled her population and trebled her trade. But the politician would here interpose ; he would remind the student of returns and tables that for twenty-five years of this period England had fought the battle of the world and sustained with her treasure the whole of Europe against the greatest military genius of the age, at the head of a people of twenty-six millions, inspired by an almost religious fervour for revolutionary conquest. And as a token of her lavish expenditure on her own armaments and on those of her allies, she was paying annually ;^3 2,000,000 to her creditors — this gigantic tax levied on her industry and commerce while she was monopolizing the markets of the world and preparing to form with her surplus wealth and surplus population a " Greater Britain " beyond the seas. The merchant or manufacturer would have a more personal and concrete proof of the advantageous character of the industrial revolution. He would remember the little shop in a Manchester back street from which his father despatched agents with Irish yarn and raw cotton to the homesteads of the 4 The Co-operative Movement. weavers. He would recollect the master manu- facturers arriving in the morning with bundles of cotton cloth, he would see them stepping over the way with his father for a dinner and a chat at the public to discuss with equal interest the prospect of their little crops of corn, hay, or potatoes, or the chance of an order for cotton goods from a London firm, while he himself would spend the afternoon with the appren- tices in packing and labelling the goods for London, Bristol, Norwich and the Chester Fair. And contrast- ing these humble memories of his youth with his present circumstances, the manufacturer would reflect with pride on his great factory employing some five hundred hands and working day and night at his pleasure ; or the merchant would point to his ware- house stocked with samples, ready for the inspection of agents and shippers from all parts of the country, and to all parts of the world. If either the one or the other cared to supplement their memory, they could compare their well-kept ledgers with the dirty note-books of their predecessors ; the manufacturer would calculate that one spinner in his factory turned out two hundred times as much as the cottage spinner of 1760 ; while the trader would smile as he handled the illiterate receipts of shop assistants of bygone days, and laid them side by side with the piles of bills on foreign and colonial houses pigeon holed daily by expert clerks, or discounted by the cashier at the neighbouring bank. And as an out- ward and visible sign of this two hundredfold pro- ductiveness of labour, of this industrial conquest of foreign lands, manufacturers and traders would dwell pleasantly in fine establishments surrounded by home The Co-operative Idea. 5 farms and newly planted parks ; they would visit at appropriate intervals their factories and their ware- houses, entertaining their customers with a fine vintage of old port ; they would ponder over Stock Exchange quotations and invest in financial com- panies and foreign mines ; or perchance they would pay down a good round sum towards the expenses of a Radical candidate for the suffrages of the county freeholders as a set-off to the social exclusiveness of the county magnates. But to this personal satisfac- tion with this best of all possible worlds, they would add the proud consciousness of contributing to the glory of their country. They might with truth exclaim, in the words of Macculloch's Dictionary : " The skill and genius by which these astonishing results have been achieved have been one of the main sources of our national power ; they have con- tributed in no small degree to raise the British nation to the high and conspicuous place which she now occupies." Inspired by these noble sentiments, they would hasten to sign the Merchants' Petition to the House of Commons in 1820 — a petition in favour of free trade and non-interference, and em- bodying in a terse proposition the creed of universal competition: "That the maxim of buying in the cheapest market and of selling in the dearest, which regulates every merchant in his individual dealings, is strictly applicable as the best rule for the trade of the whole nation." Now the economist, the politician, the manu- facturer and the merchant, were right from their own point of view. The industrial revolution had meant to England national existence and national growtli, 6 The Co-operative Movement. freedom from foreign invasion and control, freedom to become the workshop of the world, freedom to ply her trade and to extend her people and her language over all the continents. Neither was this the sum total of the good it had effected. The underlying principle of the industrial revolution — the creed of universal competition — the firm faith that every man free to follow his own self-interest would con- tribute most effectually to the common weal, with the converse proposition that each man should suffer the full consequence of his own actions — this simple and powerful idea was enabling a rising middle class to break up and destroy those restraints on personal freedom, those monopolies for private gain, with which a Parliament of landowners had shackled the enterprise and weighted the energies of the nation. It is true, at the period immediately before us, the middle class had attacked those re- straints only which interfered with their own action. Excise taxes on cotton goods, custom duties on raw material, laws of apprenticeship and legally fixed rates of wages and prices — all these things they had swept away. But combination among working men, emigration of artisans, and the exportation of machinery whereby a rival market was created for artisans' labour, remained penal offences. The worker obliged to sell his labour in a market rendered artificially dear by restrictions on his personal liberty, was forced to buy his food in a market heavily taxed for the support of a parasitic class of landowners. If, however, we cast our eyes over the events of future years, we shall see that middle-class reformers proved true to the faith that TJie Co-operative Idea.' J was in them. It was to a small knot of middle- class economists, and not to working-men leaders, that the workers owed the repeal of the combination laws, the repeal of laws preventing the emigration of artisans, and exportation of machinery ; it was the great manufacturing interest that obtained the repeal of the oppressive taxes on the people's food. By the potent magic of pure logic the competitive idea released social rights one by one from the grip of irresponsible authority and cleared the way for the advent of the democracy. Socialists as well as Democrats will admit that the policy of laisser faire, was the safest course for a Government which in no sense represented the will and the wants of the people. There was, however, another side to the picture. Capitalist employment, aided by machinery and mechanical power, introduced new methods of pro- duction and a new class of producers. The typical manufacturer of old England worked with his own hands, and employed as subordinate labour his family and sometimes a limited number of apprentices and journeymen. In that case the apprentice became in due course a journeyman, the journeyman a master. There existed no permanent and life-long division between employers and employed. All the processes of production were carried on under the manufacturer's roof; he owned both the means of production and the product he created ; while he, his family, the journeymen and apprentices, enjoyed together the fruits of their toil. With a limited number of workers and the inconsiderable output of the handi- craftsmen, supplying the easily ascertained wants of a The Co-operative Movement. their near neighbours, over-production on a large scale was impossible. With few wants and plenty to supply them, each man worked according to his strength and convenience. For the manufacturer usually owned or rented a few acres ; when he failed to exchange his manufactured goods advantageously for the pro- vision of the market, he and his family deserted the spindle and the loom, and betook themselves to the farm and the garden, raising sufficient food to sup- port them in health and rude comfort until the demand for the manufactured article was keen enough to afford profitable exchange. It is true the manu- facturers were as a class, even in the i8th century, ignorant, unversed in the arts of civilized life, with few interests beyond the routine of daily work, varied by the rough and somewhat barbarous sports of national holidays. Their farming was slovenly, the. land yielding a fraction of what was afterwards extracted from it under a capitalist system of culti- vation ; their labour, whether in agriculture or manu- facture, added little to the wealth of the nation, if that wealth be measured in commodities. But they handed down to their descendants vigorous bodies, and honest, healthy characters ; they formed for the community a veritable reserve fund of human energy. This condition of society was slowly changing throughout the i8th century. The long peace, im- proved means of communication, the opening up of colonial markets, the utilisation of iron and coal in close juxtaposition — these and ofher causes favoured the appearance of the capitalist intent on adding to his capital by the profitable exchange of labour and commodities. In the textile trades this embryo The Co-operative Idea. 9 capitalist would advance raw material to the manu- facturers, take from them their finished goods, and sell these at a profit in a distant market. In other trades he would gather men into a workshop, supply them with tools, and set each journeyman or apprentice to one part of a job, so that all v/orkers might attain the maximum speed and skill. As the capitalist paid each man wages equal to what he had before earned as an individual worker, while he took from ■ this co-operating body of workmen the whole product of their labour, it is obvious that he made a clear gain of the surplus yielded by the use of improved tools and by the greater skill and speed of specialized workers. Moreover, these early capitalists reaped the whole advantage from the opening out of markets by the political and commercial enterprise of the whole nation. Thus before the era of machinery the capitalist organizer had partially succeeded in divorc- ing the producer from the instruments of production and the means of subsistence. But he dealt with a body of workers whose numbers were limited by semi-feudal restrictions. The adult worker was still the chief instrument of production. In return for his labour he could exact from the capitalist a liberal allowance for himself and his family. With the introduction of machinery and with the substitution of mechanical for human power as a motor force, the dependence of the workers on the capitalist became complete. The prime instrurnent of production ceased to be the adult worker ; it became the automatic machine to which a pair of human hands were a needful appen- dage. The manufacturer, no longer the manual lO TJie Co-operative Movement. worker, was the owner and director of the factory, while the workers, apparently divested in the public mind of body and soul, became simply the " hands " manipulating the machinery which they could not control. The greed of gain, the passion for wealth, excited by social ambition and by an enjoyment of luxury hitherto unknown, overpowered the thoughts and feelings of middle and upper class Englishmen. The spirit of invention and improvement, the growing power of the mercantile class, the political necessities of the country — all laboured with concentrated force for the attainment of one great object: the production of material wealth. Henceforward cash payment became the sole nexus between the capitalist and the workers. To em- ployers, who rarely visited their factories, the labour of man, woman and child, appeared a commodity to be bought at the cheapest rate, and to be consumed, like the coke with which they stoke their furnace, with the least wear and tear to the machinery. The simplicity and small size of the earlier cotton- spinning machines fitted them for being tended by " the supple and docile fingers " of children ; while women had sufficient strength to direct the power- loom. The quick depreciation of costly machinery rendered long hours "desirable" ; little children were dragged from their beds and set to mind it from twelve to fifteen hours out of the twenty-four, forced to conquer physical exhaustion and mental weariness by the ever-present fear of the overseer's lash. The whole body of factory operatives worked, ate, and slept at the despotic call of the factory bell. Accord- ing to the creed of universal competition, this was The Co-operative Idea. II s "suffering the consequences of their own character and circumstances.** The feverish haste of modern industry, buying its raw material on credit, and pro- viding goods for a distant and unknown market, now absorbed all available labour (stimulating the in- creased population by high wages), then flung back into the ranks of the unemployed the labour it had created. One by one, mediaeval regulations, fixing wages or limiting the number of apprentices, were repealed or became inoperative. A degraded poor law provided the capitalist with material in the form of pauper children, and took from them human refuse in the shape of prematurely aged workers. Swiftly and silently there arose in the land a great army of destitute beings : fathers and sons who had been replaced by wives and children, groups of handi- craftsmen displaced by machine minders — an army recruited, after each period of depression, by a mass of workers of both sexes and all ages, demoralized beyond recovery by starvation and ignorance. During periods of steady trade, this rising proletariat became the irresistible means whereby the capitalist levelled down the wages of the average worker to the bare subsistence of the individual, and yoked all members of the family into his service. Hence the appallinff law of Malthus — population perpetually pressing on the means of subsistence — this newly developed fact was repeated glibly by the economist of the market- place as an everlasting ordinance of Divine justice. With the upgrowth of dense populations around the factories of Lancashire and Yorkshire, among the mines and potteries of the Northern counties and the Midlands, the capitalist employer conceived the idea 12 Tlu Co-operative Moicinent. of controlling^ the expenditure as well as the labour of his hands. He turned landlord and shopkeeper, fixed the price of provisions and the rent of cottages, and deducted both alike from the weekly earnings of the worker. This was the much vaunted freedom of contract between man and man. Among a multi- tude of feeble bodies and untaught minds — men, women and children — gathered together in one district, the individual whose earnings were most con- siderable, we are told by a contemporary historian, was a girl of sixteen years of age, a stunted, poor, unhealthy-looking creature, apparently unfit for work of any sort. This was universal competition as a method for securing to the race the survival of the fittest. " Why do large undertakings in the manufacturing way ruin private industry ? " ^ asks an astute Scotch economist of that period. And he answers, with laconic briefness, " by becoming nearer to the simplicity of slaves." It was in watching this slaughter of the innocents, this gradual debase- ment of his fellow-countrymen, that Robert Owen became a Socialist, and conceived the idea of a co- operative system of industry to replace the unre- strained competition of modern trade. It would be out of place here to tell the wonderful romance of Robert Owen's life. It is, however, essen- tial to remember that he was no mere visionary enthusiast elaborating fine theories in his study. He was a hard-headed self-made man — a man whose career represented in minature the chief events of the 1 " Princ. Pol. Econ., voL L p. 167. (London, 1767. Sii James Steuart.) The Co-operative Idea. 13 *. industrial revolution. Apprenticed early to a retail shopkeeper, at nineteen years of age he had saved sufficient to start as a small master in the Man- chester machine-making and cotton-spinning trade. Quickly realizing that the "new industry" required large masses of capital, he abandoned the nominal independence of a small master to become the man- ager of a large factory ; from the position of manager in one firm he became managing partner in another, until he succeeded to the absolute control of the large spinning-mill at New Lanark. It was here he tried his first experiments in practical economics. He raised the wages of his workers, reduced the hours of labour from seventeen to ten a day, pro- hibited the employment of children under ten years of age. He provided free education, free amusements, cheap provisions, good cottages for his workpeople and their families. At first his fellow-manufacturers watched with contemptuous amazement the deeds of this Don Quixote of the cotton trade ; his partners sought separation from this crack-brained philan- thropist intent on personal ruin. He answered these theoretical objections to the Socialist programme — good wages, short hours, free instructioti and free amusement — by showing, in the course of four years, a profit of ;^ 1 60,000, besides paying 5 per cent, on capital employed and raising the selling value of the factory 50 per cent. It was therefore as a king of profit makers that Robert Owen appealed to his fellow- manufacturers in the following words : — By the following details I give of the management of the New Lanark Mills, you will find that from the commencement I viewed the population, with the mechanism and every other part 14 The Co-operative Movement. of the establishment, as a system composed of many parts, and which it was my duty and interest so to combine as that every hand, as well as every spring lever and wheel should effectually co-operate to produce the greatest pecuniary gain to the proprietors. Many of you have long experienced in your manufacturing operations the advantages of substantial, well-contrived, and well-executed machinery. Experience has also shown you the difference of the results be- tween mechanism which is neat, clean, well arranged, and always in a high state of repair ; and that which is allowed to be dirty, in disorder, without the means of preventing unnecessary fric- tion, and which therefore becomes, and works, much out of repair. In the first case the whole economy and management are good ; every operation proceeds with ease, order, and success. In the last, the reverse must follow, and a scene be presented of counter-action, confusion, and dissatisfaction among all the agents and instruments intei'ested or occupied in the general process, which cannot fail to create great loss. If, then, due care as to the state of your inanimate machines can produce such beneficial results, what may not be expected if you devote equal attention to your vital machines, which are far more wonderfully constructed ? When you shall acquire a right knowledge of these, of their curious mechanism, of their self-adjusting powers ; when the proper mainspring shall be applied to their varied movements, you will become conscious of their real value, and you will readily be induced to turn your thoughts more frequently from your inanimate to your living machines ; you will discover that the latter may be easily trained and directed to procure a large increase of pecuniary gain, while you may also derive from them high and substantial gratification. ***** Indeed, after experience of the beneficial effects from due care and attention to the mechanical implements, it became easy to a reflecting mind to conclude at once that at least equal advan- tages would arise from the application of similar care and atten- tion to the living instruments. And when it was perceived that The Co-operative Idea. 15 Inanimate mechanism was greatly improved by being made firm and substantial, — that it was the essence of economy to keep it neat, clean, regularly supplied with the best substance to prevent unnecessary friction, and by proper provision for the purpose to preserve it in good repair, — it was natural to conclude that the more delicate, complex living mechanism would be equally improved by being trained to strength and activity, and that it would also prove true economy to keep it neat and clean, to treat it with kindness, that its mental movements might not experience too much irritating friction ; to endeavour by every means to make it more perfect ; to supply it regularly with a sufficient quantity of wholsome food and other necessaries of life, that the body might be preserved in good working condition, and prevented from being out of repair or falling prematurely to decay. Failing to convince his fellow-manufacturers, he appealed to the Government to alter the conditions of the working classes throughout the country. It is to Robert Owen we owe the idea of a factory act. In 1816, he pressed on the consideration of a Committee of the Commons a Bill limiting the hours of all factory labour to ten and a half a day, forbidding the employ- ment of children under ten years of age, and instituting a half-time system for those under twelve. It is need- less to say the committee rejected this drastic measure. But largely owing to his ardent advocacy, a Factory Act was passed in 1818, which, though practically ineffectual, served as a lever for future agitation and as a useful precedent for more stringent regulation. It was Robert Owen who proposed a national system of free and compulsory education and the establish- ment of free libraries ; it was he who suggested to provincial authorities that they should undertake the housing of the poor ; it was he who advocated muni- cipal or county organization of labour. In truth, l6 The Co-operative Movement. Robert Owen was the father of English Socialism — not the Socialism of foreign manufacture which cries for an Utopia of anarchy to be brought about by a murderous revolution, but the distinctively English Socialism, the Socialism which discovers itself in works and not in words, the Socialism that has silently embodied itself in the Factory Acts, the Truck Acts, Employers' Liability Acts, Public Health Acts, Arti- sans' Dwellings Acts, Education Acts — in all that mass of beneficent legislation forcing the individual into the service, and under the protection of the State, So far we have considered Robert Owen as a man of action. Successful in the application of Socialist principles to a population of 2,000 persons at New Lanark, he had attempted through " this example in practice " (to use his own words) " to induce the British Legislature to enact such laws as would secure similar benefits to every other part of the population, — laws which would prevent the majority of Englishmen from being trained in gross ignorance and surrounded by temptation." He failed with the Government, as he had failed with his brother manufacturers. There remained only one other course by which he could realize, on a large scale, his economic and social ideal, by establishing communities of voluntary associates, who would accept his views and practise his doctrines. It was in this attempt that he became the founder of the Co-operative movement. I will not detain the reader with a description of the communities actually established by Robert Owen and his followers. These communities, promoted and supported by upper and middle-class men, are in no way connected with the rise of the great working-class The Co-operative Idea. 17 organization — the Co-operative movemerfc, Robert Owen appealed to the working class rather as the prophet of a future State, than as a practical reformer. In the papers, pamphlets, periodicals which he spread broadcast, with munificent energy, into the homes of the people, he presented to his fellow-countrymen a moral ideal and economic theory accepted with fer- vour by the most ardent reformers of the time. For men of the calibre of Lovett, Hetherington, Watson (the leaders of the Chartist movement), of Charles Howarth and William Cooper (the originators of the modern Co-operative movement), drew their inspira tion direct from Robert Owen, and acknowledged it. Thus two separate and important branches of social reform — the socialistic legislation of the last fifty years on the one hand, and the Co-operative move- ment on the other — sprang out of the teaching of Robert Owen — the apostle of a " New System of Society." A brief analysis of the distinctive features of his philosophical position, and a rapid statement of his scheme of social reform, is therefore essential to the historical treatment of the Co-operative movement. But I shall not attempt to discuss the scientific soundness of Robert Owen's views. I shall aim solely at a clear statement of his theory, so that the reader may estimate, in future chapters, whether or no, or to what extent, the Co-operative Idea has been realized in the Co-operative movement. In the address to the superintendents and manu- facturers (quoted above), and in the " Essays on the Formation of Character," to which it was prefixed, Robert Owen elaborated the principles of his social- ist faith, and shadowed forth his Co-operative system. C 1 8 Tlie Co-operative Movement, The precept " that every man should be left to suffer the consequences of his own action," he emphatically denied. In reply to the advocacy of universal com- petition as a process of natural selection absolutely essential to the progress of the race, he declared that it was the duty of those " who have influence in the affairs of men " (by which he meant the employers or the Government) " to form the character of their dependants by placing them in healthy moral, and enjoyable surroundings." In short, though Owen admitted the presence of inherited faculties, his pecu- liar tenet was a strong conviction that the principal factor in the formation of character was the physical and mental environment of the individual from birth upwards. Hence his unbounded belief in the effect of education. Indeed, he went so far as to assert : " that any general character, from the best to the worst, may be given to any community, by the appli- cation of proper means, which means are to a great extent at the command and under the control of those who have influence in the affairs of men." Now I think we shall best understand the radical distinction between the " Creed of Universal Com- petition," and the " Co-operative Idea," if we reduce these two rival theories to their biological equivalents. The economist of the market-place, in his advocacy of Universal Competition, was groping after the bio- logical law of the survival of the fittest through the struggle for existence. This struggle for existence, he virtually declared, was the sole factor of economic pro- gress. The Socialist Reformer, on the other hand, was expressing in colloquial language the equally true and important biological fact: the modification of structure The Co-operative Idea. 19 brought about by the modification of function, in other words, the law of functional adaptation. Thus Owen contended that the whole factory population were being degraded by an every-day life which stunted their mental and physical development By habitual disuse of the nobler faculties of human nature, by persistent under-feeding, over-strain, insani- tary conditions, this mass of men, women, and children, were being artificially transformed into a population of brutalized minds and enfeebled bodies. Secondly, he asserted the converse proposition. He affirmed that if we transported the children of these people into healthy surroundings, and trained their physical and mental faculties, this alteration in their daily activity would produce an alteration in character. Thus Robert Owen insisted on the biological principle of functional adaptation, and applied it to the collec- tive character of the race. He held this doctrine in an exaggerated and crude form, and overlooked the importance of the other factors. This one-sided view of human development detracted from his re- putation among enlightened persons as a scientific thinker. Working men, however, judged the sound- ness of his theory by its practical application. While Owen's hypothesis led to legislative and volun- tary effort to raise the condition of the workers as a class, the doctrine of unrestrained competition re- sulted in a rigid policy of laisser faire2Si6. a deliberate acquiescence in the physical and mental degradation brought about artificially by the conditions of em- ployment under the New Industry. It was not surprising, therefore, that the working class accepted Kobert Owen as their apostle. 20 TJu Co-operative Movement I have purposely emphasized the first principle of Robert Owen's social philosophy because it underlay his practical scheme of social regeneration as well as his theoretical position. He steadfastly denied that the politics and enterprise of the nation should be directed solely to the acquisition of territory abroad and to the accumulation of wealth at home. He affirmed as the only basis to a science of politics, that the one legitimate object of society is the improve- ment of the physical, moral, and intellectual character of man. The wealth of the nation was no longer the goal of political and economic action ; it was simply a means to an end — the formation of a noble char- acter in the citizen. But though Political Economy was thus reduced to a subordinate division of Social Science, Owen elaborated a definite economic theory upon which he based his " New System of Society." Broadly speak- ing, his logical position might be stated thus : All wealth is the result of human effort ; the sole object of wealth is the satisfaction of human desires; human desires should be gratified with a view to improving the quality or increasing the quantity of human effort. From these propositions he deduced a theory of equitable exchange and an informal theory of con- sumption. Now it is exactly this theory that co- operators both of the First and Second Movements attempted to introduce into industry. I have there- fore gathered up the broken ends of economic prin- ciple scattered throughout his voluminous writings and joined them together, as best I could, in a con- secutive form, so as to give a general idea of his old economic position. The Co-operative Idea 21 Now ihe keystone of Robert Owen's Co-operative system of Industry was the elimination of profit, and the extinction of the profit-maker. Profit upon cost price he considered as the origin of all evil, the potent cause of the misery of the poor and the greed of the rich, the ever-abiding incentive to in- dustrial war between individuals, classes, and nations. The profit-sharing schemes which have found favour with the latter-day school of co-operators would have been denounced by Robert Owen as an attempt to spread the contagion of profit-seeking to the working classes. " Profit upon cost price," he exclaims, " can only be obtained when demand is equal to, or ex- ceeds supply, while the interests of society require that supply should at all times exceed demand." ^ He cited as an example of the competitive system of individual and conflicting interests, based on profit and carried out by the profit-maker, the condition of England in 1817, the ominous fact that the cessation of a destructive war caused factories and machinery to become valueless, while bands of workers roamed the country in absolute starvation. He argued that under a true system of general and united interest over-production could not exist ; for when the wants of all citizens were supplied, the surplus energy and wealth of the community could be devoted to the better education of the children, to the development of the intellectual and artistic faculties of the whole body of the people, to the technical improvement of manufac- tures, or to the development of trade. Accordingly we find Owen planning a scheme of ' An Explanation of the Causes of Distress, 1823. 22 The Co-operative Movement. the equitable exchange of commodities according to the cost of production. " Profit on price," he con- tended, was realized by selling one commodity at above the cost of production, or buying another com- modity at below the cost of production, a fraudulent appropriation of the possessions of the consumer, on the one hand, or a fraudulent withholding of the earnings of the producer on the other. It is clear, therefore, the economic groundwork of Robert Owen's new system of society was a peculiar analysis, or rather determination of the cost of production. The cost of production, represented to Robert Owen's mind, the wages of capital (past human effort) and the wages of labour (living human effort). Now he calculated the wages of capital and the wages of labour on precisely the same basis. In the case of fixed capital in the form of instruments of production, the wages consisted in the amount re- quired to keep the machinery and buildings in an efficient state of repair, to insure against trade risks and depreciated value, and to provide for progressive improvements of mechanical contrivances, so as to take full advantage of the inventive talent of the commu- nity. Circulating capital, in the form of commodities or raw material, were transformed through consump- tion into living energy — a mere transformation of matter into force. Labour, which included all forms of human effort, he held, should be rewarded accord- ing to its needs ; that is, according to the expenditure required to keep it in a full state of efficiency, pro- viding, at the same time by education, in its widest sense, for the progressive improvement of the physique, intellect and character of the individual and the race ; The Co-operative Idea. 23 and including an allowance for the risk of illness or incapacity, and for the decrepitude of old age. Ac- cording to his views, any other method of remunerating the workers would lead either to the vicious circle of individual accumulation or needless expenditure, or would be more wickedly wasteful of the factors of wealth-production than a deliberate policy of dirt and disrepair in the case of buildings and machinery. In this theory of wages we distinguish an informal theory of consumption. The standard of wage was fixed, not by competition between individuals for em- ployment, but according to the personal expenditure needful to efficient citizenship. But it is important to note that, from this point of view, the personal abstin- ence to which the growth of capital is usually attri- buted, would, if it were real abstinence, be a social immorality, impairing the faculties of the worker, the iitizen and the parent ; whereas there would exist, under this highly organized distribution, no margin of personal income for that more common form of abstinence — the personal preference for the power of accumulated wealth to further needless or tiresome expenditure. The reward of abstinence becomes, therefore, a meaningless term, with the practical result that a charge for interest finds no place in the wages of capital in Robert Owen's ideal system, though it was a necessary condition in the communi- ties actually established. But before Owen could hope to persuade his slow- thinking and apathetic fellow-countrymen to follow him out of this house of bondage, where men were sharply divided into a class of rent-holders and profit- makers on the one hand, and a mass of wage-earners 24 The Co-operative Movement. on the other, into that promised land of common ownership and joint enjoyment, he had to overcome two apparently insurmountable barriers. To convert the people to his new system of society, he must solve two problems. First, he had to imagine some method of adjusting the supply of commodities to the demand without having recourse to the device of competitive trading — to the eager sharpsightedness of rival traders intent on profitable exchanges. And, secondly, he had to provide for the rapid accumu- lation of wealth, whereby an increasing population might be supplied with the instruments of produc- tion ; he had to ensure this creation of surplus wealth without the incentive to personal effort, without the motive for personal abstinence, yielded by the greed of gain, or the desire for the artificial personal dignity of private property. The task of adjusting production to demand (con- sidered by economists as the peculiar function of the profit - making instinct) Robert Owen maintained would be materially eased by an enforced abandon- ment of luxury and fashion, and by the replacement of the present anarchic expenditure by a consump- tion based on the scientific ascertainment of the needs of different classes of workers. For it must be re- membered that Robert Owen had a firm faith in the advent of a social science — a science which should foretell the functions and requirements of society, with a view to the development and gratification of the individual in the same manner that chemistry and physics had discovered the laws of matter and motion, and had succeeded in analysing, reconstitut- ing, isolating and combining, according to the de- The Co-operative Idea. 25 liberate purposes of man. Impressed, as a practical manufacturer, with the ease with which the faculties of man had been isolated and perfected by division of labour, and specialized workers combined in defi- nite proportions under the factory system, he ima- gined that with adequate knowledge it would be feasible to control the desires of men, or to divert them into channels of social v/elfare. The stimulus afforded to the creation of wealth by the profit-making instinct, Robert Owen believed, would be amply compensated by the Co-operative enthusiasm and greater efficiency of the main body of workers — including managers, inventors, foremen, travellers, and other assistants, none of whom, under the existing arrangement, shared the profits of the capitalist entrepre7ieur. In denying that avarice and desire for self-gratification were the sole wealth- producing motives, Robert Owen simply forestalled the more scientific conclusions of modern economists. Marshall, in his great work on Economics tells us that "the accumulation of capital is governed by a great variety of causes : by custom, by habits of self-control, and forecasting and realizing the future ; and, above all, by the power of family affection." Owen extended the sphere of this affection from the narrow circle of the family to the wider world of the community : he had faith that custom, self-control, intelligence and emotion would be moulded and leavened by an all-pervading love of humanity, and such way would become a great wealth-producing force. For in contradiction to the competitive for- mula, " each man for himself and devil take the hindmost," he declared " that the happiness of sell 2$ The Co-operative Movement. clearly understood can only be attained by a direct and conscious service of the community." Thus the profit-maker was replaced by an ideal civil servant. The reader will have perceived, by this time, that Robert Owen denied the necessity, or even the advan- tage, of private property. In the communities he proposed to establish, all things were to be held in common. He maintained that through the Indus- trial Revolution private property had become the privilege, as profits had become the perquisite of a strictly limited class. For in the pamphlet on the Causes of the Present Distress he grasps the full significance of that central fact of the New Industry — the destruction of individualist production, a system typified by the peasant-proprietor, also a manufac- turer, paying neither rent nor interest, and owning both the instrument and the product of his labour, and the creation in its place of social production — ^of a co-operating body of workers, each man, woman or child v/orking (from an economic point of view) with and for the others. Owen perceived that the indi- vidualist producer, in direct connection with the con- sumer of his product, was replaced in modern industry by a hierarchy of workers, using different degrees of intelligence and skill, from the designer and manager to the general labourer and child-piecer — all alike subordinate to the huge factory mechanism, which embodied the enterprise, the inventions and the labour of other groups of workers. Under the factory system no worker could point to a yard of cotton or woollen cloth and say, " This is the result of my own labour, this I may rightfully keep for my own con- sumption." Moreover, with the growth of inter- The Co-operative Idea. 27 national trade no worker could personally dispose of the product of his labour to the actual consumer. In- dividualist production was a thing of the past ; but individualist appropriation of the product of social labour, — the absorption by the capitalist of the net result of Co-operative industry, after allowing a bare and intermittent wage to the manual worker, a decent salary to the brain worker, and when possible declining to acknowledge the claims of the inventor, together with individualist exchange, buying commodities at the cheapest rate and selling them at the dearest, were still dominant. He proposed, therefore, in his Co-operative com- munities, to complete the unfinished work of the industrial revolution by introducing the Co-operative system (which already existed in the production of wealth) into the ownership of land and fixed capital and into the exchange of commodities. In other words, he attempted to substitute for private property a communal possession of land and a communal accu- mulation of wealth ; for competitive trade, the equit- able exchange of commodities between various groups of united workers, according to the social vahie of each commodity {i.e., the cost of production, a terrri to which he attached, as we have seen, a peculiar meaning). By this new organization of production and distribution he imagined that he would end that chronic disaster of periods of inflation, and periods of depression ; that paradox of 19th century trade, the increased production of commodities followed im- mediately by the starvation of the producer. That Robert Owen provided an adequate stimulus to the accumulation of wealth or an adequate motive 28 The Co-operative Movement. for the mutual gratification of men s desires, will be vehemently disputed. But the creation of more or less material wealth was, in Robert Owen's eyes, a small matter beside the wholesale degradation of character involved in a system avowedly based on an unscrupu- lous pursuit of individual gain. In truth, the idea underlying Owen's Co-operative system was a deeply rooted conviction that a system of society avowedly based on that " beneficent private war " (to use the words of Sir Henry Maine) "that makes one man strive to climb on the shoulders of another and re- main there," — that good old-fashioned shouldering of separate interests, was no system whatsoever, but a senseless repetition of primeval anarchy in the world of modern industry. Robert Owen preached the ancient doctrine of human brotherhood —the hope, the faith, the living fact of human fellowship — a faith and a hope resounding in the word of one who has followed in his footsteps. " Forsooth, brethren, will ye murder the Church any one of you, and go forth a wandering man and lonely, even as Cain did who slew his brother "i Ah, my brothers, what an evil doom is this, to be an outcast from the Church, to have none to love you and to speak with you, to be without fellowship ! Forsooth, brothers, fellow- ship is heaven, and lack of fellowship is hell ; fellow- ship is life, and lack of fellowship is death; and the deeds that ye do upon the earth, it is for fellowship's sake that ye do them ; and the life that is in it, that shall live on and on for ever, and each one of you part of it, while many a man's life upon the earth from the earth shall wane."^ ^ The Dream of John Ball. William Morris. 'The Co-optrative Idea. 29 Such was Robert Owen's Co-operative ideal : an ideal which we find, in a more or less mutilated form, in the contemporary and immediately succeeding Co- operative magazines and periodicals, and which still lingers in the pages of the Co-operative News. It was an ideal which required for its realization a science which had not arisen, a character which had not been formed, economic and legal conditions existing nowhere in the purely aristocratic societies of Europe. Above all, unless it were to be subjected to an iron-bound tyranny, such a community would necessitate the development of an administrative system, of the nature of which even Owen himself had formed no conception, and which could only orig- inate in a pure and enlightened democracy. In face of these insuperable obstacles the principles of Co- operation were not only incapable of fulfilment, but, during Owen's lifetime, were not destined to meet with a full and fair trial. For where, in the wide world, could Robert Owen discover a body of asso- ciates whose faculties had been developed on his theory of consumption, or who had inherited or ac- quired characters fit for the difficulties of associated life and self-government ? Naturally enough, the communities established by him or his followers were the resort of the unemployed — of workers already degraded by starvation and idleness, or of restless or discontented spirits incapable of the most elementary duties of citizenship. And sup- posing a given number of picked men and women, inspired by heaven-born zeal for social service, had been willing to form a co-operative association, where would they find free and unappropriated land, the 30 TJie Co-operative Movement. coal, the iron, the timber wherewith to accumulate the capital needful for manufacturing on a large scale ? At the very outset these communities had, under the existing order of things, to pay rent and interest — a rent that could be raised indefinitely on the improved value of land and buildings. Indeed history tells us that the one successful experiment in Co-operative communities— Ralahine in Ireland — was broken up and dispelled by the bankruptcy of an absentee landlord, the extensive improvements made by the community being confiscated by his creditors. And granting the ability of a given community to pay out the landlord and the capitalist, what should prevent these men or their children, surrounded by competitive civilization, from reverting to that lower type of the mere capitalist or landlord living on the labour of incoming wage-earners refused full fellow- ship in property and enjoyment } That was the fate which had actually overtaken mediaeval municipali- ties and mediaeval guilds ; this was the fate in store for many future Co-operative societies, of the isolated and individualist type, in England and France. Communities, artificially created, and cut off from the life of the nation, were foredoomed to failure. Owen failed in voluntary Co-operation as he had failed in State Socialism, and for exactly the same reason. Flattered by the attentions of ministers, nobles, kings, he fondly imagined that a sudden social reformation couLd be brought about by foreign potentates and English magnates. He refused to countenance the Reform movement ; he appealed with confidence to a government of landlords and capi- talists to introduce a Factory Act; and he imagined TJie Co-operative Idea. 3 1 that individual, landlords or employers would be the founders of successful Co-operative communities. He had not grasped the significance of Democracy as a form of association whereby the whole body of the people acquires a collective life — the internal Will to transform institutions preceding the external act of reform. Our Owen " failed because not poet enougli to understand that life develops from within." He saw the goal, but mistook the means. He ignored Time, and he despised Democracy — the essential condition, and the indispensable instrument for the progressive and abiding Co-operative organization o* society. CHAPTER II. THE SPIRIT OF ASSOCIATION. IT was well for the ultimate success of the Co- operative movement that the great majority of intelligent working-men, grimly intent on escaping from out of the house of bondage into the free wilderness of political democracy, concerned them- selves little with beatific visions of the promised land of their inheritance. To a people weighted with taxes, bound hand and foot by laws against free combination and free emigration, chained to the ground by the law of settlement, a scientific theory of consumption, an equitable distribution of wealth, or a communal ownership of land and capital, seemed somewhat remote and unattainable objects. The sound instinct of the English people was rudely but effectively expressed by a Wigan weaver, present at a meeting of gentry held in the hall of that rotten borough under the chairmanship of the borough owner, to consult about the distribution of wealth in the form of soup to starving operatives : " We do not want your soup ; give us our rights, and we shall eat roast beef." The reformers led by Cartwright, Cobbett, Place, and Burdett, were moved, equally with Robert Owen, to The Spirit of Association. 33 vigorous exertion by the sight of the intolerable suffer- ing and degradation of the whole people. " England now contains," writes Cobbett in 1820, "the most miserable people that ever trod the earth. It is the seat of greater human suffering, of more pain of body and mind than was ever before heard of in the whole world." But with the practical sense of an English- man, Cobbett and his fellow-workers deliberately shut their eyes to the economic causes of the people's distress — causes over which working men, in their present political and social servitude, had no control ; and concentrated their whole energy on Parliamentary 'reform. " Thus then, my fellow-countrymen, it is not improvements in machinery ; it is not the grinding disposition of your employers; it is not extortions on the part of bakers and butchers, and millers and farmers, and corn dealers and cheese and butter sellers — it is not to any causes of this sort that you ought to attribute your great and cruel sufferings." To William Cobbett, elaborate plans for the elimina- tion of profits, and the absorption by the community of rent and interest, seemed futile and fanciful philan- thropy in face of the great proletariat, who had lost the right of voting taxes (that theoretically inalienable right of every Englishman), who were denied the right of public meeting and free speech, in whom combina- tion to raise wages was a criminal offence, and to whom associations for trading and manufacturing purposes were rendered impracticable. Factory Acts, Public Health Acts, Education Acts, Adulteration Acts — if needful, a new system of society — "these and all otlier good things," cried the people's tribune, "must be done by a Reformed Parliament — we must D 34 The Co-operative Movement. have that first, or we shall have nothing good ; and any man who would beforehand take up your time with the detail of what a Reformed Parliament ought to do in this respect, or with respect to any change in the form of Government, can have no other object than that of defeating the cause of Reform." Bamford tells us that at the end of 1816, the writ- ings of William Cobbett suddenly became of great authority, and were read on nearly every cottage hearth in the manufacturing districts. He called on the people to combine — to stand shoulder to shoulder, and with the stirring cry for political freedom, he effectually aroused, among all sections of the workers, the spirit of association — the one living force of all social organizations. But the eventual outcome of William Cobbett's ap- peal to the political instinct of the English people was clearly visible even in his own teaching. " It is the sum taken from those who labour to be given to those who do not labour which has produced all our present misery," urged William Cobbett to the Luddites. " Whatever the pride of rank, of riches, or of scholar- ship, may have induced some men to believe, or to affect to believe, the real strength and all the resources of the country ever have sprung and ever must spring from the labour of its people," repeats Cobbett to his friends and fellow-countrymen — words which might have been uttered by an Owen or a Karl Marx. "You pay a tax on your shoes, soap, candles, salt, sugar coffee, malt, beer, bricks, tiles, tobacco, drugs, spirits, and indeed on almost everything you use in any way whatever," and the proceeds of these taxes support a privileged and parasitic class, adds the practical The Spirit of Association. 35 politician, his whole mind bent on rousing the people to the first step. " You labour for the common weal ; why not control the forces of the commonwealth ? " whispers the democratic idea. " Therefore," continues Cobbett, "we ask for nothing new. There is no prin- ciple, no precedent, no regulation favourable to freedom (except as to matters of mere detail) which is not to be found in the laws of England, or in the examples of our ancestors. We have great Constitutional laws and principles to which we are immovably attached. We want great alteration, but we want nothing new. Alteration, modification to suit time and circumstance, but the great principle ought to be and must be the same, or else confusion will follow." Unlike Owen and other Utopians, Cobbett understood the mind of the English Democracy, and recognised growth as an essential element of social reformation. The Co- operative organization of industry had to be lifted from off its high place in the minds of philosophers, on the bookshelves of kings and cabinet ministers, on the tables of great ladies — this self-consciously perfect new system of society had to be transformed into a mere matter of detail, to be worked out amid the plodding uniformity of common life, slowly and unconsciously, in back streets and crowded cities, by the average sensual man under the blind eye of that great English fetish, the immortal, infallible, unchange- able law and principle of the British Constitution. It is important to realize that the successful work- ing out of the democratic idea — the dogma that no man should be taxed without the consent of his repre- sentative — involves the acceptance of those principles essential to representative self-government in all its 36 The Co-operative Movement. forms and the presence of those qualities which alone can insure its success. In the first instance, the com- munity must agree to abide loyally by the decisions of the majority ; without this initial self-subordination no democratic society is possible. Further, the com- munity must be sagacious in the choice of represen- tatives; the whole body of the members must exercise a constant watchfulness over the administration of their affairs, combining this watchfulness with trust and generosity towards officials. And, lastly, there must exist within the community men fitted by energy, enthusiasm and integrity for public service. Without these self-governing faculties the reformer's appeal to the democratic idea, Owen's creation of the Co-operative ideal, would have been powerless and without avail. During the i8th century, when the spirit of association seemed stifled beneath social apathy and the economic isolation of small pro- prietors and domestic manufacturers (protected in life and property by a strong central government), it is interesting to observe that the inborn capacity of Englishmen for self-government, declared itself in religious dissent. Throughout the last century groups of fellow-thinkers, uniting together as Independents, Congregationalists, and Baptists, erected chapels and schoolhouses in the then sparsely populated manu- facturing districts, or in the trading centres that were scattered far and wide in the Midland and Northern Counties. These separate self-governing societies exhibited all the features of pure democracy. Each man and woman voted on equal terms for the elders or deacons — a committee of management — to whom they entrusted the common purse, and frequently the The Spirit of Association, 37 choice of the minister. Each member of the con- gregation checked the administration of the elders, and criticised the doctrine of the minister, while the whole congregation watched over the eternal welfare, moral conduct, and physical wants of the younger and weaker individuals. It is difficult to over-estimate the debt which the English democracy owes to the magnificent training given by Protestant Dissent in the art of self-government. And it is a significant fact that Lancashire, the birthplace of the Co-operative movement, the stronghold of Trades Unions and Benefit Societies, the foremost county in municipal enterprise, earned for itself, in the i8th century, the unenviable reputation of being the land of chapels, Sunday-school teachers, and heterodox ministers — a prevalence of religious disorder attributed, by ecclesiastical authority, to the innate " cussedness " of Lancashire folk, "who loved to manage their own affairs in their own way." But if the social isolation and economic self-suf- ficiency of the family in the i8th century proved barren of associative effort, except among dissenting congregations, the industrial revolution, sweeping over the staple industries of the kingdom, levelled all barriers, and opened out channels of communica- tion to the democratic organisation of labour. The massing of men under the factory system, the mar- shalling of the whole army of workers under one code and one discipline, the common stigma attached to the wage-earning class as " dregs," " scum," " mob," "swinish multitude," the legal emancipation of the employers and their disavowal of any moral respon- sibility for the condition of their workpeople, to- 38 The Co-operative Movement. gather with the infamous laws against the free com- bination, emigration and settlement of the workers — all these circumstances lent the opportunity and supplied the stimulus to the formation and develop- ment of political, trade union and co-operative associa- tion. In these troubled and excited times of State trials, sedition bills, suspension of the Habeas Corpus Act, of secret committees of both Houses on the state of the country, while Owen was declaim- ing on his new system of society to aristocratic audiences, and Cobbett orating to the journeymen and labourers of England, Wales, Scotland and Ire- land on the cause of their present miseries — in these dark days, when everything tended, according to Lord Brougham, to the complete separation of the higher and lower orders, leading inevitably to anarchy and despotism, a new spirit of fellowship was springing up throughout the length and breadth of the land, leavening the common lump of men, and initiating an intellectual and moral fermentation, which dis- covered itself in diverse and manifold forms. Here the spirit of association clothed itself in Hampden Clubs, Spencean Societies, and militant Trade Unions, covering risks and enlightening proceedings with oaths and symbols worthy of the repression and superstition of the middle ages ; now this same spirit disguised itself in the respectable garb of Sunday- school classes, mutual improvement clubs and benefit societies, or here and again it adopted the mild industrial type of the early corn-milling and baking societies, of the General Redemption Societies and the Union Shops. As students of the Co-opera- tive movement, it is with these last, and at that The Sprm of Association. 39 period, least important manifestations of the spirit of association, that we are directly concerned. But we should miss the national significance of the Co- operative movement, the spiritual meaning of the future grocer's shop, if we failed to realize that all these manifold forms of democratic association, with their various ways and different methods, had one aim and one motive — the same aim and the same motive, curiously enough, described as the cause of the mediaeval communes : the desire on the part of a majority to regulate and to limit the exploitation of their labour by a powerful and skilled minority. The Co-operators, inspired by Robert Owen, added to this self-assertive instinct of an oppressed but energetic people a high ideal of communal life, a tenderness for vested rights, a conception of social service and social welfare wide enough to include honest citizens of all ranks. Nevertheless, whether we examine into the petty attempts and unnoticed failure of the early Co-operators, or whether we watch the great sustained effort of the modern Co-operative movement, it will be borne in upon us that Co- operators have succeeded or have failed exactly in so far as they have accepted or denied the principles, possessed or lacked the qualities, essential to all forms of democratic self-government. A detailed account of the early working men's associations for trading and manufacturing purposes has been given by Mr. Benjamin Jones (manager of the London Branch of the Co-operative Wholesale) in a series of admirable papers, entitled " Short Studies of Co-operative Production," published in the Co-operative News of last year. These papers consist 40 Tlu Co-operative Movement, largely of well-selected extracts from contemporary MSS. or printed records, supplemented by the per- sonal knowledge of the writer and his fellow-co- operators of the traditional history of those societies which have survived for the better part of a century. I have ventured to make free use, in these shorter studies of the whole movement, of some portion of the matter contained in these papers without in any way exhausting their interest to future readers. First, let me remind the reader that there are two recognised forms of Co-operative Association — associa- tions of consumers intent on securing low price and good quality in articles of common use by eliminat- ing the profit of the trader and manufacturer, and associations of producers anxious to obtain the full value of their labour by absorbing the profit of the employer. For a right understanding of the Co-operative movement it is of the utmost importance that the student should, once for all, dismiss from his mind the common classification of Co-operative societies into distributive and manufacturing associations, to- gether with the vulgar error that Co-operative pro- duction has failed and Co-operative distribution has succeeded. The working men's stores of Great Britain manufacture, on their own account, to the extent of three millions a year, and the productive departments of the English and Scottish Wholesale societies, to- gether with the federal corn-mills and baking societies, show an annual turnover of two millions ; while the total production of commodities by so-called asso- ciations of producers (some of which are mere joint- stock companies governed by the shareholders) The Spirit of Association. 4' amounts only to an annual trade of ;^500,ooo. In the course of nij narrative the reader will perceive that the real distinction between an association of con- sumers and an associati m of producers is not a matter of "distribution" or " production," but resolves itself into a question of administration ; it rests on two opposing, and mutually exclusive theories of represen- tation or methods of government, to be described later on. In this and the two succeeding chapters, I shall deal principally with the first class of Co-opera- tive societies, I mean with associations originated by bodies of consumers. For these associations alone show the principle of growth and continuity^ and form the backbone of the two Co-operative move- ments of 1828-34, and of 1844 and onwards. Asso- ciations of producers, on the other hand, start up, in all places and at all times, arise and disappear like crops of mushrooms, with perplexing rapidity, and frequently without trace. I shall attempt, in a separate chapter, to catch up these broken ends of Co-operative enterprise, and give the reader some general idea of the variety of their constitution and some conception of the leading causes of their con- stantly recurring failure. Now the earliest Co-operative societies of British working men, of which we have any clear record, were isolated corn-mills and baking societies — asso- ciations of consumers originating in a growing resentment among the poorer classes against the extortions of millers and bakers through monopoly prices. These societies were, however, primarily engaged in a manufacturing process ; at the outset, therefore, the common classification into distributive 42 77/^? Co-opettttive Movement. or trading societies, representing the interests of the consumer on the one hand, and productive or manu- facturing societies formed in the interests of the producer on the other, is proved untenable. An interesting little book, "An Inquiry into the Causes of the Present High Prices," published in London, 1767, throws an accidental but vivid light on the exciting causes which led to the formation of these early pre-Owenite associations. Millers have indeed within a few years raised immense for- tunes, and with incredible expedition ; and bakers in general thrive and get rich in a proportion far beyond what is seen in other trades. But the riches of both these are drawn from the general body of the people. For the law against adulteration has not its full effect. The veriest bungler in these trades may continually break this law without the least danger of discovery. In a footnote we are told " that the manufacturers and other principal inhabitants of Wolverhampton are so sensible of this, that they have lately built by subscription a corn-mill for the use of the poor only, for they find by their calculation they can pay themselves fair interest for their money, and at the same time make a considerable saving to the poor." Toward the end of last century the millers' monopoly became intensified by the conversion of many corn-mills into cotton and other factories. In 1796 a parish windmill was erected by the gentry on Barham Downs for the use of the poor. But in the previous year the working-men of Hull had taken the matter into their own hands and addressed the following petition to the aldermen and mayor of the borough r — The Spirit of Association. 43 We, the poor inhabitants of the said town, have lately ex- perienced much trouble and sorrow in ourselves and families on the occasion of an exorbitant price of flour. In consequence thereof, we have entered into a subscription, each subscriber to pay IS. \d. per week for four weeks, and bd. per week for four weeks more, which is bs. 4 of capital subscribed and wages received. And in describing the final abandonment of profit-sharing at the Mitchell Hey mills, Mr. Holyoake indulges in a couple of pages of rhetorical invective, which culmin- ates in the following phrase : " The pryamid of gain, which is not based on the sentiment of justice, is a mere rascally pile which an honest man would rather not touch." Similar opinions, based on this fundamental dis- tinction between the services rendered to society by the producer and the distributor, are still held by the individualist school of Co-operators. During the last no TJte Co-operative Movement. revision of the Rules of the English Wholesale Society (August, 1S90), Messrs. Neale & Greening proposed an elaborate scheme whereby each produc- tive department (for instance, the Boot Works at Leicester, and I imagine the New Corn-mill on the Tyne), should be registered as a separate society, and the workers therein endowed with a large measure of self-government and a considerable por- tion of the profits, with the ultimate aim of " hand- ing over a well-stocked and well-appointed factory and thriving business" to each separate brother- hood of workers. But they omitted, in these pro- posals of reform, to deal likewise with the furnishing or grocery departments, or to satisfy the equally legitimate aspiration of the drapery buyer or bank clerk towards that ideal of self-employment and equitable participation in the profits of labour — a composite ideal, the theory and practice of which we shall discuss in the next chapter. Let us, therefore, briefly consider this subtle superiority of the services Jf the so-called producer over those of the distributor from the point of view of the economist and of the man of business. Hear first the man of science : — Man cannot create material things. When he is said to produce material things, he really only produces utilities. . , All he can do is either to re-arrange matter so as to make it more useful, as when he makes a log of wood into a table ; or to put it into the way of being made more useful by nature, as when he puts seed where the forces of nature will make it burst into life. It is sometimes said that traders do not produce ; that while the cabinet-maker produces furniture, the furniture- dealer merely sells what is already produced. But there is no scientific foundation for this distinction- They both produce Federation. Ill utilities, and neither of them can do more ; the furniture-dealer moves and re-arranges matter so as to make it more serviceable than it was before, the carpenter does nothing more. The sailor or the railway man who carries coal above ground pro- duces it just as much as the miner who carries it underground. The dealer in fish helps to move on fish from where it was com- paratively little use, and the fisherman does no more. It is true that if there are more traders than are necessary, there is waste. But there is also waste if there are two men to a plough which can be well worked by one man. (iVIarshairs " Principles of Economics," book II., chap, iii.) This terse argument, with its apt illustration, lays bare the fallacy from the theoretical standpoint. Let us now inquire whether, as a matter of business, we can draw any clear line between the work of a '' pro- ducer " and the service of a distributor. Is the young lady in the show-room, who places a mantle on the shoulders of her customer, and forth- with alters the fit by taking up an inch here and an inch there with a couple of pins, a producer or a dis- tributor } And if she be a distributor, how does her service differ from that of a dressmaker who fits the yet unfinished cloak, or packs her latest achievement in a cardboard box ready for delivery } Is the young man who shakes the tea from the counter into a bag and ties it neatly with a loop for the customer's con- venience in handling it, a producer or a distributor ? or if he be a distributor, how does his service differ from that of the young lady who packs tea and coffee in the productive department of the Wholesale, or from that of the Chinaman who gathers up the leaves from the drying-ground and stamps them into the chest ready for export } The farmer is doubtless a producer ; but does he cease to be a producer when 112 TJie Co-operative Movement. he drives his cattle or carts his corn to the nearest market, or removes his turnips from the field into the barn ? Lastly, is the butcher a producer or a dis- tributor ? and if he be a producer when he is trans- forming the live animal into raw meat, what is he when he cuts a pound of steak and hands it to a customer ? As a matter of fact, this distinction with- out a difference has involved the official statisticians of the Co-operative movement in hopeless confusion. With exactly the same figures before them, Mr. J. C. Gray (secretary of the Co-operative Union) states that the production carried on by retail Stores on their own account amounts to ;^i,ocK),ooo annually; while Mr. Benjamin Jones, an eminent official of the Wholesale, in an elaborate study of Co-operative pro- duction, estimates the figure at ;^3,ooo,ooo. In one case, butchering, baking, and other domestic manu- factures are included in distribution, while in the other case a trader by profession considers the same services as productive. Thus the argument of the man of science is demonstrated by the practice of the man of business. The reader will now perceive the scientific value and practical force of the resolute refusal on the part of the proprietors of the Wholesale Society to deal differently with the employees of the workshop and the employees of the warehouse. I do not wish here to imply that the ideal of self-employment and profit- sharing — an ideal which we have not yet analysed — is unworthy of acceptance or impracticable in realiza- tion. But I maintain, if it be morally right and economically expedient that the actual workers in a concern should control the policy, pocket the profits Federation. 113 and bear the loss, then you cannot h'mit the applica- tion of this principle to the workshop ; you must introduce it into the distributive departments of the Wholesale societies, transforming these federal insti- tutions of an open democracy of 800,000 souls into the private property of Messrs. Mitchell, Bailey and Jones, and the other officials and employees of the two societies. Moreover, if you remodel the Whole- sale's boot works at Leicester into an association of producers, with the same rights of self-government that exist in the Leicester Boot Manufacturing Society (the most perfect example of the individualist ideal), then you must reconstitute the Leeds Store into an association of shop assistants. In short, you must root up and destroy the special work of the Rochdale Pioneers — the democratic foundation of the present movement ; you must withdraw from 1,000,000 customer-members the rights of representa- tive self-government, in order to endow some i,ooo storekeepers and assistants with the privilege of fighting for their own and each other's interests, instead of acting in the not less honourable role of servants of the community. But in spite of a patient adherence to the demo- cratic form of government, and a steadfast refusal to deal differently by various classes of employees, the board of directors of the two Wholesale societies have experimented in " bonus-giving " as a method of payment. In the English society, a bonus system was introduced in 1874; but the result was so far from satisfactory, that at a quarterly meeting, in June, 1876, the committee reported that they were "un- able to see their way to any more satisfactory I 114 The Co-operative Movement. system of paying bonus, and as it has not given that satisfaction and the beneficial results that were expected, they recommend you to discontinue it." This recommendation was adopted by a majority of 150 votes against 73. Scotch Co-operators have been more persistent Bonus to labour in all departments has been the rule since 1870, though the method of distributing it has been changed from time to time. At a special meeting of shareholders, convened May, 1889, to consider " bonus on wages," Mr. Maxwell, the able president of the Scotch Wholesale Society, and himself an ardent advocate of the principles of profit- sharing, thus expressed himself : " It has always been understood that two reasons could be adduced in favour of bonus on wages. It enlisted the best sympathies, and interested the workers in the work they had in hand ; and (2) it provided, above wages, a fund for old age, infirmity, and sickness. I hold these expectations not unreasonable ; but if bonus were to be paid, these looked-for results should like- wise be realized. But what had been the experience of that board, and not that board only, but of every board that has been in ofifice for years back? We have one and all felt that we are gradually being driven away from the original conditions. . . . The bonus has been taken away, and, so far as I know, it has not done one single pennyworth of good to the recipients or to the society giving it. Out of 800 employees in the productive works, only five have anything in the loan fund, and three of these are girls." The proposal made by Mr. Maxwell at the meeting Federation. 1 15 to capitalize the bonus has not been carried into effect, so that his words in 1889 may be taken as a final opinion on the present bonus system of the Scottish Wholesale Society. Neither has the friction between the two Wholesale societies and Trade Unions been lessened by the payment of bonus. To quote Mr. Maxwell again : " the Scottish Wholesale Society has throughout paid bonus to labour, and yet they have the same difficulties in founding Co-operative work- shops as Co-operators have in England." We shall presently see that trade union leaders are right in refusing to consider bonus as a part of wages, and wise in their distrust of profit-sharing schemes as methods of payment. Now it will be hardly needful to emphasize the fact that the ill success of the experiments in bonus-giving by the two Wholesale societies cannot be accounted as a failure of the individualist ideal of Co-operative production. Profit-sharing has always been indisso- iubly connected, by the leaders of this school, with the participation by the manual worker in the responsibilities as well as in the rights of government; and they have been as willing that workers should bear losses as reap profits. The two Wholesale societies have persistently resisted this view, and have in no instance suggested that their employees should share in the not unfrequent losses made in these various departments. The reader will perceive, therefore, that before we can compare the relative value of the moral ideal and practical achievement of the federalist and individualist school of Co-operators, it will be needful to retrace our steps, and examine the record Ii6 TJie Co-operative Movement. of past and present associations of producers ; />., societies formed in the individualist mould. Co- operative societies of this type are moreover included within the Co-operative Union. Some clear concep- tion of their history and constitution will be essential to our survey of the rise, progress, and present position of the great political and propagandist league, justly described by Lord Rosebery as a " State within the State." For in the formation of this State, associations of producers have contributed a note- worthy province — a province, it is true, barren of wealth, and destitute of population, but attracting nevertheless in its defence the services of the most skilful writers and eloquent orators of the Co-opera- tive movement, besides the disinterested attention of Platonic admirers from all parts of the country and all parts of the world. CHAPTER V. ASSOCIATION OF PRODUCERS, Part I. : Historical. I DO not propose, in this brief sketch of the In- dividualist School of Co-operators, to inquire into that rudimentary form of the Co-operative Productive Society that Professor Marshall tells us if:, a product of all ages, all races and all places. At the present time, and in England, this informal co- operation of groups of workers sharing equally, or in definite proportions, the product or the earnings of their labour, lingers on in the primitive industries of fishing and quarrying. To a larger extent it re- appears, in a modified form, under the contract system of modern industry — in the Cornish mines, in the workshops of the iron and machine-making -trades, and in the more skilled operations of certain docks. In these instances a definite industrial opera- tion will be entrusted by the employer, or customer, to a group of workers, instead of to a foreman or labour contractor : thus far the men become their own employers, and retain the profits usually paid for superintendence. But this Co-operative contract system (a system which I believe prevails in its most complete form in Russia) is obviously a variety of Ii8 The Co-operative Movement. piecework, and has no relation to the individualist theory of Co-operation as a solution of the Capital and Labour problem of to-day. Briefly stated, then, the individualist Co-operator advocates the substitution, in each factory or work- shop, of a brotherhood of workers controlling theorgan- ization and retaining the profits of their own labour, for the modern industrial type of the capitalist entre- preneur, buying labour as he buys machinery in the cheapest markets, manipulating and co-ordinating these mechanical and human activities, and claiming;, as a matter of course, the net output. Lest there should be any misunderstanding of the individualist ideal, I will quote the eloquent words of one of the original band of Christian Socialists, the foremost apostle of the individualist creed, and the well-known secretary of the Co-operative Union — Vansittart Neale. Theoretically, the idea we endeavoured to spread was the conception of workers as brethren — of work as coming from a brotherhood of men associated for their common benefit— who therefore rejected any notion of competition with each other as inconsistent with the true form of society, and, without formally preaching communism, sought to form industrial establishments communistic in feeling, of which it should be the aim, while paying ordinary wages and interest at the rate I have mentioned, to apply the profits of the business in ways conducive to the common advantage of the body whose work produced them. Unlike the democratic form of Co-operation which sprang out of the Owenite ideal, the individualist theory originated in a foreign land. In the critical years of 1847-48-49, in that direful time of trade depression, bad harvests, potato famine and Chartist Association of Producers. H9 agitation, a small knot of eminent scholars and divines bound themselves to;:jether, under the name of Christian Socialists, to discover some scheme of social redemption. Meeting together night after night at the house of their leader, F. D. Maurice, they discussed every imaginable plan of political, industrial and religious reform. In the summer of 1849 (to quote the words of Maurice's biographer), "Mr. Ludlow paid a visit to Paris, and came back full of the then magnificent movement of the Associations OuvriheSy which, as he said, seemed to meet the very mischiefs we were anxious to grapple with." ' I certainly thought," said Mr. Hughes afterwards, " and for that matter have never altered my opinion to this day, that we had found the solution of the great labour question ; but I was also convinced that we had nothing to do but just to announce it, and found one association or two, in order to convert all England, and usher in the millennium at once, so plain the whole thing seemed to me.''^ Now these French associations, that excited the admiration of Mr. Ludlow, and served as the model to the Christian Socialist Society for Promoting Working Men's Associations, sprang from the teachings of Buchez, the father of French Co-operation. It may be well, therefore, to trace the idea to its source.^ In a series of articles published in the Journal des Sciences Socia/es (iS^i), entitled "A Method of Amelio- ' See " French and German Socialism," R. T. Ely, p. 251. ^ For history of the French Associations established between 1834-48, see Hubert Valleroux " Les Associations Cb-opera tives." 120 The Co-operative Movement. rating the Condition of the Wage Earners of the Cities," Buchez laid down the conditions and princi- ples of his plan. As a preface to his proposals, he limited the application of his scheme to artisans " whose capital was skill, and who used tools and not machines." For, as a litterateur and a Parisian, he thought solely of the artistic handicraftsmen, and he excluded from his consideration the novel facts of the new era of machinery. Thus he ignored exactly that problem which Robert Owen grappled with as a successful man of business, and reviewed as an expert — the half-finished work of the industrial revolution — the destruction of individualist produc- tion, typified by the peasant proprietor or skilled handicraftsman (see page 7), and the creation in its stead of an industrial system necessitating a disciplined and highly organized army of workers, in different grades and varied capacities, all alike subordinated to the huge factory mechanism repre- senting the labour of other bodies or generations of workers. The reader should mark these self-imposed limits to the French philosopher's task ; otherwise we may accuse him of failure to overcome obstacles and meet difficulties absent from his mind and, I imagine, by no means fully developed in the back- ward industrial condition of his own country. He urged skilled artisans of certain trades to unite together and form industrial brotherhoods, each group of fellow-workers electing an associate as the director of their common labour, and as the official representative of the society towards the world at large. All the profits of the business (after paying current rates of wages) should be divided into two Association of Producers, 121 equal parts, one portion to be accumulated as an un- alienable common fund or capital, the remainder to be divided in proportion to the labour given by each member, or set apart as a benefit or educational fund, for wives, widows, and children. Buchez's leading idea was therefore the elimination of the entrepreneur. He attempted to realize in industry the triple virtues of fraternity, liberty, and equality — fellowship in work, freedom to elect and depose at their own pleasure the director of their labour, and an absolute equality of rights among the associates. Hence he insisted that no man should work for the society for more than a year without becoming a member, and that the capital of the concern should belong equally to all associates, and should neither be divided nor withdrawn. By these means he imagined that he would open the association to all the members of a trade, and provide for its continuous existence in spite of the backsliding of individuals. Three years of vigorous propaganda were rewarded by the establishment of an associa- tion of jewellers on his plan ; in the following years associations of other skilled artisans followed each other in quick succession. But it is outside the scope of my narrative to tell the story of the extraordinary success and ultimate collapse of the French Co- operative societies, or to describe their re-establish- ment some twenty years later, and their present decrenerate condition. Our attention must be con- fined to the English imitation and adaptation of the French idea of industrial reform. The records of the Christian Socialist movement are clear and complete : indeed, as Benjamin Jones has remarked, "the great literary ability of the 122 The Co-operative Movement, Christian Socialist has given extraordinary promi- nence to the work they attempted." The publication of Mayhevv's harrowing account of " London Labour and London Poor " added fuel to their fervour ; and in the autumn of 1849, J. M Ludlow, Maurice, Kingsley, Neale, Hughes, and the French refugee Le Chevalier, and others formed themselves into the " Society for Promoting Working Men's Associa- tions." It is as natural as significant that the English followers of Buchez experimented in industries un- transformed by the use of machinery. Of the twelve associations actually founded by the Christian Socialists, three were tailors, three shoemakers, two builders, and the other four piano-makers, printers, smiths and bakers. The south country societies in- spired and aided by them belonged to similar trades. Those associations were in the first instance moulded on the French type: they were endowed with full power of self-government. But presently the promo- ters perceived the demons of internal discord and ex- ternal rivalry arising in this new fellowship of industry. F. D, Maurice, writing to J. M. Ludlow (1850), quotes sorrowfully the words of one of the most active of the promoters : " that the associations were actuated by a throughly mercenary competitive spirit ; that they aimed merely at a more successful rivalship than is pos- sible on the present system ; that consequently they would of course produce results much worse than those which the present competition was producing, unless they were directed by a Central Board which should organize them efficiently and scientifically, or at least set before them an efficient and scientific mode of organizing themselves." Hence a Central Board was Association of Producers. 123 formed, consisting of a manager and one delegate from each association, which regulated, with the con- currence of the Council of Promoters, the relation of the associations to each other ; while the more refrac- tory of the Co-operative societies were deprived of the rights of self-government, and entrusted to mana- gers selected by the promoters. After three or four years of devoted effort, the Christian Socialists gave up their task in despair. In the first and final report of the Society for Promoting Working Men's Associa- tions, published in 1852, they describe their experience, and indicate some of the causes of their failure : — In the first nine months of our life as a society, we set up three sets of shoemakers in association, supplying in two in- stances the whole of the funds, and in the other all but ^5. None of the men were picked ; we accepted them just as they came to us. We gave to them absolute self-government, merely reserving to ourselves certain rights of interference in cases of dispute or mismanagement while any capital remained due to us. Each one of these associations had quarrelled with and turned out its original manager within six months ; one, the West End Bootmakers, went to pieces altogether before nine months had gone. The other two struggled on till the beginning of the year, never paying their way, and continually quarrelling. By the joint assent of the Council and the Central Board, they were then amalgamated, and some of the worst members turned out ; but still matters went wrong, until, in May last, we were obliged by another great outbreak and threatening insol- vency to take away all self-government from the associates, leaving them only in cases of tyranny an appeal to the society against their manager. . . . Where the associations are successful, the great danger which they and all who are interested in them have to guard against is exclusiveness. The associates find their own position greatly improved, and fear to endanger it by taking in new members. They are apt, therefore, to make too stringent rules as to admission, and to require payments 124 T^^^ Co-operative Movement. from new members proportionate to the capital to which the society has gained, and such as few of the most skilful of working-men can pay out of their present wages. The effect of this will be that a K'reat many small associations will spring up, instead of a few large ( nes, unless working men will look forward and take a broader and more Christian view of their work. These small associations will compete with and ruin one another. Within a few years all the London and south country associations of producers, promoted or aided by the Christian Socialists, had either dissolved with- out trace, or degenerated into the profit-rnaking undertakings of small masters. But the promotion of a score of metropolitan and south country associations by no means exhausted the efforts of the Christian Socialists. They rendered excellent service to north country Co-operators (as we shall see presently) by pressing on the attention of Parliament a series of bills for legalizing Co-opera- tive societies, and for extending their sphere of action. The ill-success of several great strikes prepared the way for the adoption of their ideas elsewhere. The general council of the Amalga- mated Society of Engineers, disheartened with the collapse of the strike of 1851, resolved "that hostile resistance of labour against capital is not calculated to enhance the condition of the labourer," and advised " that all future operations should be directed in promoting the system of self- employment in as- sociative workshops, as the best means of effectually regulating the conditions of labour." The ambitious project of the Atlas and Windsor Engine Works, as well as the opening of various smaller shops, by Association of Producers. 125 engineers and iron-workers, in the metropolis and the provinces, proved the practical character of this reso- lution. Other trades followed suit. Strikes of plush workers at Banbury, of the silk and velvet weavers ol Bethnal Green, of the cotton weavers of Pendleton and Padiham, were all followed by Co-operative ven- tures ; while associations of tailors, hatters and boot- makers sprang up in many of the larger towns. These associations of workers were all formed on tha Christian Socialists' model. They failed as the others had failed, leaving for the most part no record or clue to their failure. Meanwhile, in the autumn and winter of 1850-51, the more energetic of the promoters, notably Messrs. Ludlow, Hughes and Neale, re-inforced by a vigor- ous speaker and well-known Owenite missionary, Mr. Lloyd Jones, carried the campaign into the very heart of the Co-operative districts of Lancashire and Yorkshire. Through their manifest and dis- interested devotion to the Co-operative cause, through the ardent faith with which they were inspired, en- hanced by oratorical and literary gifts, this small band of enthusiasts gained considerable influence over the immediate development of the Co-operative movement. Already the Lancashire Co-operators had passed successfully through the initial stage of the Store, and were pressing forward to the workshop. Whether the Lancashire Co-operators spontaneously developed the individualist ideal of self- employment, or borrowed it from the Christian Socialists, is a question of more delicacy than importance. The facts point to the latter view. The Rochdale Corn- mill was established in 1850, on the democratic basis, 126 The Co-operative Movement. and the Bacup and Wardle Mill, opened in the same year, from the first divided the profits on capital and allowed the workers no share in the government, except as ordinary shareholders. Be this as it may it is sufficient for our purpose, that the original con- stitution of the Mitchel Hey, Pendleton, Padiham, and other cotton factories prove that Lancashire Co- operators and Trade Unionists accepted for a time the individualist theory of Co-operative production. By their commercial capacity and persistent integrity those sturdy north countrymen succeeded in the factory as? they had succeeded in the Store. Commer- cial success, however, proved more disastrous to faith in the individualist theory than commercial failure: the body remained vigorous, but the soul departed. So-called Co-operative cotton factories abound in Lancashire. The direct descendants of Co-operative ventures — Working-Class Limiteds* — are rapidly encroaching op and invading the domain of private enterprise in certain sections and districts of cotton trade. But the directors and managers of this joint- stock Co-operation — together with the trade union officials who represent the workers — form by far the most powerful, because the best informed, opponents * The term Working-Class Limiteds has been given to Joint- Stock Manufacturing Companies formed on the basis of £\ to ;^ ID shares. ■ The suffrage in these companies is usually demo- cratic, i.e.^ one man one vote. In many, perhaps the majority of instances, these Joint-Stock Companies were started by working men ; and shares are still extensively held by the working class. Whether the same proportion of the shares in these companies are now held by the working class as in the earlier stages of the movement is a disputed point. Association of Producers. 127 ofthe principles of profit-sharing and self-employment. It will be interesting, therefore, to glance at the down- ward steps from the French theory to the Lancashire practice, and to examine cursorily the actual indus- trial system resulting from the Lancashire adaptation of the individualist theory. First, let us study the failures. (I may here refer the reader again to Benjamin Jones's exhaustive papers, now in course of publication in the Co-operative News, in which he gives, with chapter and verse, every men- tion of these and other productive societies, from the Christian Socialists' publications and other sources, and from which I freely quote.) The Padiham and Pendleton Co-operative companies were started, owned and governed by the men and women who actually worked in the mill. The Padiham estab- lishment was signalled out by Mr. Ludlow for special commendation : " all the shareholders (with one or two exceptions) or some members of their families work at the mill," and he adds " that it is one of the most remarkable fruits of the energy and self-denial of the Lancashire workers." Here the story ends ; and, like other associations of producers, they would have sunk in silence if it had not been for an accidental investigation by a celebrated economist. In his report of the Padiham weavers' strike of 1859 Professor Jevons mentions two Co-operative under- takings, and the cause of their failure : — "Some years before the strike they had established two Co- operative concerns . . . neither of which undertakings met with the success that had attended similar establishments at Roch- dale." And he adds these significant words : "No such concerns can possibly succeed unless the functions of managers and opera- / 128 The Co-operative Movement. lives are kept distinct, and shareholders working as operatives are prepared to submit to a manager who is their servant. This difficulty the Rochdale men have overcome ; but in Padi- ham it led, combined with other causes, to the total failure of both Co-operative mills." The Pendleton factory. Dr. Watts tells us, broke up for similar causes, i.e., disputes between the work- ing and outside shareholders. This is not the only evidence. An impartial ob- server — Sir James Kay Shuttleworth, reviewing in 1863 the rise of Working-Class Limiteds, and referring to the failure of one of these concerns on his own estate, thus expresses his fears for their future : — There was a desire to introduce the principle of Co-operation to this extent, that the shareholders should have the advantage of the employment of their families in the mills. The immediate effect was this, that instead of producing stricter discipline and that close attention to the working of machinery which was so necessary in cotton-mills (and he might mention the discipline of a regiment was inferior in strictness to that of a cotton-mill), at their quarterly meetings most vexatious com- plaints were made by the workers against the overlookers, and an overlooker who had dared to discharge a worker who was a shareholder was in extreme danger of being dismissed at the next meeting ; and the poor manager, who had failed to obtain obedience from overlookers, or those at work with him, was very soon dismissed. He was bound to say that he was not at all sanguine on the application of anything like the principle of Co-operation, strictly so called, to the Lancashire manufacturers at present.'' The Rochdale Pioneers were cautious in their application of the individualist theory to a manu- facturing establishment. The Mitchell Hey mill was erected in 1854; but, as Mr. Holyoake tells us, "the Association of Producers. 129 share list was left open to the whole town," so that outside shareholders had from the first the control. On the other hand, the promoters evinced their devo- tion to principle by registering the society under the Industrial and Provident Society's Act, and by insert- ing the profit-sharing clause. But in 1862 the share- holders abolished " bounty to labour" by 277 to 162. Unlike their Padiham and Pendleton contemporaries, the Rochdale working men had been successful. " Nearly all the anti-bountyites (writes William Cooper, deploring this decision) are persons who joined after it had become a prosperous and paying establishment." " It was the success of the society (writes Abraham Greenwood) that attracted to it persons who cared only for the eternal divi." A like change was carried through at the Sun Mill, Oldham, originally promoted by enthusiastic Co- operators (members of the Oldham Store), to enable working men to be their own masters. In this in- stance workers were largely shareholders, and at the outset a resolution was passed, insisting that share- holders and their families should be preferred for employment. The Sun Mill still maintains its commercial reputa- tion ; but I am informed that few if any of its employees happen to be shareholders. Profit-sharing with the principal employees was introduced in 1869 ; in 1875 it was discontinued, the shareholders contend- ing " that it was incapable of affecting the purpose for which it was intended " {i.e., improvement in the quantity or quality of the work). Mr. Marcroft, the historian of the Sun Mill, adds, that the recipients of bonus had been reduced in their wages, and that on K 130 The Co-operative Movemettt. its discontinuance their wages were raised 20 per cent. Now Mitchell Hey and the Sun Mills serve as types of the general history of cotton factories primarily established in the interests of the actual workers. At the present day all profit-sharing schemes have been abandoned in Working-Class Limiteds ; shareholders are nowhere preferred for employment, and if we may credit trade union officials, the workers are not treated with more consideration than in private firms. Benjamin Jones states that there is a general opinion in Oldham " that an operative prefers to hold shares in any mill rather than the one in which he works, as he feels he has greater freedom in exercising the rights of a shareholder." This is quite comprehen- sible, since a shareholder in becoming an employee disfranchises himself (under the Joint Stock Act) for the directorate. The position was summed up by Mr. William Nuttall in 1877 (quoted by B. Jones) : Some of your friends will tell you that it would be much better if each of these mills was owned by those alone who work in them. I reply that Oldham experience proves that working men prefer to work where they can obtain the best wages and the most comfortable place, while at the same time they also prefer to invest their capital where they think it will bring the greatest interest or dividend, whether that place be the one in which they are employed or elsewhere. In other words, the workers prefer, if they have the choice, that the severance between the capitalist and workers should be complete. Thus, whether we regard the failure or the success Association of Producers. 131 of the Lancashire Co- operative cotton factories, the inference is clear. The individualist theory was abandoned as unworkable. Clear-sighted and honest- minded Lancashire folk awakened from their dream of "each man his own master" to find themselves on the horns of a dilemma. While government by the workers proved a potent cause of commer- cial failure, commercial success promptly destroyed this peculiar form of government, together with the allied method of profit-sharing, by substituting (with or without the workers' leave) the outside capitalist for the working shareholder. Joint-stock association — its compass and its limits — is not my theme. The Working-Class Limiteds, which centre in Oldham, and are scattered throughout the Lancashire valleys, are neither associations of pro- ducers, nor associations of consumers, and belong therefore as little to the democratic as to the in- dividualist form of Co-operative industry. But despite the fact that, like all other joint-stock companies, they are organized exclusively for the benefit of the capitalist, these working-class associations have materially forwarded the democratisation of industry by practice and precept. It is needless to point out the untold value to trade organizations of the com- mercial and technical knowledge gained by astute Trade Unionists as shareholders and directors, combined with the lever afforded to trade union pressure by the open publication and criticism of the profits and loss accounts of various concerns. The admirable organization of the cotton spinners of Lancashire, the sliding scale of the Oldham list, whereby the improvement, or " speeding up " of ma- 132 The Co-operative Movement. chinery is equally advantageous to the worker and to the employer, the common action in face of common enemies, the mutual recognition and conciliatory attitude of the worker's and master's organizations — all these beneficent results may be traced largely to the presence of working-class and other Limiteds. Moreover, joint-stock companies promoted, governed and owned by working men, have demonstrated that the working class are equal to managing and directing manufacturing enterprise. They have served as a forcible exposure of that middle-class fallacy that profits are the natural and inalienable perquisite of brains, without which perquisite, the brain-worker, like the sulky French cook, will refuse to serve the assembled company. The rapid substitution in the cotton-spinning trade of joint-stock companies for private enterprise has been a striking because a well- advertised example of the gradual uplifting of the industry and commerce of the country, from out of the control of the profit-making entrepreneur into the hands of officials with fixed salaries. But Lancashire Limiteds have done more than this. By selecting officials and managers from a class without a conven- tional and extravagant standard of expenditure, they have reduced the earnings of the brain-worker to the level of his actual wants — to the personal expenditure needful for the full and effective use of his faculties. The preposterous salaries given by upper-class share- holders to upper-class officials — the ;i^2,ooo to ;^5,ooo a year have been replaced by modest incomes of ;^200 to ;if 400, and appa rently without detriment to skill or integrity. But here all similarity between joint-stock associa- Association of Producers. 133 tion and the democratic form of Co-operation ends abruptly. Joint-stock association has extinguished the profit-maker, but it has retained the profits. It is true that through the above-mentioned knowledge afforded to the trade union officials average profits have been reduced to 5 per cent, on capital. But cotton factories in bygone days have paid 60 per cent, on share capital ; and there are individual instances of cotton factories averaging 12 to 15 per cent, on the capital invested, while sudden gusts of profit or loss enrich or impoverish the actual operator in, or holder of these shares. Hence that demoralizing spirit of systematic speculation pervading Oldham and other Lancashire towns : the prevalence of the local stock exchange that coarsens the texture and blunts the conscience of Lancashire citizens. This form of " profit on price " — this progress of " the science and arts of gain — not the arts that add to the world's wealth, but those by which individuals appropriate an exceptionally large share of it" (to quote Professor Bryce), it is this insidious form of gambling that constitutes the darkest feature of English as well as of American civilization, and casts a gloomy shadow over the future economic and moral development of the new and the old world. But to come home to the matter immediately before us. From 1853 to 1865 we hear little of the Christian Socialists and their fellow-thinkers ; and there is a corresponding lull in the spasmodic rise and fall of associations of producers. The designs and desires of north country Co-operators were engrossed in the establishment of Stores and Working-Class Limiteds and in the promotion of 134 '^^^^ Co-operative Movement. the North of England Wholesale Society. And during the later years of the decade, the energies of Lancashire working men were paralyzed, and their resources exhausted by the cotton famine of 1861-62 and its immediate effects. The Scottish brethren meanwhile were still in the throes of the conversion of the joint-stock shop into the citizen's Store, or were extending with slow persistency the Co-operative de- mocracy east and south of Glasgow, or they were building up federal institutions in the Scottish Baking Societies of which the United Bakery at Glasgow, with its annual turnover of ;^70,ooo, is the foremost example. On the other hand, south country and metropolitan Co-operation had been a mere exotic that withered quickly with the withdrawal of the nutriment and prop of philanthropic capital and philanthropic control. One association alone wandered as Joseph among the Egyptians in the unconquered land of private enter- prise and held aloft the standard of self-employment. The carvers and gilders of Red Lion Square, estab- lished in 1858, occupied for twenty-five years much the same position in the Co-operative movement as that accorded at the present time to the Hebden Bridge Fustian Works — they stood out in the thoughts and speeches of the individualists, in the midst of disaster, as the exceptional success, an exception which, despite of the old adage, was not held to prove the rule. This association was broken up some years ago with the total loss of all capital subscribed, and the payment of 2s. 6d. in the pound to loan holders and creditors. The goodwill, stock and plant were sold to three of the workers. In Association of Producers. 135 this ordinary form of private undertaking, I am informed the business flourished. But towards 1865-66 we note a stir and activity in the individualist camp of Co-operators. An impetus was given to the co-partnership theory by Messrs. Briggs' profit-sharing scheme, introduced into their collieries in 1866, and between that year and 1869 eleven other firms of importance followed suit, of which Messrs. Fox and Head, of Middlesborough, and Messrs. Crossley, of Halifax, were the most noted. In the same year Mr. E. O. Greening established an Industrial Partnership in the iron-gate making trade at Manchester. The latter attempt was especially advertised by a conference in June, 1866, at which the leading exponents of profit-sharing and the past and present promoters of associations brought for- ward their various plans for benefiting mankind. It is a curious and notable fact that whilst the first beginnings of the Rochdale Store and the Wholesale Societies were unnoticed by the public, this con- ference, at which were discussed the proposals of Messrs. Briggs and Greening, elicited letters of con- gratulation from celebrated politicians and erudite professors, followed by leaders in the Times, Spec- tator, Morning Star, and various provincial papers. The year was also marked by the promotion of the Cobden Mills (of which Messrs. Hughes, Neale, Ludlow, Morrison, and Greening were the founders), the most famous attempt made by the Christian Socialists to establish Co-operative production on a right footing. This concern, after a career of con- stantly recurring loss, was finally disposed of by its pro- prietors in the course of 1890. Yorkshire Co-operators i^6 The Co-operative Movement. started the Idle Cloth Manufacturing Society; certain locksmiths at Wolverhampton formed themselves (in 1864) into an association which survived to figure as the hero of the day at a midland conference in 1879 (being dismembered in 1881) ; and we have the usual crop of societies in the tailoring, boot and shoe, cabinet-making, and other handicraft trades, and a fair number of associations of builders and machine makers. But the most signal effort to carry out the indi- vidualist theory of production was made by the engineers, iron-workers and coal miners of Northum- berland, Durham, Yorkshire, and Scotland between 1870 and 1874. The stories of the Ouseburn Engine Works, of the Scottish Iron Works, of the Oldham, Apsley, Sheffield engineering and iron and tool shops, have all the sameness of ultimate disaster. In these experiments the Trade Unions are said to have lost some ;^6o,ooo, an experience which has appa- rently disgusted the larger Unions with " associated " workshops. For at all succeeding trade union and Co-operative congresses we hear from the officials of these bodies that it is impossible to invest trade union funds in undertakings from which they cannot be withdrawn on demand or very short notice. I admire the soundness of the decision ; but the answer given does not solve the question. Special levies of large amounts to meet the demands of Australian strikers or provide the out-o'-work funds for smash- ing up Liverpool cotton operators are raised with apparent ease; why not, therefore, a special levy to establish a self-governing workshop.'' The English Wholesale Society and the north country Stores also Association of Producers. lyj learnt their lesson ; that milch-cow of Co-operation, the grocery department, doubtless bearing the burden; while the infant Scottish Wholesale well-nigh came to an untimely end, and seriously hampered its growth for ten years by a loss of ^10,000 in the Scottish Iron Works. Meanwhile the Industrial Partnership of Messrs. Greening closed its doors in 1870. The profit- sharing scheme of Messrs. Briggs, which had been trumpeted throughout the world, together with the less notorious plans of Messrs. Fox, Head and Co., and other firms (duly reported in the Co-operator and the Co-operative Nezus) were abandoned, with or without explanation, but in the case of Messrs. Briggs with the cheerful consent of the workers. I feel some delicacy in detailing the other failures, lest historical instances should be mistaken for coarse in- vective. To cut a long tale short, therefore, of some hundreds of associations of producers registered under the Joint Stock or Industrial Provident Act, or known to have existed before 1870, only three remain : the Eccles and the Paisley Manufacturing Societies, established in i86o and 1862 respectively, and the Manchester Printing Society (1869). Passing over the dead bodies of some hundred societies registered from 1870 to the present day, let us rapidly survey the actual existing societies which have been, or claim to have been, organized in the interests of the producer. Part II. Present As.sociations. I take as a basis of our investigations the list of Co-operative Productive Societies, published in the 138 The Cv-operative Movevient. Report of the Central Board for 1890. First we must eliminate from this list the productive departments of the Wholesale Societies and the corn-mills and baking societies avowedly organized in the interests, not of the producer, but of the consumer. Secondly, we must cast out as unworthy, societies such as Mitchell Hey, registered under the Industrial and Provident Act, but which have practically become Joint Stock Associations, participating neither profits nor government with the workers.^ Thus, from a list of 106 separate societies, with a turnover of ;^2,3o8,o28 we are reduced to seventy-four manufac- turing, and five agricultural associations, with an aggregate annual turnover of ;^45 5,477. Of the seventy-four manufacturing societies, twenty are not in working order ; they have either not started on their career, or they have closed it during the last year, or they are in a state of suspended animation. We have therefore a remainder of fifty-four manu- facturing associations, and five agricultural asso- ciations. The perplexing variety in the constitution of these fifty-four manufacturing associations, representing the individualist school of Co-operators, baffles any de- scription, unless I were prepared to dissect the for- mation of each separate society. By studiously elimi- nating minor deviations, we may, however, reduce them to four distinct types : ^ 1 See Appendix I. (Note that Mitchell Hey is registered as Rochdale Manufacturing, and that the Bromley and Oak Mount Societies are included in the total of fifty-four manufacturing associations.) * In each class the reader will find societies which might be placed in one of two classes : I have endeavoured to classify these societies according to the dominance of certain features. Association of Producers. 139 Class I. Associations of workers formed on the Christian Socialist model ; selecting the committee of management from among their own numbers, and 2mplo3ang members only. Class II. Associations of workers of like character: but which have bound themselves over to, or had imposed upon them, an irremovable governor or irremovable committee-men. Class III. Associations of workers governing them- selves, but employing outside labour — practically, small masters. Class IV. Societies in which outside shareholders and Stores supply the bulk of capital, but in which the workers are encouraged or obliged to take shares, although they are disqualified from acting on the committee of management. Now the reader, in referring to the classified list given in the Appendix, will perceive that there are only eight societies in the first class, four of which are diminutive, with yearly sales under ^1,000. The Nelson Self- Help Society, the Leicester and Ketter- ing Boot and Shoe Societies, the Coventry Watch- makers, and the London Book Binders, and their tiny followers, deserve, however, an honourable mention, as the only associations true to their ideal of a " Brotherhood of workers." From their own stand- point these associations of workers defy criticism ; and it is to be regretted that the majority have still to undergo the distemper of extreme youth. All but two have been established within the last five years. Their aggregate turnover is £^(),62i ; the aggregate capital, ;^ 1 0,476, and they employ 440 working members. A careful investigation, however, reveals 140 TJie Co-operative Movement. the fact that five out of the eight give work out into the homes of the members, so that it is diffi- cult to ascertain whether or no these members may be termed small masters. In the next class we have four comparatively large societies. The Co-operative Builders of Brixton would belong to the first class if the promoters had not inserted a rule by which three outsiders have per- manent seats on the committee. In this society, more- over, the property qualification and term of service is so high that out of 179 working members, only forty are qualified to vote. In the Woodhouse Woollen Mills, near Huddersfield, Mr, Thompson has estab- lished himself as irremovable manager (with the right to appoint his successor by will). Mr. Clapperton, the founder of the Scotch Tweed Society, has se- cured his position as manager.^ The other society in this class is one of the survivors of an ill-fated but vigorous effort made some five years ago by Burnley weavers (seven associations in all, including the quick and the dead) to become their own employers. Four of these societies have failed ; one has never attained * I believe the Scotch Tweed Society has retained the nominal right to dismiss the manager by accepting the clause of the general rules (drafted by Mr. E. V. Neale for the use of asso- ciations of workers) to the effect that a manager can be dismissed by a majority of two-thirds of the members present at a special general meeting. This clause inserted in the general rules effectually limits the power of the working shareholders to elect or depose their own manager, should there be an equal number of outside shareholders. The statistics of the relative pro- portion of working shareholders to outside shareholders, given in the appendix, will throw an interesting light on this clause. Association of Producers. 141 independence, and is bound hand and foot to the broker who supplied it with capital, provides the yarn and takes from the society the whole product. Of the Nelson Society, little is known except its losses; but I have placed it in the first class as, in spite of calamity, it has maintained the integrity of its constitution. The Burnley Self-Help Society, however, the origi- nator of the group, has had an eventful and typical history. For the first year large profits were realized. But, to quote from Mr. Jones's interesting paper, " if we analyse the seven half-yearly balance sheets up to March, 1890, they exhibit the following results : — The total sales are;^i30,i35 ; the wages paid are ;^26,382 ; the interest on loans amounts to £66Z. The workers have been credited with ;^348 as bonus, and they have paid in cash by way of levy on their wages, to make up losses, the sum of £Zl^. The workers are therefore out of pocket to the amount of £46^, or equal to if per cent, on the total wages paid. If the shareholders had borne the loss, they would have only received interest at the rate of i| per cent, per annum, instead of the 5 per cent, per annum that has been paid in conse- quence of the workers guaranteeing them." Mean- while the society had parted with three managers : the first left to better himself in private enterprise ; the two others were dismissed by the working share- holders. Disheartened by failure, and perplexed by internal dissension, the society appealed to its first manager to undertake the management of its affairs. This gentleman agreed, but stipulated for supreme control. Last autumn an agreement was signed by both parties, whereby Mr. Bancroft is endowed with full power, and cannot be removed for ten years. Any 142 The Co-operative Movement. dispute between him and the committee is to be referred to Mr. Mitchell, of the English Wholesale Society, as final arbitrator. The societies in the third division (twenty-one) are unfortunately the most numerous; they comprise nearly half the total number of associations of producers within the Co-operative Union. Of these associations, taken as a class, I do not think it possible to speak too severely. For the most part, they are associations of small masters extracting profit out of the labour of non-members. In justice to those associations in- cluded within the group that are upright in their deal- ings and straightforward in their intentions, the con- stitutions of all associations employing non-members, the rate of wages actually paid, the " disposal of profit accounts," should be carefully inquired into before they are included in the Co-operative Union and allowed to trade under the Co-operative name, with the Wholesale Societies, the Stores, the government, and well-intentioned outsiders. As examples of this class, I give the following details of the six societies I have personally investigated, without any wish on my part to pick out undesirable specimens : — No. I. Society composed of twenty-seven workers with com- mittee of workers. Employ 100 non-members at work in their own homes. Paid last year twenty per cent, on capital, twenty per cent, on reserve fund : 3.?. in the £ to members' wages ; is. to non-members. No trade union rate : part of work given out to small middlemen : no inquiry made by society as to con- ditions under which this part of their work is undertaken. No. II, Within five minutes' walk of No. I. Formed by malcontent workers of No. I., who were refused membership. Thirty associates: cannot tell how many outsiders they employ; Association of Producers. 143 part of work given to middle-men. Five per cent, paid on capital : no profits. No. III. Similar constitution as Nos. I. and II. Has paid as much as thirty per cent, to capital : half-dividend only given to non-members, who form the majority of employees. Home-work : with part of work given to middle-men. Secre- tary deplores fact that existing members object to admitting new members. No. IV. Society composed of half a dozen shareholders, three of whom work for society : one happens to be manager, another the secretary, and the third the only well-paid workman on the premises. Employ thirty workers, twelve of whom are boys earning from 2s. 6d. and upwards ; (on the day of my visit two of these boys were under age, and employed in contraven- tion of the Factory Act.) Submitted the wages given to an official in the district, who declared they were under ordinary trade rates. This society states that it gives \s. bd. in the £ to labour. No, V. This society is of a better character, and pays trade union rates — composed of fifty-seven individuals, four Co-opera- tive societies, and three branches of the Trade Union. Out of twenty-five employees, only five are members of the society, the other members finding better work elsewhere. This society is tlie type of two others that I have personally visited, which employ outside workers because their own members prefer em- ployment in private firms. No. VI. The constitution of this society is at present blame- less, so I shall not hesitate to name it. The Jewish cigarette makers of London have recently opened a branch in which non- members (English) are employed ; but it is stated that these men are offered membership and receive trade union rates. This association is, however, an interesting example of a society tending to Class II. A year ago they urgently needed capital. Four individuals offered to supply it, on condition that they were placed on the committee, their contention being that the rates of wages were extravagantly high. The broker who sup- plied the society with material, acts as president, and holds the balance of power between the four members, who act as the workers' representatives, and the four wtio are indirectly the 144 ^-^^ Co-operative Movement. nominees of capital. Under this altered management this association bids fair to prosper. Associations of producers of this class show, un- fortunately, comparative vitality ; their average age is seven years and four months, their aggregate sales are 124,054; and they employ 1,240 workers, of whom 330 only are members ; the subordinate labour employed by sub-contractors, or in the homes, is not of course, included in this calculation. If we denounce the central type of the third and most numerous class of associations of producers, the wolf in sheep's clothing, the brotherhood of workers sweating their fellow-men, we must not fail to admire the genuine philanthropy that has usually inspired the institution and government of the societies which make up the fourth and last class of so-called associations of producers. These thirteen societies, practically Industrial Partnerships, are small concerns compared to old established private firms or modern limited companies, but they rise above the pigmy stature of the first and third class of associations. In most of these societies the democratic Store is the principal shareholder ; others are owned and governed by in- dividual capitalists. Employees are usually expected, and sometimes obliged to become shareholders, but are in most cases disqualified from acting as directors; in no instance is there actually an employee on the committee of management. Moreover, in all these associations the balance of power is in the hands of non-workers. Of this class we will take the most brilliant example, — the Hebden Bridge Fustian Society, — and note its constitution and development. This society was started in 1868 by a group of Association of Producers. 145 fustian cutters, among whom the present manager was the foremost spirit. Presently the neighbouring Stores became interested in the success of the society. Until last year capital had a prior claim of 7| per cent. ; now the interest on capital is fixed at 5 per cent. From the first this society has prospered, largely owing to the loyalty of the Stores, and to the ability and integrity of the manager. The workers (two-thirds of whom are women) are disqualified from acting as directors, and have, from the first, taken no part in the actual management. Profits accruing to workers are, in the first instance, capitalized ; all workers are therefore forced to be shareholders. But five years ago steps were taken to prevent the workers from parting with their birthright to outside capit- alists, thus introducing, as a dominant power in the society, the profit-seeking shareholder (to whose presence the retrogade policy of Mitchell Hey has been attributed). For the commercial success of the society, coupled with the power appertaining to an individual shareholder under the rules to increase his holding at par up to £iOQ, raised the value of the workers' transferable shares in the open market to an exorbitant premium. The workers, careless of the future of the society, parted with their shares to the highest bidder. A clause was therefore quickly drafted and inserted in the present rules, whereby all profits accruing to workers are credited in withdrawable shares (shares which cannot be sold, the par value being returned by the society to the shareholder on application, and which in this case do not entitle the holder to a vote). Employees who desire to become voting shareholders may apply for transferable shares, L 146 The Co-operative Movement. but must sign an agreement to sell them at par to the society, and not to part with them to individuals. Other societies in the group show every variety of constitution. The Co-operative Sundries (a young and small society) is distinguished by permitting the election of employees as directors ; though, at the present time, no employee sits on the Board. The Edinburgh Printing Company, on the other hand, does not encourage the employees to take shares, and pays bonus out in cash ; it may therefore be considered as a profit-sharing establishment, paying 14^ per cent, to capital, li". ^d. in the £ to wages. In referring to the Report of the Central Board it will be perceived that where profits are made, heavy rates of interest are paid to capital. This class of associations show the greatest vitality ; the average age being thirteen years. The aggregate sales are \;£^ 179,499, the aggre- gate capital being ;6^98,233. So far as I have been able to ascertain, these societies employ 1,274 workers, of whom 45 5 are members. Taking the total fifty-four manufacturing associa- tions, the reader will perceive from the classified table in the Appendix, that only five have been ex- cluded. Of four of these, I have been unable to obtain particulars. The London Productive differs from Class IV., since three employees sit on the committee ; on the other hand, though it employs non-members, it cannot be termed an association of small masters, as it was instituted by outside capit- alists for the benefit of the workers, all of whom are encouraged to take shares. No profits have been realized, and interest on capital has not been paid. Two out of the five farming associations are philan- Associatioji of Prodticers. 147 thropic undertakings of an expensive character, the losses incurred amounting to some thousands of pounds. The Scottish Farming Association has only recently started. Of the four agricultural associa- tions, in the Assington Association alone have the workers any practical share in the government. Now, this cursory examination of all the present forms of Co-operative enterprise that represent, even in the vaguest and most remote degree, the aspira- tions of the Christian Socialists, reveals one all-im- portant fact. The ideal advanced by the Christian Socialists, partially adopted by the Rochdale Pioneers, and constantly forced by the individualist school of Co-operators on the attention of the Stores and the Wholesale Societies — this fair vision of a brotherhood of workers — of a self-governing Co-operative work- shop in wh[ch (to use Judge Hughes' words), " the manager and committee are to be elected by the members from among their own body " v anish es into an indescribable industrial phantom, which, unlike the texture of real existence, becomes more and more imperceptible with the application of the magnifying glass. For when we look carefully into these 54 societies, we discover that over one-third of the trade is transacted by establishments which are simply capitalist associations adopting some scheme of profit-sharing. It is true that a small proportion of these societies compel or encourage workers to become shareholders. But in all cases, without a single exception, outside shareholders hold the balance of power. Nor is this all ; the minority of working shareholders are practically disfranchised by the disqualification to act on the comnn'ttee of i48 TJie Co-operative Movement. management. For why, in the name of reason, should this class of shareholders be resolutely shorn of their ordinary rights, if it be not for the express purpose of releasing the manager and other overseers from all effective control on the part of the workers — of de- posing those workers once for all from the sovereign place of directors of their own labour, and reducing them to the rdle of mere voters. In truth, the workers of the Hebden Bridge Fustian Works of the Man- chester Printing and Leicester Hosiery Societies, the three pioneers and exemplars of this class, are in exactly the same position with regard to controlling the policy of the establishment in which they work as the tailors, bootmakers, builders of the Leeds Store. And, so far as I am aware, the workers are in no better position than the porters on an ordin- ary railway, or the spinners in an Oldham Limited. For in all these instances the employees might acquire individually, or through their Trade Union, shares in the open market, and thus become a con- trolling force in the railway company and in the cotton factory. And if we turn our magnifying glass from off the bulk of the trade on to the majority of the societies, we lay bare a positive evil instead of a harmless self- delusion. So-called associations of workers are constantly resolving themselves into associations of small masters — into an industrial organization, which is perilously near, if it be not actually included within, the domain of the sweating system. Or we discover associations of workers, so indifferent and sceptical of the advantages they offer as employers, that they prefer the security of private trade, and Association of Producers. 149 leave the Co-operative workshop open to hirehngs. Or again, we watch associations, such as Mealy Royd weavers, beginning with fervour and success, but sur- rendering in the course of two years at discretion to a dictator ; or we observe far-sighted promoters carefully securing their own position as irremovable managers. Thus these fifty-four associations, with a trade of ;^ 449,228, disperse in various directions, and we are left with our elaborate microscope pointed at eight minute specks on our industrial system, the existence of which I will again emphasize by recall- ing their names — the Leicester Boot and Shoe, the Coventry Watch, the Kettering Boot and Shoe, and the Nelson Self- Help and four diminutive associa- tions -with aggregate capital of ;^755. Of these eight societies, the three largest are under four years of age. On the other hand the Coventry Watchmakers, which has survived for sixteen years, are skilled handicraftsmen at work in their own homes, and are moreover completely in the power of outside share- holders who outnumber the working members and own the bulk of the capital. So far, I have confined myself to a simple state- ment of fact. Now I will venture to disentangle from the common causes of commercial disaster the special disorders which have afflicted these associa- tions of producers from birth upwards, leading to their extinction or to their speedy transmigration into the grosser world of joint-stock association or private enterprise. Three complaints are constantly recurring in this dismal record of repeated failure : want of capital, want of custom and absence of administrative dis- 150 The Co-operative Movement. cipline. The first malady will be admitted by all concerned. The limited capital with which many of these associations have started in their career has entailed the loss of discounts on purchases of raw material, and the necessity of buying in small quan- tities and in local markets ; it has meant inferior machinery and plant — in short, a loss of commercial opportunities and a general scamping of the materials and inferiority in the instruments of production. To attract capital, these reformers of the capitalist sys- tem have offered and given ruinous rates of interest; they have been the victims of usury rare in private enterprise, and absolutely prohibited in the democratic form of Co-operation, In all cases this extra interest and decreasing return from industry must be a tax on the worker, by lowered wage or increased effort. In most cases it means rapid shipwreck. If, on the other hand, the association survives, it is quickly metamorphosed. In trades not yet trans- formed by the use of machinery, in all those minor industries which formed the subject-matter of the late inquiry into the sweating system, these associa- tions have either begun or ended as small masters. Now all students of the voluminous evidence taken by the Lords' Committee will have realized that the small master system — that lowest type of industrial organization — is being gradually pressed out of exist- ence by the introduction of machinery, by "in- creasing returns" from the use of large capitals, and by an improved organization of labour. These associa- tions of small masters may linger on in those sections of trade which escape regulation by Factory Acts and Trade Unions, but they can only exist by evad- Association of Producers. 1 5 1 ing a high standard of employment, by sweating subordinate labour, or by defrauding the customer. " Sharing profits" with labour and trade (in order to gain Co-operative patronage) serves, therefore, as a poHte euphemism covering a reduction in net earnings or deiiciencies in quality. But in the staple industries of the kingdom — in the textile, iron, and coal trades — it is practically impossible for the workers, or for any section of the workers, in a factory, mine, or workshop to become the sole capitalists of the concern in which they work. Take the moderate instance of a spinning factory, with a capital of ^6o,ooo, and employing 200 workers. Endow these workers with this sum, and the more skilful and thrifty will presently be the employers and not the factory hands. As a matter of fact outside capital is from the first a necessity, and whether the capital be held by one millionaire or by 6o,ooo fellow-workmen, the capitalist will insist on the profitable administration of his property — a condition which cannot be fulfilled, as we shall pre- sently see, by a self-governing body of workers. The lack of custom is another royal road to failure. Skilled mechanics or handicraftsmen uniting together in an association may be adepts in the technical ^ details of their trade, but they are absolutely ignorant of commercial matters. These associations are fre- quently based on the old fallacy of the Labour Exchange ; they are formed under the delusion that with industry and skill the worker must create value, whether or no the commodity he manufactures corre- sponds to any available demand. Hence we observe Co-operative workshops are frequently established in u~ 152 T/ie Co-operative Movement. bad times, or in decaying industries; they are formed to resist a reduction of wages, or to supply work to the unemployed. Obviously these associations are foredoomed to failure. For we may believe with the elder economists that unrestricted competition is the one method of adapting supply to demand, or we may hold with the modern Co-operator and State Socialist that democratic control is an efficient alter- native. But it is equally clear to the economic in- dividualist and to the economic socialist, that the feverish fluctuations of the competitive system cannot be obviated by increasing a congestion of commodities exactly at the time and in the place where the fever is at its height. Workshops for the unemployed may or may not be a wise Poor Law policy. But these workshops cannot become a living and independent part of a commercial system based on the inter- change of commodities. The last disorder peculiar to associations of pro- ducers formed on the Christian Socialist model is, however, the most fruitful of disaster. Imagine the condition of affairs in a factory in which the workers choose the committee of management from among themselves, the committee (all employees) select the manager and overseers — the committee, manager, and foremen all working together in a highly organized sys- tem of divided and interdependent labour. Through- out the day the committee-men are subordinate to the manager ; their work must be examined, prices fixed, deductions for mistakes and oversights made, their behaviour controlled — all the numberless acts of or- ganization and supervision (upon the exact fulfilment of which depends the prosperity of the concern) must Association of Producers. 153 be carried out by the manager and the foremen. In the evening the scene is changed, and the relations reversed. The manager stands as a servant before the board of directors. If the manager has refused to pass the work of a committee-man, if he has dis- missed his relative or friend, if he has given out to the piece-workers material difficult to manipulate but of a quality as good as could be bought at the price needful to secure a profitable market for the product — every act of commercial policy or administrative discipline is discussed and reviewed by the light of the individual interest of the wage- earners who act as directors or select as consti- tuents. Consider a railway managed on the system of the porters choosing the station master, the station master choosing the traffic superintendent, the whole body of employees choosing the board of directors ! Those who have watched the inner workings of asso- ciations of this mould have realized the impossibility of this form of government in a highly organized industry. Hence we notice the gross divergence between the practice and the theory of the indivi- dualist school of Co-operators ; the ingenious and elaborate devices whereby the working shareholders are stripped of their ordinary rights as property- holders and are disfranchised from an active partici- pation in the government of the concern in which they work. Or we observe a complete transformation of Co-operative factories into joint- stock Limiteds and the upgrowth of the Oldham system — a reversion to the purely capitalist organization of industry. I have wished to keep this brief analysis of the causes of the practical breakdown of the individualist 154 Tfie Co-operative Movement. theory of Co-operative production matter of fact and free from sentiment and a priori reasoning. But the »' Christian Socialists and their latter-day followers have *^ always claimed that whatever may be the economic and administrative difficulties of their proposals, they alone have established Co-operative industry on an ethical basis. Now this assumption on their part is, I venture to think, utterly unwarranted. The leaders of this school, in their schemes of self-governing workshops, or failing this counsel of perfection — of profit-sharing methods of remuneration — appeal to the desire for personal independence and personal gain among the workers. A group of workers are to be stimulated to increased effort and more sus- tained diligence because they, and not the capitalist entrepreiieur, are to be benefited by this change in their conduct. The idea of the service of one man by another is to be repudiated. Working men are to be induced to work well and skilfully, not because they will help others by so doing, but because under this system of industry the workers will reap the advantages and suffer the consequences of efficient or inefficient labour. In his work on profit-sharing, Mr. Sedley Taylor boldly declares that this personal in- ducement to greater effort constitutes the principal justification of profit-sharing systems. I do not ^ complain of this naive appeal to the old Adam of economics. But I refuse to consider it ethical. This form of self-regarding action is neither moral nor immoral : it belongs to the category of feelings which are usually termed un-moral. And, if we wish an explanation of the idealism which has centred round the Christian Socialist theory, we shall find it in the Association of Producers. l g 5 history of the Christian Sociah'st movement. The promoters of this movement very naturally mistook the motives that impelled them to social effort for the motives they were appealing to in forming associ- ations of producers. The excellent and talented gentlemen who spent time and money on the for- mation of working-class associations were inspired by ethical sentiment of the highest order : for they were rendering, what they imagined to be, a service to the community not only without remuneration, whether in the form of profits or wages, but with considerable sacrifice of personal comfort and fre- quent loss of personal property. But the working- men who, in order to become their own masters, and to gain more by their own labour, accepted these services and this capital, may have been guided by a perfectly legitimate desire to better themselves, but I fail to see any idealism in their action. And if we read the history of the early associations of producers, or if we watch the struggles of the present associations, I fear we shall be brought by our study of past and present facts to one and the same con- clusion : that an industrial organization which sub- stitutes for one profit-maker many profit-makers, is not a step forward in the moralization of trade. In truth, we are tempted to remember, by a careful observation of the internecine warfare between these small societies, ol the discords, insubordinations, jealousies, and suspicions, that distract their home affairs, the moral axiom of Robert Owen : " a profit on price for individual gain brings into action all the lower passion of human nature." I must now ask the reader to consider why I have 156 The Co-operative Movement. tacitly assumed that Associations of Producers are anti-democratic in their structure. In the first place, it is a strangely distorted view of democracy to break a community into tiny self-governing circles of pro- ducers, which by the very nature of their activities must fight each other to the death or combine to impose price and quality on the public. For it is self-evident that all Associations of Producers, whether they be capitalists buying labour, or labourers buying capital, or a co-partnership between the two, are directly opposed in their interests to the interest of the community. This fundamental opposition can only be counteracted by their rivalry or competition with each other to secure the custom. They are, and must always remain, profit-seekers — intent on securing a large margin between the cost of production and the price given. As profit-seekers they stand constantly in the presence of two contending spirits — the spirit of competition and the spirit of combination. For, to parody the words of a prose poet, "under the influence, first of one, then of the other, they spring from the gamble of competition to the plunder of monopoly, and alight from the plunder of monopoly on the gamble of competition, and know not which is most profitable." The danger of an industrial monopoly, formed by Associations of Producers such as have existed, and do exist, in the Co-operative movement, is, I confess, decidedly remote. Hitherto any attempt to federate these little societies, even in one industry, such as the boot trade, has proved utterly futile. I cannot advise a better antidote to the deep depression of the econo- mic individualist, in these days of advancing socialism, Association of Producers. 157 than to attend a conference of productive societies and listen to the "individualism rampant " with which they silently oppose or scornfully regret any scheme of federation — any proposal to delegate duties or invest control in a central institution supported by all alike. Whilst the capitalist producer has begun to realize the profitable nature of strong combina- tions to raise prices (even if he estimated the diffi- culties in a free-trading country), these associations of workers, whether from disposition or circumstances, are still in the primitive stage of internecine war- fare. Fut this argument, however, does not end my indict- ment. Granted that the ideal form of democratic industry is the self-governing Co-operative workshop, in which the workers elect from among themselves the director of their labour, again I ask, Has the ideal been actually realized ? Forty years of persistent self-devoted effort, the institution of some hundreds of Associations of Producers, have left us with eight establishments with constitutions more or less ap- proximating the model self-governing workshop (four of diminutive stature) all in the stage of infancy or childhood. The remaining forty-six, cited as ortho- dox exponents of Co-operative production, exhibit an amazing variety of aristocratic, plutocratic, and monarchical constitutions which defy scientific clas- sification. First, we have the hereditary monarchy of William Thompson & Co., the constitutional dictatorship of Mr. Bancroft, of Healy Royd, the high property qualification and extended term of service of the Co-operative Builders, further safe- guarded by the presence of a self-ordained House of 158 TJie Co-operative Movement, Lords in the persons of Messrs. Dent and Minett and Curtis. Next, we witness a veritable little army of oligarchies — the associations of small masters which characterize the making of boots and shoes, buckets, fenders, nails, padlocks and shawls. And lastly, we have that benevolent self-delusion of " co- partnership in management," which sets out by dis- franchising the members of this democracy of the workshop from acting as their own representatives. Now this disqualification, regarded from the stand- point of the workshop as a self-contained and self- governing democracy, is simply preposterous, as will be seen by the simplest political analogy. Supposing England were to apply to France for capital to carry on her political and industrial affairs, and supposing France, in return for this capital, should insist that all Englishmen should vote for Frenchmen as their repre- sentatives, these representatives selecting the execu- tive: should we be a free and democratic country? But to complete the analogy we must endow French- men with faggot votes superior in number to those held by resident citizens. Then we should be able to realize the exact form of tyranny (regarded from the point of view of a self-governing workshop) prac- tised by the capitalists of Hebden Bridge, Leicester Hosiery Society, the Manchester Co-operative Print- ing Society in their co-partnership in management. And it is to this pitiful pretence of a pseudo-demo- cracy — to this body of workers " trained under foster- ing supervision," that the managers of the democratic Wholesale Societies, that the representatives of an open democracy of near a million souls, are advised to undergo the "pleasing duty" (to use Mr. Neale's Association of Producers. 159 words) "of handing over a well-appointed and well- stocked factory and a thriving business." I am aware that a certain section of Co-operators have abandoned the idea of a self-governing brother- hood of workers, and advocate profit-sharing between employers and employed as a convenient half-way house, in which the capitalist entrepreneur may retain the privileges of an autocratic master, the workers may imagine themselves emancipated from the wage- system, while that mysterious fund "profit" is gathered up and dispersed in every imaginable form, from a loyal division of a clearly defined fund? to decreased wages or increased effort for the same pay, heavy reserve funds and exorbitant interest-bearing depre- ciations. I exclude, of course, from profit-sharing the attempt " to elevate the practice of tipping (to quote the words of Mr. D. F. Schloss) to the dignity of an industrial method," together with all expedients such as bonus on output, on earnings, on economy. All these forms of bonus are obviously varieties of piecework, whereby an astute employer stimulates the worker to a measurable amount of extra zeal, and pays him a definite sum. A discussion of the merits and demerits of different forms of the piecework system would be as much out of place in a book on Co-operation as an analysis of the tailor's time-log, or the Oldham spinning list. I therefore take for granted that by Profit-sharing wo. mean a genuine act of association between the employer and the em- ployed, a literal co-partnership in commercial gain and commercial loss, by which the earnings of the workers are regulated in each separate profit-sharing establishment, in a strictly determinate manner, by i6o The Co-operative Movement, the profit and loss account of a carefully audited balance sheet. The first objection to profit and loss sharing as a wage system (or substitution for a wage system) is an absence of principle. I do not here refer to the utter lack of definite principle in the exact proportion of profits allotted to labour. But in all profit-sharing schemes, whatever may be the details, the manual workers are not rewarded according to amount or quality of their effort, neither is the remuneration measured by their needs (that is according to a mini- mum standard of expenditure), nor do their earnings vary with the general depression or prosperity of the industry in which they are engaged. Let us take each point separately. " Profit on price " depends on the opportunities and the skill of the entreprene^iy in securing a large margin between the 'act of buy- ing' and the 'act of selling.' Now in highly organized industries the wages of labour are only a fraction of the out-going payments which constitute the " act of buying " : whereas the price obtained for a given pro- duct is wholly independent of any conceivable action of the manual worker. Moreover, in all trades in which piecework prevails the proportion of wages to other items of cost of production is fixed, so far as the efifort of the worker is concerned, but may be indefi- nitely raised or decreased by the use of superior machinery, a condition which is wholly dependent on the entrepreneur. Unless the worker, therefore, is practically his own entrepreneur^ he is offered a share in a fund which he liets not made, or he is burdened with losses for which he is not responsible. While the sun shines and the profit-sharing firm presents Association of Producers. i6i extra payments to the workers beyond the standard wage, all runs smoothly ; but when the evil day comes, and the workers are asked to accept a lessened wage, or to return part in the form of " a levy " to meet a commercial loss, even if the workers remain content, it is the manifest duty of the secretary of the Trade Union to call upon them to insist upon current wages or to come out of the "rat" firm. For if the earnings of labour in a profit-sharing firm have fallen below the current wages of the industry, this fact will be used by competing employers to bring about a general reduction of wages ; and if the profit-sharing firms be sufficiently numerous, the Trade Union is bound to collapse. Hence the standard wage (a rough and ready attempt to secure a minimum standard of comfort) is swept away, and the workers in each concern are left at the mercy of the reckless competition, the unequal intelligence, and the cupidity or good faith of their respective employers. Lastly, if it be expedient that manual workers should share in the general prosperity or depression of the industry in which they are engaged, the sharing of profits and losses made by individual firms is clearly the wrong way to set about it. This result can only be attained by a formal or informal sliding scale of wages, dependent on the general conditions of the industry, and not on the ability of individual employers to adapt themselves to these conditions. In certain industries, such as coal and iron, deter- minate sliding scales of wages have been adopted, dependent on the price of the product ; in more complicated industries, such as textile trades, exactly the same result is brought about by conferences be- M i62 The Co-operative Movement. tween expert trade union officials and representa- tives of the masters ; in both cases a peaceful solu- tion depends on the presence of a strong and well- established Union, served by experienced officials, skilful in watching the fluctuations of the market, and able to enforce allegiance from the whole body of the workers as well as to exact fair terms from the employers as a class. And it has been remarked by Mr. Price, the foremost authority on sliding scales ("Industrial Peace," page 83), "that there is apparently no necessary tendency in such an arrangement to transpose industrial divisions from the horizontal to the perpendicular — from the opposition of workmen as a body to employers as a body, to the opposition of the workers (employer and employed alike) in a single undertaking, to the workers in another under- taking, the tendency being in the opposite direction." A Board School knowledge of "solids" will, I imagine, prove this very elementary truth. How can you have perpendicular sections cutting through wages (profit and loss sharing in individual firms), and maintain at the same time that impenetrable and rigid horizontal bar which can be shifted high or low according to the pressure of prices, the geo- metrical representative of a sliding scale of wages ? We may now summarize the trade union objection to profit and loss sharing. Quite apart from any deliberate attempt by a profit-sharing employer, such as the action of Messrs. Briggs in the past, and of Mr. George Livesey in the present, to undermine the Trade Union by lengthened contract of service, deferred payment, or preference for non-unionists, and over and above the difficulty of keeping in one united Association of Producers. 1 63 body workers receiving different rates of wage for the same quantity and quality of effort, profit and loss sharing cuts at the very root of trade unionism. For by the trade union organization the workers set a reserve price on their labour. They exact from the community in return for their effort a minimum standard of education and expenditure. So far Trade Unions aim at adjusting prices to wages instead of fixing wages by prices — a fact which is fully recog- nised in the constant complaints of employers that Trade Unionists overlook the facts of foreign com- petition. But in erecting this dam against competi- tive trading, care must be taken to keep it intact all along the line, the smallest leakage in the form of loss sharing being fatal to the whole structure. Secondly, Trade Unionism is an unconscious but highly suc- cessful effort to divert the pressure of competition from off the wages of labour, and to fasten its grip on the brains or the capital of the employer. This, in fact, is the whole meaning of a formal or informal sliding scale of wages, regulated by the general con- ditions of a particular industry. Once this principle be admitted, the trade union official argues in this fashion with the individual employer who nibbles at wages : — " We see by the market quotations that you are paying x for raw material; we see that you are selling the product for z : with average intelligence and average machinery, you must be able to pay so much for labour. If you have more than average intelli- gence and machinery, you are welcome to the surplus ; if you have less than average intelligence, it is unjust that a great body of men should suffer for your 164 The Co-operative Movement. incompetence. You must clear out as our employer, and leave room for better men." To illustrate this point, I take an episode from the Oldham cotton-spinning trade. A few years back, a group of new factories with greatly improved machinery entered into competition with old-estab- lished companies. These latter, finding they could not compete with the new-comers, began to nibble at wages ; thereupon the profit-making firms followed suit, to realize their " natural surplus." Fortunately for the workers, they were efficiently organized, and successfully resisted the reduction. The superior companies were willing to restore the former wages so long as uniform rates were maintained. Hence the old establishments were forced either to improve machinery and management, or make way for fit successors. But if the cotton-spinners had been un- organized, it is obvious that there would have been a neck-to-neck race to lower wages until earnings reached subsistence level, at which point the incap- able or ill-equipped entrepreiietir would go to the wall, leaving the whole body of workers with the lowered wage, and possibly with permanently deterio- rated faculties ; and the industry on the verge of that slough of despond — decreased earnings and increased labour cost. Or supposing these old-established firms had been genuine associations of producers, such as the Burnley Self- Help societies, the same result would have ensued. ^ The promoters (to use the ' The two remaining Burnley Self- Helps have only survived through making up losses by substraction from the wages kA ihe employees. Association of Producers. 165 words of the original prospectus of the Burnley Self- Help Manufacturing Society) " would ask the workers to consider how the charges on the society can best be met — whether by curtailment of expenses, or a reduction of wages." To refit a factory with superior machinery is certainly not a curtailment of expenses; a reduction of wages is the only alternative. In this case, however, the workers would lose their accumu- lated wages in the capital of the concern, as well as suffer decrease in earnings. Thus all profit and loss sharing schemes are rightly looked on with suspicion by experienced Trade Unionists, not only as insidious methods of separating the sticks from the bundle, so that all resistance may be finally crushed, but as a deliberate or unconscious attempt to redistribute the pressure of competitive trading on the earnings of the workers ; by piercing that solid bulwark of the " standard ivage" erected by the collective effort and self-subordination of the workers in Trade Union. These are the objections to profit-sharing as a method of rem.uneration from the trade union point of view. The actual gain or loss to the individual workers, apart from ultimate injury to the class from the profit-sharing systems in force among productive societies, is difficult, if not impossible to estimate. In glancing down the records of last year, we note that only twenty Co-operative productive societies shared profits with their workers. If we divide these profits by the number of workers employed by the fifty- four associations of producers, we shall discover that the net result to the workers is considerably less than £\ per annum. In three instances, losses were 1 66 The Co-operanve Movement. actually reported, part of which must inevitably be levied on wages, without accounting for loss of in- terest on capital. But this is not all. Of these profit-making societies, nine were associations of small masters, and we have no details whether the dividend to labour was paid at an equal rate to members and non-members, or what portion of the work was given out to contrac- tors or members employing subordinate labour in their own homes. Moreover, in all instances of pro- fit-sharing, to determine the net gain or loss to the workers, we must compare the rate of wages paid by profit-sharing firms and societies with those ob- tained elsewhere. For this purpose it is an unfortu- nate coincidence that in many of the minor industries (and it is in these industries that Associations of Producers are usually established) trade union rates are non-existent. But granted a trade union list to act as a test of a fair rate of wages, if this list be based on piecework, we still lack a safe basis for calculation. Net earnings from piecework vary with the quality of the raw material and the perfec- tion and speed of the machinery. The lasters at the Leicester Manufacturing Society, though paid full trade union rates, besides a bonus varying from \s. to 2s. in the £, have not, I am informed, earned more, and have sometimes earned less, than the lasters in the Wholesale Society's West End works.^ On the other hand, if it be day-work, we must consider whether the effort of the worker has been intensified ; if so, the " profit " is simply increased wage for in- ' See letter from Mr. D. F. Schloss in Appendix II. Association of Producers. 167 creased work, and coiud have been secured in the competitive labour market. In conclusion, I would add that it has been from no lack of intelligence and self-sacrifice that the Chris- tian Socialists and their followers have failed to realize the ideal of a " brotherhood of workers." Their conduct has been admirable, but their theory has been false. From the first they ignored exactly those facts which Robert Owen realized ; they overlooked the fundamental changes brought about by the in- dustrial revolution, increasing returns from the use of large capitals, the elaborate discipline of the factory system, the skilled intelligence needful for securing a market under stress of competition. In truth, the individualist school of Co-operation, far from reform- ing the capitalist and competitive system of industry, have failed even to adapt themselves to it, except in so far as they have been proved false to the faith that is in them. For, to solve the industrial question of to-day by eliminating the entrepretieur and trans- forming groups of producers into their own masters, belongs to the same category of opinions as the at tempt to settle the land question by creating a body of peasant proprietors, or the more obviously futile proposal of obviating the growing scandal of the " unearned increment " in town holdings by leasehold enfranchisement. The state of society in which the individual producer owns alike the instrument and the product of his labour is past praying for ; a reversion to the primitive type of the actual worker buying his material and selling his product, and thus realizing profit, is no longer practicable, even if it were desirable. The mere fact that you band together 10, 20, 50, i68 The Co-operative Movevieni. 200 manual workers, and set them to perform the same operation, does not decrease its difficulty. Far otherwise, it transforms the difficulty into an im- possibility by adding to the economic helplessness of two hundred individuals the moral difficulty of association. Hence the significant fact that genuine associations of producers, owning the capital and con- trolling the enterprise of their establishment, exist only in those trades untransformed by the industrial revolution ; and that the majority of these associations are diminutive. The new industry, with the subordi- nation of the individual worker to masses of capital directed by expert intelligence (success depending on the quick introduction of superior machinery, on operations in distant markets — failure arising from national and foreign events which may be insured against with large capitals, but cannot be controlled) — this new world of industry has come, and it has come to stay. Moreover, it is rapidly extending over all forms of industry and commerce ; so that the area in which increased diligence on the part of the workers (even if this heightened effect were desirable) can counteract the lack of capital, discipline and com- mercial knowledge is daily contracting. Thus the problem before the workers is to regain collectively what they have lost as individuals. The Trade Union, besides insisting on a certain standard of education and expenditure for the workers, stimu- lates the energies and to some extent regulates the actions of the capitalist. As citizens of the munici- pality and the State, as members of the Store and the Wholesale Societies, the workers may take a further step forward; they may, through representatives, Association of Producers. 169 administer the industry and commerce of the nation. It is in this endeavour to introduce representative self- government into the commercial and manufacturing enterprise of the country that the democratic form of Co-operation has formed " a State within a State." The boundaries of this State, as well as its relations to other social powers, will be discussed in the follow- ing chapter. CHAPTER VI. A STATE WITHIN A STATE. IN the history of the Co-operative Union, the cen- tral institution and the authorized exponent of the precept and practice of the Co-operative State, we detect the origin of that strange misconception of British Co-operation that has resulted in a general impression on the public mind of discarded creeds and broken promises, and that has, moreover, subjected working-men Co-operators periodically to sharp re- bukes and fervent exhortations from bishops, nobles, politicians and economists and other would-be foster- parents of working-class associations. A slight sketch of the development of this propagandist and political league is therefore desirable. The work of the conference associations of the North of England in the early days of the Rochdale movement branched off (as the reader will remember) into two directions — the perfecting of the technique of shop-keeping and the further organization of com- mercial enterprise in the formation of the Wholesale Society ; and secondly, the extension and consolida- tion of the Co-operative movement by propaganda in unconverted districts and through alteration in the law bearing on the status of Co-operative association. A State within a State. 17 1 Now the Christian Socialists (as aforesaid) not only rendered invaluable service to north country Co- operators in promoting and drafting the Industrial Provident Society Act of 1852 ; but the successive alterations of these Acts and their successful applica- tion enabling Co-operators to take their full part in the industry, commerce and finance of the nation were largely due to the knowledge, opportunities and persistent industry of certain Christian Socialists, notably of J. M. Ludlow and E. V. Neale. And while these able lawyers constituted themselves the un- paid advocates, draftsmen and solicitors of the move- ment (a position practically held by E. V. Neale for forty years) other litterateurs and orators transformed themselves into free lecturers and copious tract and leader writers in the Co-operative cause. Indeed, some have asserted that the Christian Socialists formed the intellect of the Co-operative movement — an opinion which will be rejected by those who agree with my estimate of the relative value of the Rochdale system of democratic Co-operation and the "brotherhood of workers" proposed by the followers of Buchez. But it is indisputable that for many years the Christian Socialist leaders voiced the movement, not only in the press and on the platform, but in the lobbies and committee rooms of the Houses of Parliament and in the Law Courts. It was therefore natural and right, in any further organization of the political and propagandist side of Co-operative activity, that the Christian Socialists should take an important place ; and it was an in- evitable, though I venture to think, an unfortunate result of their superior attainments as lawyers, writers 172 TJie Co-operative Movement. and orators, that for a time at least the part they played should be a dominant one. The Co-operative Union originated in a fusion of two separate bodies of like aims, but of widely differ- ent antecedents and constitution — the North of Eng- land Conference Association on the one hand, the provisional committee of the London Congress of 1869 on the other. The North of England Conference Association was a strictly representative body — an amalgamation of those provincial associations that had carried on for a period of twenty years the practical work of the Rochdale movement, united together in one body expressly for the purpose of holding annual conferences at different Co-operative centres in Lancashire, Yorkshire, Durham, and Northu mberland. The London Congress, on the other hand, was to some extent a revival of the Congresses held in the metropolis by the Christian Socialists in 1851-52 ; it was presided over by Mr. Tom Hughes ; the majority of the constituents were upper and middle- class patrons of the movement, interspersed by the representatives of Industrial Partnership such as Messrs. Briggs and Greening, and ^certain number of foreign sympathizers. Delegates from the north country and Scotch Stores were conspicuous by their absence, only some twenty Stores, including metropolitan, in all sending representatives. The Congress, after passing various resolutions of a somewhat theoretical character, receiving detailed reports from foreign correspondents, and listening to elaborate papers, elected a provisional committee of distinguished gentlemen, supplemented by two trade A State within a State. 173 union secretaries to represent the working classes, and fixed on Manchester as the meeting-place of the Congress of 1870. At the annual meeting of the North of England Con- ference Association, held at Bury on the Good Friday of 1 870, a committee was appointed to consider, among other things (such as the establishment of a Co-opera- tive newspaper and the alteration of the law) the amalgamation of the Co-operative Conference and the Co-operative Congress. The report was apparently favourable, for at the Manchester Congress, a few weeks afterwards, despite a scant attendance of delegates from the working-class societies, a Congress Board was appointed, consisting of fourteen "well-wishers," fifteen representatives of north country Stores, two trade union secretaries and a Glasgow delegate. The Congresses of Bolton and Newcastle, 1872-1873, completed the fusion of the creators of the demo- cratic Store, and the advocates of the self-governing workshop in the Co-operative Union. From that time forward the Central Board became the official representative of the Co-operative movement, and convened annually the Co-operative Congress — sometimes termed " the parliament of democratic industry." The Co-operative Union, as it exists to-day, is a loosely organized body of 1,300 Co-operative societies with a membership of a million souls. These societies contribute a definite quota to the central funds, the United Kingdom being divided, for the purposes of representation, into seven sections — the Midland, Northern, North Western, Southern, Scottish, West- ern and Ireland. The affairs of the Union are 174 J^^^^ Co-operative Moveiiicnt. nominally administered by a Central Board of sixty- four persons, elected in definite proportions by the Co-operative societies within each section ; " each section being at liberty (to quote the rules of the Union) to determine the mode of electing its repre- sentatives on the Central Board." The Central Board, however, only meets during Congress week; for the remainder of the year it is broken up into its com- ponent parts, viz., the Boards of the several sectional districts. The sectional boards stand in close though varying relation to the local Conference Associations, and are mainly occupied with the affairs of their own localities. The central administration of the Co- operative Union is therefore delegated to a United Board composed of thirteen representatives from the seven sectional boards ; the real business of the Union being despatched at the central office in Manchester and in the sub-committees of the united board. The importance of this work to the welfare of the Co- operative world has been frequently overlooked^ The internal organization of the Co-operative State is perfected and developed by the watchful skill of the general and assistant secretaries ; delicate points of law arising among the members of societies, or be- tween societies and the public, are discussed and decided ; adverse decisions in county courts are contested before superior tribunals ; such matters as the respective boundaries of the spheres of business of neighbouring Stores considered and adjudged ; rules drafted, and manuals on book-keeping, check systems, edited by experts, widely distributed. The parliamentary committee, on the other hand, watches over the economic and social interests of Co-operators A State within a State. 175 as they may be affected by any new departure in the national legislature and national administration, and actively promotes or protects the interests of the great democracy of working-men consumers by an astute combination of political agitation and political wire-pulling. Now the Co-operative Union is stated to be governed by an annual Congress composed of dele- gates from all Co-operative societies within the Union, each society being entitled to send one dele- gate for every five hundred members. But though the decisions of the Congress are supposed to be bind- ing, not only on the administration, but on the mem- bers of the Union, the Co-operative Congress serves rather as a big debating society and a useful meeting- place for Co-operators of all classes and all opinions, than as a legislative assembly. It is in accordance with the laws of newspaper publicity that, while the daily work of the general and assistant secretaries, the activities of the sectional boards within their own localities, the shrewd persist- ence of the parliamentary committee, these manifold and significant services have been ignored or depre- ciated outside the inner circle of Co-operators, the Whitsuntide Congress, held in one of the great com- mercial or industrial centres of the United Kingdom, and opened with Mat by an inaugural address from a political magnate, a renowned litterateur or economist, a distinguished aristocrat, or plutocrat, should have attracted universal attention from all those who are, or aim to be, interested in labour questions. But despite the keen relish of newspaper reporters for the excellent "copy" afforded by the Co-operativ* 176 The Co-operative Movement. Congress after a Bank Holiday and in a parliamentary recess, the proceedings of Congress week, together with the " leaders " provoked in the London and provincial papers, are about as nearly related to the facts of the Co-operative movement as the Athanasian Creed and the Commination Service of the Church of England are to the doings of the London Stock Exchange and to the despatches of the Foreign Office. To illustrate my point, I take a single instance — that of profit-sharing. Ever since the Newcastle Congress in 1873 (at which the Co-operative Union was definitely organized under the auspices of the Christian Socialists) " sharing profits with labour" has been affirmed and re-affirmed as the saving faith of the Co-operative movement. Delegates from the democratic Store and federal corn-mill — associations as devoid of any growing de- sire as they were innocent of any original intention, to share profits with, or yield power to storekeepers, salesmen, foremen-millers and general labourers- have repeated word by word the creed of the indi- vidualist school of Co-operators with " three times three " cheers at each succeeding congress. Mean- while the managers of these very associations have carried out their Owenite principles and democratic methods with rigid consistency in the extension of the productive departments of individual Stores, and in the formation of the two Wholesale Societies. The time came, however, when the sincere advocates of the self-governing and profit-sharing workshop, sickened by false following and lip-service, brought the whole question to a practical issue. In an eloquent and manly speech at the Carlisle Congress in 1887, Judge A State within a State, 177 Hughes addressed the following words to the assem- bled Co-operators : " Two roads lie before us, along both of which we cannot travel, and of which it is supremely important we should choose the right one." And in supporting a double-barrelled resolution pro- posing the immediate re-organization of the produc- tive works of the Wholesale Societies as self-governing workshops, he pertinently remarked, " You cannot give men a share in the profits and not do it. Is one right and the other wrong ? If one is right and the other wrong, say which is right and which is wrong, and stick to the right and give up the wrong." And he ended this outspoken appeal by stating empha- tically, that if Co-operators denied the cardinal doc- trine of self-governing and profit-sharing workshops, he and his followers would retire from the Co-opera- tive Union. After a stormy debate the whole question was referred to the next Congress. The Dewsbury Congress re-asserted, with turbulent enthusiasm, the principle of profit and loss sharing in productive enterprises, the unanimity of the vote fully justifying Mr. Holyoake's remark that, "considering the district in which the Congress was held " (the very heart of democratic Co-operation), " and that the sub- ject had been twelve months in the minds of the Stores, the decision was deliberate and decisive." This Platonic resolution was followed up at the Ipswich Congress by an instruction to the United Board to request all societies within the Co-operative Union to state first, whether they themselves were ready to carry out the principle of profit-sharing in their respective productive departments, and secondly, whether they were prepared to " use their influence " N 178 T]ie Co-operative Movement. I In support of the Congress resolution, with any federal institution of which they might be members. Now, what was the result of this practical test of the Co-operative faith ? Out of 1,503 societies only 488 thought fit to reply to the circular of the Central Board, the remainder being presumably either indif- ferent or antagonistic to the resolution accepted with fervour by the majority of their delegates. Of these, 274 societies were prepared to "use their influence" in favour of profit-sharing, while only 180 societies were willing to consider the adoption of profit-sharing in their own establishments. Thereupon the Produc- tive Committee of the Central Board (in its Report to the Glasgow Congress) pathetically remarks, " In face of the discouraging nature of the replies, any further action would be futile." Fortunately, how- ever, the matter was not allowed to rest. The 180 faithful societies were requested to state, after the lapse of a year, whether they had embodied the principle of profit-sharing in their rules, or whether they intended to recommend its immediate adoption. Of these, only 35 replied : 14 being associations of producers. Out of the 21 Stores, 12 habitually paid a bonus to labour {though this is not profit and loss sharing, still less the creation of a self-governing workshop), 4 were prepared to recommend a bonus system to their members, while the remaining 5 refused to consider the question. The 274 societies willing to "use their influence" proved even more refractory : only 19 of these vouch- safed an answer ; 14, while "fully sympathizing with the idea of profit-sharing," deemed themselves incom- petent to suggest "any plan upon which profit-sharing should be worked in a federaJ institution ; " while the A State witmn a State. 1 79 5 societies with tlie courage of their convictions elaborated 5 mutually exclusive schemes, which they were prepared to recommend to the federal institu- tions. The net result, therefore, of the " deliberate decision " of the Dev.sbury Congress — the represen- tative assembly of 1,300 Stores — may be summed up thus : 4 societies are prepared to recommend a bonus system to their members, and 5 societies suggest con- flicting schemes of profit-sharing to be adopted by federal institutions. Unless we are willing, therefore, to denounce Co-operators as the biggest impostors in this " very Christian country," we must resolutely deny that the proceedings of the Co-operative Con- gress are representative of the practical intention and real import of British Co-operation. Now if we consider that the Co-operative Congress in its present national and ornamental form was consti- tuted by the Christian Socialists and their adherents — by men who had rendered valuable service — speakers and writers who were, for many years, considered by an inarticulate race of north country Co-operators as the idealists of the movement ; if we recollect that one of the most talented and self-devoted of these men has served for eighteen years as General Secretary of the Union ; if we remember that the annual congress, though ostensibly a gathering of business men, is not called upon to transact business, nor even to elect the Central Board, we shall understand why societies deal out delegates' tickets to enthusiastic converts (who have chanced to pay is. entrance fee at some Store ) or to members with " idealist " tendencies. These opinions are harmless enough in congress resolutions, but highly inconvenient at the quarterly meetings of l8o The Co-operative Movement. the Stores and Wholesale Societies — meetings at which the actual policy of the Co-operative movement is threshed out and determined. Whether it would be desirable to tighten up the representative basis of the Co-operative Congress, is a question for Co-operators to decide. Meanwhile, though we cannot accept this yearly gathering as a literal "Parliament of Democratic Industry " — a title better fitted to the quarterly meet- ings of the Wholesale Societies — the Co-operative Congress, even as it now exists, has manifold uses. For an annual Congress forms a necessary though subordinate part of the machinery of the Co-operative Union; it enables the Central Board to collect and analyse Co-operative statistics, to report on com- mercial and political events bearing on the growth of Co-operation, and to submit all these facts annu- ally to open discussion, thus stimulating the officials of the Union to further effort and more efficient work. Moreover — and this I commend to the con- sideration of that type of Co-operator who prides himself on being a mere dividend maker — this mus- tering of forces, this loud proclamation of increas- ing membership, trade and capital, impresses not only railway companies, newspaper writers, traders, and manufacturers, but also our legislators, with an effectual sense of the financial influence and " polling-booth power " of the Co-operative Union, and serves as a telling advertisement of a commercial organization debarred by internal law and custom from the more humble methods of advertising. And lastly — and of all the uses, this is the most impor- tant — Congress week affords a meeting-place for the leading inhabitants from all sections of the Co- A State within a State. l8l operative State, together with endless opportunities for private discussion of common difficulties, for friendly adjustments of rival interests, for intimate interchange of individual experiences, thereby gener- ating among officers, committee-men, and representa- tives that subtle enthusiasm and noble emulation imparted by the consciousness of serving in common a great and growing community. With greater in- tellectual sincerity, and a more lofty sense of social responsibility in the rank and file of Co-operators, this annual gathering might well become, not only genuinely representative of the Co-operative move- ment, but one of the most significant and inspiring of our National Assemblies. To complete this rapid sketch of the central in- stitution of the Co-operative State, there are two matters that require to be noticed : first, the rela- tion of the Co-operative Union to the Wholesale Societies, and secondly, the institution in 1871 of the Co-operative Nezvs — the official organ of the whole movement. The student of Co-operative records will note from time to time strained relations between the Whole- sale Societies representing the practical and demo- cratic form of Co-operation, and the Co-operative Union, which, up to the last few years, has been largely dominated by the theoretical and individualist section of Co-operators. But the resolute refusal on the part of the directors of the English and Scotch Wholesale Societies to recognise Congress resolutions as valid instructions on matters appertaining to the organization of the establishments over which they are called upon tc 1 82 The Co-operative Movement. preside, and their quiet but persistent reference of all such questions to the quarterly meetings of delegates, has not only been amply justified by the practical outcome of the Dewsbury Congress, but is in full accordance with the constitution of a democratic federation. For whatever we may think of the re- spective views of the individualist and democratic school of Co-operators, it is obvious that the Co- operative Union, as a democratic body, has no concern whatsoever with the internal affairs of its members, except in so far as it deterniines on a par- ticular constitution as a condition of membership. Imagine the scene at a quarterly meeting of the Wholesale Society if a delegate were to move a reso- lution affecting the administration of the Bolton Store, or were to raise a debate on the condition under which the goods supplied by the Tower Ham- lets Society were manufactured ! Like the Wholesale Society, the Co-operative Union is a federation of Stores for specific purposes, these purposes being, in the case of the Co-operative Union, certain legal, political, propagandist and educational functions. Special administrative powers with regard to these common affairs are delegated by the members of the Union to the Central Board. The attempt to trans- form this Central Board into a Board of Control, endowed with powers similar to those held by the Local Government Board over Boards of Poor Law Guardians, cuts at the very root of the constitutional structure of a federation of self-governing bodies. I do not deny that it might be desirable in the consti- tution of the Co-operative Union, as well as in that of the Wholesale Society, to insist on some clearly A State within a State. 183 defined constitutional principle as a condition of membership in all associations applyin^j for admit- tance. And if, instead of drafting resolutions about the details of the banking and productive departments of the Wholesale Society, the Central Board had formulated and passed through Congress some clear and concise definition of what constitutes a Co- operative society — some decisive test whereby a Co-operative society might be distinguished from a joint-stock company or private firm — no one would have complained, while many would have re- joiced. For in resolving this vital question, I agree with Judge Hughes that we stand at the parting of the ways, and that one of two alternative constitutions must be accepted — the self-governing and profit-shar- ing establishment on the one hand, or the open de- mocracy of the Store on the other. In either case the friction arising from opposite methods and mutually exclusive aims would have been ended. For if Co- operators had determined on the former constitution, the Co-operative Union would have been speedily reduced to a very select company. To-day it would consist of the Leicester Boot and Shoe Manufacturing Society, the Coventry Watchmakers, the London Bookbinders, the Kettering Boot and Shoe Society, and their humble companions, the majority of outcast societies re-constituting themselves, in all probability, as a "Federation of Democratic Industry." If, on the other hand, an " open democracy governed by its re- presentatives " on the Rochdale system and after the manner of a political democracy, were deemed to con- stitute a Co-operative society, the Co-operative Union would still contain 1,300 Stores, the majority of corn- 184 The Co-operative Movement. mills and baking societies, and the two Wholesale Societies, while all those hybrid institutions classed as productive societies might have figured in the parlia- mentary return of "profit-sharing" establishments from which they have been now ignominiously ex- cluded, presumably on account of their strange con- nection with the anti-profit-sharing British Co-opera- tive movement. But the friction between the Wholesale Societies and the Co-operative Union is now happily a matter of ancient history. From the first the Wholesale Societies have been members of the Union ; recently the Co-operative Union has become a member of the English Wholesale Society, thus establishing its right to challenge the policy of the directors in the proper place — the meeting of proprietors. The two federa- tions, with offices in Manchester, are moreover closely interlinked by the presence of common factors, in the persons of directors and officers of the Wholesale Society elected to the Central Board and vice versa. The steadily increasing importance of the Central Board as a referee in legal matters, as an educational and propagandist body, and last but not least, as a political power, is a sure guarantee that no attempt will be made to reverse the past relations by subor- dinating the affairs of the Union to the policy of the Wholesale Society, an attack on the integrity of the Union which would be disastrous if it were not futile. For if Co-operators desire tangible proof of the wisdom of limiting the authority of an association to its proper sphere, no better example can be given than the success which has attended the independent institution of the Co-operative Newspaper Society A State within a State. 185 Early in the career of the Co-operative News an attempt was made to transform the infant into a handmaiden of the Central Board. The sound sense of Co-operators determined that it should be owned and governed by a separate federation, the Wholesale Society, the Co-operative Union and some of the largest Stores being among the shareholders. Hence, under the guidance of an able editor, the Co-operative News has been strong enough to be an impartial recorder of conflicting views, and has established itself with a weekly circulation of 37,000, as the sole and undisputed organ of the Co-operative move- ment. The reader has now a clear view of the central institution and component parts of the Co-operative State. But as in the history of a nation we are apt, in exhaustive accounts of the proceedings of the Cabinet, Houses of Parliament and the Law Courts, to lose sight of the life of the people, so in a rapid sketch of Co-operative institutions we may easily overlook the main significance of the British Co- operative movement — the success and failure of the Store system (with its dependent federation) as one form of democratic local government. The student will have grasped the extent and the boundaries of the democratic form of Co-operation by a study of the two maps prefixed to this book. These maps illustrate the present extension of the Store sys- tem as demonstrated by the sales in £ per hundred of population throughout Great Britain. Ireland is barren of the democratic form of Co-operation, and has there- fore been omitted. I have unfortunately been unable (through lack of space) to publish a map localizing 1 86 The Co-operative Movement. the failures for the last thirty years.^ By the aid of these maps and the figures upon which they are based, we can perceive at a glance, first, localities in which Co-operation has taken a firm root ; secondly, districts in which it has been tried without success, and lastly, those parts of the country which have been (for one reason or another) barren of effort. If I were preaching a sermon in Congress week, I should point out to assembled Co-operators that, according to these maps, failure has in many places preceded success, and that the permanent revival and vigorous growth of the Store, after an abortive effort, is a direct encouragement and incentive to the in- habitants of London and Birmingham (places which appear dark on the map of failure and light on the map of success) to try again or persevere in their present attempts. On the other hand, I should urge that the barrenness of great parts of our country prove the crying need of more active propaganda. But though the facts portrayed by a comparative study of these maps may be used as an aid to faith and an argument for action, the student will ask for some clue or explanation of the very marked locali- zation of success or failure in democratic Co-opera- tion. Now an adequate answer to this problem would entail a detailed knowledge of the industrial condi- * Failures are most numerous in the metropolis ; they are thickly dotted over Durham and Lancashire, and in fact over all districts which show present success. Birmingham and the surrounding districts are black with failure ; Liverpool and South Wales are also distinguished on the map of failure. Sea Appendix. A State withhi a State. 187 tion and racial characteristics of Co-operative and unco-operative populations, a knowledge to which I make no pretension. I offer, however, certain sugges- tions, which can be disproved or verified by more accurate study. First, it would appear that a Celtic race is not favourable to the growth of this form of democratic self-government. Ireland, Wales and Cornwall, and the Western Highlands of Scotland are compar- atively barren of effort or darkened with failure. And while the barrenness of certain districts, as in England, may be attributed to poverty, sparse popu- lation and agricultural pursuits, we have no apparent reason, except racial characteristics, for the incapacity or indifference of the South Wales miners,^ for instance, since the coalfields in England and Scotland are co- incident with the uprising and steady development of the Store system. Passing over the Celtic provinces, we perceive that next to coal-mining (the high wages of miners for the last year must be discounted in a map based on percentage of sales to population), engineering, ship-building, textiles (more especially cotton-spinning and manufacturing), show the highest percentage of Co-operative sales ; while agriculture stands well at the bottom of the scale, a fact easily accounted for by the isolation and poverty of the labourer. But ill success is not confined to thinly populated districts. Failure in densely populated areas is best exemplified in the industries of the small workshop and home-work types — in all those trades * I understand that Co-operation has recently taken a fresh start in South Wales. 1 88 The Co- operative Movement. reviewed by the Lords' Committee on Sweating, with the partial exception of provincial boot-making, an industry which is being rapidly transferred into fac- tories. I do not wish to generalize from these scattered observations of the connection of certain occupations with success or failure, since with careful examination we should find exceptions to each state- ment. The workers in the Yorkshire and Scottish worsted and woollen cloth factories (to take one example) are vigorous Co-operators, whereas the West of England clothiers show incapacity or indifference. But if I were obliged to select one trade distinguished throughout Scotland and England for Co-operative activity, I should unhesitatingly name engineering and implement making. Gloucester, Ipswich, Crewe, and other centres of these industries form oases of success in the midst of otherwise barren districts, while Leeds, Oldham, and Newcastle, are strongholds in the very heart of the Co-operative State. The striking coincidence of the democratic form of Co-operation with the trade union organization is I think, an indisputable fact, and a fact, moreover, which has important bearings, as we shall see presently, on the economic results of Co-operative trading. One conclusion I venture to draw from the information I have gathered. Eliminating distinctions of race as hypothetical elements in success or failure, Co-opera- tion flourishes best among those populations engaged in trades completely transformed by the industrial revolution, and fails in those industries in which the small profit-maker and domestic workshop are domi- nant features. Here it is needless to remind the reader that the absence of Trade Unions in the whole A State within a State. 189 domain of the " Sweating System " was the most pro- minent fact brought out in the late inquiry. Let us now pass from the undiscovered causes to the patent uses and results of the democratic form of Co-operation, No one who is intimately acquainted with a north country or Scotch manufacturing and mining district, or with a Midland village, will under-rate the national importance of the Store as a training school for citi- zenship in its widest sense. In urban districts, not yet become, or recently transformed into municipal boroughs, the " Co-op. shop " serves, or has served, as the sole form of local self-government beyond the election of the Board of Guardians and the Vestry. Here you will discover the position of president or committee-man of the Co-operative Society is more prized than that of mayor or alderman in a wealth); city ; and is accepted as the outward and visible sign of the esteem and confidence of the majority of the inhabitants. And exactly the same qualities of public- spirited energy, capacity for compromise, dogged persistence, and self-subordination, together with shrewd intelligence in choice of officials, watchfulness and generosity towards servants — precisely the same intellectual and moral gifts are needed in the mem- bers of the successful Store as in the citizens of a well- ordered and enterprising municipality. But though success arises in either case from the same conditions, failure is followed by vastly different results. For, should the inhabitants of a certain district be inert and indifferent to the welfare of the community, or should they be fitful and undisciplined in their effort, incapable of that initial self-subordination without V 190 The Co-operative Movement. which all association is impossible, or should their words and actions be governed by personal vanity, extravagant expectations or dishonest motive, the store will not be started, or it will quickly fail, whereas the municipality or the county council must endure, but will exist in a corrupt, wasteful, slovenly or un- representative form. Hence, in promoting and sus- taining the Co-operative Store, political individualists and political socialists may find a common ground for strenuous endeavour. On the one hand, the indivi- dualist may rightly urge that the voluntary association of consumers renders needless the intervention of the mechanically formed municipal or county authority, and he may illustrate his argument by the free libraries and reading-rooms provided by Co-operators which had in many instances forestalled the efforts of ratepayers in a similar direction. On the other hand, the socialist may calculate that so long as the Store remains an open democracy, returning all surplus over cost price, or by reserve funds and depreciations accumulating property to be owned in common by all who choose to enter, the Co-operative Store is practically a communal institution ; while the pride in communal possessions, and the faculties for represen- tative self-government (lacking wliich the programme of the Fabian Society or the Social Democratic Federation cannot be achieved, if, indeed, it be enter- tained) are encouraged and developed. Thus the democratic form of Co-operation may either be con- sidered as an alternative to State Socialism or as a stepping-stone to socialistic organization in all its forms. In truth, the education of the Co-operator raises the citizen to the plane of free and deliberate A State within a State. 191 choice. Co-operators are strong enough to stand alone, and they are sufficiently intelligent and ex- perienced to combine as citizens of the municipality, the county, or the State, when association, tempered by compulsion and framed on a larger and more enduring mould, is deemed or proved expedient. But there is a point of weakness in the very back- bone of the Co-operative structure which the student may not overlook, and which must be remedied by the persistent efforts of Co-operators, unless this form of representative self-government is to be restricted to a comparatively narrow area. The majority of the customer-members are not convinced Co-operators. The motive that impels the rank and file of members to deal with the " Co-op. shop " is very similar to that of the thrifty squire or London house- holder in despatching orders to the Army and Navy Stores — they believe either in the cheapness or quality of the goods supplied, or they rely on the quarterly "divi." as a mechanical and unconscious device for saving or for forestalling quarterly expenses. Thus, instead of bestirring themselves to alter or improve the management in all or some particulars, they readily transfer their custom to a neighbouring shop on the first provocation. The ordinary ratepayer, on the contrary, suffers personally for his indifference, and will be more easily roused to a personal superintend- ence of communal affairs. Moreover, taken as a general fact, the unit of the Co-operative movement — the customer — is a woman ; the unit of the munici- pality and the State — the ratepayer and the Parlia- mentary voter — is a man. Now, whatever view we may entertain as to the future development of women. 192 The Co-operative Movemetit. few will deny that at the present time they are as a class deplorably deficient of that larger sense of the common weal which secures, through association, ulti- mate advantage to the family and the individual. They abandon, for the sake of some seeming expediency of the hour, those larger expediencies which affect the condition of the class to which they belong or the community in which they live. Here, again, the Co-operative movement seems destined to be a common ground of effort for those who hold mutu- ally exclusive opinions. Men and women who con- scientiously oppose the political enfranchisement of women may, with perfect consistency, advocate active participation in an organization framed for the supply of the household as a safe channel for unspent energy and a legitimate outcome of a woman's position of housekeeper for the family. On the other hand, those who take a broader view of the citizen-woman may earnestly recommend Store mem- bership and Store government as a sorely needed apprenticeship for the more public responsibilities of the parliamentary voter and representative, or for the more arduous duties of municipal and national administration. Thus we may either regard Co-oper- ative effort as a harmless safety-valve for woman's surplus energy, or we may perceive in the details of the Universal Provision shop an unique technical training for the housekeepers of the nation, or lastly, we may recognise in this form of association and administration an admirable school for the future citizen. But, however we estimate the effect of the Co-operative life on female members, in one conclusion we may rest assured : that if the democratic form of A State within a State. 193 Co-operation is to be a great fact as well as a great example, if it is to become a dominant form of industrial organization, then a vigorous and successful propaganda among female customers must stand foremost in the present and future programme of Co-operative leaders, and the women of England must take their place as energetic, loyal, and experienced members in all associations of consumers.^ The commercial success of the individual Store is not the sole achievement of faithful membership and able management. For the million Co-operators of Great Britain dictate as consumers to thousands of fellow countrymen (directly as employers, or indirectly as customers, for goods manufactured in this country) the exact condition of their life and labour. Thus the Co-operative Store and its dependent Federations may either be used as a great engine in the oppres- sion of one worker by another, or as one of the levers whereby the British working-class may secure sovereign power in industry as in politics, establishing on a firm basis industrial as well as political demo- cracy. But to bring forth this Child of Promise we must witness the intermarriage of the Co-operative and trade union movements — not the dissolution of one by the other, or even the subordination of one to the other ; but the voluntary interdependence, on terms of equality, of two opposite but complementary corporations — the citizens organized as consumers, and the workers organized as producers. Let us first consider the economic shortcomings of either organi- * In this connection it is impossible to over-estimate the valu- able character of the work of the Women's Co-operative Guild. O 194 The Co-operative Moveme^it. zation isolated from the other ; secondly, the mutual support already afforded and lastly, the untold acquisition of strength to both parties arising out of a relationship of more complete good faith and more persistent helpfulness. A weighty objection was urged against the Store system, many years ago, by the great German socialist Lassalle. So soon as the Co-operative Stores more and more embrace the whole working class, it will be seen as a necessary con- sequence that wages, owing to the cheapness of the necessaries of life (the result of the Co-operative Stores), will fall in precise proportion." Now supposing the Co-operative Store is simply a means of reducing the cost of living ; and if it be planted down in a population of unorganized workers, I see no sufficient answer to this particular deduction from the "iron law" of wages. It is true that Co- operators might deny the first proposition ; they might urge that Stores have not so much lowered prices as they have raised quality ; and that the vast improvement in the material supplied has not cur- tailed expenditure, but has stimulated the desire for superior articles. One piece of well-made furniture attracts another, and the two demand a carpet ; while a good gown necessitates a better mantle. This may be the case with regard to cartain commo- dities, such as furniture and clothing ; but even here it requires Co-operative education, as well as Co-operative trading, to persuade the ordinary customer that cheap and nasty are frequently interchangeable terms. But in household provisions, quality may be translated into terms of quantity ; good coal gives out more A State wit /mi a State. 195 heat ; and three spoonfuls of fine quality tea make a better brew than five of an inferior leaf, and so on. And in support of Lassalle's speculative position, we know, as a fact, that money wages, in unorganized trades, vary from district to district, according to the cost of living ; that, for instance, general labourers in London are paid more per hour than general labourers in a provincial town where house-rent is low ; that a Jewish tailor will take less from a Leeds contractor than from a London sweater. In truth, Lassalle's law applies more or less strictly to those who work for subsistence wage, or to workers who are not strongly enough organized to grasp and retain any accidental advantage that might accrue to them through lowered prices in the necessaries of life. And the reason is clear. An isolated family accus- tomed to, or dependent for working energy on a certain quantity of house-room, clothing, and food, will accept, without reluctance, the money wage that will enable them to procure these conditions, and will undersell other workers until they reach this level. I remember asking an ardent Co-operator whether he would take a lower wage in the neighbourhood of a first-rate Store than he would accept in a working- class quarter supplied by small retailers under the old credit system, and he answered with bold self- assurance : " Of course I would." Then there was a pause, and he added in a rueful undertone, but with becoming meekness : " At least, if the Union would let me." North country employers have not been slow to recognise this peculiar virtue of the Co-opera- tive system, and have now and again pleaded before arbitration boards, and argued in conferences with 196 The Co-operative Movement. the men that the cheaper cost of living brought about by the Co-operative system is a sufficient reason for lowering wages, — a contention, I need hardly remark, quickly laughed out of court by trade union officials. For a proposal to reduce wages, based on this argu- ment, can be successfully resisted by the Trade Union, The master will not be permitted, with imposing and self-complacent logic, to trot off with the Co-operator's " divi." on that useful hack, " Foreign Competition." The economy in the workers' consumption effected through the Co-operative system is a pure gain to the nation, and has no conceivable relation to the \\ prices obtained by the manufacturers in the home and foreign markets, so long as the Trade Union can keep that carefjilly erected dyke — the Standard List — absolutely intact all along the line. Thus it is the Trade Union, and Trade Union alone, that enables the workers to retain the dividend, or discount, of the " Co-op. shop," or to secure the full advantage of the lowered price and improved quality of the com- modities offered by shopkeepers within the charmed circle of the citizen's Store. But the Store may not only sink into a pure nega- tion without the complementary trade union move- ment ; it may grow rapidly into an instrument of positive oppression. Let us suppose that the directors of the Wholesale Societies and Stores (consulting what they deemed the consumers' interest) were to supply their members exclusively with articles made under the sweating system, either here or abroad. What would it avail the 100,000 boot makers, tailors, furniture makers, potters, household utensil makers, farmers and farm-labourers, and other tradesmen at A State wiihhi a State. 197 present employed in manufacturing commodities sold at the stores that they could buy at their own society 25^. worth of goods for a sovereign, if they were hence- forward deprived of their employment or forced to accept work under the conditions known as "sweat- ing " ? And it is a strange short-sightedness on the part of the critics of the Store system to limit the responsibilities of Co-operators to goods made in their own workshops. As associations of consumers hav- ing full control of their own expenditure, and with ample opportunity of ascertaining the exact con- ditions under which each article is made, Co-operators are more or less responsible for the life and labour of every man, woman, and child employed in the produc- tion of the commodities they consume. This moral obligation they can best fulfil by extending the work- shops and productive departments of the Stores and the Wholesale Societies into all industries. But even here they are dependent on the existence of Trade Unions. For if there be no Trade Unions, Co-operators possess no standard whereby to fix wages ; and unless Unions are strong enough to en- force a uniform rate on trade competitors it is difficult, if not impossible, for the Co-operative employer to maintain a fair scale of wages. So long as the Co-operative State is surrounded by a competitive '' system of industry, the Co-operative workshop may be used as a lever for raising washes ; it cannot remain for long the sole exception to a reduced labour cost. Sooner or later the productive department must be closed, or the wages must be adjusted to those of private enterprise. On the other hand, it i? easy to enumerate the 198 The Co-operative Movement. shortcomings of the trade union movement without a Co-operative system of consumption. The factory operatives have not forgotten the Truck system — the sale of provisions and the renting of cottages by employers — a delicate instrument of oppression still used in " sweated " industries. And the refusal on the part of retail tradesmen, at the dictation of rich customers, to give credit to workers on strike is still remembered as the starting-point of many a north country Store. But these are small matters. While each succeeding year proves that competition betweea capitalists is frequently followed by the formation of commercial monopolies, petty competition between small retail traders has always meant fraudulent quality and elaborate devices for entangling the wage- earner by the credit, hire, or tally system. Against the frauds of the individual trader the wage-earner as a Trade Unionist has no defence. To check that more statesman-like form of profit-making — the combination of capitalist producers to raise prices — the Trade Union, even within its own industry, is utterly powerless. Indeed, a Trade Union among the workers directly fosters the growth of the capitalist trust by uniting the employers in one solid phalanx of self-defence. Hence we see the representatives of the miners obtaining a considerable advance of wages in a rising market ; but despite this fact, we have colliery proprietors reaping enormous profits — using the advance in wages as a protest for obtaining an advance of prices out of all proportion to the increased labour cost. I am aware there are some who still urge that the enlightened self-interest of the trader and manu- A State IV i thin a State. 199 facturer will always secure for the consumer the best quality and lowest price attainable without the inter- vention of a Co-operative system of consumption. Whatever may lie hidden in the remote recesses of a future state, competition as a past and present fact has been weighed and found wanting. The unnecessary multiplication of private traders, the wasteful methods of small capitalists and the petty deceptions practised on the consumer, the habitual robbery of the punctual creditor to cover bad debts — ;all these deeply-rooted defects of competitive trading the Co-operative Store has obviated. The breakdown of the flour syndicate, in 1889, before the firm attitude of the Co-operative flour-mills serves as one example of the silent success of the demo- cratic form of Co-operation in protecting the public from that most modern development of unrestrained competition — the capitalist trust. Thus, whereas the Trade Union alone can maintain a definite standard of education and expenditure for the workers of every grade, industry, and profession, the peculiar function of the Co-operative Store (and in fact of all associa- tions of consumers) is to pierce monopoly prices and uncover fraudulent quality until the fund known as profit— the entire surplus between the act of buying and the act of selling — is distributed directly or in- directly throughout the whole community. After this short analysis of the interdependence of the Co-operative and trade union organizations, and before I venture to suggest a complete " union of hearts," it will be well to note the mutual services consciously or unconsciously rendered. Exactly the same qualities of sagacity, self-subordination, dogged- r' 200 The Co-operative Movement. ness, and integrity are required for the success of a Trade Union as for the success of the Store : thus one form of democratic association becomes the training ground for the other, a fact that explains the general coincidence of the Trade Union and the democratic form of Co-operation in localities and mdustries. Furthermore, the Co-operative Store with its withdrawable capital has served as an emergency fund to the sister organization, to be used, not only in support of common members in strikes and lock- outs, but as a balance to the workers' credit, impress- ing the masters with that wholesome consciousness of the financial strength of their antagonists, the workers with that due sense of financial responsibility that usually conduces to a policy of conciliation and compromise on both sides. I have already mentioned, in my reference to Working-Class Limiteds, the in- strument of knowledge afforded to Trade Unions by the publication and discussion of all the details and prices and cost of production. And lastly, the democratic form of Co-operation, with its large capitals and secured market, has transformed many "sweated" trades into factory industries, thus securing to the workers sanitary work-places, and to the Trade Union a firm footing. For who can doubt, after the revelations of the Lords' Committee, that the home- work and small workshop system constitutes the most formidable social and economic obstacle to the growth and stability of the Workers' Union. Com- pare the Co-operative bakeries, with their magnificent premises and perfect mechanical arrangements, with the underground and backyard dens of private trade ; compare the tailoring and shirt departments of the A State zvithiu a State. 201 Scottish Wholesale Society at Shieldhall with the sweaters' shops at Glasgow; visit the West End Boot Works of the English Wholesale Society at Leicester, and put side by side nett earnings, duration of labour, and sanitary conditions, with those obtained under the small-master system. But the most unique triumph of trade union organization through the Co-operative system of consumption arises from the transformation of retail trading from a petty enterprise into a great industry. Through the fellow-feeling engendered by service in large establishments of a similar character and under a democratic government, the status of the storekeepers and shop assistants is rapidly becoming clearly defined, and those hitherto unorganized workers are steadily developing common interests and professional aspirations. Hence the recent institu- tion of a Trade Union of Co-operative employees — the pioneer, we may hope, of a National Union of Shop Assistants, to protect the interests, extend the privileges and perfect the training of perhaps the most ignorant, oppressed, and divided class of British citizens. Now with a broader understanding of the comple- mentary character of the two movements, with a larger-hearted appreciation of each other's difficulties on the part of officials and leading members, the people organized as consumers and the workers organ- ized as professionals might rapidly become an irresis- tible twin power. For the Parliamentary Committee of the Trade Union Congress and the Parliamentary Committee of the Central Board represent to-day, to a large extent, the same persons, or at least the same families. We may consider the wage-earning man as / 202 The Co-operative Movement. the typical client of the one, the housekeeping wife as the typical constituent of the other. The officers of the two organizations, therefore, should aim at a clear understanding between their respective clients. For obviously, it is suicidal folly for the wage-earning husband to raise prices on the housekeeping wife. And it is even more disastrous for the wife to beat down the husband's earnings to subsistence level, or to deprive him of employment. The essential aims of these two persons and the organizations which represent them are identical — their common object is to secure to themselves and their descend- ants the unearned income now received by other classes — or, to state it more correctly, the surplus income of all members of the community over and above the personal expenditure needful to effective citizenship. "Equality of opportunity for all citizens," might be inscribed on the banners of both organiza- tions. Meanwhile, whatever may be the ultimate goal of democratic organization in all its forms, a close political alliance between the two movements might be maintained for present purposes. The Co- operative Union should assist the Parliamentary Committee of the Trade Union Congress in pressing on the attention of Parliament all such questions as the extension of Factory Acts, Employers' Liability Act, Truck Acts, technical education, liberty of combination, certificates for engineers and sailors — all those measures whereby the safety, status, and skill of the worker, as a professional, is secured, maintained, and developed. The Parliamentary committee of the Trade Union Congress, on the other hand, might support the Co-operators in their advocacy of A State ivithin a State. 203 Adulteration Acts, Merchandise Marks Acts, Weights and Measures Acts, and in their steadfast opposition to any attempt on the part of landlords and capi- talists to revert to protection as a method of increasing profits under pretext of raising money wages. For it is as clearly to the interests of Trade Unionists that fraudulent quality shall be exposed, that the cost of living shall be low, as it is to the interests of Co- operators that the irresponsible employer, manufac- turer, and trader, free from the publicity and control of a democratic organization, should be severely han- dicapped by the law. But this is not all. Co-operators might encourage Trade Unionists to explain at members' gatherings and quarterly meetings the con- ditions of life and labour under which certain com- modities, sold at the Stores, are manufactured : they might recognise the Trade Unions of all industries in which they are employers ; they might even refuse to deal with printers, builders, manufacturers, who employ "rat" labour; they might use their enormous influence as traders and investors with railway and dock companies to secure the universal recognition of the Trade Union and fair treatment to the worker. On the other hand, the Trade Unions owe to the Store a loyal support. There is too much short- sighted hypocrisy in these matters. The secretary of a Trade Union paid to organize and agitate in favour of fair conditions of labour will allow his wife to desert the " Co-op. shop," and will encourage her to buy commodities, the price of which is a patent label of the sweating system. If the Co-operative work- shop is to be made into a powerful lever for raising the condition of the workers, Trade Unionists must 204 ^/^^ Co-operative Movement. become energetic Co-operators ; they must insist, as directors, managers, delegates to federal institutions, on the responsibilities of the consumers, as well as on the rights of the worker. The rank and file of Store-members (most of whom are themselves Trade Unionists, or at least belong to trade union families) must banish the " sweated " product from the Store Counter. The great mass of working-class consumers must resolutely boycott the private traders, and adhere to the Store through good and bad repute, steadfastly insisting that democratic control shall supersede competition in lowering price and raising quality. For it will only be by a full acceptance on the part of all citizens of their responsibilities as consumers that we can form out of the present state of industrial war a great Republic of Industry firmly based on the Co-operative principle of " all for each and each for all " ; the whole body of the people must accept with determination and intelligence their place as members of the Co-operative system of industry, discovered by Robert Owen, and built up into a " State within a State " by the self-devotion, sagacity, and doggedness of Rochdale Pioneers and their democratic followers. CHAPTER VII. THE IDEAL AND THE FACT. WE are now in a position to estimate how far the modern Co-operative movement has realized Robert Owen's Co-operative system of industry. The reader will remember that the keystone ol \ Owen's New System of Society was the elimination of profit on price and the substitution of a salaried official for the profit -maker. Profit on price he regarded as the forbidden fruit of industry — as the potent poison exciting the economic man to fraudu- lent devices and selfish monopoly — in short, as the origin of industrial warfare. And he imagined that ^ profit-making as a method of adjusting supply to I demand might be superseded by a scientific ascertain- ment of the needs of the workers. Now with regard to the first point — the elimination of profit on price — the democratic form of Co-opera- tion has been entirely successful. The absorption of profit by the community has had a twofold effect. The actual seller of an article within the Co-operative system has no personal interest in defrauding the customer. The devices of the credit and tally system, the dodges and deceptions of leading articles and second prices, of adulterated or fraudulent goods, 2o6 The Co-operative Movement. together with the more modern and statesmanlike policy of great trusts and capitalist combinations, boldly dictating prices — all these monstrous or pigmy forms of industrial tyranny have been effectually checkmated within the area of its influence by the democratic form of Co-operation. This is the immediate and direct result of elimina- ting profit on price. But the ultimate effect on the organization of industry of selling at cost price is of \^ greater importance. It is the unique, and I say advisedly, the glorious achievement of the democratic form of Co-operation, that through extinguishing profit as well as eliminating the profit-maker, it destroys the occasion — it roots up and extirpates the very foundations — of the art of wealth-gaining apart from rendering services to the community. For if all industry were organized according to the democratic form of Co-operation, gambling in shares — all such operations as " Bearing," " Bulling," and cornering the market would be relegated to the work of an economic antiquarian. The Stock Exchange would become or be superseded by a mutual Banking Department, in which currency would be economized and transactions adjusted by expert accountants. For it is obvious that the shares in an association of consumers can never rise above par because interest on capital is reduced automatically to the market rate through the Rochdale system of dividend on pur- chase. In an association of producers, whether they be capitalists buying labour or labourers buying capital, or an Industrial Partnership, shares will rise and fall according to profits realized. Hence we watch gambling in the shares of the Hebden Bridge Fustian The Ideal and the Fact. 207 Society, as well as in those of Oldham Limiteds, It is fondly imagined that this immaculate financial purity of the democratic form of Co-operation is secured by the legal form of the Industrial and Pro- vident Society. That this form is as powerless as that of a joint-stock Limited to obviate the rise and fall in the value of shares, is demonstrated by such instances as Hebden Bridge (originally an asso- ciation of workers) and the Civil Service Supply Association (originally an association of consumers), both alike registered under the Industrial and Provident Society Act, but dividing profits among shareholders or workers. In the open democracy of the Store and the dependent federal institutions all surplus over and above cost of production, together with the '' unearned increment" of superior sites or trade fluctuations, is shared with all those who choose to enter, even at the eleventh hour, or else is accumulated in the form of extra depreciations of land and buildings, and heavy reserve funds for the use of future generations of citizens ; thus realizing, strangely enough, the one original feature of Buchez's ideal — an indivisible and inalienable capital, the property not of individuals but of an " immortal " association — the creation of past effort and the heritage of future wants. Thus we see to-day in many, if not the majority, of north country Stores, the interest on capital falling from 5 to 4 per cent, and even this amount is frequently dependent on a minimum purchase from the Society. In short, the whole body of consumers refuse a tribute of interest to a minority of capitalists in excess of the market rate 2o8 The Co-operative Movement. It is, however, a more difficult and delicate question whether the democratic form of Co-operation has effectually and finally demonstrated that individual profit-making is an unnecessary method of adjusting supply to demand, No intelligent observer v/ill fail to realize the untold economic value of a controlling body of proprietors representing not only the ordinary shareholders intent on the profitable turnover of the capital invested, but embodying (as managers and representatives of retail societies or as individual members of a Store) the interests of the consumer anxious to secure the highest quality for the price given. Thus at the quarterly meetings of the Whole- sale Society, and at conferences of buyers held in different parts of the country, the directors and officials of the federal institution undergo the whole- some ordeal of listening to the criticism of expert customers — to the opinions of men whose profession in life is to ascertain the wants, and to supply the needs of individual consumers ; while the buyers and directors of the central institutions have ample oppor- tunity of instructing the consumer's representatives as to the real value of articles apart from their com- petitive price, together with the conditions of employ- ment needful in the production of cheap commodities. At monthly and quarterly meetings of the members of the individual Stores, their officers and delegates are forced to submit in their turn to detailed com- plaints as to the fit of a Leicester boot, the flavour of a packet of tea, and the colour of a slice of bacon. The members require a satisfactory explanation or insist on a prompt remedy. Without doubt this close and constant tie between the entrepreneur and the The Ideal and the Fact. ^09 customer accounts for the unmistakable rise in the standard of taste, for the knowledge of real value, and consequently for the stability of demand that is a characteristic of consumption in Co-operative districts. Here we perceive a near approach to a scientific ascertainment of the wants of the community. But I freely admit that so long as the Co-operative movement forms a "State within a State," and the Co- operative system is surrounded by an individualist and competitive society, it is impossible to assert dogma- tically that democratic control would be an effective alternative to individual profi,t-making in lowering the price and improving the quality of commodities. At the present time the officials of Stores are stimu- lated by the efforts of shopkeepers to underbid them. The Wholesale Societies live in wholesome fear of the private trader and manufacturer. Moreover, the member of the Store, the delegate to the Wholesale Society, can clinch his complaints of inefficient management by tangible proof in the form of an article of better quality or lower price bought in the open market. Whether efficiency of administration would survive a monopoly of custom by associations of consumers, is a niatter upon which none of us can dogmatize. I venture, however, to offer a few sug- gestions towards the solution of this all-important question. First, let me remind the reader that competition between individuals and communities is not neces- sarily connected with profit-makings Public officers, from ambassadors to village schoolmasters, are chosen from among many competitors. The choice may be regulated by corrupt or frivolous reas6ns, but this is P 210 The Co-operative Movement. equally true in industrial competition. Buyers are bribed ; shoddy goods of flashy appearance are pre- ferred to sound articles. The German Emperor selects from many generals the commander-in-chiei ; the Prime Minister of England is indirectly chosen from among a number of competing political leaders; not to mention the entire Civil Service, in which the competition for employment is stereotyped in the form of examinations. In the realm of industry all joint-stock associa- tions are governed by selected officials — by men who are not stimulated by personal acquisition of profit. Here profit on price is not the reward but the test of efficient management. If the London and North Western Railway ceased to pay a dividend, the Directorate would probably be overturned, and the personnel of the office changed. But the profits realized in a commercial undertaking are by no means the sole, if indeed the soundest test of managing capacity. The landlord who rack-rents an East End slum extracts a higher profit than the Glasgow muni- cipality from their admirable artizans' dwellings, and yet diligence and skill may be absent in the petty landlord, and present to a high degree in the Council and officials of the Glasgow Corporation. On the other hand, we can imagine many instances of effective competition without profit-making. The municipali- ties of Leicester and Northampton might both under- take to provide gas, water, education, and amusement to their inhabitants. If the affairs of Leicester were better administered, it would be quickly ap- parent to the citizens of both towns, and would lead to dissatisfaction among the citizens of Northampton, The Ideal and the Fact. 2ii and consequent immigration to the more favoured town. The Wholesale Society, for instance, has erected works at Leicester because of the superior intelligence and skill of the workers — qualities which must depend largely on the high standard of health and comfort of the Leicester citizen. The village of Enderby might beat Leicester in supplying boots for the foreign market should the cost of living in the latter municipality rise without corresponding advan- tage to the citizens. Emulation among localities would, in these instances, supersede competition among individual traders. In fact, if each munici- pality provided its citizens with all the necessaries of life at cost price, the law of "the survival of the fittest" would tell with extended force on human intelligence and character. For the efificient service of the community would not, in that case, depend on the chance appearance of a Harrod or a Whiteley in one municipality rather than another, but on the general capacity of all the citizens for democratic self-government. In the Co-operative movement illustrations abound of efTective tests of management without recourse to profit. A member of the Bolton Store compares the working expenses or leakage account of his own society with that of Oldham ; he sets side by side the boots manufactured by the Scotch and English Wholesale Societies ; the bacon cured at the New- castle and London branches of the English Society. And lastly, rival associations of consumers start up and compete in quality and price with old-established institutions — a trial of strength which partakes of old-fashioned barbarity. This form of competition, 212 The Co-operative Movement. however, rarely answers its purpose. Blackburn, with seven societies, is worse served than Bolton or Leeds with their giant Stores administered by officers always subject to the criticism of large and vigorous constituencies. Indeed if we were to generalize from the facts of the Co-operative move- ment, we should unhesitatingly assert that the demo- cratic control exercised by the community, in a large and well-established society, is a far superior method of securing efficient management than the competition between rival Stores situated in the same town or neighbourhood. But in all these cases the amount of dividend paid to the members is no test of efficient management (even if we allowed that " divi." were a form of profit). The isolated Stores of Forfarshire pay 5^. in the £i (though there are in some small villages as many as six competing for custom), and are far-famed for the high price and bad quality of the goods they supply. In associations of consumers all those who are interested possess, if they choose to use it, complete material for a sound judgment as to the relative excellence of services rendered by individual producers and pro- fessionals. The members can estimate the expendi- ture of faculty as well as the satisfaction of desire ; they can compare social cost with social value. Hence emulation among officials to secure the con- fidence and goodwill of their constituents replaces profit-seeking. The net result to the whole com- munity is substituted for the gain to a minority of capitalists or workers as the final test or measure of efficient service. In short, competition between indi- viduals for the indefinite gain a'r>d the uncertain The Ideal and the Fad. 313 employment of profit-making enterprise, is succeeded by competition between individuals for fixed employ- ment and stated wages. Granted, therefore, that the whole commerce and industry of the country were to be undertaken by the community in the form of stores, municipalities, counties, or states, whatever other difficulties we might encounter, competition between individuals would still be an effectual method in the selection of officers, and a potent stimulus to ability and industry in the service of the community by various classes of producers. We may therefore say that the cardinal principle of Robert Owen's New System of Society, the elimi7iation of profit on pricey has been realized in the modern Co-operative movement. But the reader will remember that while Robert Owen denounced profit- making as a wasteful and demoralizing method of re- muneration hostile to the larger and more permanent interests of society, he objected equally to competition between individuals for employment as a method of determining tJie price at which they should work. To quote the words of the first chapter : " He held that labour (which included all forms of human effort) should be rewarded according to its needs ; that is, according to the expenditure required to keep it in a full state of efficiency, providing, at the same time by education, in its widest sense, for the progressive improvement of the physique, intellect, and character of the individual and the race ; and including an allowance for the risk of illness or incapacity, and for the decrepitude of old age." Now in the great competitive and commercial system of to-day we note two facts utterly at variance 214 27^ Co-operative Movement with Robert Owen's view of a proper method of remunerating human effort. In the first place, brain- workers extract from the community incomes alto- gether out of proportion to their needs ; secondly, whole classes of manual workers are reduced to bare subsistence — to a standard of life degrading to their faculties as wealth-producers, citizens, and parents. The democratic form of Co-operation has obviated the first evil. For a multitude of competing self- seekers, each intent on amassing a great fortune, or adding to a little heap, we see a complete civil service of industry — an army of officials with fixed salaries ranging from the £2 a week of the village storekeeper to the ;£"400 a year of heads of depart- ments handling goods to the tune of a few millions. These salaries, we are told by merchant princes and great financiers, are quite inadequate to attract that calibre of brain which secures sound financial opera- tions on the part of Messrs. Baring Brothers, or the intimate knowledge of the cotton market that has distinguished Mr. Steelstrand. The rising tide of Co-operative enterprise, the steady progress of the Store system with its federal institutions, adding year by year to the multiplicity of their operations in industry and commerce, are a sufficient answer to this biassed or theoretical view of human motive. The goodwill of a great community, the political power and social influence equitably earned by the able and energetic official of a powerful and grow- ing organization have proved as efficient a form of remuneration as the unknown gains and lawless expenditure of the capitalist entrepreneur^ or the The Ideal and the Fact. 215 exorbitant salaries given by middle-class shareholders to middle-class officials, consequent on an extrava- gant estimate of the conventional outlay due to social position. I do not wish to assert that there have not been frequent instances of suicidal short-sightedness on the part of the members of a Co-operative society in refusing to their manager adequate compensation for the expenses which he is obliged to incur if he is to gain the knowledge of men and affairs which will alone fit him to serve the society well. Out of a multitude of failures Co-operators have acquired a certain imaginative insight into the brain-worker's life. Experience has taught them that the responsi- bility and constant mental anxiety of the entrepreneur needs a more generous personal expenditure than is necessary to the manual labourer with his regular hours and undisturbed rest. They do not now propose that the salary of the servant should in no case exceed the average earnings of his masters — the general theory which dominated the first associations of working men — a principle as illogical as it proved disastrous. For the avowed object of working-class association has been to raise the expenditure of the worker to efficiency point : hence the workers should be the first to recognise the false economy of in- efficient service. But while it has been easy for Co-operators to extinguish the profit of the middleman, it has been impossible for the Co-operative employer struggling in the midst of a competitive system to raise the wages of the manual workers to the level of effective citizenship. It is in this endeavour that Co-operators 2i6 The Co-operative Movement. need the constant, and, I fear sometimes unwelcomed, assistance of Trade Unions. For no organization, except a Trade Union, or as the French more aptly term it — an association of professionals, possesses at once the technical know- ledge and experience to determine, and the power to secure a standard of technical education and scale of living for all its members. A Trade Union offers to the community a rough and ready estimate of the expenditure needful to a certain class of faculty ; it ensures through a standard wage that the endurance and capacity of one individual will not lower the remuneration of all to a level at which efficiency in that particular industry is impossible to the aver- age man. Or to describe a variation of the same fact — one man who willingly sinks to the condition of a brute is not permitted to drag his fellows into a like morass of misery. As typical instances of the degrading effect of exceptional endurance of exceptional indifference on the life and labour of other workers, under a purely competitive wag 2 system, we might cite the Jewish tailor at the East End, or the Irish loafer at the dock gates. Once again, therefore, by a conjunction of Co- operative and trade union organization, we must bring the producer and consumer face to face. I do not mean that the bootmaker can sell his boots to the weaver, while the weaver disposes of his cloth to the farmer's wife ; this personal relationship is no longer possible in a commercial system transformed by the industrial revolution. Barter between individuals must be superseded by negotiations, through author- ized representatives, between groups of workers and The Ideal and the Fact. 217 consumers. Individualist exchange must follow in- dividualist production, and give place to collective bargaining. To gain a clear conception of the collective bargain — of the social relation which will supersede the in- dividual relation — let us imagine, therefore, that this industrial democracy were fully developed and that industry were organized by associations of consumers (whether voluntary or compulsory, the Store, the Wholesale Societies, the municipality and the State), while all workers were united in Trade Unions. Then the official of the weavers' Union would debate ques- tions of wages and technical training with the official of the Store or the municipality; the college of surgeons or physicians would, as at present, determine the standard and subjects of examination for the medical student and fix fees for medical attendanc-e, subject perhaps to the democratic control of a Minister of Health.^ The official of the Trade Union and the official of the community would, it is true, represent the rival interests of different sections of the com- munity. But as members of one State the interests of their constituents are ultimately identical. For under a democratic organisation of industry it will * It is noteworthy that this determination by a Trade Union or Association of Professionals of the price at which they will work, or the educational qualifications upon which they will insist, is not demurred to by the capitalist class in professions such as the Law and Medicine, of which they have practically the monopoly. But the limited and broken authority of work- ing-class Unions, the attempt on their part to secure a full sub- sistence wage for their members, is bitterly resented as an interference with individual liberty. 2i8 The Co-operative Movement. be recognised that the well-being of each individual will be indissolubly bound up in a high standard of capacity among the whole body of citizens. Nor is it difficult to discover the practical basis for a compromise between the immediately conflicting interests of the consumer and producer of special commodities or services, supposing that these dif- ferent groups of citizens should persistently refuse to recognise the " larger expediency " of efficient citizenship among all classes of the community. Fleeming Jenkin, in his Essay on Trade Unions, has expressed it with admirable conciseness : — " But while the wants of men determine their pay, it is the demand for men of that class which deter- mines how many shall be employed at that pay. This is a corrective to discontent. If their wants are great, few or no men of the given class may get any pay at all. It is the seller of labour who determines the price, but it is the buyer who determines the number of transactions. Capital" (or the community) "settles how many men are wanted at given wages, but labour settles what wages the men shall have." Thus if the National Union of Boot and Shoemakers were to raise wages above the point of efficient citi- zenship the Wholesale Society or municipality would import boots and shoes and manufacture other ar- ticles instead ; or if the gas stokers proved unreason- able, we might -prefer petroleum or electric light rather than submit to their dictation. Barristers and medical men might even be brought to modest terms by free justice and municipal dispensaries. For if the issues between the producer and consumer of commodities or servic^^^ were uncomplicated by The Ideal ajid the Fact. 2tg the unknown profits and losses of individual capi- talists and brain-workers, public opinion would be a final and irresistible court of appeal. For while the community would possess all the materials for a judgment, they would also have an absolute power to enforce it. Indeed there are some who maintain that the community would be a harder taskmaster than the individual capitalist ; and they cite, in sup- port of this proposition, the low wages of Post- Office employees. But assuming that this charge of govern- ment "sweating" be proved, this objection overlooks the fact that under the present capitalist organization of industry the vast majority of the nation are not employees of the community, while a considerable and powerful minority are relieved, by the possession of unearned incomes, from all service as wealth-pro- ducers, direct or indirect In a democratic organi- zation of industry — such as we are, for the purposes of our argument, assuming to exist — all men alike would be, in one capacity or another, servants of the community. Hence if the Dockers refused to the Cotton-spinners fair conditions of employment, the Cotton-spinners would, when the case of the Dockers came up for consideration, pay the Dockers back in kind. We can hardly imagine that the whole com- munity of workers would submit to conditions of employment whereby the lives of all would be ren- dered equally distasteful. And if one special group of workers were singled out for oppression, it hardly needs even the intelligence of the a priori economist to perceive that the recruits to that profession or in- dustry would not be very numerous. If the services of this class were of use to the community, the terms 220 The Co-operative Movefnent. would have to be raised. Here, in fact, we come back to Fleeming Jenkins' explanation of the basis of the collective bargain. Again, it is objected that this form of industrial organization, with its standard rates of wages and prices, is applicable only to the well-disciplined and efficient workers of the industrial army. In other words that the organization of industry for the benefit of the community will leave no place for those who, for one reason or another, can render no eflicicnt service to the community. With the sweater will be eliminated the great majority of the sweater's unfor- tunate victims. Is it necessary to remark that the unfit, the men and women who have fallen from the ranks, are dealt with in the end, under the present system, by a Poor Law ; and that under any conceiv- able industrial system these unfortunates could only be effectually dealt with (unless we permitted them to die in the streets) under a reformed Poor Law ? Doubtless the ranks of the new army of paupers would be largely recruited by the vicious and incapable mem- bers of the upper and middle class. But these persons the workers already support in extravagant luxury : the only change would be in the amount of the allow- ance — a change which might be considerable, but which would undoubtedly be in the direction of public economy. Whether the democratic administration and democratic control of industry, with its regular demand and regulated standard of life, would di- minish the appalling number of incapacitated and demoralized workers — the class which we at present term paupers — is a question which dannot here be discussed, but which is worthy of the careful con- The Ideal and the Fact. 221 sideration of the student of economic and social questions. No better text-book on this subject can be offered to the reader than the Report of the Evidence of the Lords' Committee as to Sweated Industries. But the social value of this form of society would not consist solely or even principally in a more equitable diffusion of the necessaries and comforts of life. If this were all, it would be a poor result for generations of human effort ; a goal unworthy of the disciples of Robert Owen. For Co-operators have always been inspired by the ancient doctrine of human fellowship, by the new spirit of social service, by a firm faith that the day would come when each man and woman would work, not for personal sub- sistence or personal gain, but for the whole com- munity. This service of the community by the citizens — this free ministering of all by all — con- stitutes the moral ideal of the British Co-operative movement, and one of which most assuredly Co- operators have no reason to stand ashamed. An organization of society in which the community — not any profit-making individual — would always be the employer — an organization of labour whereby the immediate and ultimate welfare of the workers would be guarded by a representative personally uninterested in the question of wages and intent on a general high standard of effort and enjoyment in the class he represents — this fully-developed industrial democracy alone provides, in a complete form, the economic basis for the future religion of humanity. While every worker feels that by increased effort he is adding to the power of oppression of a privileged 222 The Co-operative Movement. class ; while every wage-earner discovers that by an additional stroke of work, unreckoned in his wages, he is compelling a weaker fellow to accept lower wages or forcing him to an intolerable strain — then we shall still watch the disastrous policy of the more ignorant Trade Unions (even more observable in the customs of unorganized workers) undermining the prosperity of English industry by a collective effort to lower the quantity and efficiency of labour, instead of the enlightened policy of raising the quality and quantity of human effort in each individual worker and the standard of life throughout the whole class. And this is not the mere vision of a moral Utopia. We see before a sure presage of future ages — a Child of Promise — " the State within the State." For the spirit of social service is already rife among the officials of the Co-operative movement. It is exactly >^ this conscious service of a great community, this pride in promoting a noble cause, that opens the moral and intellectual gulf between two classes of men of identical occupation, retail tradesmen on the one hand and the officials of the Stores and the Whole- sale Societies on the other. While persistent pursuit of petty gains, narrow prejudices, and illiberal policy distinguish retail traders as a class, public spirit and a large grasp of social and economic questions are the usual characteristics of Co-operative officials. Thus, in the subtle power of the Co-operative Faith we discover the secret of that administrative success of the British Co-operative movement which perplexes the ordinary man of the world. Officers earning less than the market rent of their ability, chairmen and committee men accepting nominal fees, watch The Ideal and the Fact. 223 nevertheless with integrity and zeal over the interests entrusted to their care. Doubtless there are Judases in the Co-operative movement as in all new religions. For the committee-man or officer who accepts a bribe or neglects his duty, must be fully aware that he is not simply an indifferently honest man, like many of his fellows in private trade, but the deliberate be- trayer of the means of salvation to thousands of his fellow-countrymen of this and all future generations. CHAPTER VIIL CONCLUSION. I WILL assume, in the remarks witn which 1 propose to end this slight sketch of the British Co-operative Movement, that we, Hke the early Co- operators, are socialists ; that we accept, as the Ideal towards which we are tending, a state of society in which all citizens will serve the community with whole - heartedness, the community remunerating them, in return, according to the personal expenditure needful to the full and free use of their mental and physical faculties. Without this desire for, and faith in, a possible socialist state, these observations will appear uncalled for. I should therefore advise the student who desires only a matter-of-fact statement of past or present events, or the philosopher who is satisfied with society as it at present exists, to close the book, as the few remaining paragraphs will afford him no nutriment, and may even supply an irritant which will effectually prevent the comfortable digestion of the preceding narrative, and of the statistics contained in the Appendix. Have we citizens of Great Britain then any certain ground for faith or even for hope that through the concurrent action of the Co-operative and trade Conclusion. 225 union organization we shall attain Robert Owen's New System of Society ; a state in which the earn- ings of all workers will represent efficient citizenship, while all citizens will render willing service accord- ing to their highest ability ? Tlie answer, I fear, is no longer doubtful Even if Trade Unionists and Co-operators worked in unison, voluntary association, though an admirable training and convincing ex- ample, would be found wanting as a sole and all- sufficient method of social reform. For the Co-operative movement, though a striking and imposing example of a complete solution of the administrative difficulties of an industrial democracy, forms at the present time an altogether insignificant part of the national industry. The total capital of the country is estimated at ten thousand millions. Only twelve millions of this is administered by volun- tary associations of consumers. But the enthusiastic Co-operator will ask : why not develop the voluntary system of democratic Co-operation until it embraces the whole field of industry ? It may be well, there- fore, to inquire briefly into the probable social and economic limits to the further extension of this form of democratic self-government. The first barrier to an indefinite extension of the Co- operative movement under the present social system are the conditions of life of certain classes. Men living below a certain standard of life, or in isolation, populations continually shifting their abode .and changing their occupation, are incapable of voluntary association, whether as consumers or producers. The hand-to-mouth existence of the casual labourer, the physical inertia of the sweater's victim, the vagrant Q 226 The Co-operative Movement. habits and irregular desires of the street hawker, and of the mongrel inhabitants of the common lodging- N house — in short, the restlessness or mortal weariness ' arising from lack of nourishment, tempered by idle- ness, or intensified by physical exhaustion, do not permit the development, in the individual or the class, of the qualities of democratic association and ^democratic self-government. We need no demon- \ stration of the truth of this fact ; it is the burden of complaint at Trade Union and Co-operative Con- gresses. Thus, I imagine, it is no mere coincidence that Co-operative and trade union organizations flourish best in state-regulated trades, such as textile and mining industries ; while the wage-earners of Birmingham and London, at work in their homes, or in workshops that escape regulation, are appa- rently incapable of association as consumers or producers. The labour history of the last fifty years tells us plainly that legislative regulation — the out- come of compulsory association — is the only effectual instrument for raising the condition of certain classes to the social plane upon which voluntary association becomes possible. But whether or not we admit that the absence of legislative restriction is the principle cause of this incompetency, it is indisputable that about four-fifths of the wage-earning class are outside the Co-operative and trade union movements. Poverty and irregular habits form a lower limit to the growth of Co-operation. Fastidiousness and ;^ '3^ the indifference bred of luxury constitute a higher limit to the desire or capacity for democratic self- government. The upper and middle class, with Incomes altogether out of proportion to their actual Conclusion. 22"] needs, demand the servility of the profit-making traders and the irregular and diversified production of profit-making manufacturers. The business-like despatch and quick answers of the Store official jar on the sensitive feelings of the great lady, accustomed to the silent subservience and immediate acquiescence of well-bred servants, paid to wait on her pleasure and convenience. The caprices of fashion, the vagaries of personal vanity and over-indulged appetites can find no satisfaction in an organization of industry based on the supply of rational and persistent wants. Moreover, the severe mental strain consequent on the conscientious expenditure of a large income, or the apathy of a mechanical satisfaction of every want disinclines the wealthy customer for the responsi- bilities of association. Physical nausea and mental exhaustion are the common ailments of the rich, as well as the complaints of the very poor : while the love of personal possessions, and the spirit of rivalry engendered by social ambition, effectually withdraw the surplus energies of the well-to-do classes from any form of democratic association. To bring, there- fore, the great bulk of the middle and upper class expenditure within the jurisdiction of the Co-opera- tive movement we should be forced to impose a graduated income-tax amounting to something like twenty shillings in the pound, on all incomes over £Apo a year. Propaganda among the rich is as futile as propaganda among the very poor; if the Co-operators " mean business " with those classes of society, they must add certain items to their political programme the character of which there is no need to specify. 228 TJie Co-operative Movement. The social limits are not the only boundaries of the , Co-operative State. The administrative limits are, if ^' anything, more important. For the group of citizens who administer a Store or the Wholesale Society are necessarily the actual consumers of commodities or services supplied through those organizations. Now this special form of democracy does not always form a possible or desirable and administrative group. We cannot imagine the Calais and Dover Line of steamers being owned and managed by the actual passengers. If it were deemed desirable that the community should undertake this service, we should, follow the example of the Belgian Government in the service of the Ostend and Dover route, and the central government would provide a national line of steamers. Again, the most ardent Co-operator who aimed at the communal administration of rail- ways, would hardly contend that the proper adminis- trative group for the London and North Western was the passengers and traders who used it. All persons, whether or no they travel by rail, are indirectly interested in the means of transit as consumers or producers of articles upon which carriage is paid. Hence an important body of consumers would be disfranchised ; while the difficulty of gathering to- gether a genuinely and permanently representative body of the different classes of passengers and traders would render a steady and uniform administrative policy impossible. In the single instance of a con- sumer's organization undertaking the means oi transit — the Liverpool Docks — the franchise has been limited to traders paying at least ;^io annual dues, so as to form, from out of the casual and Conclusion. 229 scattered constituency of customers, a responsible body of proprietors permanently intp.rested in the good management of the docks. And even on the Mersey Docks Harbour Board the community at large is directly represented by four nominees of the' government. Hence in some of the largest and most important industries an open democracy of consumers forms an undesirable or impossible constituency for represen- tative self-government. But this is by no means the most important administrative limit. In all cases of a "national or artificial monopoly the actual consumer is an improper representative of the community. We could not, for instance, endow the farmers and agricultural labourers with the land of the nation ; no body of proprietors which excluded any portion of the community would be a satisfactory constitu- ency. If our mineral wealth were to be nationalized, the mines would not be handed over to the col- liery proprietors or even to the coal miners. More- over, when consumption is compulsory, association must also be compulsory. The provision of such articles of universal consumption as water, gas, roads, street-lights, must obviously be undertaken by a compulsory association of consumers, if we desire to maintain an industrial democracy. For instance, if the Sheffield Store had undertaken to raise the two and a half millions recently paid by that municipality for its water-works, it is obvious that the Sheffield Co-operative Society would have become a combin- ation of capitalists making profit or suffering loss by a speculative supply of the wants of those Sheffield citizens who, through ignorance or indifference, \ 230 TJie Co-operative Movement, remained outside the association. In other words, we should again have returned to the individualist system of industry, with its advantages and disad- vantages — a form of society which we are not at present discussing. And in this example of the Sheffield Store we touch on a financial as well as an administrative limit to the rapid growth of Co-operative compared to other forms of democratic enterprise. While a muni- cipality, through the collective power of compulsory association, can raise millions every year by its assess- ment on the citizens, the Store accumulates capital at a snail's pace. Compare the 300 millions of property administered, according to Mr. Giffen, by municipalities in 1885 (gas-works alone standing at 21 millions) with the 12 millions of Co-operative capital. To sum up, therefore, these obvious limits to the Co-operative commonwealth, we may state that all the larger forms of national wealth, such as land, means of transit, and all commodities of compulsory consumption — gas, water, sanitary appliances, etc. — are excluded from the possible domain of voluntary associations of consumers. But the statement of the boundaries of the Co- operative State is not yet complete. The whole national export trade is necessarily excluded. For here it is obvious that administration by an open democracy of actual consumers cannot even exist unless we await the miraculous conversion of the hordes of China and the savages of Africa to the doctrines of Robert Owen. It is, of course, conceiv- able that the Store system might be developed among other Anglo-Saxon nations with whom we trade, and Conclusion. 23 1 that a relationship such as exists between the Scotch and English Wholesale Societies might be established in the corresponding central establishments of Aus- tralasia, Canada, America, and Great Britain. But other forms of socialism seem likely to obtain in Australasia ; and the American people, intent on personal gain, show neither desire nor capacity for any form of government other than a nominal democracy ruled by a corrupt plutocracy. On the other hand, the British Stores and Wholesale Societies '' might frankly engage in a profitable export trade with the merchants of foreign countries ; or they might export surplus manufacture, so as to obtain the increasing return from manufacturing on a large scale in those industries in which they are already engaged. But the danger to the integrity and prosperity of the Co-operative movement of this step is easily demonstrated. All the economic advantages of the control of production by the actual consumers are abandoned. Once again Co-operators taste the forbidden fruit of industry — profit on price. Sup- posing the profit from the export trade became a considerable portion of their total income, voluntary associations of consumers, able at any moment to limit their numbers, would be sorely tempted to close their doors to new-comers. Thus the Wholesale Societies might be transformed into profit-making machines of capitalist producers, and the habit of trading with non-members abroad might be rapidly extended into the custom of trading with non-members at home. With the quotation of the shares of the Stores and the Wholesale Societies on the Stock Exchange, rising and falling in value with the advent of a nev/ directorate, ot 232 The Co-operative Movemetit. Lhe rumour of a foreign war, the whole fabric of the Rochdale system might fall into disrepair, if not into hopeless ruin, by internal competition between societies, or combination among them against the interests of the whole community. Thus, those of us who believe in the millennium of a fully developed industrial democracy, perceive in the national export trade the last resort of capitalist administration of industry. No mere voluntary asso- ciation of Co-operators can undertake the export trade. Here again the only possible participation of democratic Co-operation would bring us rapidly back to the individualist system — profit on price for individual gain. Should these industries therefore eventually fall into the hands of the representatives of a democracy, they must obviously be administered by the public organization of the whole people — that is by the State or the municipality. For in this manner only can the profits, which will necessarily accrue from dealings with other States, be accumu- lated for the benefit, or distributed for the satisfaction of the whole body of citizens. The limits of the probable domain of the Co-oper- ative State are now all within sight. Voluntary associations of consumers are practically restricted to the provision of certain articles of personal use, the production of which is not necessarily a monopoly, the consumption of which is not absolutely compul- sory, and for which the demand is large and con- stant Under the present social system a restricted portion only of the nation is within reach of a social democracy — that intermediate class neither too poor nor too wealthy for democratic self-government. Let Conclusion. 233 us attempt to reduce these limits to a statistical form in relation to the total income of the United King- dom. I must however warn the reader that I offer with all reserve the following estimate, with the hypo- thetical figures upon which it is based. I use these figures as a convenient form of summing up certain arguments, and not as an accurate calculation of the present or future possibilities of the Co-operative movement. Let us assume that Co-operators, although unwilling to reduce the incomes of the well-to-do classes by legislative measures, were determined to use their political power to level up the standard of life among the degraded classes to the plane of voluntary associa- tion. Assuming, moreover, that in this attempt they were successful, the Stores and dependent federal institutions might then hope to attract the whole expenditure of working-dass income within their sphere. Of the 1,300 millions of national income, 500 millions, at most, is attributed by statisticians to the wage-earning class. From this let us deduct 100 millions for rent, gas and water rates, and taxes. The commodities or services which these charges represent, we have already shown to be outside any possible extension of the Co-operative system. Another seventy millions of working-class income is spent in alcohol ; no Co-operator proposes to under- take the provision of spirits and beer to the Co-opera- tive world. We have therefore a remainder of 300 to 350 millions. Hence this sum might represent the Co-operative trade. But it is needless to remind the reader that the income of the working class, and more especially that proportion of it which could be spent 234 T^h^ Co-operative Movement. at the Store, is capable of almost indefinite increase. For instance, the " drink bill " would probably be reduced to a modest pittance if all working men developed the qualities of democratic self-government. And without any recourse to socialistic measures, the gross income of the working class might be con- siderably enlarged. But there is every reason to suppose that the same conditions of increased intelli- gence and sobriety among the workers would enable capitalists to obtain larger returns and landlords to exact higher rent. In other words, whatever might be the increase of the total wealth of the nation, the proportionate share of the workers in the national income would, other things being equal, remain the same. The trade of the working-class Stores therefore might, even under the present social circumstances, increase from the present turnover of 35 millions to the 350 millions of working-class income spent in household provisions. Narrower limits are set to Co-operative manufacturing. A very small proportion \ of these commodities could be produced under the Co-operative system of industry. Imports of food and tobacco constitute the great bulk of the wage- earner's consumption. Of the remainder, we must subtract what is spent, not on new commodities, but on second-hand articles, which have already passed through the hands of the well-to-do classes, of which there is undoubtedly a large working-class con- sumption. And lastly we are face to face with the I economic limit of the unit of productivity — I mean I a sufficiently large demand for any one article to allow of profitable manufacture. For instance, the Conclusion. 235 Wholesale Society has hitherto felt itself unable, in spite of the proximity of its chief centre to the great cotton industry, to undertake the manufacture of cotton cloth. The range of variety in calicoes and prints bought by the working class, render the quantity of any one quality or style demanded by Co-operators too small for profitable manufacture even by their central institution. This unit of pro- ductivity is the blank wall which Co-operators have already discerned as the practical barrier to demo- cratic manufacturing. I need not, however, point out that this barrier to Co-operative manufacture would be pushed further and further by the extension of Co-operative trade. To sum up this rough estimate, therefore, we can hardly conceive that the Co-operative turnover, under the present social conditions, could exceed 300 to 400 millions — a trade which would only admit of 75 millions of capital, should the present ratio between Co-operative capital and trade be maintained. As the working-class capital is estimated at the present time at 169 millions, we shall therefore always be face to face with the present difficulty of using the capital of the working class in the Stores and the Wholesale Societies. Hence Co-operators are right in asserting that they will always have a superabundance of capital at their command for which the democratic school of Co- operators can find no employment. We may con- fidently predict therefore, that the individualist school of Co-operators, should I be mistaken in my view of the economic and administrative obstacles to the reali- zation oi" their ideal of the self-governing workshop, 236 The Co-operative Movement. and should they succeed in converting the British working class to their principles, would always have at their disposal a large margin of working-class capital. The custom of the wealthy, anxious to secure quality, and able to pay a good price for a good article, and stimulated to benevolent interest in in- dividualist effort by fear of approaching socialism, might become the happy hunting ground of the self- governing workshop ; while the whole export trade might be transferred to industrial partnerships, with their autocratic capitalist administration and profit- sharing wage-system. Thus the various forms of Co-operative enterprise need not compete. The in- dividualist school of Co-operators, in fact, if they surmount purely economic obstacles, will find that their antagonists are the Trade Unions, and not the officials of the Stores or the directors of the Wholesale Societies. I have refused to consider one limit to the adminis- trative capacity of the Co-operative organization fre- quently described by the opponents of the democratic form of Co-operation — the centralized government of the Wholesale Societies, First, because I believe that the constitutional structure of these Federations is indefinitely elastic and adaptable. Secondly, because I imagine that the administration of some seventy-five millions of capital, and the organization of a trade of some 350 millions, though an arduous undertaking, is not beyond the capacity of the present Store system, even if the constitutions of their dependent Federations were to remain unchanged. These then are the external boundaries to the possible domain of the voluntary associations of con- Conclusion. 237 sumers. But there are also internal obstacles to the realization of the dream of the enthusiastic Co-opera- tor — the absorption by a Co-operative community of the whole of the tribute now levied on the workers by those who " toil not, neither do they spin." A large portion of the income of the community is paid, not for personal services rendered to the nation, but to capitalists and landlords. Co-operators do not escape the payment of this tax. For, like the Owenite communities actually established, the mem- bers of the Store and the Wholesale Societies, sur- rounded by a competitive system of industry, cannot escape the tribute of rent and interest even within their own domain. Doubtless with regard to the interest on the twelve millions of Co-operative capital, it is credited to associates, that is to say, it is charged on the consumption of all members and paid to a minority of capitalist Co-operators. The rent of land, however, is usually, if not always, levied by an out- sider, either in the form of technical rent or as interest on the capital expended in the purchase of the free- hold. The Bury Store, for instance, cannot escape the tax of Lord Derby's rental ; the fact that the Society may have acquired a freehold does not alter the position, since Lord Derby extracts from this com- munity of workers the interest on the capital paid to him as purchase money. Hence the Co-operative system of industry has taken only one step forward in completing the work of the industrial revolution foreshadowed by Robert Owen. Through the open democracy of the Store it has exchanged an indivi- dualist for a social administration of industry, and thus secured the profits of enterprise for the commu- 238 The Co-operative Movement. nity at large. This first step, however, is the most difficult. The democratic administration of industry involves the possession of active intellectual and moral qualities ; whereas the inhabitants of hospitals and asylums are equal to the passive receipt of rent and interest. But the British Co-operative move- ment has left the ownership of land and the means of subsistence in the hands of individuals, whether within or without the Co-operative State. If the English democracy therefore wish to complete the social changes prophetically described in Robert Owen's New System of Society, if they are determined to add to the social production of wealth (brought about by the new industry) to the communal ad- ministration and control (introduced by the Co-opera- tive and trade union movements) the communal ownership of land and the means of production, they must use deliberately the instruments forged by political democracy, taxation in all its forms on un- earned wealth and surplus incomes, and compulsory acquisition, not necessarily without personal compen- sation, of those portions of the national wealth ripe for democratic administration. And we have ample precedent for class taxation, and personal compen- sation, as a method whereby the democracy may acquire or control the instruments of production. A Conservative government recently proposed to use the drink tax to buy out the publicans ; a Radical government might suggest a land tax to buy out the landlords, and doubtless Mr. Ritchie, as Chancellor of the Exchequer in a future Conservative government, will impose a graduated Municipal Death Duty on real property, whereby the dwellings as well as the Conclusion. 239 streets might gradually become the property of the corporation. But, like the details of a reformed Poor Law, these measures of relief to a class over- burdened with property are without the scope of an essay on that form of democratic industry known as the Co-operative movement. In conclusion, I would emphatically re-assert that ' the social, administrative and economic boundaries of the Co-operative State by no means limit the power of Co-operators in our national life. The gathering together of the whole working class in a Co-operative Union on the one hand, and in a Federa- tion of Trade Unions on the other, would make the workers practically paramount in the State, The organization of workers as consumers would effectually prevent any attempt on the part of capitalists and landlords to bribe certain sections of the working class . by the promise of high money wages to support a pro- tectionist policy in its legislative form, import duties, or, in its economic form, trusts and capitalist com- binations to raise prices. And if the officials of these twin Federations, representing the primeval interests of consumption and production, were to unite in solemn compact, then it would be comparatively easy to weed out of the community those who consume without producing, the parasites of all classes ; while those who at present produce without consuming their full portion would be raised to a higher place in the national banquet. That this result cannot be accomplished without resort to legislation, the outcome of compulsory association, has, I think, been clearly demonstrated. But before we can have a fully developed democracy, the nation at large must 240 The Co-operative Movement, possess those moral characteristics which have enabled Co-operators to introduce democratic self- government into a certain portion of the industry, commerce and finance of the nation. It is, therefore as moral reformers that Co-operators pre-eminently deserve the place in the vanguard of human progress. While completing and extending their domain to its furthermost limits, Co-operators should deliberately introduce their methods and experience into the administration of the parish, the municipality, the county and the State ; thus fulfilling by the sure but slow process of democratic self-government Robert Owen's Co-operative system of industry. Thus the two distinct bodies of social reformers created by the teaching of Robert Owen — British Co-operators and British Socialists, once again united by a common desire for industrial democracy under the banner of Radical Reform, may accept as a full and complete expression of their aims and methods the noble words of that great democrat John Bright : — " I believe that ignorance and suffering might be lessened to an incalculable extent, and that many an Eden, beauteous in flowers and rich in fruits, might be raised up in the waste wilderness which spreads be- fore us. But no class can do that. The class which has hitherto ruled in this country has failed miserably. It revels in power and wealth, while at its feet, a terrible peril for its future, lies the multitude which it has neglected. If a class has failed, let us try the nation. That is our faith, that is our purpose, that is our cry — let us try the nation. This it is which has called together these countless numbers of the people to demand a change ; and, as I think of it, and Conclusion. '2^1 of these gatherings, sublime in their vastness and in their resolution, I think I see, as it was, above the hilltops of time, the glimmerings of the dawn of a better and nobler day for the country and the people that I love so well." ■wsXoidmji 3JB O tNVO N=3=d «00 oqM USUI -93)1llUU103 00 vO f2 O ON N r>i N t^sO O t^ t^lO M (4 n r) f- " "" ^ .ss O Th »^ u-> O "I o ro N a -o "^ >, U O vn to n t~» f^ *" o^ ers. oyees are ciders. O On N ON N t^VO \n O "^ ehold Empl who bareh t^ t^m M N M t^ 5^ 3 1 '^ J3 (/} ;> . IV. u-1 N ■*00 t^ N « « •- M* /-!. O «00\>-N!^0 ? 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" t) IS >»- C U M fl I I O f^ "^00 NO f-. o tfl On ■<*• t^ND NO O -& « Tf in u-1 1^ t^ 1-1 M en vo ro N 00 fO ■^ ON O "" fO N N N o - o o o ro a O O ro m Ln '"O N .ti O "NO t^ On LT) O a O N N N - M N C> VO >-l t^ *^ *^ V> M • • S • • liii^- nufact n Woi s Fish News , Mor Din . e Ma Gray, Mr. J. C, vi., 112 Gray's Inn Road Labour Exchange, 47 Greening's, Mr. E. O., experiment m industrial partnership, 135-137 Greenwood, Mr. Abraham, 93, 129 Habeas Corpus Act, suspension of in 1817, 2 Handicraft production, description of, 3-4-8; contrasted with factory production, 4 Hebden Bridge fustian cutters, 144 Hetherington, Henry, 17-56 Holyoake, Mr. G. J., 45, 56, 60, 108, 128, 177 Howarth, Charles, 17, 61 Hughes, Judge, 119, 125, 135, 172, 177, 183 Hull Co-operative Corn Mill, 42 Individualist co-operation, definition of, 75 ; in corn mills, 79-82 ; the origin of, 118-121 ; Christian Socialist attempts at, 121-125 ; in Lancashire, 125-130; in the iron trade, 135-136; in woollen and other trades, 135-137; analysis of present forms of, 139; details of existing experiments in, 139-149; causes of failure, 149-153; results of, 157-159 Industrial revolution, the, 2-12 "Inquiry into causes of present high prices," 4:1 Index 259 Jenkin, Fleeming, 218 Jevons, Prof. W. S., 127 Joint stock companies, rise of, 126 ones, Mr. Benjamin, vi., 39, 112^ lait l37t 13O Jones, Lloyd, 125 King, Dr., 53 Kingsley, Rev. Charles, laa Labour Exchanges, 47 Laisser /aire, doctrine of, 7 Lancashire, 37, 93, 125 Lassalle, Ferdinand, and co-operation, 194 Law in relation to co-operative societies, 51, 67, tlii Le Chevalier, 122 Limited liability companies, 126, 131, 133 Lovett, William, 17, 53, 56 Ludlow, Mr. J. M., 119, 122, 125, 127, 135, 179 Macculloch, 5 Machinery, effects of introduction of, 8, 9 Maine, Sir Henry, 28 Malthus, II Married Women's Property Act, 7a Marshall, Prof. A., 25, lio, 117 Marx, Karl, 47, 48 Maurice, Rev. F. D., 119, 12a Maxwell, Mr. William, 114 Merchants, petition of, 1820, 5 Mitchell, Mr. William, 113, 14a Morris, Mr. William, 28 Morrison, Mr. Walter, 135 Neale, E. Vansittart, 118, 125, 135, 171 New Lanark, 13 North of England Co-operative Wholesale Society, 89, 94 North of England Conference Association, 1 73 Nuttall, Mr. W., 94, 130 O'Connor, Fergus, 57 Oldman, Mr. F., vi, Oldham Cotton mills, 129 Owen, Robert, i ; and New Lanark, 13 ; and Factory Acts, 15 ; and Socialism, 16; his "New System of Society," 17-19; proposal to eliminate profit, 21 ; as to cost of production, 22 ; lus " Causes of the Present Distress," 26 ; and the Reform movement, 30; and labour exchanges, 47 ; his system, how far realised, 205-7 Penny postage, effects of, 88 Place, Francis, 32 Price, Mr. L. L. F. R., 162 Production and distribution, alleged difference between, 10S-113 Productive Co-operation, wrong classification, 40; analy^s of, 75, 4S1, "39. '57- 26o Index Profit, analysis of, 64, 96 ; division of, 64; Owen'i new of, at, 1 55 Profit-sharing, 21, 96, 114; Messrs. Briggs' triui of, 135, 154-157. 159-169 ; trade union, objections to, 160-163 Quarterly Rez-iew on the Union Shop movement of 1829, $1 Ralahine, 30 Redemption societies, 38, 78, 80 Reform movement, 33 Religious revival of i8th century, ■effect o* oii the j>Tcwth of aeM- governing faculties, 36-37 Rochdale pioneers, the, 59, 88, 93 Rosebery, Lord, 116 Scotland, distribution of co-operation in, map facing preface ; rise of co-operation in, 77 ; Scottish Wholesale Society, institution of, 89 ; constitution of, 103, 105 ; Scotch Tweed Society, 140 Schloss, Mr. D. F., 159, 166 Sheerness Baking Society, 43 Shirtmaking, co-operative, 10$ Shuttleworth, Sir J. H., 128 Socialism, Co-operation in relation to, 202, 3j6, 239 { Christian, 118, 135, 154; of Robert Owen, 16. Smithies, James, 74 Spencer, Mr. Herbert, 91 Steuart, Sir James, 12 Strikes resulting in co-operative societies, 135, Ity Taylor, Mr. Sedley, 154 Ten hours movement, relation of co-operation to, 61 Thompson, William, 47-50 Thompson, Mr. William, of Huddersfieki, 140, 157 Tomlinson, Ambrose, 61 Trade unions, 38, 54, 56, 84; and indiv'dualist co-operation, 136; and profit-sharing, 162 165; relation of to cooperation, 195, 201, aiy Union Shops of 1828-32, 44, 51 Value, influence of theories of, M Valleroux, Hubert, 119 Wages, Owen's theory of, S! Watson, James, 17, 56 Whitby Union mill, 43 Whitehead, Mr., vi. Wholesale societies, see co-operative wholesale eoiietie Wigan weaver, anecdote of, 32 Women, place of, in co-operation, 72, 191 Women's Co-operative Guild, 193 •« Working Class Limiteds," 126, 131 Worksiiup, the self -governing, loS, vm^ 157 APR 20 UK DATE DUE nCi: f\Pl ; 1 .S ]qgc, C' Ij GAYLOHD PRINTED INU.S A. /3 3 1970 00669 9919