- º, º 4. Tº a 3 - º ... rº. * Gººg º, 173° tº 52. Sºº- - C0-0PERATIVE ASSOCIATIONS, HOW MADE MOST EFFECTIVE. AN ADDRESS By H. O. N. A. MAS A WA LIX E. R. Author of “The Science of Wealth.” - BEFORE T H E S OVE REIGNS OF INDUSTRY, AT NORTH BROOKFIELD, JULY 21st, 1874. THE producing, or, as they are commonly called, the working, classes throughout Christendom have, within the last half century, come to under- stand in what their power as a body consists, and in what manner they can most effectually wield it. They have learned that it can be done by associ- ated action, — by combining their energies for the accomplishment of a given purpose. But while they have thus discovered the secret of their strength, have they at the same time learned how to use it to their advantage? - That is quite another matter, and one of deep interest to themselves and the public; because, being in a great numerical majority, in so far as they do understand how to utilize their power, in so far will they be able to secure every advantage to which they are justly entitled. Hence the great importance of inquiry and investigation in regard to the great social problems they are called upon to solve. One of these questions I propose to consider at the present time. It is that of Co-OPERATIVE ASSOCIATIONS. When several persons act together for the accomplishment of a given pur- pose, they are said to co-operate. Hence the term co-operation. There are two general purposes for which co-operative associations may be formed. 1st. For carrying on some branch of productive industry, as AGRICULTURE. In England there are Associations of this kind, and they are said to be successful. They are more needed there than here, for such a purpose. THE FISHERIES. A great part of all the fisheries of the world are carried on upon this mu- tual principle. Men associate together, and divide the proceeds of their en- terprise. #. whaling business, once an important industry, has ever been conducted by the joint efforts and interest of those engaged in it. Every person em- ployed becomes a partner, and shares in the final result of the voyage. This secures all the energies of each individual. MANUFACTURES. Then associations may be formed for manufacturing purposes. Establish- ments of this kind have been organized that have succeeded well. But it is obvious that undertakings of this description must be attended with much difficulty, since a large capital must be wielded with skill and judgment to ensure a successful issue. But the credit system meets us here, as the great obstacle to co-operation. According to present custom credit must be given on all that is sold. Hence, such an extension of risk and responsibility must be incurred as few co-opera- tive establishments could successfully encounter. Were the manufacturer to: sell to the wholesale merchant for cash, and the latter give the credit which legitimately belongs to the mercantile business, co-operation in any branch of manufacturing would be perfectly feasible. EXCHANGES. 2d. Co-operation may be used for faciliating exchanges. One kind of product must be exchanged for another by the intervention of money. The workman, having obtained pay for his services, wishes to convert his funds into the commodities he consumes. He goes to the retailer, and pays him a profit upon the articles he buys. The retailer must have a profit. It is right he should, provided it is not exorbitant. But it is equally just and proper that the consumer should obtain his commodities as low as possible. The retailer has no moral or legal claim upon any one to purchase of him; and so far as the consumer can dispense with the retailer's services, he is at liberty to do so. Co-operation, therefore, for trading purposes, is morally right. IS CO-OPERATION DESIRABLE * Certainly, if a saving can be realized by the co-operators; because “a penny saved is as good as a penny earned.” Whatever men can save is so much added to their incomes. Therefore any honest effort to obtain that object is commendable. 3 IS CO-OPERATION PRACTICABLE 2 That depends entirely upon the business to be carried on, and the manner in which it is conducted. If it be a difficult one, requiring rare skill, great financial ability and high moral endowments in those who conduct it, and a large investment of fixed and circulating capital, it will be less practicable than one demanding only ordinary talent, limited capital and little responsi- bility. All this is obvious. Of all kinds of co-operation, that which is con- nected with trade is by far the most simple and feasible. For example, suppose 100 persons, representing 100 families, join together and pay into a common fund $10 each, –$1,000. With this, groceries to that amount may be purchased, a room provided, and the services of some one secured to distribute them. The thousand dollars thus advanced consti- tutes the capital of the Association. Each member pays for every article when he takes it. As fast as new supplies are wanted, they are purchased with the money received from the sale of the goods; and thus the trade is kept up. This is the entire operation. Nothing can be more practicable. It calls for nothing extraordinary. The principal of the concern, who has the care of the distribution, must be a man of fair intelligence, of sound judgment, of sagacity and industry; above all, he must be one in whose honesty perfect reliance can be placed. No accounts are to be kept with in- dividuals, since no credit should be given—the goods are in the shop or the money is in the till. With such an arrangement no time will be required for keeping accounts or making out bills, and no time spent in collecting them. An account should be kept of all the purchases made, and of each day's sales. This is easily done, and demands but little acquaintance with book-keeping. Any man who can read, write and cypher can do all that is needed. Noth- ing, therefore, can be more feasible than an undertaking of this kind; and the advantages are as obvious as the object is desirable. But what are the rules or conditions to be observed in such an under- taking? 1. There must be, as I have intimated, a permanent capital, though it be, as we have supposed, a small one. - 2. As I have before insisted, no credit must be given. The Association must neither take nor give credit; if it does, the result will be unsatisfactory. “Cash Down” must be the motto. The credit system has ruined many Associations, because it makes co- operation difficult and dangerous. Credit is the workingman's greatest curse. I say this deliberately and without reserve. By this I mean that he suffers more from the practice of taking credit upon what he consumes than from anything else outside his own personal habits. A man may purchase a house - on credit, if he will, because it is fixed capital. He does not consume it. He has it permanently on hand, and by the use of it is able to lay up a greater amount of his annual earnings; but he should never take credit upon any- thing for daily consumption. In ninety-nine cases out of a hundred there is no occasion whatever for his doing so. The retailer has no proper business to give credit. If he does he will make losses, and must and does charge enough additional profit on his goods to make up this loss; which profit those who do pay for their goods must, of course, pay. - - 4. Every workingman may, and should, have capital enough to pay for every- thing he consumes when he gets it. If he is paid once a week, or once a month, then he needs to have only one week's, or one month's, wages before hand to be independent of all credit, and owe nobody for what he eats and drinks. How many are there who could not do this if they would? It is the most downright folly for any man to eat up his wages before they are earned, and thus make himself a perpetual slave. I cannot be too emphatic on this point. The laborer will never secure his rights until he has achieved his independence of credit; and he will never do this until, by self-denial and rigid economy, he has placed himself in a posi- tion where he can pay cash for all he consumes, and never fear a dun from any man. For one, I can say that I would sooner feed upon potatoes and salt for a twelve-month than go to the market to be trusted for my dinner. 3. A profit must be charged upon all sales, to meet necessary expenses; and it should be large enough to guarantee against all accidents; since, if there be more than sufficient for that purpose, the balance that may have ac- cumulated at the end of the year can be divided amongst the stockholders, or added to the working capital. A margin should always be provided. 4. Again, economy should be consulted in the choice of a room for the business, and in the help required to carry it on. This is one of the striking advantages of co-operation—nothing need be expended to entice custom. So that the location is central, and the room sufficiently large and convenient, it matters not whether it has plate glass windows, frescoed ceilings, or rose- wood counters. No matter how simple and inexpensive–the more so the better, for all saved in this way accrues to the profits of the associates. Associations often fail for want of economical management of their affairs. The great object being to save money, all unnecessary expense or waste must be carefully avoided. 5. Pure, unadulterated articles alone should be furnished. This is an im- portant object. 6. And lastly, but not least in importance, the assistance of the fair sex must be secured in all co-operative Associations, or they will be wanting in a most essential element of success. So far as practicable, the wives and daughters, as well as husbands and sons, should be included. The interest in all movements and measures will be greatly increased by this association of the sexes in labors for the general good. Not only will the specific object for which co-operative Associations are formed be greatly benefitted by this union of the sexes, but the social condi- tion of the country will be improved by it—especially of the agricultural portion. The cultivation of the earth is a noble, healthy employment; but the great drawback hitherto has been that those engaged in it were so iso- lated-so separated from each other, so much occupied with their labor, and had so little intercourse with each other – as to have very few opportunities for improvement. The population of the manufacturing or trading towns and villages have had greatly the advantage over the rural districts in point of social privileges. This has been true in all countries. The fact has been very strikingly shown in England, where the agricultural population has ever been far in the rear in all great social reformatory movements. 5 If the Associations now being rapidly formed all over the nation will unite the energies and efforts of both men and women, great advantages for cul- ture and improvement, hitherto unknown, will be secured. I regard this as one of the most important considerations connected with the labor move- ment of the age. With these conditions fulfilled, there can be no doubt of success; and the history of such undertakings, when conducted in accordance with what has been laid down, shows that they have been eminently success- ful. Prof. Fawcett (now M. P.), in his “Manual of Political Economy,” has given a very full and interesting account of certain co-operative societies in Europe, from which we extract the following: “The co-operative movement in England was first commenced at Rochdale. About 1844, a few workingmen in that town suspected, and no doubt justly so, that they were paying a high price for tea, sugar, and other such articles, when they at the same time believed that they were not free from adulteration. They therefore said: ‘Why should we not club together sufficient among ourselves to purchase a chest of tea and a hogs- head of sugar from some wholesale shop in Manchester?' This they did; and each one of their number was supplied with tea and sugar from the common stock, paying ready money for it, and giving the same prices for it they had been charged at the shops. When all the tea and suger had thus been sold, they agreed to divide the money thus realized among themselves, in proportion to the capital each had subscribed. They found, to their surprise, that a large profit had been realized. The great advantage of the plan became self-evident; for not only were they provided with a lucrative invest. ment for their savings, but they obtained unadulterated tea and sugar at the same prices they had been previously obliged to pay for the same articles when their quality was de- teriorated by all kinds of adulteration. A fresh stock of tea and sugar was, of course, purchased. Qther laborers were quickly attracted to join the plan, and subscribe their savings; soon the society was sufficiently extended to justify them in taking a room, which they used as a store; and the success of the plan fully kept pace with its en- largement. “This society, now famous as the Rochdale Pioneers, possessed in 1865 a capital of about £72,000. The business was not long restricted to articles of grocery: bread. meat and clothing were all sold on the same plan. Their capital so rapidly increased that they were soon enabled to erect expensive flour-mills; and a supply of pure bread, as well as unadulterated tea, was thus insured. “A ready-money system is so scrupulously adhered to that even a large shareholder cannot make the smallest purchase on credit. The managers of the business are chosen by the general body of shareholders; and, in almost every case, an excellent selection has been made. “With regard to distribution of the profits, a sufficient sum is at first allotted to pay a dividend of five per cent, on the capital; the remaining profits are divided on the fol. lowing plan: Every person, when he purchases goods, receives one or more tin tickets, on which is recorded the amount of his purchases. At the end of every quarter each person brings these tin tickets, which form the record of his aggregate purchases; and the remaining profits are distributed in proportion to the aggregate amount which each individual has expended at the store. Thirteen pence in the pound (equal to about five and a half per cent on the amount purchased), is the average amount which, in this manner is received as a drawback. An annual dividend was made in 1865 of £42,000, among 5,500 members.” The reasons for this extraordinary success given by Prof. Fawcett are: the ready-money system, -selling for cash and buying for cash, turning capital over many times a year, -a large custom assured by the large membership, and economy of administration. 6 A very successful Association of co-operative masons has existed in Paris since 1848, commencing with seventeen members, with a capital of $70. It has grown to very large dimensions, has a capital of over $70,000, and con- tracts for the building of the largest hotels and railway stations. We are informed by the London Telegraph of June 19th, that the “Supply Association,” a co-operative institution formed by the “Associated Civil Ser- wants,” divided £40,000 in profits in six months–$200,000! The instances above cited are sufficient to show the extent and success of voluntary associations formed for trading purposes. OUTSIDE SALES. Should sales be made to persons outside the Associates? - If the object be to get their goods themselves at the lowest possible rates, the more sold outside the better the Associates will secure that object, pro- vided a small profit be charged upon all sales. Suppose the sales amount to $10,000 per annum, at 10 per cent, $1,000. Of this amount $8,000 sold to Asssociates, at 10 per cent, $800 $2,000 to outsiders, -- 200 1,000 Expenses, in both cases the same, say 700 Profit or surplus, - - $300 If sold only to Associates, $8,000 at 10 per cent, $800 Expenses, 700 Surplus, $100 Here would be a difference of $200 a year in favor of the company, which would reduce the percentage paid by the Associates to 7+ per cent, or a quar- ter less than if no sales were made outside. It will, however, always be op- tional with those associated whether sales shall be restricted to themselves or not. The time is coming when co-operation for a great proportion of the busi- ness of society will be adopted; but it will be when the producing classes have become more intelligent than they now are. The great obstacle in the way of the labor movement in this country, as well as abroad, is the want of a better understanding of what their needs really are, and how to supply them. Workingmen at the present day in many parts of the world, are calling for changes which, if effected, would be to their disadvantage; while they take no interest in and even are often found to oppose measures of the utmost importance to their interests. As an instance in point, I would refer to the income tax which for sev- eral years was levied in this country upon capital. It was a just tax; and the amount raised in a single year (1866) was over 60,000,000 dollars. But the great capitalists, the millionaires of New York, annoyed by this tax, formed an association for the purpose of securing its repeal. Lobby- ists, of the best qualifications, and with the most powerful of appliances, - a plenty of money, -were sent on to manipulate Congress and secure the desired object. The work was accomplished. The income tax was abol- ished; and the whole amount of which capital was thus relieved was thrown upon consumption. As the laboring classes consume by far the largest part of all taxed commodities, the result is that most of this large amount has been transferred to their shoulders. But now, what did the workingmen say or do in regard to the repeal of this income tax? Did they remonstrate against it? Did any of their numerous Associations raise a voice against the abolition of this righteous tax? Not at all; and yet, had they done so, the tax would have been in existence to-day; for the government needed it as a part of the national revenue. The Secretary of the Treasury, and every one connected with the public finances, protested against the repeal; but as no movement was made on the part of the masses, it was repealed. Had there been any popular demonstration, – had the workingmen in their variº ous Associations uttered their protest, — the measure would never have been accomplished. - This instance of strange inaction is a striking illustration of the want of a right appreciation of their true interests on the part of the workingmen, and of their neglect to act in cases where the influence of their ballots would be effectual. The issue was a plain one, that everybody could have under- stood; and if the workingmen had been awake to their interests, the repeal would not have been even attempted. The most imperative duty of the workingman everywhere is to educate himself as fast as possible in regard to the nature of the questions in which he is especially interested. He must learn to think for himself, and follow no one blindly, whoever he may be. The advantages gained by the laboring classes will be just in proportion to their intelligent appreciation of the nature and bearings of the questions upon which they are called to act. The blind fanaticisms and frightful atrocities of the Parisian Commune af- ford an appalling example of the fearful crimes an uninformed and misguided proletariat may commit when led on by desperate men, as ignorant as them- selves of their own interests and the proper mode of securing them. A better education in regard to all economic subjects is the great want of the people everywhere. - - The “sovereigns of Industry” is an Order seeking to combine all toiling men and women in an organization for the purpose of securing to themselves increased material, social and intellectual advantages. The Patrons of Hus- bandry have demonstrated the practicability of such a plan by uniting the farmers in Granges throughout the land. We seek to complement their work by inviting to our Councils all classes of laboring men and women, without regard to race, creed or nationality. The order is spreading rapidly. Several state Councils have already been formed, and we have Subordinate Councils in fifteen States—many of them numbering from 150 to 300 mem- bers each. At the last session of the Massachusetts State Council, held in July, their Secretary reported an average saving to the members, in the pur- chase of the necessaries of life, of fourteen per cent. In Springfield there are 1200 persons belonging to our Order, and they are saving at least $1,500 per week in their purchases. Will not each reader of this circular, not already in the Order, and who finds no Council in his neighborhood, seek at once to interest enough of his friends to secure one in his locality? The National Council is located at Worcester, Mass. WM. H. EARLE, President, J. Butterfield, Secretary. For copies of Constitutions, circulars, etc., or further information in regard to plan for organizing Subordinate Councils, address the Secretary, enclosing stamp. [P. S. Copies of this circular supplied to Councils for $1 per 100 copies.