Britain’s Consumers Keep Shop
H. NAPIER MOORE
The story of a giant co-operative movement which has 6,000,000 members, owns more than 100 mills and factories, and does a trade of $1,731,000,000 a year
LAST December, in writing of the circumstances which made it inevitable that the Imperial Conference would fail to achieve any economic agreement involving tariffs against countries outside the Empire, I referred to the influence upon the Labor Government of the Co-operative Wholesale Societies of Great Britain. Mention was made of the financing of Russian grain imports by a subsidiary of the Co-operative Bank; of Co-operative representation in the British Cabinet and on the floor of the House; of the domestic and international ramifications of what is the largest and most highly organized democratic trading organization in the world.
The 1930 result of Canada’s experiment in one phase of co-operative dealing—the Wheat Pools......has con-
centrated attention on the principal of co-operation and raised before many a giant interrogation mark as to its practicability. This is the story of a co-operative movement which, starting in Britain, has encompassed the world. I tell it because its full significance is undreamed of in Canada, because what is merely a Canadian nucleus ol co-operative trading societies sold more than five million dollars worth of goods and paid nearly half a million in dividends in 1929; because the Canadian Wheat Pools, as co-operative producers, are selling their product to a gigantic alliance of co-operative consumers; and because it is a human interest story. It is presented as a record of straight fact, not as a treatise on economics.
In its broadest international aspects, it ÍB the story of a movement which claims to involve capital amounting to $4,200,000,000; of 206 co-operative organizations in thirty-nine different countries; of 62,000,000 individual members affiliated to these organizations with their families probably 200,000,000 souls.
So far as Great Britain and Ireland is concerned, it is the story of 1,234 co-operative societies and federations whose six million members, representing families totalling more than twenty million heads, spend 460 million dollars a year and are co-operatively supplied with food, clothing, fuel and household goods. These societies, in the year 1929 to 1930 did a trade of $1,731,603,415. They have a share and loan capital of $1,025,656,895. They
employ 248,736 workers in production and distribution and pay out $161,000,000 a year in wages.
And it is the story of the Co-operative Wholesale Society, the C. W. S., the central buying, manufacturing and supply organization for all the individual units, which operates 114 factories for the making of every household and personal requirement, which owns and operates its own coal mines, farms, tea and coffee plantations, which is the largest flour miller in Britain and the largest tea buyer in the London market, which makes a thousand tons of soap a week, which owns ships and foreign depots, and which operates a bank and conducts its own insurance business.
It is a story which started seventy years ago at a Sunday afternoon tea party in a Lancashire farm house.
What England now knows as Co-operation was born in the stress and strife of the radical reform period of 1760 to 1830,
when Robert Owen, a wealthy cotton manufacturer, originated schemes for social salvation that attracted the attention of reformers from all parts of Europe. Of a few hundred co-operative societies formed as the result of his vigorous teaching, only a score or so existed at his death. Socialist communities established in America made slight progress. Never did a movement seem so dead as this of co-operation. Its lands were sold, its script had no value, its orators no hearers. Yet a spark survived, to be fanned by a little group of workers in Rochdale. Came the failure of a strike of flannel weavers; came suffering and privation owing to the high price of food and the lack of employment, and came the formation of a little group known as the Rochdale Pioneers and the decision to inaugurate a co-operative society.
A Modest Beginning
rT'HEY had four objects—to benefit the social and domestic condition of the members, to build houses for members, to provide work for the unemployed members, and to, as soon as possible, arrange powers of production, distribution, education and government. And the nucleus of the present co-operative constitution was born of principles which provided that capital should be of their own providing and bear a fixed rate of interest; that only the purest provisions procurable should be supplied to the members; that full weight and measure should be given; that market prices should be charged and no credit given or asked; that profits should be divided pro rata upon the amount of purchases made by each member; that a definite percentage of profits should be allotted to education.
That original band of Rochdale pioneers numbered twenty-eight, including one woman, and they collected the capital for their venture in weekly subscriptions of twopence (four cents) per member, afterwards raised to threepence (six cents). It was some time before they raised twenty-eight pounds. The ground floor of a Methodist chapel was taken. With the aid of a counter and three forms, bought for a dollar, and farthing can-, dies—the gas company would not trust them—they opened their store on December 21, 1844. A wheelbarrow was sufficient to remove all the stock of flour, oatmeal, butter, sugar, soap, soda and farthing candles.
The first attempt at wholesale purchasing failed. But one Sunday afternoon, in 1860, at a tea party held on Jumbo Farm, near Oldham, the foundation of the Cooperative Wholesale Society was laid. On March 14, 1864, the C. W. S. opened business at No. 1 Balloon Street, Manchester, with a tiny warehouse. Today, a magnificent office building at the same address is but the heart of a colony of colossal administration offices and warehouses.
Boiled down to essentials, the origin of the C. W. S. was the origin of a combine—a group buying wholesale quantities, dividing the goods among themselves by their own labor, and dividing the money saved by such dealing^ They were humble folk, these Rochdale Pioneers, but they were hard-headed. Their communal shop succeeded. Because it succeeded, came opposition from the orthodox traders and difficulties with the wholesale houses. Wherefore, said the pioneers, we will make our own goods. And they started with biscuits. Today, in two factories at Crumpsall and Cardiff, 1,000 employees of the C. W. S. work forty-four hours each week making mountains of biscuits. In 1929 sales were more than three and a half millions of dollars. And, after payment of interest, depreciation charges and all other factory expenses, $250,000 “savings” on biscuits alone were returned to the consumers in the shape of dividends.
What of today’s six million disciples of the Rochdale Pioneers? How do they proceed? In what manner do they benefit?
For the sake of clarity, let me reiterate that the Cooperative Wholesale Society is not a parent organization. It has in London, Newcastle, Bristol and Cardiff, branches which are replicas on a smaller scale of the vast producing and distributing centres in Manchester, and it has depots in Leeds, Northampton and Birmingham. But no retail business is done in any of these. The retail trade is conducted by the 1,234 societies formed in
various cities, towns and districts, each of which is a selfcontained unit. The C. W. S. fixes its own prices on commodities and sells at the same rate to all societies. These societies in turn fix their price to the consumer, allowing for carriage.
Any person can join the local co-operative ■ society by paying one shilling, receiving in exchange a book of rules and a pass book. On purchasing goods, the member is given a stamp or check, which is affixed inthebook.
Thus is kept a record of purchases. At regular intervals, quarterly or half-yearly, the society declares a dividend. Such dividends average two shillings in the pound. Thus if the member has in one quarter spent twenty pounds on goods, he or she gets two pounds credited to his or her account. The first two pounds remains until it is increased to five, when the member is deemed to be fully qualified, entitled to go to any meeting of the society and vote for directors or on matters of policy. Dividends can remain until they reach 200 pounds, the limit allowed by the Industrial Provident Societies Act. Or they can be drawn again, the member receiving either cash or its equivalent in merchandise, whichever he deems to be most convenient.
Each shareholding society has one vote in the central C . W . S . by virtue of membership, one additional vote
for the first complete 10,000 pounds worth of goods purchased from the C. W. S., and one other additional vote for every complete 20,000 pounds worth of goods purchased thereafter from the C. W. S. during the year. By these votes policies are decided and directors elected for two years.
A Giant in Industry
AND now, what is there to direct?
From that first venture in biscuit making has grown a system of co-operative manufacturing unique in the world today. From biscuits to flour was a logical step. In 1929 the eight flour mills of the C. W. S. turned out 1,111,860,680 pounds of flour. Every week they turn 13,361 tons of grain into flour. They buy heavily of wheat. When the price is right, they buy Canadian wheat. When they can get it cheaper from Russia, they buy it from Russia. In 1929, the latest year for which complete figures are available, the value of flour pro-
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Britain’s Consumers Keep Shop
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duced was more than $45,000,000. Onehalf of the wheat used was grown in Canada and Australia. To antipodean farmers credits were advanced through the C. W. S. bank, and in 1930 similar credits were advanced to Russia.
Between October 1,1928, and September 30, 1929, direct sales of wheat by the Canadian Wheat Pool to the English C. W. S. were 6,610,648 bushels, 4,352,000 of which were shipped from Atlantic ports and 2,258,684 from Pacific ports. Sales to the English society from October 1, 1929, to September 30, 1930, were 5,666,826 bushels, 3,272,000 of which went from Atlantic ports and the balance, 2,394,826, from the Pacific. During the crop year 1928-29, the Scottish C. W. S. bought 1,730,000 bushels of Canadian pool wheat, and during the crop year 1929-30, 1,064,162 bushels. It should be borne in mind that these figures represent only direct sák«. The Scottish Co-operative Wholesale Society has a branch in Winnipeg and buys a good deal of its wheat from various Canadian grain firms, as well as from the Pool. Moreover, both societies no doubt purchase considerable Pool wheat indirectly through other channels.
Today, more than 100 C. W. S. mills, factories and plants throughout Britain are supplying the needs of Co-op members. There are thirteen clothing factorías, two cotton weaving plants, five woollen weaving plants, eleven boot and shoe factories with their own tannery. Other huge establishments are producing butter, cheese, bacon, lard, canned goods, preserves, cocoa and chocolate, tea and coffee, vinegar and yeast. They make drugs and they make bedding and quilts. They make cigars and put up tobacco. They make hats, hosiery, corsets, jewellery, gramophones and grand pianos. Cooperative workers are manufacturing cutlery, soap, paint, bicycles and motor bikes. From the iron works come bedsteads and all manner of ironmongery. Umbrellas, leather goods, saddles and harness are delivered as regularly as suites of furniture of all grades for all purposes. There are tinplate works, brush works, mat works, oil mills, saw mills, bottle works, potteries and a vehicle factory all in the picture.
At Shilbottie, 730 miners dig coal from a C. W. S. mine. In ten counties of England there are 33,599 acres of farm lands used by the C. W. S. for pastoral, agricultural and fruit-growing purposes. There are twenty acres of seed testing ground at Derby and two timber-growing estates in Norfolk. Milk depots handle the product of C.W. S. herds.
At Lowestoft, Yarmouth, Grimsby North Shields and Fleetwood, fishing stations bear the sign “C. W. S.”
In Ceylon, South India and Assam, large tea plantations are owned conjointly by the English and Scottish Co-operative Societies. A vast warehouse on the Manchester Ship Canal stores the leaf. In Sierra Leone, Accra on the Cold Coast, Lagos and Port Harcourt in Nigeria, C. W. S. purchasing depots gather in raw materials, and three C. W. S. steamers carry produce from foreign countries.
From the factories referred to above there came and was absorbed last year $152,574,335 worth of goods and produce. That represents but one-third of a total C. W. S. turnover for the same period of $446,440,625, for more than $100,000,000 worth of produce was imported from British dominions, colonies and dependencies and foreign countries, and the balance purchased from home merchants.
In Manchester and surrounding districts, I spent a day being rushed through one factory after another. Working conditions compared favorably with those obtaining in any privately owned establishments I visited. Standard wage scales and hours of labor are basic. Every employee is a member of a union. Dining rooms, recreation clubs, athletic societies are maintained in profusion. A pension scheme provides for employees retiring at the age of sixty-five, death benefits are paid to dependents of members dying previous to their retirement, and a thrift fund encourages saving.
A Co-operative Bank
WHILE the co-operative movement is largely supported by those who come under the heading of “labor,” spread of the patronage to middle-class workers is indicated by the progress of the C. W. S. bank, over the counter of which go ten millions of dollars every working day of the year. Its assets are $215,000,000, not far behind the Bank of Nova Scotia with its $262,000,000. It has 26,000 current accounts and its system of individual deposits is operated through more than 700 co-operative society agencies. Paying interest ranging from three per cent on current accounts to four and three-quarter per cent on deposit notes, it is the banking agency of nearly all the British trades unions—some 8,700 accounts. During the strike year of 1912 the C. W. S. Bank loaned $350,000 to the Northeast Lancashire cotton operators and to the Northumberland Miners’ Federation, after the latter had been refused by one of the
great joint stock banks. And in 1926, during the general strike, between May 3 and May 25 it paid out in cash fifteen and a quarter millions of dollars.
Housed in one of the most magnificently appointed buildings in the North of England, a building rich in panelled woodwork and equipped with the last word in lighting, furnishing and ventilating devices, the C. W. S. bank, staffed and managed by co-ops, has served as a model for similar banks in Germany, France, Belgium, Russia and other countries.
From banking to insurance is a logical step. The Co-operative Insurance Society, Limited, handles every form of insurance save marine. It has 195 branches and 11,809 agents in Great Britain and Ireland, and in 1929 it collected $72,500,000 in premiums.
How, in times of depression, does this colossus of trade and finance uphold itself? It has had its trials. In the slump of 1921, for instance, loaded with heavy stocks of goods and with stupendous commitments and staggered by the rapid fall of prices, the C. W. S. lost in twelve months, besides its reserves, more than $35,000,000. Yet its members never lost faith. At the beginning of 1930 losses had been made good, .reserves had been rehabilitated, and thestructurerestored completely. And in those trying years was paid interest on every dollar of capital, share and loan, invested in the C. W. S.
That is why, if you ask H. J. A. Wilkins, president of the C. W. S., or R. F. Lancaster, its secretary, or Sir T. W. Allen or Sir W. E. Dudley, directors, how they are weathering the present depression, they will tell you that they have no fears.
Education and Politics
APART from catering to the stomachs • of its members, the C. W. S. also caters to their minds. With five huge printing establishments, it publishes a monthly magazine with a circulation of 900,000. It publishes various year books and technical organs. It sells 150,000 books from its Manchester department alone each year, and it owns Reynold’s Illustrated News.
Education is a firm plank in its platform. Through the Co-operative Union, Limited, and its Central Educational Committee, are operated junior and adult summer schools, schools for adolescents, schools for employees, correspondence schools and all manner of recreational societies—choirs, orchestras and dramatic clubs. Examinations are held and prizes
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