Co-Operation

William Henry Van Ornum

from the pages of The Twentieth Century, May 10–September 20, 1894

Introduction In England Its Ideal Ancient Co-operation Some Experiments Various Schemes Various Schemes European Credit Banks European Credit Banks European Credit Banks Friendly Societies Historical Summary A Foundation A Plan Dangers Development Acquirement and Operation of Public Enterprises The Co-operative Commonwealth Conclusion

May 10, 1894.

TWENTIETH CENTURY.

CO-OPERATION.

BY WM. H. VAN ORNUM.

I.

In view of the great interest that is being taken in the subject of Co-operation at this time; and in view of the evident confusion of thought which prevails on the subject as shown in the writings of many who assume to discuss it, I have thought it highly desirable to bring on, if possible, such a general discussion as will make clearer the true principles of Cooperation, and the prerequisites for success in co-operative enterprises. The need for such a discussion is apparent the moment we pick up any one of the thousand and one so called co-operative schemes which are offered with all possible assurance by their honest but often not well informed authors. For instance, I have frequently seen in the columns of the TWENTIETH CENTURY, proposed plans of what were called cooperative enterprises, but which were almost purely capitalistic ones, only that the capital was to be distributed in small blocks. I believe that a more general understanding of the subject will not only increase the interest in Co-operation as an ideal method of production and distribution, but it will prevent the large percentage of failures which has marked the history of Co-operation in the past. I will therefore start the discussion and invite criticism, hoping that the result will be helpful to the many co-operative schemes which are being set on foot.

First then, it is necessary to clearly draw the line between Capitalism and Co-operation, so that we shall not be in danger of confounding the two. The first is the present system, or want of system, under which production and distribution is carried on. It is based upon the old notion of political economy, that there are three factors in wealth production, one of which is capital; that capital performs a part in that production and consequently is entitled to share in the product; and that interest is the natural share which capital is justified in exacting. Dividends on capital stock, royalties and profits on invested capital are ah only different forms of interest, and derive their entire sanction from this same idea of capital. This political economy is a very different thing from social economy, which is the science of the production, distribution and consumption of wealth subject only to the natural laws of social intercourse which will necessarily govern human association when freed from the arbitrary interference of the law. On the other hand, political economy is the science, so far as any science is possible, of production, distribution and consumption of wealth subject to the political institutions which interfere with the natural laws of social intercourse. Social economy is always the same, only being modified by the prevailing degree of intelligence in society; while political economy varies greatly according to the political institutions which prevail. For instance, political economy will be a very different thing in a community where the law subjects land to private ownership and monopoly, from what it would be where it were free. So, in order to understand political economy in any country, it is necessary to know the political institutions of that country in relation to wealth, etc. it should be remembered that our whole system and institution of property, particularly that of private fortunes, is the outgrowth of political, instead of social economy. Its results are the results of human enactments and not of the free play of natural forces. Land monopoly, money monopoly, patents, franchises, control of the means of communication, and many others have interfered with the course of nature in social affairs, setting up distinctions, classes and castes based upon wealth and legal privilege. In the absence of those things nature always tends to equality in material condition, with a resulting equality in social relations. The only thing that violates this equality is the legal advantage which comes from privilege. Capitalism then, is a product of the law which builds up wealth and privilege on one side, and on the other poverty, wage slavery and abject dependence.

Co-operation, on the other hand, is based upon the newer social economy which recognizes all wealth as the product of labor, without help from any source whatever, and therefore, which asserts that all wealth belongs to labor without its being called upon to divide with anybody. Seeing that it has produced all wealth in the past and that the only things that stand in the way of unlimited production in the future are the institutions of Capitalism which shut labor off from access to nature, labor seeks a way to overcome the obstructions. This will be found in Co operation, which is nature’s way of overcoming both the natural difficulties, and the artificial obstructions which have been set up by human enactments. Therefore, Cooperation, having an entirely different basis, different methods and a different end it must necessarily keep itself entirely aloof from Capitalism. The two have nothing in common. They are as antagonistic as light is to darkness.

Now let us look at a joint stock company under Capitalism and see how it is made up! There is a certain amount of capital stock held by certain persons called stock holders, who, as such, perform none of the labor of the co-operation. If one of them does any part of the work he always expects pay for his services apart from his stock interest. The president, secretary and other officers, while they are stock holders, and draw their quota of dividends on their stock, always have an additional allowance as a salary. That salary they are expected to earn independent of any stock interest they may possess, so that the dividends never represent labor performed. Wherever also, the corporation has a bonded debt the interest on that debt is wholly outside of any labor performed. While in [6] some cases the workers may be in possession of some of the bonds of the corporation and in virtue thereof draw interest, that interest is in nowise a compensation for anything done which aids the workers or lightens their burdens. And the same thing is true of those sinecure officers or agents whose work is not actually necessary to the performance of the work of production peculiar to the corporation. Now, as all the wealth produced is the product of the labor performed; and as all payments of whatever nature, must be made out of the product, it necessarily follows that the more capital stock there is to draw dividends, the more bonds there are to draw interest, and the more purely ornamental officers there are to draw high salaries the more the fund will be depleted from which wages are to be paid to the real workers. But these capitalistic features which have been engrafted upon an otherwise co-operative society have still further changed the nature of the organization from a basis of pure co operation.

The owners of the capital stock assume, by virtue of that ownership, the proprietorship of the whole society. They pretend to employ those who perform the labor, and then, by reducing wages to the lowest possible price at which it can be obtained, divide the entire surplus, after paying the interest, salaries, etc, among themselves as dividends. Labor stands no possible chance of getting increased returns by increased diligence. Its condition is that of hopeless servitude; while, on the other hand, the proprietors—the stockholders, through the sinecure officers, stand in the relation of masters spurring their slaves on to the greatest possible exertion in order to swell their own unearned gains.

It is easy now to see just what the difference is between a joint stock company and a co-operative society. Eliminate the capitalistic features of any joint stock corporation, such as stocks, bonds and ornamental officers, so that it comprises none but the actual and necessary workers; and then place them all on the same footing, so that there are no high and no low—for without equality there can be no genuine co operation—and we have an ideal co-operative society. There is not a railroad, telegraph or telephone line in this country, or anywhere else, or public or private works, great or small, which cannot be run by precisely the same men who run them now working as co-operative societies ; and that too with far greater cheapness, safety and dispatch than now obtains. These men are doing the work now. Let them continue to do it, but let the capitalistic features be abolished—the rent, interest, dividends, sinecure salaries and profits all be wiped out, and the products of the labor divided among those who perform the labor, share and share alike, and there will be no labor question to interfere with the orderly course of events, and every worker will be stimulated to render the best possible service.

Now, taking the joint stock company, or corporation, as we know it, with its capital stock, its bonds, mortgages and fixed charges; its rents, interest, dividend and royalties; its ornamental or useless officers useless so far as the production of wealth is concerned, and only useful when it become necessary to promote destructive competition or trust combination with others, or to manipulate legislatures, and its artificial gradations in the stations and pay of the workers. I say, taking all these as a type of capitalism, we may also take this same corporation, stripped of all these capitalistic features, as a type of pure co-operation; so that we have set before us the two systems in the sharpest and strongest contrast, one filching away the entire product of the workers for the benefit of the idle; and reducing those workers to a condition of wage slavery, and the other leaving them in full possession of the entire product of their labor, destroying the inequalities which capitalism had set up, and opening the way to a realization of that common human brotherhood which is the end toward which all reforms finally tend.

TWENTIETH CENTURY

May 24, 1894.

COOPERATION,—IN ENGLAND.,—II

BY WM. H. VAN ORNUM,

Let as apply the principles already reached, to those movements in this and other countries, which have flourished under the name of co-operation; and, I think, it will easily be seen why they have failed to bring any considerable relief to the producing classes, or have gone out of existence entirely. They have not been co-operative in the true sense of co-operation. They have been either purely capitalistic, or they have been an admixture of capitalism and co-operation, I have been unable to find a single instance of pure co-operation in all the history of organised co-operative effort to which I had access.

Taking the most conspicuous and withal the most successful of all mode in co-operative movements, that which has grown up in England known as the Rochdale system, and it will take but the slightest examination to see that it not only falls far short of what an ideal system should be; but that it is only the faintest attempt at co-operation; and has far more of capitalism than co-operation in it. Mr. Holyoke, in his “History of English Co-operation,” defines co-operation as “a new power in industry, constituted by the equitable combination of worker, capitalist and consumer, and a new means of commercial morality by which honesty is: rendered productive. It is a concert of many for compassing advantages impossible to be reached by one, in order that the gain may be fairly shared by all concerned in its attainment,”

Here is a distinct recognition of the old political economy, that capital is a factor in production and is entitled to share in the product. By including the capitalist in the enumeration of the co-operators be ignores the doctrine of social economy that it is labor which produces all wealth and is therefore entitled to all wealth, The problem of labor is to get the whole of its earnings; and bow can it do that when a part is set aside for those who perform no part of that labor? Unless co-operation can secure this for the worker it can never work the emancipation of labor.

But English co-operation is confined to exceedingly narrow limits, Even if its principles were all that could be desired, it would still fall far short of the proper requirements. It is almost wholly distributive, It makes but very slight attempts at production. Up to 1882, out of 1,199 co-operative establishments in the United Kingdom, five were co-operative corn mills mainly engaged in grinding for the co-operative stores; and only twenty-two of the total number of 1,226 carried on any other manufacturing. The comparative insignificance of this co-operative manufacturing will be seen in the report of sales, The aggregate sales in 1,199 stores in 1882 reached £24,000,000, The sales from the five corn mills during the same year were £1,300,000; while for the twenty-two co-operative manufacturing establishments they only amounted to £220,000. It will be seen that while the system has had a large development, it has been almost entirely in the line of the purchase and distribution of certain necessaries of life, such as groceries, bread, meat, coal, furniture, draperies, etc. The most important field, that of production, has as yet scarcely been touched, But we shall have to look a little closer at the system to see bow widely it departs from the true principles of co-operation. Of course, in a sense, all working together is co-operation; but the co-operation which is to stand forth as a distinctive principle from capitalism, which is to secure to the worker the full fruits of his industry; destroy competition: abolish the wage system; and which is destined to realize the Co-operative Commonwealth has a far greater significance than that. While the English co-operative societies differ somewhat in their various constitutions, they all have certain characteristics upon which they agree and which are considered essential to the system.

First, they all have definite capitalization in shares, instead of an uniform membership. This alone is destructive of true co-operation.

Second, members may hold any number of shares ranging from £1 to £5 each, as a minimum, up to £200 as a maximum; which makes them joint stock companies; and indistinguishable from any other joint stock corporation except that the stock is distributed in more hands.

Third, interest is allowed to the shareholders on the amount of their shares held, which is unadulterated capitalism and a clear violation of co-operation.

Fourth, goods are sold for ready cash only.

Fifth, the ordinary market prices are charged for goods sold, realizing large profits to the store. This perpetuates the idea of profits. It is out of these profits that interest is paid to the shareholders, and out of which there remains, after paying the interest, something to be divided back to the purchasers of goods as dividends on purchases. A truer idea of cooperation would be taught by furnishing those goods to members at cost plus the expense of handling, with no allowance for interest to shareholders and no profits.

Sixth, dividends are declared at regular intervals on cash purchases, whether those purchases are made by members or not.

Seventh, each member casts one vote only at all elections, regardless of the number of shares he holds. This tends to preserve equality in the management, and prevent many of the abuses of capitalism. But in this country this provision is not applicable, because the law allows one vote for each share. Therefore there must be a complete abandonment of the share system, even if it were otherwise desirable.

Eighth, a small sum, commonly two per cent of the net profits, is set apart each year as an educational fund with which the society maintains a library, obtains periodicals and carries on a propaganda for cooperation.

Such are the essential features of English co-operation. It will be seen that it is based upon and teaches the old economies; scarcely touches the labor question; and perpetuates all the abuses of capitalism. In fact, in its actual workings, it is made a bulwark of capitalism. It seeks to harmonize capital and labor; to inculcate pinching economy as the road to wealth; and to cultivate a class of small capitalists. Professor Jevons says: “Savings deposited in almost any form of co-operative company tend to incite the instincts of the capitalist, and to acquaint the owner with a new view of the labor question.” It is because of this manifest tendency that co-operation, such as exists in England, has been encouraged and often assisted by English capitalists; especially since this tendency became clearly discernable. The same thing has been noticed by others.

The “Encyclopedia Britannica” points out that English co-operation is distinctly capitalistic in its tendencies because it strengthens the principle of capital and private property by making every co-operator a capitalist and thus personally interesting him in the maintenance of present economic conditions of society. It has frequently been urged against co-operation that such enterprises are especially liable to failure; and therefore that there is great risk in putting money into them. But the statement is not borne out by the fact. In 1884 “The Co-operator” published a list of 224 industrial cooperative societies (so-called), which had been dissolved; but even according to the loose and indefinite ideas of cooperation which prevailed then, and still prevails in England, it was forced to admit that 16 of them were merely joint stock companies, with no co-operative element in them; forty-four of them proposed to divide the profit among capitalists and customers, and twenty-four of them between capitalists, customers and workers. There was not one of the entire 224, which was entitled to the term co-operative, as understood in the new economy. Therefore such an experience is absolutely worth nothing as against any plan which eliminates every element of capitalism from it. But there are lots of instructive lessons which may be learned from English co-operation, lessons which it would be well for those who are attempting to set up co-operative enterprises in this country to learn. One of those lessons is, that large resources in the way of monied capital, and special advantages are not needed. In fact, it has been observed that wherever a co-operative society started out under peculiarly favorable auspices and was able to buy everything it needed at first, it has been led into excesses which soon wrecked it; whereas, those which started in poverty, in pitiful savings, oppressed by the clergy, by traders and by the law, which had no rights which they did not win by hard fighting, have been the ones which scored the greatest successes. I think it will be found that the same principle will hold good in the present co operative movement. The danger to individual enterprises will be that they will not start small enough; will undertake to do too much, and will purchase their necessary experience too dearly.

Twentieth Century, May 31, 1894, 7-8.

CO-OPERATION.—ITS IDEAL.—III.

BY WM. H. VAN ORNUM.

Notwithstanding all the shortcomings of English co-operation; all its failures to realize the lofty ideals which appear so real to lovers of the Co-operative Commonwealth, yet it was conceived in the same spirit in which we now seek to bring in the new social order. The original purpose of its founders was to establish self-supporting communities distinguished by common labor, common property, and common means of intelligence and recreation. It was to be a conspicuous example of industrialism freed from competition. G. J. Holyoke says of it: “In the communal life an ethical character was to be formed in the young, and impressed upon adults, and all assured education, leisure and ultimate competence as results of their industry.” In this they were seeking to reap the harvest at the same time that they sowed the seed. A mistake that we, as well, are apt to make in our impatience to realize our ideals—Commonwealth; that is, a wealth that is common to ail, is the fruit that grows upon the tree of co-operation. But the seed must have time to germinate. The young shoot must root deep into the soul of human experience. It must be tended by the faithful and devoted labors of those who see in visions of the future the fruition of their ideals. They must see to it that the rank weeds of capitalism are not allowed to choke out the tender plant. The Co-operative Commonwealth can only come as a development resulting from a period of cooperative production and distribution, during which the old ideas of property, of classes, of inequalities and of strifes shall gradually give place to new conceptions of life, of human associations, the obliteration of classes and inequalities, and the realization of an universal human brotherhood.

With all its faults, and notwithstanding its tendencies in many directions to capitalism, English co-operation has bought us nearer to the possibilities of a higher and purer form of co-operation. It has developed the weaknesses and limitations of the old, and given us a nearer view, and therefore a better conception of the new. Wherever it has flourished it has stimulated the hope and trained the intellect of those who have enjoyed its benefits. It has inculcated the lesson of honesty; taught frankness and openness as a principle, and educated a superior class of workingmen. These results have been so uniform and conspicuous wherever co-operation, even in its unsatisfactory forms, has been tried, that people expect to and do find co-operators better fed, better dressed, stronger, more robust, more self-reliant, and their children more healthy and plump. And these are the very qualities most requisite in those who will carry co-operation forward to new conquests. A serious mistake will be made if the utmost care is not exercised in the selection of personal material for co-operative enterprises. This applies equally as to skill in the trade or calling in which the workman is expected to be employed; and to his general intelligence and habits as a member of a community. Before real co-operative work is undertaken on any considerable scale, suitable schools of co-operation should be started, where the most thorough instruction can be given in all matters pertaining to the work and association.

But, while it is necessary to give the closest attention to ah the details and present needs in the construction of a system of co-operation, we must never lose sight of the high ideal to which we aspire. The gardener never forgets that all his labor in planting and tending the young tree is finally to enjoy the fruit of it. To that all his care is directed. The quality of the fruit is largely determined by the wisdom and judgment shown in its culture. Just as the different stages of growth of a tree tend finally to bring. in due time, the flower, and afterward the matured fruit, so even our present society, in its deepest trend, is working toward co-operation and the communal state. It is easy to see hints of that state among us even now. In the family relation there are many. In every family where there is competence and plenty, accompanied with culture, the wealth held by that family is a commonwealth—common to its members. No one will deny to another the satisfaction of any want, or any gratification on a plea that such other has not performed his or her part in procuring that wealth. Each seeks the pleasure and comfort of every other. Each is ready and willing to serve the other; and that too without any stipulation as to pay further than is implied in this common sentiment. As to labor, each performs such as he or she can do best, being guided by their own tastes and inclinations. The father or mother never lets slips an opportunity to increase the general stock of wealth for the gratification of all the members. Nor do the sons and daughters, except as they are taught to look forward to a division of the community in the setting up of new communities of their own. In the ideal family there is no governing force implying command on one side and submission on the other. Reason, love and freedom are the determining elements in the association of its members. It is true, there are not many of these ideal families. But they exist; and the fact that they do exist is a pledge and promise of that larger communal society which. some time will develop through co-operation to a brotherhood which will be as broad as humanity itself.

I do not wish to he understood as holding that the family, even at its best, is the ideal state in the association of the sexes. That is another question; and has no relation to the present subject except as such associations help or hinder the final development of society to the Co-operative Commonwealth. Undoubtedly the family as now constituted, in conjunction with the laws for the succession of property, does hinder the growth of that larger commonwealth by perpetuating from generation to generation those small communities. The whole history and experience of each one of these communities constitutes a course of training whereby the members are taught to regard the other members far differently from what they do those people who are outside of their communities, or members of other communities. This is the same spirit which among different nations is called patriotism, and leads the American to look with disfavor upon the foreigner; the Frenchman to antagonize the German, and the Britisher to assume important airs over all others. all these things, whether manifested between rival nations or rival families, are barriers which have been erected, and are cunningly maintained in order to keep men apart. Why should a Frenchman hate a German; an American distrust a foreigner; or an Englishman assume airs over others? The differences between them ah, and between them and other men the world over, exist only in their own imaginations. And the causes of strife between them exist only in the rivalries and strifes of their rulers in which the people themselves have not the slightest concern. And so, too, why should any of us look upon merely blood relatives, even children of the same parents, as any different from any others having hike desirable qualities? The man or the woman should be esteemed for his or her own qualities of mind and heart rather than for any other consideration. That friend of any of us, who entertains common sentiments and common hopes is always a more valuable and valued friend than any mere blood relative, no matter what outward show ordinary conventionalities require us to assume.

This is not to say that there is no such thing as paternal, maternal or filial love. They are natural manifestations, and have their proper uses for the preservation of the species. But their uses are limited to those periods of life when the necessity exists for them. And without the artificial extension which they receive through the perpetuation of families they could not long survive the period of their use.

These families—small communities—acquire special interests of their own (estates), which they seek to foster, extend and perpetuate. In their desire to perpetuate and extend these estates the great commonwealth, which is to come, is hindered. And I think this is one of the main obstacles which stand in the way of the Co-operative Commonwealth. So long as families, family names and estates are perpetuated from generation to generation there can be no genera blending into the larger—the universal family. Therefore, the family, while it contains a picture in miniature of co-operation and of the Co-operative Commonwealth, as a whole it stands as a bulwark of capitalism.

And yet, society is certainly tending, as a whole, toward the desired change. Capitalism is manifestly breaking down as a method of production and distribution of wealth. The glaring inequalities in its workings, as shown in the results, and the growing antagonism between capitalists and workingmen, everywhere attest this truth. The mass of the people have no estates to preserve and no family names worth perpetuating. Everywhere the producers are in more or less open revolt against the system of capitalism from which they have nothing to hope except an everlasting grind for a mere existence. On top of the increasing number and extent of strikes and labor organizations, those who through the impotence of capitalism to meet present emergencies are out of employment, have begun to hand themselves into industrial armies, and, in one way or another, to demand relief. This marks a new period in the revolt; and one which is likely to bring important results. But whatever course that revolt shall take it must go on. Capitalism is certainly in its death throes. On the other hand, the large measure of success which bas attended even such feeble attempts at co-operation as have been tried in England, and the popular concession everywhere accorded to co-operation marks it as the coming system. I shall endeavor to bring out in subsequent chapters the real character and strength of those concessions.

Twentieth Century, June 7, 1894, 7-8.

CO-OPERATION.—ANCIENT.—IV.

BY WM. H. VAN ORNUM.

While the principle of co-operation has found staunch advocates in almost, if not all civilized countries in the world, and in almost every age since there has been a written history, the developments of it have taken widely different forms in different countries. It is as if humanity was trying a great variety of experiments in order to find out which best suited its needs. And just like such experiments in other directions, it is likely that it will be found that none of them thus far have been altogether satisfactory. In nearly, if not all such cases the propaganda for cooperation has been accompanied by attacks upon the institution of private property and efforts to establish some form of communal society. Almost invariably co-operation and Communism have been coupled together in the ideas of the originators of social agitations as being, if not the same, so nearly akin as to be inseparable. It has only been when co-operation, as in England, has been so dwarfed and minimized as to lose the character which distinguishes it from capitalism, that its communal features have been dropped. In the earlier schemes, Communism was the great distinguishing feature; and co-operation has only come to be recognized as a means to that end within comparatively recent times. Another feature which has been depended upon as an element in the regeneration of society has been severe asceticism on the part of the individual members of the society, sometimes in the diet, in dress, in endurance of hardships and pain, or in the practice of celibacy. The school of Pythagoras, when stripped of the legendary and fictional features which have been thrown around it, appears to have been one of those schemes which were intended for the education and purification of society. Asceticism, in abstinence from animal, foods and in celibacy, with community of goods, was taught as a personal discipline. It was intended more as a moral and social reform, than as a scientific and speculative school. When, however, it degenerated into a political league and became entangled in politics its usefulness was ended.

Another society which had its origin about 150 years B. C. was the Jewish sect known as the Essenes. There is scarcely a doubt that Jesus Christ was a member of this sect; and that he was, in his time, the most prominent exponent of it. All the essential teachings of Christ were the doctrines of that sect. It held to a theory of life which was peculiar to itself. It was marked by severe asceticism in the habits of its members; and with rare benevolence to one another and to mankind in general. Marriage, and all intercourse with women, was absolutely renounced. It enforced and practiced the most complete community of goods. In all but two things the members were denied all right of initiative; that is, in deeds of helpfulness and of mercy. The deserving poor and the destitute were to receive instant relief; but no member could give anything to his relatives without first consulting the heads of the society. In form, their polity was largely democratic. It was the first society in the world that condemned slavery both in theory and practice. In order to perpetuate its society it adopted children when young and trained them up in the principles of the order. In its oath of initiation, it bound its members to reverence the deity; to do justice to all men; to hurt no man voluntarily, or at the command of another; to hate the unjust; to assist the just, and to render fidelity to all men. The members were noted for their fortitude and temperance. They appeared superior to pain or fear; and lived to a great age owing to their severe asceticism. They frequently underwent the most extreme tortures rather than to violate their principles or faith. It is said of them that they reached the very highest moral elevation ever attained by any sect or people in the ancient world, being just, humane, benevolent and spiritually minded. One of its cardinal principles was the universal brotherhood of man. Those who wish to study the character and teachings of this remarkable people can do so by referring to the “Life of Jesus, of Nazareth,” vol. i ; by Keim.

Among other communal institutions which have flourished and exerted a great influence in their time was that established by Minos, in Crete. It was largely patterned after by Lycurgus in his legislation for the Spartans. No Cretan was allowed to lead an indolent life. All must serve in the army or devote himself to agriculture. The children were all brought up together, and underwent the same teachings and exercises. The whole population was fed at common tables, exactly alike and at the public expense. The land was tilled by mercenaries or slaves. Once a year, at the feast of Mercury, the slaves were waited on by their masters. Notwithstanding the almost complete suppression of originality and individualism this social state lasted for a thousand years. There are also unmistakable evidences of ancient communistic institutions in Ceylon and many other countries; institutions so widely separated both in time and space that we cannot legitimately infer any connection between them as to their origin. Yet, the poverty of history is so great as to ancient social relations and conditions that it is next to impossible to obtain any reliable data. And this observation applies almost equally to all countries and peoples. In the field of fiction the ancients had their seers who beheld in visions of the future their ideal society. Plato had his “Republic,” and Moore his “Utopia.” Later on, Campanella described the “City of the Sun,” and in their order down to more recent times came Harrington with his “Oceana,” Bacon with his “New Atlantis,” Defoe, with his “Essay of Projects,” and Fenalon with his “Voyage dans l’Isle des Plaisers.” Bellamy, with his “Looking Backward,” has been the most conspicuous instance in modern times of a dreamer’s vision, and has produced the most profound impression on his age. In all these cases there were so many points of similarity that any one of them might properly be taken as a type of all the others; not in their respective plots, but in the essential elements which constitute them. Their ideal society is something that has been ordained or instituted by law, instead of being an outgrowth and expression of the needs of the people freely developed without restraint. Being such, th y must needs be maintained by laws enforced against those who violate them. Their equality is an enforced one. They have manufactured their fruit, instead of waiting for it to grow and ripen upon the only tree which bears the fruit of equality, of perfect human brotherhood; that is, the tree of cooperation.

All through the different schemes for communistic societies which have ever been established in ancient or modern times runs the same defect, not in all case to the same extent, but in all cases to some extents And their success or failure as distinct enterprises seem always to bear a close relationship to the extent to which they approximate toward societies unhampered by legal regulations and unenforced by penalties. All of them manifest the same high purpose to correct the injustices and inequalities which exist in human society. All reach out for better social conditions, conditions which would make possible a larger and purer life by every member of society. But something else is needed besides yearnings after the ideal. This world is not a fool’s paradise. Any scheme which contemplates conferring upon the ignorant, the indolent or the careless the rewards of well doing, always has and always must fail, no matter how carefully its details may be guarded by legal enactments or arbitrary institutions. Soft- hearted philanthropy will never build among men the city of God. It requires brave, earnest and resolute men and women ; those who clearly perceive the truth and are willing to follow it under all circumstances, no matter what the discouragements.

What then becomes of our boasted love for humanity—our universal brotherhood? As I have said before, it is the fruit which grows upon the matured tree of co-operation. It is impossible for perfect brotherly relations to exist between the refined and cultured on one side and the ignorant and grovelling on the other. Nor can there ever be any permanent gain in trying to promote relations of association between them. Even admitting that such relations could be maintained, and that the ignorant would feel the refining infitience of those with whom they associated, the debasing influence of ignorance would exactly equal the elevating influence exerted upon the others. There would be no gain. All men are benefitted by association with others of superior attainments ; but those others must never debase themselves to bring about such an association. It is the part of the uncultured to lift themselves by their own exertions to a position where they can win the association of those they desire. In this is the real stimulus to progress. Those of superior attainments have only to see to it that they put no obstacles in the way of their brother’s progress, and always lend such encouragement and kindly help as they may. I firmly believe that the apparent inequalities among men as to their intellectual and moral attainments almost, if not wholly, arise from such obstacles as .have ea placed in their way through the unequal workings of the laws, especially in the laws of property. The probability is that co-operation opens up a way through those obstacles which obstruct human development; which will disintegrate the private fortunes; open avenues for human advancement; and which will finally raise the mass of mankind, now so degraded up to the level of the most exalted.

Twentieth Century, June 14, 1894, 7-9.

CO-OPERATION.—SOME EXPERIMENTS.— V.

BY WM. H. VAN ORNUM.

During more recent periods, since written history has kept a record of great social movements, nearly every age and country has had its agitation which contemplated such social regenerations as would practically bring equality in material and social conditions among men. Just as in other cases among the ancients, those agitations have generally been directed against the principle of private property. And if any proof were needed beyond the evidences which are everywhere observable, of the fact that the institution of private property does not express the needs of humanity, that proof would be found in abundance in the repeated efforts of mankind within the last four hundred years to throw it off, and substitute some form of community of property. Popular revolutions which have from time to time broken out in different countries against the constituted authorities, except those which have had their origin in religious disputes, have almost if not always arisen because of the unjust workings of that institution. They have been revolts against some of its features; and all improvements in social conditions which have resulted from such revolutions have been in the setting aside, for the time being at least, of the laws of property. They have suspended for a time the operation of those laws; and permitted of new adjustments. Afterward, when the authority of the aw became restored, the same abuses were enacted over again as soon as the legitimate results of the law had time to make themselves felt, when a new revolution became necessary. With such a history to appeal to, everywhere teaching the same lesson, it is time we learned that lesson, that private property, as an institution is unsuited to the wants of human society and ought to be abandoned. And when it is abandoned the necessity for any form of human enactments which shall restrain the freedom of individuals will cease; because, in one way and another, directly or indirectly the whole volume of the law, and government of mankind by man, is intended to, and does maintain this institution of property; and to classes and distinctions which result from it.

But what has all this to do with co-operation? some one will ask me. I reply: it has everything to do with it. Capitalistic production is the direct result of this institution of property established and maintained by law. It is impossible to start a co-operation which shall realize its sublime purpose without attacking the institution of private property and therefore antagonizing, and ultimately destroying the law. And it is equally impossible to maintain such a system of cooperation for a considerable time without bringing about a community of property as to all the means of production. So that we cannot consider co-operation without, at the same time, considering the question of government, and that of community of property as well.

It will be instructive to hastily glance at some of the most conspicuous attempts to establish communistic societies in different countries during the last four or five hundred years, and see wherein they failed, in order to profit by their examples.

Early in the sixteenth century a sect called Anabaptists arose in Germany, becoming prominent about the time of the Reformation. The name was given it in derision by its enemies, and had reference to its peculiar doctrines as to infant baptism. It must not, however, be confounded with the religious sect known as Baptists, because it was far more than a religious sect. In fact, this was the smallest part of its purposes. It was a revolutionary society in revolt against feudal oppression, which developed into a war against all constituted authority. It attempted to establish by force the Christian commonwealth, with absolute equality and a community of goods. Under the lead of Thomas Münzer, a Lutheran pastor, it inaugurated the Peasant’s war of 1525, which was quickly suppressed by the authorities. Münzer was executed, but the agitation continued, resulting in another outbreak seven years later. This was also defeated and suppressed in 1535, the leaders executed and their followers driven out of Germany by fierce persecutions. The mistake they made was in supposing that a change of system, such as they desired, could ever be affected by revolution. Revolutions only suspend, for the time being, the operation of the laws, so as to admit of a partial readjustment of existing systems to popular requirements. For instance, in France, before the revolution, the land had all been absorbed by the church, the state and the great estates. The revolution broke that up. The land was dividedamong the people, which afforded a temporary relief. But the same system of private property, even private property in land, continued. The great body of the law remained the same, and capitalism is just as firmly fortified and just as despotic today as it ever was. probably the need for a revolution in France, provided a revolution was the best or only remedy, is just as great now as it was in the time of Louis XVI. Revolution is never more than a temporary expedient. It can never work such a change as the Anabaptists sought to establish, or such as we seek in the co-operative commonwealth. If the revolution which now threatens this country should really take place, the most it can possibly do to further that co-operative commonwealth is to suspend the operation of those laws which now hinder the planting of cooperative communities. Their growth and the development of the commonwealth must depend upon their own inherent strength; that is, upon the extent to which they fulfill the wants of mankind. The kingdom of God will never be ushered in at the point of the bayonet.

Among the co-operative schemes of industry and Communistic society which have been tried in Europe and this country with varying success may be mentioned the Society of Harmony, started at Wirtemburg in 1785 as a schism from the Lutheran Church, and which emigrated to this country in 1804 under the leadership of George Rapp, and settled at Beever, Pennsylvania; the Society of Amana, at Homestead, Iowa; one at Tuscarawa, Ohio ; several colonies of Shakers which have established themselves at various places throughout the country; the Moravians, who were only mildly Communistic in their polity ; the Dunkers, the Separatists, the Oneida Perfectionists, the Icarians, and many others. These are still in existence, but have generally declined until they number but few members in proportion to those they counted in their days of greatest prosperity. In all of them this decline in membership is so marked a characteristic as to foreshadow the early extinction of all of these societies. It would not, however, be fair to assume that this is owing to any inherent weakness in Communism itself. They have all adopted regulations which are utterly foreign to Communism and to which it is easy to trace the cause of their decline. Their interference with domestic life in regulating, even in some cases prohibiting the intercourse of the sexes ; and in prescribing minute rules of conduct in diet, dress and general habits for the observance of members, has the effect of suppressing the spontaneity of the individual, and rendering life unattractive, especially to the young, in the communities. As a result the young leave them when they arrive at manhood and womanhood. There is an almost absolute despotism vested in their leaders. The smallest minutia of the daily life of the members is regulated from headquarters. Observing this, Mr. Nordhoff, who made a considerable study of these societies, observes that “The fundamental principal of Communal life is the subordination of the individual’s will to the general interest, or the general will. Practically this takes the shape of unquestioning obedience by the members towards the elders or chiefs of their society.” On the contrary, so far from being fundamental, all this is wholly foreign to Communism. But rather, Communism is not only persistent with the liberty of the individual, but there can never be any true Communism where that liberty is abridged. Just as co-operation must be strictly voluntary, leaving the most perfect freedom at all times; the greatest spontaneity of the individual, as its resultant—Communism—will not suppress that spontaneity. The failures of Communism, just like the failures of co-operation, have been because Communists chose rather to violate the principles of Communism, as they did the principles of co-operation.

J. H. Noyes, in his work on “American Socialisms,” gives a short history of forty-seven failures of Communistic societies. I think it will be found that instead of their being, in any sense, failures of Communism, they were failures because they were not Communistic.

Twentieth Century, June 21, 1894, 8-10.

CO-OPERATION.—VARIOUS SCHEMES.—VI.

BY WM. H. VAN ORNUM.

It is impossible to review, even in a hasty manner, the multitude of co-operative schemes which have, from time to time, been advocated or tried in this and other countries. Nor is it my purpose to undertake it. The most that I can hope to do is rapidly to scan a few which may be regarded as typical, or which convey some valuable lesson as to what co-operation has accomplished; what it may be hoped to accomplish; and the conditions under which success may be expected.

In a previous number I reviewed one phase of English co-operation, known as the Rochdale system. I do not wish to be understood that this is the only form which English co-operation has assumed. As a matter of fact, there are several others of great importance. One, which approaches the Rochdale quite nearly in some respects, and yet differs from it in other essentials, is the London system. It had its origin in a revolt of the purchasers against the high prices of the shop-keepers. It was first started by the clerks in the General Post Office, in 1864, and limited to them and their families. Meeting with success, other members of the civil service took up the idea; and a new society was formed ‘which was open to members of every branch of the civil service. It sought by co-operation to buy at reduced rates most or all of the articles needed for current consumption. Each member was provided with a purchase ticket, with a price list of everything in the store. It also included a list of every merchant with whom the association had dealings, and catalogues of special articles sold by special tradesmen. The society had its physicians, surgeons, accouchers, apothecaries, counsellors, stockbrokers, etc. who engaged to attend to the wants of members at reduced rates. Insurance was also obtained at a reduction. Purchasers were given the advantage of cheapness; but received no dividends on their purchases. While it was generally intended to furnish goods of good quality and measure, there was no such safeguard against adulterations as the Rochdale stores. This association was followed by the Army and Navy store, built on the same lines. It was not intended for the poor, but to enable a few well-to-do people to buy cheaply. So far they were successful. They also broke tip the habit of paying commissions to dishonest servants to influence purchases. The only element of co-operation in it was the co-operative purchase of supplies; and this was too loosely arranged to admit of proper safeguards as to quality and measure.

In 1825 a co-operative society was organized in Scotland to put in practice the ideas of Robert Owen. It was capitalized for £50,000 in shares of £250 each, which was afterward reduced to £200. 280 acres of land was bought at Orbiston, Scotland, for £19,995, and paid for mostly with borrowed money. The society soon fell into debt, and in 1828 its affairs were wound up and the estate sold.

The Catholic missionaries have frequently been strong supporters of co-operation. It is true, the support has generally taken the form of the compulsory establishment of communistic institutions: philanthrop-despotisms; but generally they were fairly well suited to the states of development of the peoples among whom they were set up. This is shown by the hold they acquired and the tenacity with which the people clung to them after the power of the missionaries was broken. Such institutions were established by the Jesuits in Paraguay, early in the seventeenth century, and which continued for more than a hundred years. Even now many of the customs remain in full force although the Jesuits have long since been banished from the country.

Among the theoretical promoters of co-operative communism must be mentioned Claude Henri Saint Simon, and François Charles Marie Fourier. Both were Frenchmen, nearly contemporaneous; and both sought, to a greater or less extent, to set up the kingdom of heaven by law, rather than await the slower but more certain course of evolution, although there is much in the teachings of both to make apparent this absurdity. Still, absurd as this is, and as those who yet teach practically the same doctrines will sometime find it to be, the advocacy of it had, and still continues to have a vast practical value in spreading a knowledge of the possibilities of a better state of society: that lofty ideal where capitalism, with its ruinous and wasteful competition and wage slavery shall give place to cooperation.

The teachings of Saint Simon had little influence on popular thought during his life; but after his death strong followers took them up. A society was formed, and, for a time, flourished; but it was soon wrecked through the desire of the leaders for rulership. Still their influence was perpetuated, and in some directions has produced most lasting results. Being scientific men, they were able to grasp the possibilities of human progress. It was among these men and in their schemes for human betterment that the project for building the Suez Canal first had its inception. They sought to unite mankind for the exploitation of nature instead of having mankind exploited by man. The complete emancipation of women and their equality with men was one of their fundamental tenets, although they maintained the Christian law of marriage.

Fourier taught that the evils of society arise from the unnatural restraints imposed by society on the gratification of individual desire, which is the fundamental basis of anarchy. He claimed that there exists a perfect harmony among the passions, and that cooperation, or united industry is the natural means for its attainment. And then, in the face of this practical wisdom he proposed the foolishness of arbitrarily organizing society as a whole into phalanges of 1,600 persons each, each phalange to occupy a common building built upon a uniform plan, called a phalansterie, with a definite allotment of land set apart to each phalansterie. He provided also for elaborate regulations of domestic affairs to govern the communities. In other words, he would have society impose still more extensive and vigorous restraints upon the gratification of individual desires, instead of promoting the perfectly voluntary co-operation of individuals while leaving each to gratify his own desires in his own way. He was like a potter who would put the human clay into a superior kind of mould and thus turn out a superior class of men.

Farming is an industry which seemingly offers peculiar facilities for co-operation, but in which co-operation is in a very backward state. There are many reasons assigned for this, but that most generally given is, that farmers, as a class, are naturally repugnant to co-operation: that their habits of life unfit them for united production. But this is not true, as I shall attempt to prove. The early history of the race shows, that the earliest form of land tenure was of agricultural association through community of land. If there was naturally any such special inaptness among farmers for co-operation it ought to have shown itself then. The truth is, that the present system of land tenure is the thing which, more than all others, stands in the way of co-operation in agriculture. Every intelligent farmer knows well how promptly land yields to better culture; and co-operation makes possible just such improved tillage through greater subdivision of labor, closer attention to details and improved methods. The further fact is also true, that the condition of isolation of the farmers under the present system is a most constrained and unnatural one. Man is everywhere a social being, and if the land system which condemns the farmers of this country to lives of solitude, was once broken up, so that they could adopt a more rational plan, they would as naturally do it as men condemned to solitary confinement in prison would abandon their cells if they could.

The history of the Ralahine community, begun in 1831, in County Clare, Ireland, is a complete demonstration of this position. Here was an agricultural people, differing in no way from the people in other parts of Ireland, rack-rented and famished until driven into riotous demonstrations. They had killed the old steward of the estate: shot him dead in his own house. Throughout Ireland the landlords were fleeing from the fury of their oppressed tenants. Evictions were the order of the day. Tillage lands were turned to grazing, and the people driven out. A police force of 30,000 armed men were maintained to keep the people in subjection, backed by coercion laws and the English army. Thousands perished in silence while others banded against the landlords. The recital of the outrages committed upon the Irish people would take pages to tell of them. Yet amidst all these unfavorable conditions the community was started. One Irish landlord, a Mr. Vandeleur, who had taken lessons in Socialism from Robert Owen, determined to try a new plan with his tenants. After considerable difficulty he secured a new steward, named Craig, who proved a most worthy assistant, to take the place of the one who had been killed. There was only 268 acres under tillage, with a bog of 63 acres which gave sufficient fuel. A small stream supplied a limited water-power. He put up several buildings, with dining hall, lecture, reading .and class rooms. Nearby was a storeroom, dormitory and six cottages. He then turned the old castle into a building for the accommodation of the people whom he hoped to unite in co-operative work. A constitution for the new society was drawn up by Mr. Craig. Its objects were declared to be:

To acquire a common capital;

To render to each other a mutual assistance;

To obtain a larger share of comforts for the members;

For moral and mental improvement; and

For the education of the children.

The methods were announced to be, to unite to rent the land and buildings from Mr. Vandeleur, and it provided that all property should be his until paid for. All members were to work and co-operate fully in production. Youths of both sexes from 9 to 17 were to learn trades. Meetings of the committee of management were to be held evenings to arrange for the work of the next day. Each member was to be governed, in his selection of work, by his own feelings, but power was reserved to coerce members who refused to work. No gambling, drunkenness or tobacco to be allowed. Full liberty of conscience was recognized. The governing committee was composed of nine members to be chosen half-yearly. The treasurer was to furnish full reports at regular intervals, and provision was made for dividing all profits among members. The rent was fixed at £700 a year which was acknowledged to be a very high price.

Now came the hardest part of the work—to get members. The people were moody and suspicions. They looked upon the whole thing as another landlord’s scheme to trap them. Craig received frequent warnings, and several times was assaulted. But he never lost heart. His uniform courtesy and kindly sympathy at last won. A meeting was held at which he explained the pun. Still the people hesitated until Craig proposed the election of officers. They then realized that he did propose to let them manage their own affairs. The membership was soon filled with twenty-eight men, twelve women and twelve youths under seventeen years of age. The experiment was a success from the start and attracted attention all over Ireland. Crime ceased in County Clare, and was greatly reduced all over the country in the hope of encouraging other landlords to do the same thing. On this estate there were no more outrages for thirty years. The people prospered and were happy notwithstanding the famine and notwithstanding the high rent they had to pay. The success exceeded all expectation.

But the landlord had an inveterate passion for gambling. He lost all land was thrown into bankruptcy. Under the English law the tenants were held to have no rights which landlords were bound to respect, and the little community was stripped of everything by Vandeleur’s successor. Solemn agreements between landlord and tenants went for nothing.

Then the old outrages began again, and with good reason. But the practicability of agricultural co-operation was demonstrated in the most complete way and under the most adverse circumstances. I think no reasonable person, in the face of these facts, can doubt for a moment that the land system is almost the only bar to co-operative farming. There have been many other experiments and all teach the same lesson, but there is not space for further details.

Twentieth Century, June 28, 1894, 7-9.

CO-OPERATION.—VARIOUS SCHEMES:—VII.

BY WM. H. VAN ORNUM.

In America, some attempts at co-operation among farmers have been made by means of the granges. The grange movement was started in New England a little more than twenty years ago. It was begun as a co-operative scheme; and patterned as nearly after the Rochdale plan as circumstances permitted. Aside from its social and educational features, it aimed to reduce the cost of supplies required by the farmers by buying direct from manufacturers at wholesale prices; securing an economical distribution of them; and finally getting goods of better quality. The movement spread rapidly to the west; and it is there that it reached its greatest development. It quickly took on the character of a popular revolt against the high prices charged, and impositions practiced upon the farmers throughout the country. A great deal of bitterness was engendered against tradesmen, much of it needless, which was returned with interest on the part of the tradesmen. Being based upon a very imperfect knowledge of co-operation; and developing rapidly, as it did, there was no opportunity for its leaders to acquire a thorough knowledge of the principles they were called upon to practice, so that it is nothing strange that the co-operative feature of the grange has failed to realize the sanguine expectations of its early promoters; and has largely fallen into disuse. The grange still exists with considerable strength in some parts of the country, held together by its social and educational influences; but it forms an element which may be utilized at no distant day for a larger and purer co-operation which will sweep capitalism into oblivion. And the same remarks will apply to the Farmers Mutual Benevolent Association, and other farmers organizations which still flourish in many of the western and southern states.

The Sovereigns of Industry was another co-operative order started in the east about the same time as the grange; and was intended to fill about the same place among artisans and residents in the cities and towns as the grange did in the country. Councils were started in many of the stat incipient Stores organized; and considerable headway made. The rapidly shifting populations, especially in western cities and towns, added to many other causes, interfered with definite settled work and continuity of action; so that they soon fell into disuse. It was in the work of this order that the writer learned his first lessons in cooperation. About this time a co-operative society at New Bedford, Mass., attained a considerable success. It probably belonged to this same order, as it was modelled after the same pattern. It clubbed the money of its members; bought goods at wholesale; and divided them at the houses of the members. In time it opened a store where it did a business of $2,500 a month. The retail dealers formed a combination against it and threatened to boycott any wholesale house which should sell goods to it. Under this pressure the supplies were, for a time, cut off; but other wholesalers, a little further off, accepted the trade that the others refused; and the era of prosperity was continued. It was nothing, however, but co-operative buying on orders which had previously been given and paid for. It kept no stock; incurred no debts; and supported no paid shopkeepers. I have no information as to the later history of the society.

Co-operation has been applied extensively to insurance of almost every kind and quality in this and other countries. There are a few purely mutual companies; but generally co-operation is so mixed up with capitalism that the capitalists reap the benefits which accrue from co-operation. This is true in all those companies which have capitalistic features, such as capital stock, dividends, fixed premiums, etc. Another class known as benevolent insurance orders will be considered under the head of Friendly Societies, later on.

Building and Loan Associations are classed as cooperative. And they are so In one particular: they are co-operation applied to savings. In all their other features they are purely capitalistic. They loan out the accumulations of savings of the members on strictly capitalistic principles, at enormously high rates of interest. And the interest which accrues from these loans is divided according to the same principles. At one time, when publishing a paper in the interest of building and loan associations, I was informed by a prominent banker in Chicago that at that time he held building and loan association stock to the amount of $80,000. And yet he never expected to borrow from an association. On the contrary, he was a lender of money; and found this an opportunity to loan his money at a much higher rate of interest than he could realize from ordinary bank loans. Taking these societies as a whole it is the veriest burlesque of co-operation to class them as co-operative. While they have one single co-operative feature yet their advantages all accrue to capitalism. And just so far as they foster the idea of building up a capital by small increments on which to do business or perform undertakings they are strengthening capitalism.

Kaweah and Topolobampo are still fresh in the minds of co-operators in this country. Without going into any of the controversies which have marked the history of these enterprises, I think it possible to learn an important lesson from both of them; a lesson which has been taught in many another co-operative scheme which we have passed under review in these chapters. Kaweah was wrecked, first, by the jealousies and rivalries of its rulers and would-be rulers; and, finally, by the hostility of the government, whose real function was, and is, to maintain and perpetuate the present capitalistic system. In all co-operative societies rulership has produced rivalries, dissensions, disorders, and finally dissolution, with a certainty proportioned to the intelligence of the mass of the members. It is only the densely ignorant who will continue to submit to being ruled; and even they are far more orderly and reasonable if accorded an equal voice in common affairs. Any scheme of co-operation to be successful, must be strictly democratic in its management; and that management must not extend one step beyond business matters. For its best success, it must place no regulations or restraints upon the private affairs or habits of life of its members. Rulership in government is just what is destroying human society today; and it must be eliminated from the coming society or it will destroy that also.

The same observations apply with even greater force to Topolobampo. A benevolent despotism can never be a lasting success. A dictator is a legitimate slave- holder; and is as much out of place in a co-operative or communistic community as the prince of darkness would be in paradise.

Profit sharing—so-called—has been put forward and heralded the world over by interested parties as a cooperation of the interests of the employer and the employed; but it is no such thing. The interests of the employer, looked at from his standpoint, are to obtain the greatest amount of labor for the smallest amount of wages: that is, to retain in his own hands as much as possible of the wealth produced by the employed; while the interests of the employed are to obtain all, or as much as possible for themselves, of that wealth. Now there can be no co-operation in that. The two positions are absolutely antagonistic. G. J. Holyoke says: “There can be no association between persons of opposing interests; and it is idle to speak of fraternity between rivals.” Still, workmen may be tricked into a belief, by reason of a want of knowledge of their own rights and interests, that their interests and the interests of their employers are identical. Under the influence of that belief, they may guard against waste and exercise increased industry. And, in order to obtain that increased efficiency, the employer may engage to hand over to the workman something more than he would do without it; but this is obviously in the interest of the employer and not of the workman. The interest of the workman lies in emancipation and not in amelioration. Whatever closes his eyes to emancipation and makes him content with amelioration is against his interest. As a matter of fact, profit sharing, as commonly practiced, is but a sort of discriminating charity.

The keynote of the whole scheme of profit sharing is contained in the remark made by Robert Owen to Mr. Marshall, of Leeds, when he was being shown over the mills there. Mr. Marshall said: “This army of workmen, if they chose to be careful in the use of material entrusted to them, might save me £4,000 a year.” “Then,” remarked Owen, “why not give them £2,000 and they will do it, and you would gain £2,000 by the arrangement?“ It is on this theory that profit sharing proceeds. But the employers almost never carry it out. In this country and in England profit sharing has been a snare and a delusion. Time after time the solemn engagements entered into by the employers have been broken. It was conspicuously the case in the colleries of the Messrs. Briggs, in England, where the system was put in force with great flourish of trumpets. The estimated saving of £3,000 a year was fully realized. But the workmen were cheated. The Briggs’ did not apportion to them their just share according to their own agreement. Some one has said that, “any agreement between Allen, the employer, and Barton, the workman, that Barton shall receive what Allen chooses to give him is no agreement at all.” Moreover, profit sharing has generally been accompanied with dishonoring conditions which were calculated to break up the workingmen’s unions.

A single instance of profit sharing will be sufficient to illustrate its workings. One of the most conspicuous in this country has been that of Alfred Dolge, of Dolgeville, N. Y. The facts which are here presented are condensed from Mr. Dolge’s book, so that he cannot complain that I have misrepresented him.

Mr. Dolge calls his plan “A great distribution of earnings.” The following is the substance of it: In the first place, he sets aside each year a calculated amount of the profits of the business for the benefit of the men. He does not give it to them in cash, hut invests it in various schemes for their benefit. There is a pension fund; a life insurance plan; a mutual aid society; a building fund for houses; a club house and a public park. But all depends upon the arbitrary will of the employer.

The following is an extract from the “Pension law:”

“From a desire to improve the material condition and prospects of its employés; to establish them as a compact, contented and well regulated community; and to fasten the mutual ties of esteem as well as of interest, that hold us together, and without which no lasting success is possible, the firm of Alfred Dolge has this day made the following pension law:

“Every employé, after continuous service 10 years, shall be entitled to a pension under the following conditions: In cask of total or partial disability to work, by accident, sickness or old age, while the disability lasts he shall be entitled to a pension calculated upon the basis of the last year’s service, s follows: 50 per cent after xo years service; 6o per cent after 13 years service; 70 per cent after 16 years service; 80 per cent after 19 years service; 90 per cent after 22 years service; and 100 per cent after 25 years service. If accident arises, or sickness is contracted in pursuance of duty, 50 per cent may even be allowed before the expiration of 10 years service.”

But the peculiarity of the whole thing is that the firm retains the absolute power to discharge any employé at any time, and thus cut off his pension, as well as to alter, amend, or even abolish any one or all of the above rules. It is an agreement which does not bind. It will probably be found that the employés of Mr. Dolge are prepared to appreciate and understand genuine cooperation.

Twentieth Century, July 5, 1894, 7-8.

CO-OPERATION.—EUROPEAN CREDIT BANKS.—VIII.

BY W. H. VAN ORNUM.

We now come to a most remarkable phase of cooperative work; remarkable alike for its present achievements and for the possibilities which it suggests It has wrought a transformation scene in the condition of a large part of the working people, and often among those of the very lowest, in at least three of the principle countries in Europe; and improved their material condition in many others, just in proportion to the extent to which is h is been applied. It has opened the way for mutual self help to the very poorest, inspired them with hope; aroused their self- respect, and stimulated their spirit of independence. It has been the means of making their homes more habitable, improving the culture of their fields by purchasing machinery, procuring fertilizers and buying stock, and has enabled them to got better prices for their products and to buy supplies at wholesale But the most wonderful effects have been wrought upon the people themselves, The idle have become industrious, the spendthrift made thrifty; the drunkard forsook his cups and the tavern hunter the inn. The illiterate, even when bowed with age, have learned to read and write, A Prussian judge reports that litigation, by reason of it, especially in the collection of debt, is sensibly diminished. Even one priest reports that the co-operative bank has done more, in his parish, to reform the morals of the people than all his ministrations. Those who study co operation more to arrive at a definite working principle and plans, than as a hazy sentimentalism, should carefully consider the European Credit Banks in all their details and variations. I say European, because, while the Credit Banks had a distinctively German origin, they have had a different development in different countries, according to the special needs and circumstances found in those countries In one country they have taught one lesson; and in other countries others. Or, rather, in one place they have taught one part and in another place another part of the same great lesson, that to operation is applicable to all the wants of human association, and that the development of the individual depends upon the extent to which he is enabled to cooperate with his fellows.

Herr Schulze-Delitzsch, a man of some means and a benevolent character, about 1845, observing the extreme straights to which the peasants were driven through the exertions of professional usurers, set himself to devise a plan of relief, The problem, according to his own words, was, “to procure capital without a capital of guarantee.” Passy, one of Schulze’s associates, put it, “to find means of giving credit to those who have no security to offer in exchange.” In other words, the question to be solved was, could labor be pledged for money?

Schulze’s first step was the formation of a co-operative association for the purchase of raw material, He next proceeded to the formation of a credit association, The dominating principle in this was benevolence, It was a capitalist institution, philanthropic, condescending, and was to be supplied with funds by those who did not expect to become borrowers, It looked to helping the people instead of developing a mutual self-help among the people themselves. Its weakness was, that it was not sufficiently co operative. It soon became evident that this would not accomplish the desired end; when Dr. Bernardi, a friend and fellow worker with Schulze, devised a more co-operative scheme, Still, it was sought first to protect the interests of the investor—the lender. Co-operative credit was of secondary importance. Money was borrowed from those who had money to lend; and business was done for a profit, Consequently, interest was kept at a comparatively high rate—ay, from twelve to fourteen per cent, afterward reduced to eight, Each member as required to subscribe for one share and no more, which was at first fixed at £30, payable in small installments. The bank was permitted to engage in all kinds of banking operations; but all money was to be loaned inside the association. All forms of security— mortgages, pledges, securities, bills of exchange, etc, were accepted. Loans were not restricted in amount, but must be made for short time, commonly for three months, with but one renewal. The administration was placed in the hands of a committee which drew a salary and a commission on the amount of the business done. These associations were based upon the unlimited liability of the members; that is, every member was liable for the debts of the whole association.

These associations multiplied with great rapidity. By 1883 more than 4,000 associations had been established with a membership of 1,200,000, and with a capital of £10,000,000, doing business at the rate, according to some estimates, of £100,000,000 a year, They had extended throughout Germany, Austria, Italy; and, to a considerable extent, to almost all the countries of Europe. According to Herr Schmid, of Vienna, in 1886 the total number in and out of Germany, formed on Schulze-Delitzsch lines, was 4,500, with 1,500,000 members, and doing a business of £450,000,000 annually.

From the first, the government put every conceivable obstruction in Schulze’s way. He was politically a present ed man’ officially harassed and badgered, persecuted by the courts and tabooed by the press, But he added more to the wealth of German than the entire amount of the French indemnity. When the system was started it was almost impossible for a poor man to obtain a loan. Interest ranged from 50 per cent to 100 per cent and one instance has been recorded where 750 per cent was exacted. And yet, not withstanding the great benefit which these institutions brought to the people, there is no doubt that they are more capitalistic than co-operative They are open to the criticism of Father DeBesse of France that they are “fighting usury by practicing it.” Almost every feature of them is capitalistic with a definite capitalization in shares with interest, usury and dividends and with fixed salaries and commissions to the responsible officers of the institutions Their success has been wholly due to the small element of co-operation which is found in their constitution, viz.: the unlimited liability of the members. In that way the members co-operate together to protect each other’s credit and enable them to obtain loans which they could not do singly With this one exception, the Schulze-Delitzsch credit banks are pure and simple capitalism and while they have had a rapid development, and transact a vast volume of business, they have been subject to the same dangers that other capitalistic enterprises encounter. Failures have been frequent. Between 1875 and 1876 (one year) no less than thirty six associations ere declared bankrupt and 176 more went into liquidation In all cases however their failure has been directly traceable to greed and carelessness on the part of the officers and not to a failure of the principles of co-operation, as will appear later.

In sharp contrast to the Schulze-Delitzsch associations was the Loan Banks devised by Raiffeisen, a burgomaster in twenty five parishes in Westerwald, Germany In almost every essential particular these banks are the direct opposites of those of Schulze-Delitzsch. Schulze placed the interests of the lender foremost and Raiffeisen those of the borrower. The first aimed at business and the second at social benefit. Still they each occupied their own separate sphere, the Schulze-Delitzsch associations reaching the middle lower class of people while the Raiffeisen did the same for the very poorest. But the history of the last has been the most remarkable and the most instructive from the standpoint of co-operation.

In his official capacity Raiffeisen was brought in daily contact with the miseries of the poor during the famine of 1846 and 1847 The population was half starved ill clad, badly housed and badly brought up. By hard labor it could hardly eke out enough to keep body and soul together. The country was under the pest of remorseless usury. The people suffered in mute despair, deeming it utterly impossible to protect themselves from the exactions of the professional usurer. The whole district was turned into a usurer’s hell.

Raiffeisen determined to take the cudgel and declare relentless war against usury. His first venture was a co-operative bakery. It was a signal success. It enabled the poor to buy their bread at just half the current price. He next started a Co-operative Cattle Purchase Association, which was again a success. The usurers, however, still held their money debts. To combat these, Raiffeisen now started his first bank with £300 which he had managed to scrape together. No one ever contributed a penny in share capital and yet from this small beginning, it has grown until it distributes its millions through its thousands of channels bringing comfort and plenty everywhere that it sets its foot. The usurers were compelled to relax their grasp and the people were given a new lease of life. Starting, as it did, in one of the poorest provinces in Westerwald, it has grown to enormous proportions with its branches reaching out all over Germany, Italy Austria and Hungary, with offshoots in France and Russia

Personally modest and unassuming Raiffeisen entered upon no noisy propaganda. He was content to work in his own limited way and sphere. It was five years before his second bank was formed and eight more until the third was started. After that, it was six years to the starting of the fourth. Since 1880 they have multiplied with great rapidity When in 1888 Herr Raiffeisen died a half of Germany mourned him as a benefactor No higher tribute can be paid to his practical good sense than this, that after a history of forty three years, out of more than 1,000 institutions established on his lines, and all dealing with the very poorest in their localities, they can boast that neither member nor creditor has ever lost a penny by them. This also teaches some further lessons that co-operation when organized on national lines, is applicable to the affairs of the poorest and most ignorant; and also that men, as a whole, are honest and upright in their dealings when it is possible for them to be so. In the face of such a history who shall say that co-operation is impracticable in any direction. Almost at the same time that Raiffeisen started his Loan Bank in Germany, Proudhon began his People’s Bank in Paris, with a great flourish of trumpets, parading before the world his splendid enterprise. It was big with promise and flush of funds but was destined to end in nothing but smoke in less than two months. One was the enterprise of a practical, sensible and earnest man and the other the imperfect scheme of a visionary

In the next will be given the details of the organization of the Raiffeisen Loan Banks

Twentieth Century, July 12, 1894, 7-8.

CO-OPERATION.—EUROPEAN CREDIT BANKS.—IX.

BY W. H. VAN ORNUM.

When a Raffeisen Loan Bank is to be started, a definite district is selected, commonly containing about 400 inhabitants. Within the limits of that district members are selected with great discrimination by those who have undertaken its formation, or who have already joined, the object being to secure a membership limited to the very best materials. No difference is observed between the rich and poor, except, that as the bank is based on the unlimited liability of its members, the well-to-do are generally accorded a leading part in the administration, because they must bear the brunt of the liability. A committee of five is elected which is charged with executive work of the institution. A council of supervision is also chosen, consisting from six to nine members according to the size of the district, to supervise the work of the executive committee and overhaul all that has been done at least once a month. Both the executive committee and the council of supervision serve without pay. The cashier is the only person who receives pay for his services; and he has no voice in the administration. The bank is strictly forbidden to transact any of the ordinary business of a bank. Originally there were no capital shares or entrance fees. But Bismarck insisted that the plan should include a share capital. The associations replied by placing the shares as low as ten or twelve mark, payable by installments. Raiffeisen insisted that there should be no dividends, but again Bismarck interfered. And again the associations practically annulled the chancellor’s edict. Every farthing that is left over is rigorously passed to the reserve, which slowly but steadily grows and forms a solid basis of credit for the association. Not even in the event of the dissolution of the association is any sharing out permitted.

Borrowing is not made easy, but hard. While money must he found for all who need it, in every case the borrower must make out a good case; prove that he is trustworthy, and that his enterprise is sound. If he does this, no matter how poor, the money will be placed at his disposal. Without such proof, no matter how rich, the money is sure to be refused. He must then apply the money strictly to the objects for which he received it. The smallness of the districts enables every one to act as a check upon every other. No one can misapply the money without others knowing it.

Every three months a complete review is made by the council of supervision. If necessary better security is called for from the borrower in the interests of the association. If not forthcoming the loan is called in at four week’s notice. This, however, is almost never resorted to. It is only an expedient which may be resorted to if necessary.

Lending is almost entirely done on personal character. Notes of hand are taken, generally unbacked, or else backed by one, or at most two.

In addition to the close supervision by disinterested officers of the associations, men who serve without pay, a corps of inspectors are kept travelling from one association to another examining books and accounts, and the workings of the associations.

The associations obtain money by borrowing it from banks and individuals; which they can do by reason of the confidence inspired by their strict business habits. They are able to get all the money they want at the lowest rates of interest. So great is the confidence inspired in the stability of these banks that the law courts actually allow trust funds to be paid to them on deposit. During the two critical periods of German credit; the war of x866 with Austria, and that of 1870 with France, when deposits were withdrawn at wholesale from other banks, deposits were actually pressed upon the Raiffeisen banks for safe keeping, although it should be without any interest at all.

With a record of millions of money lent, mostly to poor people, through a more or less complicated sys. tern of business in about a thousand associations, and extending over forty three years, there have been only ten cases of embezzlement or misappropriation of funds; and in every case these were met out of the reserve, or by the sureties. No wonder they command confidence; and no wonder they can obtain all the money they want for any length of time for productive purposes, as low as per cent per annum ! Unlike the Schulze-Delitzsch banks, loans are made for long time. The record shows that about 15 per cent of the loans are made for one year; 43 per cent from one to five years; 34 per cent for from five to ten years; and 8 per cent for a longer period. So long as a borrower continues regular in his payments, and applies his loan to the objects for which the money was granted he may be sure that it will go on.

These associations have led to other co-operative schemes, such as co-operative associations to insure cattle against disease; co-operative dairy associations; co-operative hop growers’ associations, and co-operative vine growers’ associations. These latter have doubled the receipts of the cultivators in many districts. Grapes are gathered and are taken directly to a common press, where they are immediately tested for sugar, and credited to the grower according to an agreed scale. By means of their credit associations they can pay cash down, only reserving a small balance to be paid at the end of the year. The result is, the wine is made pure and cheap. A move has lately been set on foot to establish co-operative wine shops for the sale of wine from co operative associations.

Like the Schulze-Delizsch, the Raiffeisen banks are based upon the principle of unlimited liability. This is essential to their very existence; but they introduce an element of safety wholly wanting in the first. Each being restricted to a certain district, and that too a small one, the members are kept, constantly in touch One with another; each acts as a check upon the other, and none can misuse the funds borrowed without the fact becoming known to the others whose interests would be imperiled. The workings of these banks has greatly raised the standard of personal character among the people. So greatly do they prize the memberships in these associations that they cultivate a very high degree of excellence in order to obtain them. Drunkards become sober; the indolent industrious; the improvident thrifty; and the ignorant and illiterate learn to read and write that they may become familiar with their business and reports. The meetings are well attended the members taking the liveliest interest in all their affairs. These Raffeisen banks have made character a realizable asset, tending directly to develop a higher order of character among the poor.

Another element of safety that must not be overlooked is, that the work of administration is performed without compensation. The offices offer no temptation for greed ; and the fact that men can be found to do arduous and responsible work of the highest quality without pecuniary compensation speaks volumes of promise for co-operation. The failures which have attended the Schulze-Delitzsch banks are all traceable to this one fault: the carelessness and greed of their officers which was stimulated by the payment of salaries and commissions. The contrast in the results of the two systems is so marked that no room is left for doubt as to their comparative merits. The Schulze-Delitzsch, while developing more rapidly, is far less co-operative and contains many more capitalistic features. Although it has enjoyed a large measure of public confidence it has encountered many signal failures; while the Raiffeisen system has never had one.

In Russia the credit associations have been thwarted and crippled by the vicious and meddlesome interference of the government, so much so as to almost destroy their usefulness. In 1883 there were reports of a thousand associations; but they were mostly nominal. They have since dwindled until it is doubtful if there are now as many as half that number, and they of no great use. If a member borrows for a specific purpose he may divert the funds to other purposes; and the government forbids the association to expel him, thus directly encouraging people to join merely to defraud the associations. Wherever government interferes in the affairs of the people, it always does it to the injury of the people.

It is reported that in some of the provinces of China there exists a form of mutual bank, whereby the people can easily obtain the means necessary for making improvements; but I have been unable to obtain satisfactory details of their plan and workings.

Co-operative credit has recently obtained a foothold in Japan also, with every prospect of success.

Twentieth Century, July 19, 1894, 8-10.

CO-OPERATION.—EUROPEAN CREDIT BANKS.—X.

BY W. H. VAN ORNUM.

In Italy, co-operative banking has developed another of its possibilities; that is, the issuing of bills of credit, or current money. The People’s Bank of Milan was the first, started by Signor Luzzati, in 1866. Within a few days after it opened its doors it was confronted by a war. The government had levied a forced loan; and a financial panic was the result. The People’s Bank promptly came to the rescue and offered to issue small bills of five, three and two lire, against security. Any person could obtain the bills by depositing approved security. The printing press was started at once, and with the most admirable success. From that moment the success of the bank was assured. At the beginning, it had but £28 capital, exactly the same as that possessed at the start by the Rochdale Pioneers; and all work was performed gratuitous. According to the last reports which are accessible, it now employs over 100 paid employees and 240 unpaid officers. It had 16,392 members; a capital of £336,752; and a reserve of £168,376, doing an annual business of £71,841,788; and distributing in dividends £46,080.

It must be remembered, however, that the Italian banks started out on a radically different plan from those of Germany. They began upon the principle that borrowing means dependence upon others; so they discarded it as the prime purpose; and largely confined their transactions to bills of exchange, discarding the principle of unlimited liability. In this, and in their share capital, their dividends and other capitalistic features they are less co-operative than their neighbors in Germany and Austria. Their method of borrowing is this: suppose A is considered good for £40; B for £30; and C for £60; on the strength of their joint signatures any one of them is entitled to a loan of £130, provided no other paper is out signed or backed by A, B and C. Then again, a tradesman, having money owing him from a customer, needs but to have the customer’s acknowledgement of the debt, when he can get it discounted. This system has been found to work well and safely. Under it banks have paid all the way from six per cent to twenty per cent dividends. Year by year Signor Luzzatti has insisted upon stopping that, but without avail. “Limit dividends,” he said, “cast away every inducement to greed.” The only lesson of value in this type of bank is, that co-operative banks can just as safely and properly issue circulating bills of credit based upon proper security as any other agency in the world. Beyond this, the banks of Signor Luzzatti do not differ widely, in the extent of their co-operation, from the banks of Schulze-Delitzsch. They are not for the very poor. They fail to reach those who are in greatest need of their help.

Realizing this fact, Dr. Wollemborg started a new type of credit bank, in Lombardy, in June, 1883, with only thirty.two members, and patterned very nearly after the Raiffeisen banks of Germany. A few peasants became borrowers. When their first quarter came around they were surprised to receive notice that they owed 1 1/2 per cent on their loans. They could not understand it. They had been used to from 30 per cent to 100 per cent; and sometimes much higher. They brought in their notices to see if some mistake had not been made. Being assured that the notices were correct they at once proclaimed the good news. The subsequent history has been a repetition of that of the Raiffeisen banks in Germany. In fact, they have followed closely the Raiffeisen lines, except in some cases carrying his principles still further. They have thoroughly met the wants of the very poor, and have produced the same moral effects among them. As to personal character, they are strict as no other. A man may be as poor as a church mouse; but it is no bar to membership. Not a penny has to be paid down for shares; but the applicant must be honest, sober, thrifty, well conducted and thoroughly trusted by his neighbors. He must also have a rudimentary knowledge of reading and writing. It is said that under these influences illiteracy, which was as prevalent as in any portion of Ireland, is rapidly disappearing. The stimulus of personal interest has proved more powerful, in habits of temperance, than all the eloquence of priests and the arguments of temperance lecturers. Just as in Germany, unlimited liability has been found to be devoid of any element of danger. Not a farthing has been lost to anybody. Even where members have left the country they have sent in their payments with regularity. The poor become self- reliant and business like; cultivation has been improved; paupers are transformed into self-supporting citizens; and the usurer finds his occupation gone. The hovels are transformed into neat and tasty houses; and thrift and order take the place of carelessness and disorder.

The credit unions of Belgium are formed on a still different plan. An indefinite number of members join, each taking one share, of say 200 francs. On this they pay 20 francs, and in some cases only 10; but the share entitles them to a credit of 200 francs on paper, to which the union affixes its signature, and becomes responsible; a modification of the issue of currency bills of credit. At first this seems extremely hazardous; but with care in accepting members this has been found to work well. The first one established proved its soundness by living through a crisis of almost unparalleled severity.

In Switzerland almost the only form of co-operative bank which has been introduced to any extent has been something like our building and loan associations: co-operation in savings. But these have flourished for more than sixty years. They pay no dividends; carry all surplus to the reserve; and have redeemed every farthing of their share capital. Their management is strictly democratic; and the same attention is given to small as to large business.

In other directions co-operation is well advanced in Switzerland. Co-operative dairy associations, which produce the famous Swiss cheese; co-operative cattle- purchase associations; cooperative Smithies, which have effected important savings; and co-operative insurance associations against hail and cattle plague, and sometimes against fire, have much reduced the cost of insurance below that charged by joint stock companies. In some places co operative butcheries exist. There are thirty-five co-operative cattle-purchase associations in the canton of Thurgan, which supply 22,230 of the population with their needed farm stock. For more than forty years have these associations kept the population in milch cows and heifers, rendering invaluable services, and receiving their money back with interest. But why with interest? If t