THE CIVIL SERVICE SUPPLY ASSOCIATION.
Within the last few years the progress of the Civil Service Supply Association in London has been so extraordinary that a few words concerning it may not be uninteresting to our readers.
The object of the society is ‘to carry on the trade of general dealers, so as to secure to members of the Civil Service and the friends of members of the society the supply of articles of all kinds, both for domestic consumption and general use, at the lowest possible price,’ on the principle of dealing for ready-money. Co-operation on the broadest scale of retail shop-keeping is brought into play. The organisation consists of three classes of purchasers: the holders of shares of the value of one pound each, and from whom the committee of management is chosen; ordinary members, who being connected with the Civil Service, pay two shillings and sixpence a year; and outsiders, or mere supporters of the concern (who, however, must be friends of members or shareholders), who pay the sum of five shillings annually. All have the same advantages in the purchase of goods, but members of the Civil Service have the privilege of having goods above a certain amount delivered carriage free. As the thing stands, the number of shareholders is limited to four thousand five hundred.
The constitution is a little complex, and to the non-initiated, perhaps not very rational; let it, however, be remembered that it is not so much a business concern, as what may aptly be termed a ‘benefit society;’ and if the objects of the society when it was started in 1866 have in late years been deviated from, it is more from the excessive growth of the institution than from any other cause. The Association has from less to more assumed truly gigantic proportions, and now takes rank as one of the wonders of the metropolis. The headquarters of the Association consist of huge and handsome premises in Queen Victoria Street, ‘City,’ the lease of which, subject to a ground-rent of one thousand four hundred pounds, has been purchased, and which, together with certain additions to the building, has cost no less a sum than twenty-seven thousand pounds; but such is the increased value of property in this locality that they have recently been valued at thirty-two thousand pounds. On the ground-floor of this building, groceries of all kinds, wines, spirits, provisions, cigars, and tobacco are sold, forming three departments. On the first, all goods which come under the terms of hosiery, drapery, or clothing, besides umbrellas and sticks, are the articles of sale, forming two departments; and on the second floor, commerce is strongly represented by stationery, books, fancy goods, drugs, watches, and other miscellaneous goods, forming three departments. The third floor is appropriated for the offices of the clerks of the Association, who form a large staff, and for storage.
For the accommodation of West-end customers, an emporium in Long Acre was until recently used; but that becoming too small for an increasing trade, the Association has built commodious premises in Bedford Street, Covent Garden, costing twenty-five thousand pounds, whither the Long Acre business has been removed, and the arrangements of which are the same as at Queen Victoria Street. Not content with these, the Association has taken large premises at the back of Exeter Hall for storage purposes, as well as for the sale of various new articles and the carrying on of the tailoring department.
It is not a little astonishing to know that a society which originated in a very humble way indeed, has developed its business so much within little more than ten years that it requires more than six hundred employés for the furtherance of the concern. The secretary, who is the chief of this staff, has several clerks under him; and besides there are accountants, a treasurer, several storekeepers, clerks, assistants, cashiers, &c.—a body which costs the Association nearly fifty thousand pounds annually! The direction of the whole concern is vested in the hands of the committee, which numbers fifteen; and the shareholders participate in the management so far as they are the constituents, so to speak, of the committee-men, the election taking place once a year, when five of the body go out in rotation. It may be added that there are likewise auditors, bankers, and other officials requisite to a society of this kind; and that the necessary managerial business is transacted at the ordinary meetings of the Association, twice a year.
The Civil Service Supply Association is said to take rank now amongst the largest buyers and sellers of this country, a circumstance we need not be surprised at when it is stated that the sales from the first year of the society’s establishment to August 1877 amounted to upwards of six million pounds sterling; and the wonderfully rapid increase of the business may be judged by the fact that the sales of the Association, which in the first year (1867) amounted to L.21,322, in the year ending August 1877 reached the large sum of L.1,041,294. These figures are valuable in demonstrating the unprecedented success of this extraordinary Association, a success mainly due to the large body of members by which the Association is supported. Last year the number of clients was twenty-five thousand, including the four thousand five hundred shareholders already referred to. Last year each shareholder had the privilege of nominating two persons for membership, by which nine thousand outside members or subscribers will be added. We are further told that there is always a mass of applicants for admission to the Association, many of whom have been on the books of the society for years, unable to procure tickets.
Cheap goods being the main object of co-operative associations, we will now say a few words regarding the prices charged. At first the benefit in this respect was very appreciable; but as the society has increased, the benefit has, as a natural consequence of a corresponding increase in working expenses, to a certain extent decreased, and it may be added, is in many cases very variable. While on certain articles, such as fancy goods, drugs, perfumes, and the like, the reduction is considerable; on others again, such as tea, sugar, butter, and the like, which are of more common use, there is but a trifling difference between the Association’s prices and those of the retail trade. This seems rather to defeat the true objects of co-operation, which are expected to convey benefit more in respect of articles of general consumption than of those much less necessary for common existence. The variableness of reduction arises probably from the fact that goods sold at little profit by shopkeepers are also not to be sold much cheaper at the stores; while the goods on which most gain is made at shops are those on which the Association can afford to make large reductions; but by a strange fatality, they are, as a rule, the very articles less required than any others by the members of the society.
In calculating prices the committee deem it necessary to act so as to be on the safe side in case of any error that might arise. On an average, the prices charged to members are at the rate of ten per cent. above the wholesale prices, thus allowing a profit to defray working expenses, which are about seven and a half per cent. This allowance has always proved a generous one, for besides covering the annual expenditure, there has always been an important surplus.
For some years this surplus was allowed to accumulate, it being thought that it might probably prove useful as a reserve fund; but when it reached the large sum of nearly one hundred thousand pounds, it was plainly apparent that steps should be taken to dispose of it and all future surpluses. As concerned the foregoing sum, the rules of the society according to the act of parliament under which the Association is incorporated, rendered appropriation of it in any way impossible; it was therefore set apart as a reserve fund, invested in the buildings, stock, &c. of the Association; but a new set of rules was formed by which all profits accruing thereafter were to be divided amongst the shareholding body, and placed annually to the credit of each, to be, however, only withdrawable by their relicts after death, or when the accumulations on any share shall amount to one hundred and seventy-five pounds, when, in order to comply with the provisions of the Provident Societies Act, which limits the funds any member may have in a society enrolled under its provisions to two hundred pounds, the excess must be withdrawn. This arrangement, which was duly legalised, and came into force in March 1874, naturally gave the shares a far greater value than they had hitherto possessed, as will be seen from the fact, that from the date mentioned to August last there has accrued very nearly one hundred thousand pounds. If the profits continue at this rate, the shares will of course increase in value each year, and already—since recent alterations in the rules have made them transferable and saleable—shares have been disposed of for sums varying from twenty to thirty pounds each; hardly a bad investment, comparatively speaking, for the sellers, to whom they cost but ten shillings, the rate of interest being eleven hundred per cent. per annum! This large profit is, however, considered by many to be a really objectionable feature, and at variance with the principles of the Association, namely, ‘to supply articles at the lowest possible price.’ We believe this view is entertained by the Committee of Management, who are about to take steps to have the high rate of interest reduced.
Seeing that a large annual profit accrues to the Association, and causes an embarrassment, the inquiry naturally arises—why not lower the prices of articles so as to leave no profit whatever? There are various reasons, as we understand, why prices cannot be lowered beyond an assigned limit. The profit on small quantities of articles is, as has already been stated, so infinitesimally meagre as to admit of no sensible reduction. And in many cases it is important not to make such reductions as would trench on the business of wholesale dealers; there being, indeed, an apprehension that customers might purchase articles not for their own use, but to sell at some advance to retailers and others. After all, the profits arise more from the average gain than from a charge on the respective articles.
It was to be anticipated that retail dealers would be bitterly antagonistic to the Civil Service Supply Association; and so steady and sturdy was their opposition, that in its first years the Association experienced considerable difficulty in persuading wholesale houses to deal with it. Indeed large orders were the only inducement by which these houses could be got to supply the goods required, and even now we believe some firms hang back. The transactions of the Association have, however, operated upon members of the retail trade, who finding their business affected, have in self-defence been forced to reduce their prices to the general public. It thus becomes apparent that the Civil Service and other kindred co-operative associations have directly benefited the masses, by inducing a general lowering of the cost of many articles of daily necessity.
As an instance of the difficulties and jealousies which have from time to time beset this beneficent institution, the committee for a long time found it difficult to get and retain good tailors, who as a rule disappeared in a mysterious manner. These difficulties have, however, with patience and perseverance, been overcome, and the tailoring branch has become very successful.
It may here be mentioned that all goods purchased at the stores must be described in the form of an order, which has to be examined and checked, and payment always made to properly constituted cashiers (never over the counter), before the receipt of the goods. Large orders undergo a thorough and strict examination, to see that the goods are for the legitimate use of the applicant member or shareholder, with the view of defeating any improper interference from retail dealers.
In its present successful condition, to which the Civil Service Association has so rapidly attained—the clear assets amounting in August 1877 to one hundred and ninety thousand pounds, after all liabilities had been paid—there are few things which cannot be obtained at or through the medium of the stores. It were a futile task to attempt even an approximate estimate of the goods that may be bought in this manner; suffice it to say that each and all are duly chronicled in the Association’s Price List. This list, which is issued once every quarter, is no bad criterion of the success of the institution. When it was first issued, the contents covered no more than a small single sheet; now, however, it is a thick book of nearly three hundred pages. It is not only a record of all goods sold at the stores, but also contains the names and addresses of the various firms which have entered into arrangements with the society for selling their goods to members at a discount varying from five to twenty-five per cent.; and besides, a large portion of the volume is occupied with advertisements, which doubtless form no inconsiderable source of profit to the Civil Service Supply Association.