History of the United Co-operative Baking Society Ltd.

by William Reid

JOHNSTONE SOCIETY’S REPORT.

The report of the Johnstone Society is so interesting and throws so much light on the affairs of the Federation that it is worthy of being printed in full, as issued in circular form by the Bakery committee.

To the Committee of Management and Delegates representing the United Co-operative Baking Society Limited, Glasgow.

Gentlemen,—Having been appointed at your quarterly meeting, held 30th November 1872, to report on the results which would be likely to flow from your Society having a branch bakery in Johnstone, we respectfully beg to offer the following for your consideration.

The advantages which the promoters of your Society saw in having a “united management, a concentration of labour, and a combined purchasing power,” is nearly, if not altogether, neutralised by the high cost of your productive and distributive departments; ten shillings a sack is, we believe, something unknown in Scotland as the cost of baking and distributing common loaf bread, and in your establishment it cannot be set down even at this high rate, as your auditors at last quarterly meeting warned us that the depreciation of your fixed stock was not commensurate to its “tear and wear,” and we believe investigation during the quarter now ended has brought out that your liabilities in direct debts were greater than was accounted for in your balance of October last.

This being the case, it is a duty incumbent on all to examine into and see if anything can be done to remove the obstruction to progress and place the Federation on a sound and stable basis, beneficial alike to individual and to the union of societies.

To do this reforms of more or less consequence may require to be introduced, but the one on which we are commissioned to report, and which appears to us as the most urgent, and the most likely in being effectual in removing the evils complained of, is the setting down of a branch in Johnstone, or some other place, where a great amount of distributive expense could be saved at a small outlay.

The cheapness of carriage of flour in the bulk and its dearness when manufactured into bread, which is at once bulky, fragile, and heavy, suggests readily the idea that it would be well to have branches set down in localities where there is a consumpt of bread large enough to work them successfully; we consider Johnstone a place of this class, and desire to lay before you, in detail, some of the reasons why we think so.

In making Johnstone a district with a branch bakery we would class the following societies together, viz.:—Paisley Provident, Paisley Equitable, Howwood, Elderslie, Kilbarchan, Linwood, and Johnstone. Taking October balance as an average of the bread taken by these different societies, we find in the aggregate that the six societies first named took bread to the value of £892, 10s. 6d., and that Johnstone Society took bread to the amount of £884, 12s. 9d., a total of £1,777, 3s. 3d., or within £100 of being a third of all the purchases made at the Bakery during the quarter. The Johnstone Society’s quantity, £884 a quarter, averages something like sixty-four dozen loaves daily, the outcome of four sacks of flour; say, then, with the other societies named, eight sacks of daily consumpt. The weight of this number of sacks, in the bulk, is one ton (twenty cwt.), and the price of carriage and delivery in Johnstone, from Glasgow, is four shillings. These eight sacks, made into bread in Glasgow, gives a weight, including boards, of over thirty-four cwt.; this is exclusive of vans, which, we believe, are about half as much more, or seventeen cwt. each. In this condition, then, of baked bread it costs your Society thirty shillings or over daily to deliver to the various societies of the named district. Supposing, then, that you had a branch in Johnstone and a more restricted delivery system adopted, we entertain no doubt but one horse and van could overtake the whole three mile radius, give and deliver the required bread to the different societies. The cost of this would be about twelve shillings a day, which would leave a clear profit to the Society of fourteen shillings a day, or £54, 12s. a quarter, nearly £220 a year.

Another View of the Case.

We have had an interview with a practical managing baker, and his estimate of the cost of production is much below your present expense; he considers that the quantity required (eight or nine sacks a day) could be baked into loaves at a cost of three shillings per sack (he laid stress on the fact that the job was loaf baking alone, and said that men were able and really did do more of this kind of work). Buying the flour at the then price of fifty shillings per sack, and adding three shillings for baking, rent, etc., we have a gross cost of fifty-three shillings per sack. The outcome from this quantity of flour should be sixteen dozen small loaves; retailing them at the then price of 4¼d. each, you have the sum of sixty-eight shillings; 10 per cent. less would be sixty-one shillings and twopence, or a profit of eight shillings and twopence on each sack baked and sold; this eight times (a daily output) would give sixty-five shillings and fourpence per day, or £19, 12s. a week, £254, 16s. a quarter. But allowing half this quantity has to be delivered to societies, and say this will cost three shillings per sack, which would give a total cost of about £48, 15s., which sum deducted from the £254, 16s. would still leave the sum of £206 a quarter of a clear profit realised from the business done by the seven societies comprising the proposed district.

Regarding the practical part of the scheme we have nothing to offer in way of a ready-made bakehouse or other suitable premises, and we are afraid that should the business be gone into, as proposed, new premises would require to be got; on this, however, we ask your consideration to the fact that your present premises have not the necessary storage for flour which your large turnover requires. This is attested by the proposal which was made six months ago for alterations, and if it is true, as we believe it is, that properly stored flour is from one to two shillings a bag better in outcome than when used as has hitherto been done at the Bakery, one shilling on each sack baked for a quarter, say 1,800 sacks, and you have a sum of £90.

The alterations which were proposed and were estimated to cost about £200 have never been carried into effect, consequently the Bakery labours under the disadvantage of want of storage at a loss equal to something like £90 a quarter.

We know full well the high cost of distribution, and some are sanguine the productive cost could also be lessened; could not this sum, then, of £200, or say £300, required for storage purposes be laid out on a branch bakery in the Johnstone district, and take away a third of the trade from the centre; you would then have storage to suit your requirements for some time to come, very probably you would be less for productive expenses, and most certainly your cost of distribution would be so much curtailed as to release the Federation from the incubus which at present keeps her down.

Gentlemen, our aim and earnest desire is the prosperity of the Federation and its component parts; we lay these considerations before you and leave the matter in your hands, being confident your united wisdom will be well able to direct the path which will earliest and best lead to better and happier times for the United Co-operative Baking Society.

The Johnstone Society’s Committee.

Johnstone, 21st February 1873.

At that time it would seem that the representatives of all the societies were enamoured with the idea of branching out, especially in view of the very rosy picture which had been presented in the Johnstone Society’s report, but they realised that at the moment branching out was impossible. The Federation’s commitments in capital expenditure were already as much as could be borne; the cost of building a new bakery would add considerably to the burden, and neither delegates nor directors could see how it could be carried; so, when the subject was brought up again at the June quarterly meeting, it was left in the hands of the committee, with the proviso that no extension take place until a general meeting of the members had been called.

The proposal, however, had never been one which was pleasing to Barrhead Society. Immediately after the remit to Johnstone Society and the Paisley societies to collect information, a deputation from Barrhead had waited on the Bakery committee, and, after pointing out that the capital of the Society was far from being what it ought to be, they said they had been instructed by their committee to state that they considered it inexpedient in the meantime to proceed with the proposed branch at either Paisley or Johnstone because of the plant and other necessaries which would be required and which the funds of the Federation were not in a position to meet. It was owing to the determined opposition of the Barrhead and Thornliebank delegates and the strength of their argument that the capital of the Society was insufficient for the enterprise, that the Johnstone scheme was held over.

Nothing further was heard of the proposal until the beginning of 1876. By that time the trade of the Federation was taxing the productive capacity of the bakery to its utmost limits, and on the 29th of April a special meeting of delegates was convened for the purpose of considering the situation, and especially a recommendation by the committee that a small bakery which was to let in Paisley Road should be taken for a period of three years. A lengthy discussion took place. Mr Inglis, Paisley Provident Society, moved “that the committee be empowered to open a branch bakery, either in Paisley or Johnstone, and to lease temporary premises in the locality chosen until the new bakery was ready.” At once Mr Tolmie, of Avonbank, brought forward an amendment “that the committee be empowered to take such action at once as will appear to them to be for the best interests of the Federation.” Mr Paton, Paisley Provident Society, seconded Mr Inglis’s motion, and Mr Johnstone, Barrhead, the amendment of Mr Tolmie; but the motion that a branch be opened in the West was carried by 42 votes to 39 for the amendment. While the amendment did not prohibit in so many words the suggestion contained in the motion, it was believed that it would have that effect, because, although on this question of branching out the committee as a body had always held a neutral position, it was believed that they were not very favourable to the proposal of the Paisley and Johnstone societies.