An Introduction to the Industrial and Social History of England

by Edward Potts Cheyney

Coöperation has always contained an element of philanthropy, or at least of enthusiastic belief on the part of those especially interested in it, that it was destined to be of great service to humanity, and to solve many of the problems of modern social organization. Advocates of coöperation have not therefore been content simply to organize societies which would conduce to their own profit, but have kept up a constant propaganda for their extension. There was a period of about twenty years, from 1820 to 1840, before coöperation was placed on a solid footing, when it was advocated and tried in numerous experiments as a part of the agitation begun by Robert Owen for the establishment of socialistic communities. Within this period a series of congresses of delegates of coöperative associations was held in successive years from 1830 to 1846, and numerous periodicals were published for short periods. In 1850 a group of philanthropic and enthusiastic young men, including such able and prominent men as Thomas Hughes, Frederick D. Maurice, and others who have since been connected through long lives with coöperative effort, formed themselves into a "Society for promoting Working Men's Associations," which sent out lecturers, published tracts and a newspaper, loaned money, promoted legislation, and took other action for the encouragement of coöperation. Its members were commonly known as the "Christian Socialists." They had but scant success, and in 1854 dissolved the Association and founded instead a "Working Men's College" in London, which long remained a centre of coöperative and reformatory agitation.

So far, this effort to extend and regulate the movement came rather from outside sympathizers than from coöperators themselves. With 1869, however, began a series of annual Coöperative Congresses which, like the annual Trade Union Congresses, have sprung from the initiative of workingmen themselves and which are still continued. Papers are read, addresses made, experiences compared, and most important of all a Central Board and a Parliamentary Committee elected for the ensuing year. At the thirty-first annual Congress, held in Liverpool in 1899, there were 1205 delegates present, representing over a million members of coöperative societies. Since 1887 a "Coöperative Festival," or exhibition of the products of coöperative workshops and factories, has been held each year in connection with the Congress. This exhibition is designed especially to encourage coöperative production. At the first Congress, in 1869, a Coöperative Union was formed which aims to include all the coöperative societies of the country, and as a matter of fact does include about three-fourths of them. The Central Coöperative Board represents this Union. It is divided into seven sections, each having charge of the affairs of one of the seven districts into which the country is divided for coöperative work. The Board issues a journal, prints pamphlets, keeps up correspondence, holds public examinations on auditing, book-keeping, and the principles of coöperation, and acts as a statistical, propagandist, and regulative body. There is also a "Coöperative Guild" and a "Women's Coöperative Guild," the latter with 262 branches and a membership of 12,537, in 1898.

The total number of recognized coöperative societies in existence at the beginning of the year 1900 has been estimated at 1640, with a combined membership of 1,640,078, capital of £19,759,039, and investments of £11,681,296. The sale of goods in the year 1898 was £65,460,871, and net profits had amounted to £7,165,753. During the year 1898, 181 new societies of various kinds were formed.

88. Coöperation in Credit.—In England building societies are not usually recognized as a form of coöperation, but they are in reality coöperative in the field of credit in the same way as the associations already discussed are in distribution, in production, or in agriculture. Building societies are defined in one of the statutes as bodies formed "for the purpose of raising by the subscription of the members a stock or fund for making advances to members out of the funds of the society." The general plan of one of these societies is as follows: A number of persons become members, each taking one or more shares. Each shareholder is required to pay into the treasury a certain sum each month. There is thus created each month a new capital sum which can be loaned to some member who may wish to borrow it and be able and willing to give security and to pay interest. The borrower will afterward have to pay not only his monthly dues, but the interest on his loan. The proportionate amount of the interest received is credited to each member, borrower and non-borrower alike, so that after a certain number of months, by the receipts from dues and interest, the borrower will have repaid his loan, whilst the members who have not borrowed will receive a corresponding sum in cash. Borrowers and lenders are thus the same group of persons, just as sellers and consumers are in distributive, and employers and employees in productive coöperation. The members of such societies are enabled to obtain loans when otherwise they might not be able to; the periodical dues create a succession of small amounts to be loaned, when otherwise this class of persons could hardly save up a sufficient sum to be used as capital; and finally by paying the interest to their collective group, so that a proportionate part of it is returned to the borrower, and by the continuance of the payment of dues, the repayment of the loan is less of a burden than in ordinary loans obtained from a bank or a capitalist. Loans to their members have been usually restricted to money to be used for the building of a dwelling-house or store or the purchase of land; whence their name of "building societies." Their formation dates from 1815, their extension, from about 1834. The principal laws authorizing and regulating their operations were passed in 1836, 1874, and 1894. The total number of building societies in England to-day is estimated at about 3000, their membership at about 600,000 members with £52,000,000 of funds. The history of these societies has been marked by a large number of failures, and they have lacked the moral elevation of the coöperative movement in its other phases. The codifying act of 1894 established a minute oversight and control over these societies on the part of the government authorities while at the same time it extended their powers and privileges.

The one feature common to all forms of coöperation is the union of previously competing economic classes. In a coöperative store, competition between buyer and seller does not exist; and the same is true for borrower and lender in a building and loan association and for employer and employee in a coöperative factory. Coöperation is therefore in line with other recent movements in being a reaction from competition.

89. Profit Sharing.—There is a device which has been introduced into many establishments which stands midway between simple competitive relations and full coöperation. It diminishes, though it does not remove, the opposition between employer and employee. This is "profit sharing." In the year 1865 Henry Briggs, Son and Co., operators of collieries in Yorkshire, after long and disastrous conflicts with the miners' trade unions, offered as a measure of conciliation to their employees that whenever the net profit of the business should be more than ten per cent on their investment, one-half of all such surplus profit should be divided among the workmen in proportion to the wages they had earned in the previous year. The expectation was that the increased interest and effort and devotion put into the work by the men would be such as to make the total earnings of the employers greater, notwithstanding their sacrifice to the men of the half of the profits above ten per cent. This anticipation was justified. After a short period of suspicion on the part of the men, and doubt on the part of the employers, both parties seemed to be converted to the advantages of profit sharing, a sanguine report of their experience was made by a member of the firm to the Social Science Association in 1868, sums between one and six thousand pounds were divided yearly among the employees, while the percentage of profits to the owners rose to as much as eighteen per cent. This experiment split on the rock of dissension in 1875, but in the meantime others, either in imitation of their plan or independently, had introduced the same or other forms of profit sharing. Another colliery, two iron works, a textile factory, a millinery firm, a printing shop, and some others admitted their employees to a share in the profits within the years 1865 and 1866. The same plan was then introduced into certain retail stores, and into a considerable variety of occupations, including several large farms where a share of all profits was offered to the laborers as a "bonus" in addition to their wages. The results were very various, ranging all the way from the most extraordinary success to complete and discouraging failure. Up to 1897 about 170 establishments had introduced some form of profit sharing, 75 of which had subsequently given it up, or had gone out of business. In that year, however, the plan was still in practice in almost a hundred concerns, in some being almost twenty years old.

A great many other employers, corporate or individual, provide laborers' dwellings at favorable rents, furnish meals at cost price, subsidize insurance funds, offer easy means of becoming shareholders in their firms, support reading rooms, music halls, and gymnasiums, or take other means of admitting their employees to advantages other than the simple receipt of competitive wages. But, after all, the entire control of capital and management in the case of firms which share profits with their employees remains in the hands of the employers, so that there is in these cases an enlightened fulfilment of the obligations of the employing class rather than a combination of two classes in one.

With the exception of profit sharing, however, all the economic and social movements described in this chapter are as truly collective and as distinctly opposed to individualism, voluntary though they may be, as are the various forms of control exercised by government, described in the preceding chapter. In as far as men have combined in trade unions, in business trusts, in coöperative organizations, they have chosen to seek their prosperity and advantage in united, collective action, rather than in unrestricted individual freedom. And in as far as such organizations have been legalized, regulated by government, and encouraged by public opinion, the confidence of the community at large has been shown to rest rather in associative than in competitive action. Therefore, whether we look at the rapidly extending sphere of government control and service, or at the spread of voluntary combinations which restrict individual liberty, it is evident that the tendencies of social development at the close of the nineteenth century are as strongly toward association and regulation as they were at its beginning toward individualism and freedom from all control.

90. Socialism.—All of these changes are departures from the purely competitive ideal of society. Together they constitute a distinct movement toward a quite different ideal of society—that which is described as socialistic. Socialism in this sense means the adoption of measures directed to the general advantage, even though they diminish individual freedom and restrict enterprise. It is the tendency to consider the general good first, and to limit individual rights or introduce collective action wherever this will subserve the general good.

Socialism thus understood, the process of limiting private action and introducing public control, has gone very far, as has been seen in this and the preceding chapter. How far it is destined to extend, to what fields of industry collective action is to be applied, and which fields are to be left to individual action can only be seen as time goes on. Many further changes in the same direction have been advocated in Parliament and other public bodies in recent years and failed of being agreed to by very small majorities only. It seems almost certain from the progress of opinion that further socialistic measures will be adopted within the near future. The views of those who approve this socialistic tendency and would extend it still further are well indicated in the following expressions used in the minority report of the Royal Commission on Labor of 1895. "The whole force of democratic statesmanship must, in our opinion, henceforth be directed to the substitution as fast as possible of public for capitalist enterprise, and where the substitution is not yet practicable, to the strict and detailed regulation of all industrial operations so as to secure to every worker the conditions of efficient citizenship."