The project was received with great favour by the friends of co-operation. Mr. John Stuart Mill, in his Principles of Political Economy, announced that "the Messrs. Briggs had taken the first step; and that it was highly honourable on the part of those employers of labour to have initiated a system so full of benefit both to the operatives employed and to the general interests of social improvement." Mr. Hughes, M.P., after visiting the collieries, expressed his surprise at the great success achieved in the first year of working the collieries as a partnership of industry. "I believe," he said to the owners, "that in taking this step you have done a great work for England, and one which will be gratefully recognized before long by the country." The promoters also claimed a reward from the Paris Universal Exhibition, for having been "the first large employers in England who have allowed all their workpeople, whether co-shareholders with them or not, to participate in all divisible profits beyond a fixed percentage on the paid-up capital of the company."
Only a few years have passed, and already this promising partnership of industry has come to an end. It has not been brought to an end by the masters, but by the men. The masters were satisfied with the profits made during the recent high prices of coal; but the men were not satisfied with the wages. Had they been as free as the Welsh colliers, they would have insisted on being paid as highly; but it would have been, as it was in Wales, ruinous to the masters. The system of industrial partnership had at length to be abandoned, and the men now work for wages instead of for part-profits. The truth is, the colliers were not sufficiently educated to appreciate the advantages of the industrial scheme. Though some of the Whitwood workmen have been stimulated by thrift, to build and furnish houses of their own, the greater number of them, during the recent flush of prosperity, squandered their wages on frivolity, extravagance, and intemperance.
The attempt was also made by several firms engaged in the iron trade, to
embody the principle of co-operation in their respective concerns.
Amongst these were the firms of Greening and Co., Manchester, and Fox,
Head, and Co., Middlesborough.
The experiments were to a certain extent brought to an end by the greed or laziness of the colliers, who have for a time destroyed the prosperity of the iron trade. Messrs. Greening and Co. started with great enthusiasm; and the results were very successful as regards the workpeople. Nothing could have been better than the spirit of goodwill, and even devotion, which was displayed by many of them. But, unhappily, contracts were taken by the management, which resulted in a series of losses; and the scheme ended in liquidation. Mr. Greening states that "the Distribution Societies have as yet been much more successful than the Production Societies;" but he hopes "to see the latter crown the edifice by making workers everywhere no longer servants, but co-partners with capital."
The firm of Fox, Head, and Co. also admitted their workmen to a partnership of profits. They had for some time been much annoyed by strikes. Their works had stood idle for about a fourth of the whole time that had elapsed since their commencement. The system of co-operation was adopted in 1866, at the close of a long strike. One of the conditions of the scheme was that Fox, Head, and Co. should not be members of any association of employers, and that the workmen should not be members of any trades union. The original intention was to pay the workmen a bonus according to profits. They eventually adopted the practice of the Messrs. Briggs and Co., which was, to divide the profits over ten per cent. into two parts: the one to belong to the capitalists as their profit, and the other to be divided amongst all those who had received wages or salaries during the year, in proportion to the amount received by them. An opportunity was also afforded to the workmen of depositing their savings with the firm; but as there was only one instance, during three years, of a workman applying to invest his savings, this clause was withdrawn.
In consequence of the depressed state of the iron trade, there were no profits to be divided during the first two years. The men were, however, paid the current rate of wages, and were saved the expenses of Union levies. The co-operative store, which had been founded by the workmen, was in a very prosperous condition. In the third year of the co-operative scheme, a bonus of two and a half per cent, was divided between the employers and the employed. The workmen also received an advance of five per cent. in wages. In the fourth year the wages of the workmen were further increased ten per cent., and this took the cream off the bowl. However, a bonus of four per cent. was paid on the wages and salaries received by the employés during that year. At the meeting held to communicate the result of the year's business, Mr. Head said:—
"There may be some who think the tendency of our policy has been too sentimental. I don't believe in doing business on sentimental principles. But I contend that mere money-making is not the sole end of existence. We have been associated with many of you for several years, and we cannot help feeling a considerable interest in you. After all, life is not so very long. Another twenty or thirty years will see us all under ground, and there will be other employers and other workmen carrying on business at Newport Rolling Mills. It would indeed be strange if we did not take some interest in those with whom we are so much associated. And so, without in the least relaxing discipline, or sacrificing any true principle of business, we hold it to be our duty as employers, as well as your duties as employés, to consider each other's interests, and to do all that each of us can in the way of true and hearty co-operation."
The coal famine began to tell upon the iron-workers. The furnaces were often laid off for want of coal. The principal causes of the bad supply of coal arose from shorter hours of labour, and higher wages for less work. Yet a bonus of three and a quarter per cent, was allowed on the wages and salaries received by the employés during the year 1871. The co-operative stores continued to be very productive, and many of the members saved considerable sums of money. In the next year, a bonus of three and a half per cent, was divided. But difficulties were in store. The coal famine continued. The employers of labour held meetings to resist the successive advances of wages, and to counteract the operations of the trades unions.
Mr. Head strongly urged the men to hold together: "Cease to be deluded," he said, "by these trades unions. Save all you can, and with your savings provide against the day of sickness—a day which is sure to come sooner or later. Provide for old age; read good books,—you have every chance now, with a free library in the town. Give credit to others for wishing to be straightforward and honest as well as yourselves; and in every way I would ask you to act as reasonable, straightforward, sensible English workmen ought to do. Show that you can appreciate being well used, that you can appreciate those who put themselves to trouble that they may do you good; and beware lest, by want of sympathy, you drive the best of the employers out of the business, and retain those alone who are despotic and tyrannical. Cease to follow those who are actuated by self-interest, or by blind impulse; who do not care a bit if they get you into trouble, provided only they serve their own selfish ends. Such men are but blind leaders of the blind, and if you follow them you will eventually find yourselves deserted, and lying hopelessly and helplessly in the last ditch."
It was of no use. The men's wages went up twenty per cent.; and there was an end of the bonuses. The coal famine continued. The masters, instead of making profits, made immense losses. The price of iron went down. The mills stood idle for two months. The result was, that when the masters next met the workmen in public meeting, Mr. Waterhouse, the auditor, reported that "while the gross earnings of the year have exceeded the expenditure on materials, wages, and trade charges, they have been insufficient to cover the full amounts to be provided under the co-operative scheme for interest on capital, depreciation, and the reserve for bad debts; and that consequently it was his duty to declare that no amount was at present payable as bonus either to employers or employed." No further report was issued in 1875, excepting an announcement that there was no dividend, and that the firm did not intend to continue the co-operative scheme any longer. During the time that it lasted, the employés had received about eight thousand pounds in bonuses.