In Sir Horace Plunkett's recent book, "The Rural Life Problem in The United States," he develops this principle clearly. He says that in the organization of country life in Ireland it was necessary to go into the very heart of the people's experience and organize their economic and social processes in forms of co-operation.
"When farmers combine, it is a combination not of money only, but of personal effort in relation to the entire business. In a co-operative creamery for example, the chief contribution of a shareholder is in milk; in a co-operative elevator, corn; in other cases it may be fruit or vegetables, or a variety of material things rather than cash. But it is, most of all, a combination of neighbors within an area small enough to allow of all the members meeting frequently at the business center. As the system develops, the local associations are federated for larger business transactions, but these are governed by delegates carefully chosen by the members of the constituent bodies. The object of such associations is primarily, not to declare a dividend, but rather to improve the conditions of the industry for the members.
"It is recognized that the poor man's co-operation is as important as the rich man's subscription. 'One man, one vote,' is the almost universal principle in co-operative bodies.
"The distinction between the capitalistic basis of joint stock organization and the more human character of the co-operative system is fundamentally important.
"In this matter I am here speaking from practical experience in Ireland. Twenty years ago the pioneers of our rural life movement found it necessary to concentrate their efforts upon the reorganization of the farmer's business.
"1. We began with the dairying industry, and already half the export of Irish butter comes from the co-operative societies we established.
"2. Organized bodies of farmers are learning to purchase their agricultural requirements intelligently and economically.
"3. They are also beginning to adopt the methods of the organized foreign farmer in controlling the sale of their butter, eggs and poultry in the British markets.
"4. And they not only combine in agricultural production and distribution, but are also making a promising beginning in grappling with the problem of agricultural finance. It is in the last portion of the Irish programme that by far the most interesting study of the co-operative system can be made, on account of its success in the poorest parts of the Island. Furthermore, the attempt to enable the most embarrassed section of the Irish peasantry to procure working capital illustrates some features of agricultural co-operation which will have suggestive value for American farmers.
"A body of very poor persons, individually—in the commercial sense of the term—insolvent, manage to create a new basis of security which has been somewhat [grandiloquently] and yet truthfully called 'the capitalization of their honesty and industry.' The way in which this is done is remarkably ingenious. The credit society is organized in the usual democratic way explained above, but its constitution is peculiar in one respect. The members have to become jointly and severally responsible for the debts of the association, which borrows on this unlimited liability from the ordinary commercial bank, or, in some cases, from Government sources. After the initial stage, when the institution becomes firmly established, it attracts local deposits, and thus the savings of the community, which are too often hoarded, are set free to fructify in the community. The procedure by which the money borrowed is lent to the members of the association is the essential feature of the scheme. The member requiring the loan must state what he is going to do with the money. He must satisfy the committee of the association, who know the man and his business, that the proposed investment is one which will enable him to repay both principal and interest. He must enter into a bond with two sureties for the repayment of the loan, and needless to say the characters of both the borrower and his sureties are very carefully considered. The period for which the loan is granted is arranged to meet the needs of the case, as determined by the committee after a full discussion with the borrower. Once the loan has been made, it becomes the concern of every member of the association to see that it is applied to the 'approved purpose'—as it is technically called. What is more important is that all the borrower's fellow-members become interested in his business and anxious for its success.