This section is from the "The Science Of Wealth" book, by Amasa Walker.
"The co-operative principle, when applied to trade and manufactures, enables the laborer to support his industry with his own capital, and, in this manner, to rise from the mere status of a hired laborer. . . . There can be no doubt that these societies promote a most healthy social intercourse between workmen; for, at frequent meetings, the shareholders consult each other upon matters of business. They have to show their discrimination in selecting the proper persons to be managers; and, in fact, the experience of the Rochdale store proves that a co-operative society can succeed in carrying out many a social improvement, which would not otherwise be introduced. Thus, two and a half per cent of the profits realized at Rochdale support an excellent reading-room and library, which the shareholders, as well as their wives and families, are permitted to use gratuitously; the society organizes excursions, and often performs some united work of charity: not long since, its members presented a magnificent drinking-fountain to their fellow-townsmen. A co-operative store may, moreover, become a particularly powerful agent in benefiting the working classes, because it can be conducted on the smallest possible scale. The experiment can be made without involving any expense: any half-dozen working-men may try the plan, as it was tried in 1844 at Rochdale, by clubbing together sufficient to purchase a chest of tea from a wholesale grocer. If their first effort is successful, they may gradually develop their plan, until, at length, it becomes a great and important trading establishment."
The same writer gives the following account of an industrial co-operative association: —
"A small society of co-operative masons was established in 1848, in Paris. This society was reproached for holding certain political opinions, and the government attempted to discourage it by refusing to loan any capital. This intended hostility secured its future success; for the societies which were assisted by the government, in almost every instance, proved to be failures. The co-operative masons endured many vicissitudes; and, in the year 1852, they determined to re-organize their society. It then consisted of only seventeen members, and borrowed no capital. They resolved to create a capital, by depositing in a common chest one-tenth of their daily earnings. At the end of the first year, a capital of fourteen pounds and ten shillings was in this manner created. At the end of 1854, the capital had increased to six hundred and eighty pounds; and, in 1860, consisted of one hundred and seven members, and the capital possessed by them was fourteen thousand and five hundred pounds. The Hotel Fould, the Hotel Rouher, the H6tel Fres-cati, &c, &c, were erected by this industrial association. At the present time, these co-operative masons are building an hotel for M. Girardin, on the Boulevard of the King of Rome, and an hotel at Montrouge, for M. Pacotte. No laborers, except the shareholders, are employed by the society. The laborers are paid the ordinary wages, current in the trade, and the net profits realized are proportioned in the following manner: two-fifths of these profits form a fund, from which the annual dividend is paid; and the remaining three-fifths are appropriated to provide an extra bonus on labor. The bonus each laborer thus receives is proportioned to the amount of labor he has performed throughout the year. No arrangements that could be devised would more powerfully promote the efficiency of labor. This is the secret of the remarkable success achieved by this society."
The advantages of these associations is further stated, as follows: —
"In the first place, it may be observed that the laborers receive the whole profits which result from their industry; for they supply the capital which is required. Another most important effect seems likely to result from these associations; for they appear to hold out a fair prospect of correcting a very disadvantageous tendency, which is associated with the present rapid accumulation of wealth. For we have previously remarked that each year the production of wealth is conducted on a greater scale: manufactories are enlarged, farms are extended in area, and in every branch of industry there are those that seem, from the very vastness of their capital, to monopolize the additional profit, and thus compel the smaller producer to succumb. Hence, each year it becomes more difficult for the laborer to engage in any industry on his own account. . . . Hence, the industry of the country must be conducted by two distinct classes; namely, employers who supply the capital, and workmen who provide labor; unless those who labor agree to form themselves into associations, and subscribe amongst themselves sufficient capital to carry on production upon a large scale. It must be quite evident, that co-operative trading establishments, when successful, as it were intensify many advantages which laborers derive from co-operative stores. But we have separately described these two classes of institutions, because we think that the success of the former may be imperilled by many circumstances which do not affect the latter. In fact, we have already stated, that, in the case of a co-operative store, success may almost be guaranteed. . . . But the case is very different with regard to a co-operative society carrying on some branch of industry for profit."
This the writer shows to be more hazardous. He gives, in connection with this, a statement of a very successful agricultural co-operative enterprise, commenced some thirty years since, in which the results were in the highest degree satisfactory.
The description here given, by Professor Fawcett, of cooperative societies abroad, furnishes satisfactory evidence of their feasibility, and the great advantages the laboring classes may derive from them. If true to their interests, they will direct their attention to the formation of such associations in this country. By so doing, they will violate no legal enactment, in no way disturb the public peace, or interfere with the laws of trade. They will simply avail themselves of their just rights, for the use of the power which legitimately belongs to them.