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INTERNATIONAL LABOUR OFFICE

THE

COOPERATIVE MOVEMENT
AND

PRESENT-DAY PROBLEMS
WITH SPECIAL REFERENCE TO
REHABILITATION AND RECONSTRUCTION

GENEVA, 1955

STUDIES AND REPORTS
Series H (Co-operation), No. 5

First Printed, Montreal, 1945
Second Impression, Geneva, 1955

PUBLISHED BY T H E INTERNATIONAL LABOUR O F F I C E ,
G E N E V A , SWITZERLAND

Published in the United Kingdom for the INTERNATIONAL LABÓUB OFFICE

by Staples Press Ltd., London

PRINTED BY " LA TRIBUNE DE GENÈVE " , GENEVA, SWITZERLAND

CONTENTS
Page

Introduction

Part I. Restoration of Basic Economic Functions

CHAPTER I.

Food and Agriculture

Means of Agricultural Production

Rural Supply Co-operative Organisations
Feeding Stuffs and Fertilisers
Seeds
Farm Implements and Machinery
Livestock
Miscellaneous Requisites
Agricultural Credit

Rural Credit Co-operatives in Europe
Their Chief Characteristics
Rural Credit Co-operatives and the State
The Finnish and French Systems
Organisation of Agricultural Marketing

19
20
22
24
27

Types and Number of Rural Co-operatives Marketing Agricultural
Products
Co-operative Marketing of Specific Agricultural Commodities
Grain
Livestock and Meat
Eggs and Poultry
Dairy Produce
Fruits and Vegetables
Textiles and Other Products
Restoration of the Fishing Industry

27
30
30
32
34
36
40
44
47

Fishermen's Co-operatives: Numerical Data
Some Problems
An Experiment
CHAPTER II.

9
10
12
13
16
16

Transport, Power and Housing

Fuel
Transport..
Electric Power

48
51
54
56
56
60
63

¡i

CO-OPERATION AND PRESENT-DAY PROBLEMS
The Housing Problem
Necessity for Collective Action
Co-operative Activities
Distributive Co-operative Societies
Housing Co-operative Societies
Housing Co-operative Societies and Housing Policy
Reconstruction Co-operatives

CHAPTER III.

Inter-Co-operative Relations

Page
67
68
69
70
70
73
74
78

Advantages of Direct Inter-Co-operative Relations

Some Instances of Inter-Co-operative Relations
Inter-Co-operative Relations within Countries
International Inter-Co-operative Relations within Europe
Inter-Co-operative Trading through International Co-operative
Agencies

82
83
88

Nature of Inter-Co-operative Relations

Comparison of Different Forms of Inter-Co-operative Relations...
A Considered Policy

Part II.

Social Problems of Rehabilitation

CHAPTER IV.

Employment

Co-operative Forms of Employment of Industrial Workers

95
98

101
103

104

Co-operatives among the Unemployed
106
Building and Public Works
108
Workers' Productive and Labour Contracting Co-operatives.. . . 109
Forms of Scattered Industry
112
Cottage Industry and Home Work
113
Handicrafts
114
Workers' Productive Societies
116
Application of the Forms of Scattered Industry to Rehabilitation 117
Industrial Decentralisation
120
Co-operatives and Employment on the Land

123

Access to the Enterprise
124
Co-operative Forms for the Organisation and Operation of Agricultural Holdings under Individual Control
127
Co-operative and Collective Forms of Farming
128
The Co-operative Economy and the General Level of Employment.. . .
Stability of Employment in Co-operative Enterprises
Disturbances of Economic Equilibrium
CHAPTER V.

Improvement of the Standard of Living

Influence on Real Income from Work

136
137
139
149
149

CONTENTS

Hl
Page

Mode of Life
Environment
Leisure
Health
Nutrition

151
152
152
153
153

Social Security
Insurance
Credit

160
161
162

CHAPTER VI. Democratic Management of the Economy
A Sector of Democratic Economy
Co-operative Democracy and Political Democracy

Part III. Conditions and Forms of the Co-operative Contribution
to the Rehabilitation and Reconstruction Effort
CHAPTER VII.

Conditions of Co-operative Action

164
164
169

173
177

Teaching and Training

177

Legislation

182

Co-operative Legislation
Fiscal and Economic Legislation

182
183

Co-operative Institutions and the Planning of the Economy

186

Co-operative Institutions and the Public Authorities

188

CHAPTER VIII.

Forms of the Co-operative Contribution

Consultation and Representation

198
198

Price Regulation, Rationing
198
Organisation of Production and Marketing
199
Representation of a More General Nature
201
Place of Co-operation in the Permanent Machinery of Government
203
Representation in International Economic and Social Organisations
205
Assignment of Public Utility Functions

207

Mandates and Delegation of Functions
Co-operative Organisations and Public Bodies Linked in Joint
Service Undertakings

209
216

Conclusion

222

Index

227

2 7 *

INTRODUCTION
It is proposed in the following chapters to examine the role of
the different types of co-operative organisation in the work of postwar rehabilitation and reconstruction.
The present study therefore forms a sequel to its predecessor
in this series1, which sought to define and measure the possible
contribution of the co-operative movement to the task of immediate
relief in the countries devastated by war and occupation. Besides
being a continuation, it combines in several ways with the earlier
study to form a single whole.
First, as the countries requiring relief have also to pass through
a period of rehabilitation and reconstruction, the two studies overlap each other, just as the problems of relief, rehabilitation and reconstruction form an unbroken chain.
Second and more particularly, it is obvious that in some of its
aspects the role of co-operative organisations with distributive
functions will be much the same in rehabilitation as in relief operations. For rehabilitation may be regarded as the continuation or
the accompaniment and consolidation of the work of relief; conversely, though the latter represents a transitory effort, primarily
inspired by the urgent needs of the moment, it is from the beginning
mingled with considerations affecting the immediate future and
gradually extends into an effort at economic, moral and social
rehabilitation. It has therefore been thought unnecessary to repeat
in this study the description of the co-operative distributive network given in the preceding volume. It will be enough to complement it where necessary, for instance, to show some affinity between a particular aspect of the activity or functioning of consumers' co-operative organisations and this or that feature of some
of the problems of rehabilitation or reconstruction.
Lastly, the first two parts of the preceding study, containing a
general survey of the co-operative movement, of its principles and
methods, of its various forms, and of its distribution throughout
the world, may be regarded as common to both studies. For without these general data and this comprehensive survey, it would
be difficult to form a sound idea of the place of co-operative institutions in the post-war effort in general—in rehabilitation and
1
I.L.O.: Co-operative Organisations and Post-War Relief (Studies and Reports,
Series H (Co-operation), No. 4, Montreal, 1944).

CO-OPERATION AND PRESENT-DAY PROBLEMS

reconstruction as well as in immediate relief operations, since the
nature and extent of their role clearly depend on their particular
character, on their fitness for certain functions, and on their degree
of development and geographical distribution.
The task of rehabilitation is even greater and more complex
than that of relief. It comprises a much larger number of problems.
It concerns many more countries: not only those requiring relief,
but, to some extent, all, or nearly all others.
It covers a far longer period of time, as the work of rehabilitation extending and accompanying relief measures prepares the way
for long-term programmes which must try to inaugurate a new
stage in human progress in a world already psychologically, socially
and economically transformed by the war. Neither rehabilitation
nor reconstruction means a complete restoration of the past, and it
is in the first effort of rehabilitation that the relationships, habits,
outlook, methods and institutions of the future will be formed and
established.
No attempt, of course, is made here to tackle the whole complex
of problems which constitute the task of rehabilitation and reconstruction. But to a still greater degree than in the organisation
of immediate relief, any recovery programme must count, for the
solution of certain problems, on the responsible collective effort of
the organised elements of the population represented by the people's
voluntary institutions. T o the solution of some of these problems
co-operative organisations of many kinds offer necessary, useful
or possible forms of help. The present study is limited to a study
of such problems under those of their aspects which lend themselves
to co-operative action. In this confronting of co-operative methods
with some major problems, reference will not be confined to the
types of co-operative organisation which have already attained a
high degree of development and are prepared to make an important
contribution. Mention will sometimes be made of less known and
even less developed types, where these seem to contain a new idea
in harmony with what can be discerned of the economic tendencies
or social aspirations of t h e modern world. Only the future can tell
whether these beginnings will prove fruitful. But what was the
co-operative movement a century ago, and, in most countries, as
little as twenty-five years ago ?
The problems of rehabilitation and reconstruction are not always
the same, in all their features, for every country. Obviously, too,
the nature or importance of the contribution that co-operative
organisation can make to their solution varies in the same way.
Some of the matters dealt with in this study concern all countries
indiscriminately. Others are of interest rather to countries of a

INTRODUCTION

particular category or categories: countries which have taken an
effective part in war operations, countries which have considerably
altered or intensified their wartime agricultural or industrial production, countries which have been a theatre of war, countries
which have been subjected to blockade or counter-blockade, even
countries which, though not involved in the struggle, have felt
many repercussions from it in their economic life and perhaps in
their social development. Some of the chapters are more specially
directed to the problems peculiar to the industrially backward
countries, but not every factor in their situation has been considered.
This study, like the preceding one, is mainly documentary in
character and does not attempt to lay down a plan for the future.
It is confined to providing material for the elaboration or execution
of whatever plans are made. The facts and evaluations making up
this material have been derived from the observation of recent
events. Besides reflecting the state of affairs at a given moment,
they reflect the information currently available to the International
Labour Office. In other words, they are only partly complete. As
regards certain points and certain countries, they could not be
completed because of present circumstances; in other cases, they
could only have been completed by excessively long and problematical research. It seemed better to have some gaps in a documentation which was otherwise generally sufficient than to have
a more perfect documentation too late to be of use.
While the study does not claim to put forward a solution to
every problem, it is not limited to providing facts and figures.
When occasion arises, the opportunity is taken to describe briefly
some solution that has been attempted with success or to call
attention to attitudes or tendencies that seem significant, or even
to plans and projects, if they help to throw light on future possibilities.
The study, so conceived, deals with three classes of problem.
Part I analyses the possibilities of co-operative action in the restoration of basic economic functions: agricultural production, fisheries,
housing, transport, power, etc. Part II is devoted to some of the
social problems of rehabilitation: employment, improvement of
standards of living, democratic management of the economy.
The third and last part examines the conditions under which and
the forms in which the co-operative movement can most effectively
contribute to the solution of some of the problems of the present
and of the immediate future.
A simple index, mostly of countries and forms of co-operative,
has been added for purposes of easy reference.
5

PARTI
Restoration of Basic Economic Functions

CHAPTER I
FOOD AND AGRICULTURE
Means of Agricultural Production
From the task of relieving famine and disease and of supplying the most urgent needs for clothing and shelter, it will be
necessary to pass—even before that task is accomplished—to the
replenishment of Europe's farms with the requisites of agricultural
production: feeding stuffs and fertilisers, seeds, tools and machinery, livestock, fuel and other commodities.
Before the war, Europe (including the U.S.S.R.) was estimated
to be responsible for 46.2 per cent, of the world production of
foodstuffs and 24.2 per cent, of that of textile fibres. But the domestic production of food and other farm products has fallen off
in a number of European countries as a result of war conditions,
and in some instances the reduction is serious. It was estimated that
Belgium, Greece, and Norway were unlikely to achieve more than
two fifths of their normal volume by the time the war ended, and
that production in France and the Netherlands would have been
reduced by almost a half. This falling off is due to a number of
causes: lack of labour (even, in certain cases, the physical weakness of the workers), transport difficulties, destruction of buildings
.and machinery, shortage of agricultural requisites, etc. Among
all these factors consideration will be given here only to the shortage of requisites, including machinery.
Everywhere, and particularly in countries which had a highly
specialised agriculture dependent on large imports of feeding
stuffs and fertilisers, there will be a pressing need for these commodities if production is to be rapidly increased and brought to
the highest possible level. An indication of the extent of the deficit
is given by the considerable decline which has taken place in the
volume of trade of the Co-operative Fertiliser Supply Society and
the feeding stuffs societies in Denmark. These societies, supplying as they do a large number of agriculturists and holding an important place on the market, have always provided an excellent
means of measuring the country's agricultural activities. The
5

CO-OPßRATION AND PRßSENT-DAY PROBLEMS

volume of trade of the Co-operative Fertiliser Supply Society
fell from an average of 274.9 million kg a year in 1936-1940 to
not much more than half that amount, i.e., 157.6 million kg in
1942; that of the feeding stuffs societies fell still more spectacularly,
from 783.2 million kg in 1936-1940 to only 92.4 million kg in
1941-42. This experience, easily measurable in the case of Denmark, has been shared by many other countries of Europe, neutral
as well as liberated.
In regard to seeds, the Technical Advisory Committee on
Agriculture of the Inter-Allied Committee on Post-War Requirements has reported on the probable post-war seed requirements
of the Allied countries of Europe, considered from the point of
view of helping Europe to feed itself. It has recommended that
provision should be made for a probable deficit of rather over one
million tons of seed, including cereals, seed potatoes, pasture and
garden seeds.
The situation is particularly serious with respect to livestock:
Occupied Europe already has lost one third of its horses, one fourth of its
cattle, almost half its hogs, one third of its sheep. Moreover, the stock that
survives is diseased and malnourished—unfit for breeding. The decline will
continue to the end of the war.1

It is estimated that it will take five or six, or even as many as
ten years to restore herds to their pre-war level. Owing to shortage
of shipping space, the possibility is being investigated of speeding
recovery through improved veterinary services, the import of
breeding animals, and the extensive use of artificial insemination.
The Technical Advisory Committee has also given consideration to the provision of agricultural implements and machinery.
In addition to feeding stuffs, fertilisers, seeds, and machinery,
there will be a need for minor requisites, such as packing materials,
binder twine, and insecticides, and also for certain less specifically
agricultural items, namely, petroleum products, coal, cement, and
timber.
The Inter-Allied Committee on Post-War Requirements has
reported to the United Nations Relief and Rehabilitation Administration (UNRRA) that in addition to over 9J4 million tons of
food, it will be necessary to ship more than 41 % million tons of
coal, metals, oil, animal feeds, fertiliser; and clothing to nine newly
liberated countries alone over a six months' period. It is suggested
that this amount of supplies, together with a year of normal crops,
should suffice to set Europe on its feet again. With the agricultural
1
Herbert H. LEHMAN: "Agriculture's Postwar Job", in Country Gentleman
(Philadelphia), June 1943.

FOOD AND AGRICULTURE

requisites, as with food, clothing, and medicaments, the question
arises how they may be distributed to those needing them in the
most rapid, efficient, and economical way.
RURAL SUPPLY CO-OPERATIVE ORGANISATIONS

One appropriate channel will clearly be the organisations of
farmers themselves, more particularly those which have been
established expressly to effect the distribution of farm supplies.
Beginning in the 1880's, the agriculturists of Europe have gradually
built up an extensive network of rural supply co-operatives. This
network is their own and under their direct management, and
therefore stands available to meet their requirements exactly.
The network comprises a number of highly specialised cooperatives dealing with particular agricultural requisites. For
instance, in 1942 there were in Denmark 1,567 societies for the
supply of feeding stuffs and 1,516 societies for the purchase of
fertilisers. And before the war, there were in Europe at least 7,818
societies1 for the selection and supply of livestock, as well as 4,465
societies2 for the purchase (for sale or hire to members) of machines.
However, the most widely distributed type of agricultural cooperative society naturally adapted to playing a part in the distribution of agricultural requisites is the non-specialised purchase
and sale co-operative. 3 According to pre-war statistics there are
more than 44,500 such co-operative societies serving rural areas in
Europe (excluding the U.S.S.R.). This estimate may be regarded
as low, since the figures refer only to federated societies. In 1937
there were altogether over 46,000 non-specialised purchase and
sale co-operative societies in Europe (excluding the U.S.S.R.). 4
In addition, about one third of Europe's 65,775 rural credit
co-operative societies and one half (24,000 out of 42,325) of the
specialised marketing co-operatives render their members an
additional service by making available to them such supplies as
seeds, feeding stuffs, fertilisers, and some implements.
Altogether, therefore, there are in Europe (excluding the
U.S.S.R.) somewhere in the region of 107,000 agricultural cooperative societies with distributive functions in regard to agricultural requisites, that is, well over half the total number (188,000)
1

land.
2

In 6 countries: Finland, Germany, Latvia, Luxembourg, Sweden, Switzer-

In 9 countries: Estonia, Finland, France, Germany, Latvia, Lithuania,
the Netherlands, Switzerland, Yugoslavia.
3
Cf. Co-operative Organisations and Post-War Relief, op. cit., p. 68.
4
Cf. I.L.O.: Co-operative Societies throughout the World: Numerical Data
(Geneva, 1939), p. 42. Reprinted from International Labour Review, Vol. XL,
Nos. 2 and 3, Aug. and Sept. 1939, pp. 254-271 and 375-419.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

of European agricultural co-operatives (excluding rural insurance
societies). To these must be added some 2,000 rural consumers'
co-operative societies in Hungary, over 400 consumers' societies
affiliated to the Finnish Co-operative Wholesale Society (S.O.K.),
and some 260 rural consumers' co-operatives in Switzerland, all
of which supply their members with agricultural requisites (and
also articles of domestic consumption), as is also done by a considerable number of consumers' co-operatives active in the rural
areas of other European countries. 1 Including such consumers'
co-operatives, there are perhaps some 109,660 societies in Europe
with distributive functions in the field of supply.
In the U.S.S.R. 2 , there were 28,000 rural consumers' co-operatives, with a membership of more than 36,000,000, in 1940, serving
the needs of almost the entire rural population.
No doubt the European network of rural supply co-operatives
as a whole, built up through persevering efforts over a long span
of years, is susceptible, in some countries, of fresh development,
in the direction either of geographic extension or of improved
service. Nevertheless, the few figures given in the foregoing paragraphs show that it has already attained a considerable density.
The network, in addition to being a fairly close one, is effective
in operation, and the data given below testify to the large—and
sometimes very large—part that the rural supply co-operatives
of various kinds have played in the agricultural requisites trade.
Feeding Stuffs and Fertilisers
It is not possible to determine the exact proportion of the
trade in feeding stuffs and fertilisers handled by co-operative
organisations in each one of the different European countries.
Nevertheless, the following table, which gives such data as are
available, sufficiently indicates the importance of co-operative
trade in these two fields. Except for Great Britain, where the
agricultural co-operative movement is far less developed than the
consumers' movement is, or than the agricultural co-operative movement in most other European countries, between 40 and 80 per
cent, (and in two instances as high a proportion as 90 and 100 per
cent.) of the national trade in one or the other commodity is in
co-operative hands. It is not unlikely that in most of the other
European countries the co-operative organisations would be found
1
Consumers' co-operatives functioning in rural districts could also, as an
emergency measure, undertake the distribution of agricultural requisites even
where they do not normally deal in them. In some countries consumers' cooperative wholesale organisations have entered the rural supply field, often in
order to dispose of by-products of the milling of grains and oils.
2
Cf. Co-operative Organisations and Post-War Relief, op. cit., pp. 108-109.

FOOD AND AGRICULTURE

to control a similarly high proportion of the supply of feeding
stuffs and fertilisers. In all instances the figures relate to the years
before the present war.
TABLE I. PERCENTAGE OF NATIONAL TRADE IN FEEDING STUFFS
AND FERTILISERS HANDLED BY CO-OPERATIVE ORGANISATIONS

CountryDenmark
Estonia
Finland
Germany
Great Britain5
Latvia
Lithuania
Netherlands
Sweden
Switzerland
1

Of imports.

Feeding stuffs

Fertilisers

67'
80'
40-60
13
80

40
80'
40-60

61.3
40

so
6
90
100
64.6
40
60

' England only.

In Denmark, feeding stuffs and fertilisers are distributed by
specialised organisations dealing in each of those products. The
1,500 Danish feeding stuffs societies hold registrations for 762,500
cows, representing more than 50 per cent, of the total number of
cows in the country; a similar number of fertiliser societies had a
volume of trade in 1940 of nearly 290 million kg, which was, however, reduced to 157.6 million kg in 1942 owing to the cutting off
of imports and other wartime difficulties. Before the war (1938),
the five unions of the Netherlands co-operative agricultural associations supplied farmers with 898,000 tons of fertilisers and 783,000
tons of feeding stuffs; one of them, the Co-operative Supply Society
of the Dutch Co-operative Agricultural Associations (Centraal
Bureau) in Rotterdam, was the largest importer of maize, of which
.it imported some 200,000 tons annually, and one of the chief importers of artificial fertilisers, with an annual turnover of 100,000
tons of potash and 150,000 tons of nitrate.
In Norway, where between 50 and 60 per cent, of all farmers
are members of general agricultural co-operative societies, the
Felleskjöpet Wholesale Society, the most important of the district
wholesale societies of the agricultural co-operative movement,
supplied its members with 74,000 tons of fodder and 62,000 tons
of fertiliser in 1941. The Union of East Switzerland Co-operative
Agricultural Societies, which has at times accounted for as much
as 50 per cent, of the fertiliser business in Switzerland, supplied
fodder to the value of 10 million francs1 and fertiliser to the value
» In 1942, 7.7 million francs.
2 8

CO-OPERATION AND PRESENT-DAY PROBLEMS

of 4 million francs in 1941. Some 80 Swiss pasture co-operative
societies also contribute t o the supply of fodder.
In regard to the activities of consumers' wholesale societies in
the feed and fertiliser business, mention may be made of the poultry
feeding stuffs plant of the Danish Co-operative Union and Wholesale Society (F.D.B.) ; of the oil mill for pressing cattle food of the
English Co-operative Wholesale Society, which in 1937 supplied
150 affiliated associations with farm and farm home supplies valued
at £2J^ million; and of the oil refinery and feeding stuffs factory of
the Swedish Co-operative Union and Wholesale Society (Kooperativa Förbundet). The Acid-Fodder Association set up by the Swedish
Co-operative Union has recently made contracts with the Swedish
cellulose factories for the supply of cellulose fodder, in view of the
shortage of imported feed and the reduced output of the Union's
productive works. Since 1929, the Union has also owned a superphosphate plant near Stockholm, with a pre-war production of
half a million bags annually, representing one quarter of the country's demand. The plant was leased by the Co-operative Union to
the National Union of Swedish Farmers. In order to alleviate
the wartime scarcity of fertilisers, the Union has recently established plants for the production of phosphate and nitrate fertilisers.
In Switzerland, an association (formerly a department of the
Co-operative Union and Wholesale Society of Switzerland) dealing
with the purchase of agricultural products, fertilisers, and fodder
had a trade of 22.6 million francs in 1942, 4 million francs of which
were for fodder. The consumers' co-operative movement in Finland
owns a fertiliser plant.
Seeds
It may be assumed t h a t practically all non-specialised rural
supply co-operatives and rural consumers' co-operatives furnish
their members with seeds, most of which would be selected or improved seeds. Sometimes the co-operatives are big suppliers: in
Finland, for instance, 75 per cent, of the demand for seed was met
by co-operative organisations in 1937; in the same year local purchase associations in the Netherlands supplied over 15,250 tons
of seeds and plants.
The demand for high-quality seeds has led co-operative organisations in a number of countries to enter the field of seed production. Thus, in Czechoslovakia, there was a seed association {Selecta)
with its own testing and experimental services and a network of
seed-raising stations; in Denmark, a seed production and marketing
society (with a trade of more than 20 million crowns in 1942);
in Finland, the Hankkija Agricultural Co-operative Wholesale

POOD AND AGRICULTURE

Society before the war operated the only selected seed production
centre in the country; in the Netherlands, the Centraal Bureau had
its own station for the cultivation of seeds.
From Great Britain has come the suggestion 1 that British
farmers can help to meet the post-war demands of the continent
for seeds, seed corn, and seed potatoes, and that British agricultural
co-operative societies should be organised and equipped in advance
to carry out this important work. There are six co-operative seedgrowing societies a t present established in Wales. 2
Farm Implements and Machinery
There has been a heavy loss of machines on European farms, due
to a number of causes, including military destruction, confiscation,
removal, lack of replacements, non-repair, abnormal deterioration
through shortage of lubricants. Parallel with this loss of machines
there has been a loss of draught animals, which will often be more
readily replaced by machinery than by other animals. The war
will also have occasioned a serious lack of manpower on European
farms, through war casualties, deaths from disease, loss of physical
strength and efficiency among the population generally, and other
causes. Part of the rural population is also likely to be engaged
for some time on urgent works of reconstruction (rebuilding of
roads, bridges, railways, houses, etc.). If production is not to be
hampered, machines will have to replace the missing men. This
shortage of farm machines may even be intensified by certain
projects for the reorientation or improvement of agriculture aiming
at or entailing a more intensive use of mechanisation than heretofore.
These considerations suggest the necessity of making the best
possible use of the machines that are available. It is unlikely that
the supply will equal the demand for a considerable time, and some
form of rationing will be necessary.
Individual use of machines in a time of scarcity means that
they stand idle; their collective use, on the other hand, under a
planned system of rotation, brings them into full productivity.
Apart from this practical physical advantage, it is desirable, in the
difficult period of restoration, to avoid a situation in which there
would be privileged individuals enjoying a priority in the purchase
or use of machines that are necessary to all or nearly all agri1
Cf. J. W. HEWITT: The Co-operative Supply of Agricultural Requirements.
Paper read at a Conference on Co-operative Systems in European Agriculture,
held by the British Association for the Advancement of Science, in London on
16-17 April 1943. Reprinted in Year Book of Agricultural Co-operation 1943-44
(Manchester, 1944), pp. 26-30.
* Two for seed potatoes, two for seed oats, and two for red clover seed.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

culturists. The collective use of farm machines was already firmly
established before the war, and in many countries organisations for
this purpose exist, together with organisations which aim at making
machinery available on an individual basis to small agriculturists
(who would otherwise be unable to obtain it).
The provision of agricultural implements to make up for losses
suffered during the war has been considered by the Technical
Advisory Committee on Agriculture of the Inter-Allied Committee on Post-War Requirements. 1 While in countries which normally produce their own machinery the main necessity will be to
restart the industry, there are other countries into which all but
the simpler implements had to be imported before the war. It is
frequently the case that in these countries the loss of draught
animals may necessitate a great increase in the use of mechanical
cultivation. In this connection the Committee has considered the
co-operative use of machinery to get small farms into full production as quickly as possible, on lines suggested by the experience
of the British war agricultural committees with the operation of
farm machinery on a collective basis. The Governments of Czechoslovakia, France 2 , Greece, Poland, and Yugoslavia, in submitting
to the Inter-Allied Committee their estimates for the number of
tractors and other machines required, all stated their intention to
use them either on a collective or on a co-operative basis. An
American writer has made the suggestion that the military vehicles
known as "jeeps", when no longer required for military purposes,
should be used by European farmers to help to solve problems of
transport and haulage. 3 According to the manufacturer, however,
the vehicles would have to be geared down for civilian use.
Many of the 46,000 rural co-operative supply societies not only
buy feeding stuffs and fertilisers to meet their members' needs,
but also purchase ordinary agricultural implements and machinery
for sale to individual members or for hiring out to the membership
on a collective basis. In a good many countries this function has
grown so much in importance that the machine departments of the
general rural co-operative societies have become detached and constitute distinct societies, or special machinery co-operatives have
been established. The following table gives the most recent data
available on such specialised societies alone, in European countries.
1
1

Cf. International Labour Review, Vol. XLVIII, No. 1, July 1943, p. 68.
Cf. André DuLiN: Systems of Co-operation in Pre-War France and their
Post-War Expansion. Paper read at a Conference on Co-operative Systems in
European Agriculture, held by the British Association for the Advancement of
Science, in London on 16-17 April 1943. Reprinted in Year Book of Agricultural
Co-operation 1943-44, pp. 43-51.
* Bertram FOWLBR: "Food, Jeeps and Co-ops", in Common Sense (New York),
June 1943.

FOOD AND AGRICULTURE

TABLE II. MACHINE CO-OPERATIVE SOCIETIES IN NINE EUROPEAN
COUNTRIES
Country

Estonia
Finland
France
Latvia
Germany
Lithuania
Netherlands
Switzerland
Yugoslavia

Year

Number of
societies

1937
1937
1939
1938
1936
1939
1937
1942
1933

283
450
1,850
236
800
125
258
399
64
4,465

Total

In certain countries these societies have even developed special
federations. This has been the case, for instance, in Estonia, in
France (where the National Federation of Threshing Associations
and Co-operative Societies had 670 affiliated societies in 1937),
and in Germany. In Hungary, the Co-operative Wholesale and Productive Society of the Farmers' Union (Hangya), and in Finland,
the Hankkija have special sections for machinery.
A further stage is the co-operative manufacture of machinery
for agriculture and the dairy industry. In Denmark, for instance,
there is a Co-operative Dairy Societies' Joint Purchase and Engineering Works, with over 1,500 members (societies and individuals) and a turnover of more than 10 million crowns. Agricultural
machinery is also manufactured by co-operative organisations in
Estonia (Wholesale Society E.T.K.), Finland, and Great Britain
(Engineering and Dairy Equipment Factory of the Co-operative
Wholesale Society). In Sweden, the Co-operative Union acquired
an agricultural machine factory in 1943, in which year its sales of
agricultural machinery doubled, from 500,000 to 1 million crowns.
Outside Europe, mention may be made of the National Farm
Machinery Co-operative Inc., comprising co-operative organisations in the United States and Canada, which could perhaps make
some contribution to Europe's need for tractors and other farm
machinery.
The available information does not permit of anything like a
complete picture of the role of co-operative organisations in the
agricultural machinery trade in many countries. The following
data, however, relating to Finland and the Baltic States only,
tend to show that, in certain countries at least, co-operative organisations occupied an important place in the trade in agricultural
machinery: Estonia, 50 per cent, of total imports; Finland, 75-90
per cent, of total demand ; Latvia, 65-70 per cent, of total demand
2 8 *

CO-OPERATION AND PRESENT-DAY PROBLEMS

(85-90 per cent, for dairy machinery); Lithuania, 80 per cent, of
total demand.
Livestock
A contribution to the task of replenishing European livestock
can bt expected from the co-operative stock-breeding societies
or associations whose object is to place at the disposal of smallholders high-class sires too expensive to be acquired by most individuals. Such co-operative organisations are numerous and wellestablished in the principal stock-raising countries, particularly
in Finland, Germany, Latvia, Luxembourg, Sweden, and Switzerland. 1 The activities of these organisations are assisted by their
own or public veterinary services2 or, in the dairy countries, are
closely associated with the work of the milk-testing societies or
associations. It is likely that the stocks of these organisations are
practically exhausted or in bad condition. Nevertheless, it would
seem that the rebuilding of these collective stocks with the least
possible delay would be the most efficient means of replenishing
European livestock herds, and would certainly be superior to any
attempt at replenishment on an individual basis. Possibly these
co-operatives, or some of them, could be converted into artificial
breeding co-operative societies, on the model of the associations
of this type which have sprung up, particularly in the United
States, in the course of the last few years. Indeed, the suggestion
has been made in the co-operative press in the United States' that
such co-operatives could despatch semen to Europe by aeroplane.
Should this suggestion prove practicable and be carried into effect,
with European co-operative organisations as the receiving agencies,
this novel form of inter-co-operative relations would do much to
hasten the process of re-establishing the much needed production
of milk in European countries. 4
Miscellaneous Requisites
Less important than feed, fertiliser, and seeds, but nevertheless
worthy of brief mention, are cement and minor agricultural requisites, such as binder twine and straw board used for packing. 5
1
1

Cf. Co-operative Organisations and Post-War Relief, op. cit., p. 71.
The Yugoslav health co-operative societies, which from 1934 onwards
undertook the organisation of veterinary sections, began in 1938, in collaboration with stock-breeding co-operatives, to establish special veterinary co-operatives.
* Cf. Pennsylvania Co-operative Review, June 1944.
' Similarly, it has been suggested that hatching eggs might be shipped by
boat or aeroplane from the United States to European agricultural co-operative
organisations which would serve as centres for the establishment of co-operative
hatcheries.
6
In view of its importance and special characteristics, the problem of supplying the countryside with fuel and motive power requires separate treatment
and is not dealt with here.

FOOD AND AGRICULTURE

The following examples illustrate the part of co-operative organisations in providing these requirements.
In Denmark, the Co-operative Cement Works normally supplied
680,000 bags of cement annually to its 1,400 member societies,
while in Lithuania nearly 60 per cent, of the demand for cement
was met by the Central Union of Agricultural Co-operative Societies before the war.
The Co-operative Wholesale Society of Danish Distributive
Societies (F.D.B.) was producing 1,000 tons of binder twine annually before the war, and though this amount represented less
than 20 per cent, of the country's requirements, the Society controlled the price of binder twine in Denmark; the Society also
owns a tannery and a harness factory. There is a rope and twine
works among the numerous productive enterprises of the English
Co-operative Wholesale Society. The Netherlands possessed 9
co-operative straw-board factories that together accounted for
about 60 per cent, of the national production of straw board, most
of which was exported, especially to England.
As already observed, the various types of rural supply co-operative organisations in Europe were equipped for and accustomed to
the handling of import business. Some of them, indeed, were by
far the largest importers of agricultural requisites in their respective
countries. A number of co-operative organisations in countries
outside the European continent are in a position to participate in the
rehabilitation of agricultural production in Europe and may be all
the more inclined to do so if their contribution passes through
European co-operative channels. Mention has already been made
of the possibility that British agricultural co-operatives might
help to meet demands for seeds, seed corn, and seed potatoes,
while some rope and twine might be contributed by the English
Co-operative Wholesale Society. Some assistance might also be
expected from agricultural co-operative organisations in Ireland. 1
But it is from co-operative organisations overseas, more particularly
those in the United States and Canada, that the major contribution can be looked for. Farmers' marketing organisations could
supply seeds, seedlings, and livestock, while the regional co-operative wholesale associations (which mostly serve the farm population) could supply fodder, fertilisers, implements, insecticides,
twine, and so forth. These societies and the National Farm Machinery Co-operative Inc. 2 could contribute agricultural machines,
including tractors.
1
Co-operatives in continental countries relatively less affected by the war,
such as Sweden and Switzerland, may also perhaps be able to contribute agricultural requisites to countries having a greater need.
1
See above, p. 15.

CO-OPERATION AND PRESENT-DAY PROBLEMS

The 108,000-110,000 European co-operatives dealing in agricultural requisites are widely dispersed and can therefore reach even remote villages and districts. At the same time they themselves are
easily accessible through the various federations or central organisations in the different countries. The process of fédéralisation has also
been carried into the international field. Since 1929, the central
organisations of rural purchasing co-operatives in Belgium, Bulgaria, Czechoslovakia, Estonia, the Netherlands, and Sweden have
been associated in an International Co-operative Agricultural
Purchasing Society (Intercoop) with headquarters in Rotterdam
in the Netherlands.
This system of co-operative organisation, made up of numerous
and geographically well distributed entities, has in many instances
achieved a high degree of technical development. Built up over a
long period of years, it did not reach its present position without
difficulties and sacrifices or without good reasons. European agriculturists set up for themselves co-operative supply societies in
part to reduce their costs of production and often because they
mistrusted the quality of the goods supplied through ordinary
commercial channels. Mutual association was their defence against
fraud and also their means of access to technical progress. The
same motives which prompted the establishment of these organisations suggest t h a t they should be used in the tasks of rehabilitation, and also that measures should be taken to extend the
network wherever that seems necessary.

Agricultural Credit
In order to obtain the means of agricultural production and to
bridge the gap between planting and harvest, farmers and peasants
will need credits. Particularly well suited to the provision of such
short-term credit are the rural credit co-operative societies, though
this is not the limit of their usefulness, as they also have a part
to play in the provision of medium-term credit. Attention was
drawn to their indispensable role as far back as 1927 by the World
Economic Conference held by the League of Nations in Geneva.
A special resolution of the Conference defined this role in the following terms:
The increase of agricultural production is intimately bound up with the
organisation of agricultural credit, which will place at the disposal of agriculturists
the necessary capital on favourable terms. . .
The first condition for surmounting these difficulties [of making adequate
provision for agricultural credit) is the organisation of suitable credit institutions
in those countries where they do not yet exist and their development where they

FOOD AND AGRICULTURE

are already in existence. The best form of institution appears t o be the co-operative credit society operating by means of resources which the very fact of association enables it to procure and to increase with or without the assistance of the
public authorities.
It is, moreover, by the co-operation of national organisations t h a t the effective
guarantees for appeals for credit, whether national or international, can be most
easily procured. 1

RURAL CREDIT CO-OPERATIVES IN EUROPE

The rural credit co-operatives are extremely well distributed
over Europe. There are more co-operatives of this single type than
of any other and they account for more than one third of the total
number of agricultural co-operative societies of all types in Europe.
The rural credit societies today cover more than 8J^ million holdings in some twenty-five European countries. The following table
gives the number and membership of such societies in 1937.2
TABLE III. NUMBER AND MEMBERSHIP OF EUROPEAN RURAL
CREDIT SOCIETIES
Country

Austria
Belgium
;. .. .
Bulgaria
Czechoslovakia
Danzig
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland (including Northern Ireland)
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Rumania
Sweden
Switzerland
Turkey
Yugoslavia
Total

No. of societies

Membership

1,839
1,165
1,899
6,080
51
100
242
1,179
10,550
18,121
4,327
1,008
90
2,372
325
268
71
1,299
3,736
4,638
816
640
663
65,762
4,283

315,535
98,492
216,538
1,440,784
3,357
21,356
105,443
147,500
586,372
1,997,382
193,901
421,507
8,899
481,742
130,275
94,607
8,576
214,001
816,007
905,420
93,200
59,509
107,324
8,882,372
414,645

1
LEAGUE OF NATIONS: The World Economic Conference. Final Report (Series
L.O.N. Publications, 1927, I I . 46(a), Geneva, 1927).
* Cf. I.L.O.: Co-operative Societies throughout the World: Numerical Data
(Geneva, 1939), op. cit.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

These figures relating to the pre-war period are sufficient to give
an idea of the European network of rural credit co-operatives.
More recent figures are available for a few countries, but do not
always apply to the same political divisions, making comparison
difficult. However, such figures as are available point to a decrease
in the number of rural credit co-operatives. It is known, for instance, that the number of such co-operatives has decreased in
Germany (17,442 in 1942), apparently through a process of consolidation of societies which has been instituted since the outbreak
of war. There also seems to have been a slight decrease in the
number of credit societies in Ireland (81 in 1940), the Netherlands
(801 in 1940), Sweden (748 in 1941), and Turkey (523 in 1944).
However, the membership of the societies in these countries has
grown. The number of societies increased in Bulgaria (2,117 in
1941), and both the number of societies and membership increased
in Switzerland (704 societies with 66,149 members in 1941).
T H E I R C H I E F CHARACTERISTICS

The recent tendency exhibited in Germany towards amalgamation of rural credit co-operatives in order to form larger units is
exceptional. Normally, the credit societies are quite small, with
an average membership of from 130 to 140. Their small size, so
far from being a sign of weakness, is generally regarded as one of
their principal virtues and as a condition of their successful operation. It keeps them close to the people whom they serve and allows
a simplicity which makes for very modest overhead expenses, easy
administration and ready participation of the members in the conduct and supervision of the business.
It must also be remembered that these are not ordinary credit
institutions organising the provision of credit as they would any
other business run to earn a living or to make profits. Credit cooperatives are at the service of their members, to meet their legitimate credit needs by the granting of loans which will bring
them real and permanent advantage. Like any ordinary credit
institution, the committee of a credit co-operative, when deciding
whether to grant a request for a loan, must of course take every
precaution and require full guarantee of its repayment. But the
ordinary credit institution does not feel it has any responsibility
towards the borrower; it can strictly limit itself to securing regular
payment of interest and repayment of the principal, even if repayment should lead to the borrower's ruin. A credit co-operative, on
the other hand, if it discharges its functions faithfully, will see that
repayment is made possible by an improvement in the position of

FOOD AND AGRICULTURE

the borrower resulting from the loan made. Thus co-operative
credit, so far from being a factor in rural indebtedness, is the best
protection against it. The careful examination of requests for loans
has a further consequence: the advice given on such occasions and
the special conditions sometimes imposed on the borrowers regarding their methods of cultivation constitute effective means of
education and technical progress.
Moreover, in all countries, and particularly in those where
there is rural poverty, the rural credit societies have been valuable
agencies for education in thrift and for the collection and utilisation of peasants' savings. In Czechoslovakia, for instance, the 6,000
pre-war rural credit co-operatives with nearly one and a half million
members held about one third of the total savings deposits in the
country.
Through the rural credit co-operative societies the patiently
gathered savings of the rural community are used within the community itself for its own benefit and under its own control. The
savings deposits of the credit societies, coupled with their borrowing power based on the joint responsibility of their members, serve
to satisfy the need for short-term credit, and, in part, that for
medium-term credit (mostly by borrowing from higher institutions),
among the rural population. The extent to which they satisfy this
need may be gauged by some figures relating to the pre-war period.
For instance, in Bulgaria 28 per cent., in Czechoslovakia 65 per
cent., in Poland 25 per cent., in Rumania over 50 per cent., and
in Yugoslavia 36 per cent, of the demands for agricultural credit
(either short-term or as a whole) were met by co-operative organisations.
It should be borne in mind that within each country the credit
societies form an organised system through federation. Central
banks, which serve as clearing houses for the transactions of the
societies, provide medium-term and, to a fairly large extent, longterm credit. It is difficult to say to what extent the upper stories
of this financial structure are still everywhere at the disposal of the
local credit societies in certain countries.
Nevertheless, it is the very simplicity of this machinery for
credit, particularly in the basic lower units, which makes it so
durable and constitutes the best guarantee of its power to remain
in operation. There is no doubt, therefore, that it will be found
worth while to take the necessary measures to set the rural credit
societies firmly on their feet, so that they may be in a position to
make the maximum contribution to the speedy restoration of
European agriculture.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS
RURAL CREDIT CO-OPERATIVES AND THE STATE

In assessing the measures necessary to restore to agriculture
this essential instrument of its rehabilitation and organisation,
regard must be had to the limitations imposed on the activity of
rural credit co-operatives by the very conditions in which they
operate. It is equally or perhaps even more important to consider
the financial position in which many of them will be placed as a
result of the war.
The conditions under which local rural credit co-operatives
operate "are such that they must generally confine themselves to
the provision of short-term credit and, to a less extent varying
with each country, of medium-term credit. It is to be anticipated
that for a fairly long period the agriculture of certain countries will
have a great need of medium and long-term credit, whether for the
restoration of war-devastated holdings (dwellings and other buildings, soil, livestock, implements), or in order to carry out, with
some chance of success, the long-term transformation (shift from
one type of production or system of cultivation to another, mechanisation, agrarian reforms) implied in the plans of agricultural
reorganisation contemplated for certain regions.
It is not even sure t h a t rural credit co-operatives will be ready
immediately, in every European country, to satisfy the short-term
credit needs of their members out of their own resources. It is
indeed likely that these resources will have been more or less seriously impaired by outright or disguised depredations, by repercussions
of the economic situation, inflation, and so on. It will clearly be
for the State to use its political and administrative resources to
help the rural credit co-operatives to recover the funds and other
property taken from them. It is to the State, too, that they will
probably turn for the advances they require, as it is doubtful
whether they will be able to get them from the general banking
system, which has itself been badly shaken and will have many
heavy calls upon it. In France, for example, the Provisional Government 1 has already decided to extend financial assistance (up to
3,000 million francs) for the restoration of agricultural and rural
undertakings, in the shape of loans to agriculturists, agricultural
co-operatives and other agricultural associations, and rural artisans.
However, the advances are not made directly to the individuals or
bodies concerned, but are placed at the disposal of the central
organ of the credit co-operative movement in France, the National
Institute for Rural Credit, which is responsible for their distribution.
1

Journal officiel de la République française, 17 Oct. 1944.

FOOD AND AGRICULTURE

Such a procedure was not uncommon before the present war
and it will very probably continue in the future. A varied and long
experience has shown that the State, while able t o assess general
needs and situations, is badly placed for making direct loans to
individuals. It lacks the machinery (or has to build up a cumbersome and costly machinery) for judging accurately the real needs
of each applicant and the urgency of his claim vis-à-vis the others,
for forming an estimate of each borrower's solvency, for controlling
the use to which each loan is put, and for fixing or varying judiciously
the date of its repayment.
If the loan granted is not large enough, it may be without real
utility. If it is too generous, it will do harm by weighing too heavily
on weak shoulders. Large or small, it will be harmful if in the long
run it leaves the borrower poorer and less capable of obtaining
credit than before: overindebtedness is often the result of a faulty
extension of credit. Finally, if the loan is not repaid, the State
will have the politically embarrassing choice either of distraining
upon its debtor or else, if it neglects to do so, of perhaps demoralising conscientious debtors and giving encouragement to the habit
of non-repayment.
On the other hand, the small rural credit co-operatives are excellently placed for forming an exact estimate of requirements,
for exercising proper control and for distributing credit prudently
and with a full knowledge of the facts,, since they are close to the
needs to be satisfied and since the members of a society all know
each other and are jointly responsible for its debts (which more
often than not are secured on the whole of their property).
It is for this reason that in a large number of countries the State
passes through them the permanent credits (especially for a long
term) and the occasional credits (to deal with a crisis or to serve
some particular project) which it extends to agriculture. The
efforts of the State to organise agricultural credit and those of the
rural co-operatives are often so closely linked that they meet in a
common institution that is at once a public body and the national
centre of the credit co-operatives. The structure of such institutions may be even more complicated, since it may comprise other
agricultural and credit co-operatives, handicraftsmen's co-operatives and even consumers' co-operatives in addition to the State
and the rural credit co-operatives. The State participates either
directly or through the bank of issue or in some other indirect
manner in the setting up of the share capital or in the maintenance
of the working capital of the institution. It also has a share in its
management.
These mixed credit institutions were found before the war under
S

CO-OPERATION AND PRESENT-DAY PROBLEMS

widely varying forms, in the following European countries: Bulgaria, Finland, France, Germany, Greece, Hungary, Lithuania,
Poland, Rumania, and Turkey. There were also examples of them
in places outside Europe, among others in Algeria, Iran, Japan,
Madagascar, Mexico, Morocco, and the Union of South Africa.
The Finnish and French Systems
While there is no need here to go into details of structure and
function, it may perhaps be useful to describe briefly two systems
of agricultural credit organisation, those of Finland and France,
which differ quite widely from each other and are at the same time
typical enough to give an idea of how there may be a conjunction
of the resources and methods of the State and those of co-operative
organisation to meet the credit needs of European agriculture
during the rehabilitation period.
The Finnish system of agricultural credit has been organised
from the top downwards and, a t the beginning, without any collaboration by rural people, who were too poor to start local credit
co-operative societies themselves. The first step was the creation,
in 1902,.of a Central Bank of the Co-operative Agricultural Societies,
for which the initial capital was found by a group of private persons
interested in the future formation of local credit societies. In
addition, the Bank received from the State an advance of four
million Finnish marks at a low rate of interest and an annual grant
of Fmk. 20,000 for a period of 10 years. The first intervention of
the State thus took place before the existence of any local credit
co-operatives, but with a view to their establishment. During the
ten-year period 1902-1912 local credit co-operative societies developed satisfactorily in the most depressed districts. From 1920
onwards, the local societies, having been granted permission to
receive savings from non-members, multiplied their deposits many
times over. 1 After 1925 the main activity of the societies was the
granting of long-term loans out of a fund of Fmk. 103 million
granted to the Central Bank by the State for that purpose.
The intention of the founders of the Central Bank was that
their financial aid and that of the State should only be temporary.
Its by-laws accordingly provided that shares subscribed by private
persons should be progressively redeemed by the local credit societies in proportion to the amount of the loans granted to them
by the Bank. This redemption was completed in eight to ten years,
but towards the end of this period the State began to be a shareholder in the Bank along with the local credit societies. However,
1
Between 1915 and 1920 they multiplied nearly 25 times; between 1915 and
1930 more than 1,100 times.

FOOD AND AGRICULTURE

the share of the State decreased as that of the societies grew larger.
By the end of 1938 the credit societies had contributed Fmk.
15,000,000 against the State's Fmk. 25,000,000. In 1943, the State's
share was still Fmk. 25,000,000 but the capital of the Bank had
risen to Fmk. 90,000,000. Apart from share capital, the resources
of the Bank consist of deposits of the credit societies (11.5 per cent.),
loans from the State's Public Treasury a t a low rate of interest or
free of interest (20 per cent.), and loans from the Bank of Finland
and the Postal Savings Funds and State-guaranteed short-term
foreign loans (68 per cent.). In view of this direct or indirect financial dependence of the Central Bank on the State, the latter
exercises a certain amount of influence on the Bank's management,
but has been careful not to invade it unduly. It has retained only
a limited internal control; it has power to appoint three members
of the board of directors, but it has only six votes in the general
meeting—the maximum any shareholder may hold.
External
supervision, on the contrary, is fully exercised : auditing of the credit
societies was done by the Central Union of Finnish Co-operative
Societies until 1939, and since that date has been in the hands of
special auditing officers appointed by the Government.
The Central Bank, though strongly supported by the State,
is therefore not a purely State agency, but an institution of mixed
character, in which the State and co-operatives collaborate until
the latter are in a position to manage it entirely themselves.
In France, agricultural credit has been organised from the
bottom upwards, so as to be in close contact with agriculturists
requiring loans, which are granted chiefly in consideration of the
character and professional ability of the borrowers. At the same
time it enjoys some financial support from the State and is subject
to a certain degree of State supervision. This combination of influences explains the three-storied structure of the French rural
credit system. This characteristic feature consists of private bodies
on the two lower levels and a public institution a t the top, viz.:
(a) local societies, (b) regional funds, and (c) the National Institute
for Rural Credit. Members of local societies must be either individual agriculturists or agricultural associations (collective
members). They supply the share capital. Most of the societies
have limited liability, but some have unlimited liability, which the
law allows. They accept savings deposits from any person, whether
a member or not, and use these and other resources to make loans
to their members for agricultural purposes. Applications for loans
beyond their means are forwarded by them to the regional funds.
The local societies are managed by an elected board of directors
who receive no remuneration for their services.
5

CO-OPBRATION AND PRESBNT-DAY PROBLEMS

The regional funds, which numbered 98 in 1938, are essentially
associations of local societies, but individual agriculturists and
agricultural groups or associations may also be affiliated. By law
two thirds of the shares of regional funds are reserved to local
credit societies. When set up, their capital may not be reduced
below the original amount at foundation nor below the amount
on which any advance received from the State has been calculated.
Advances obtainable from the State are in proportion to the paidup capital of the regional fund. In the regional funds the number
of votes of a member at a general meeting was equal to the number
of shares held, but with a maximum of 4-5 votes for any shareholder (mostly collective members). Regional funds had power:
(a) to grant advances to their affiliated credit societies to set up
or supplement their working capital; (b) to discount notes subscribed by members of the local societies and endorsed by the
latter; (c) to receive deposits in the form of current accounts and
issue bonds (to a value not exceeding three fourths of the bills
in hand) ; (d) to invest in stock (under strict regulations) or deposit
in postal savings banks the unused part of their resources; (e) to
supervise the operations of the local credit societies connected with
them. Regional funds receiving advances from the State had to
keep their books in accordance with very detailed regulations
issued by the Department of Agriculture and to submit to supervision by inspectors of finance.
At the head of the system was the National Institute for Rural
Credit, which was an administratively independent and financially
autonomous public institution. It was administered by a board
of seven directors (at least two of whom represented the regional
funds) elected by the Plenary Committee of the Institute from
its members. The Plenary Committee was composed of members
of parliament (one fifth), high officials of the Departments of Finance and Agriculture (two fifths),and members elected by regional
funds (two fifths), and had the task of supervising the work of the
Board of Directors. The General Director of the Institute was appointed by the Minister of Agriculture and could not be removed
from office except a t the request of the Plenary Committee and the
Board of Directors.
Though the Institute was financially autonomous and operated
in accordance with banking procedure, it possessed some features
of a central public administration. For instance, it did not issue
a balance sheet, its budget was subject to ministerial approval
and, like the institutions to which it lent, it was supervised by the
Inspectorate-General of Finance and the Inspectorate-General of
Agricultural Associations and Credit Institutions. However, its

POOD AND AGRICULTURE

banking procedure enabled the Institute to handle agricultural
credits more expeditiously than it could have done under administrative procedure. The Institute made its advances and loans out
of resources consisting of a State subsidy, special credits allocated
to it by various Acts, deposits made by the regional funds, reserves,
and the rediscounting of its securities by the Bank of France.
The Institute also had the function of supervising the rural credit
co-operative societies and other collective borrowers.

Organisation of Agricultural Marketing
European agriculturists have not only organised co-operatively
to procure high quality requisites as cheaply as possible, but also
for the sale of their products.
For they work, buy, and borrow in order to produce; and they
produce to sell. The marketing of produce is not merely the final
act in a series, but the one which governs and directs every activity
throughout the year. By the grower's success or failure in marketing his produce is measured the success or failure of all the preceding
efforts of the series. It is therefore not surprising that agriculturists
should have tried to gain control of so decisive a process.
This the small and medium agriculturists have sought to do, not
by individual means, but through organisation and the adoption
of co-operative methods, designed to obtain a regular and assured
market for their wares at reasonably stable prices related to the
costs of production.
Co-operative organisation enables the host of little producers
to assemble their individually small crops of varying quality for
pooling with those of others, to enjoy the advantages of standard
grading and large, uniform lots, and to have the produce shipped
to market in response to real demand. In short, they are enabled
to secure marketing advantages which, without such co-operative
organisation, would remain the privilege of the big landed proprietors. Furthermore, just as the rural supply co-operatives have
been instruments of technical progress in production, so too, cooperative marketing organisation, particularly in its more highly
developed forms which impose the most discipline and responsibility on the producers, has done much to improve methods of
cultivation, harvesting, breeding, and so on.
TYPES AND NUMBER OF RURAL CO-OPERATIVES
AGRICULTURAL PRODUCTS

MARKETING

The need for adjusting production as closely as possible to
marjcet conditions has favoured the development of marketing co2 9

CO-OPERATION AND PRESENT-DAY PROBLEMS

operatives organised on a commodity basis, particularly in the case
of export products. But so anxious are European agriculturists
to control the marketing of their produce that in the absence of a
specialised co-operative they often entrust this function, either
temporarily or permanently, to the first co-operative which happens
to have been established in their village. This may be a rural consumers' co-operative society. Very often it will be a multi-purpose
or "village co-operative"—the most widespread form of rural cooperative in Europe—which supplies agriculturists with their
domestic and farm requirements and at the same time effects the
sale of their produce. In 20 out of the 24 European countries where
such general agricultural co-operatives were reported before the
war, these co-operatives performed thefunction of sale as well as that
of purchase. Selling is sometimes even entrusted to the rural credit
co-operative society, which in many cases is the oldest among the
co-operative institutions of the village. Before the war, more than
a third of the European rural credit co-operatives were engaged
in marketing their members' produce.
According to the very incomplete information available, the
function of marketing agricultural produce was performed in
Europe before the war by about 77,000 rural co-operative societies,
divided as follows:
Marketing co-operatives specialised by products. .
Non-specialised agricultural purchase and sale cooperatives
Rural credit co-operatives
Total

42,326
11,829
22,596
76,751

The number of these co-operatives was really much greater
than the figures indicate, particularly as regards the rural credit
and the non-specialised purchase and sale co-operatives, for which
two groups the statistics show the marketing activities only where
the societies' accounts were sufficiently detailed Jo enable the
distinction to be made. This explains why the figures include the
rural credit co-operatives of only three countries (Bulgaria, Germany, and Greece), and the non-specialised purchase and sale cooperatives of only 11 out of the 20 countries where co-operatives
of this kind are known to have marketed their members' produce.
It is at any rate clear that the co-operatives of the three categories mentioned played an important part in the marketing of
agricultural produce, a part meriting closer examination. No more
need be said about the rural credit co-operatives, the known sales
business of which seems to have represented only some 2.5 per
cent, of the total sales of rural co-operatives. But before examining,

POOD AND AGRICULTURE

product by product, the marketing activity of the rural co-operatives as a whole, it may be well to glance at the role of the nonspecialised purchase and sale co-operative societies in certain
countries. For the sales business of such co-operatives represents
about 12 per cent, of the total figure for the co-operative marketing
of agricultural produce.
In Bulgaria, for instance, the sales business of the non-specialised
purchase and sale co-operatives was more than three times their
trade in supplies; in Iceland and Poland sales slightly exceeded
purchases; in Germany 1 sales represented 86 per cent., and in Sweden
82 per cent, of purchases. In Switzerland, where a t least 60 per
cent, of the general agricultural co-operative societies sell their
members' produce, these societies' sales amounted to rather more
than one third of their purchases. In Great Britain, however,
purchases were at least seven times more important than sales.
More recent data are available for some of the countries mentioned. Thus in Bulgaria, the General Union of Agricultural Cooperative Societies, with some 1,600 affiliated societies (mostly
of the general purpose or rural credit type) and an aggregate membership of 250,000, representing more than 35 per cent, of the
rural population, had in 1940 a total turnover for marketing and
supply of 1,162 million leva, 71 per cent, of which was for marketing. In England, 93 requirements societies reported a combined
turnover in purchases and sales in 1942-43 of £12.4 million, 27 per
cent, of which represented sales.* In regard to Iceland, it may be
mentioned that the Federation of Icelandic Co-operative Societies
is responsible for 80-90 per cent, of the country's exports of agricultural commodities.
From the figures available it would appear that there has been
a considerable development of purchase and sale co-operatives
since the outbreak of war, at least in certain countries. This is so,
for instance, in Sweden. Although it is not possible to distinguish
between selling and purchasing activities, it is worth remarking
that the total trade of the general societies affiliated to the National
Union of Swedish Farmers rose from 127.1 million crowns in 1938
to 203.4 million crowns (for a volume of 928,600 tons) in 1941, and
218 million crowns in 1942. These figures, of course, reflect a certain
rise in prices, as well as an increase of trade. More significant,
perhaps, is the growth in membership, from 44,600 in 1937 to 75,000
in 1942. And it should be noted that in Sweden these non-specialised
societies are found side by side with federated societies of the
1
According to recent reports it would appear that in Germany about one
half of all agricultural produce is placed on the market by agricultural (nonspecialised or specialised) co-operative societies.
1
Compared with 16 per cent, in 1940-41.

CO-OPERATION AND PRESENT-DAY PROBLEMS

specialised type dealing in dairy products, meat, eggs, and other
commodities. Switzerland offers a clear instance of an increase
in the marketing activities of non-specialised purchase and sale or
rural consumers' co-operatives: the Union of East Switzerland
Co-operative Agricultural Societies, one of seven such federations
in the country, increased its volume of sales from 3,266 carloads
(of 10 tons each) in 1938 to 9,209 carloads in 1943, or by 280 per
cent. Agricultural products marketed accounted for 22.1 per
cent, of the total trade of the Union in 1938, for 29.6 per cent.
in 1941, and for no less than 38.7 per cent, in 1943. The value of
such produce amounted to 35 million francs in 1943, not including
wheat to the value of 17.5 million francs delivered to the Federal
Government.
CO-OPERATIVE MARKETING OF SPECIFIC AGRICULTURAL
COMMODITIES

Some attempt at definition of the place held by rural co-operatives before the war (or at present) in the collection, processing,
and marketing—at home or for export—of the main agricultural
products is perhaps the best way of assessing the role that such
co-operatives can play in the post-war organisation of the European
agricultural market.
GrainCereals figure quite frequently among the products collected,
stored, and marketed by the general (or non-specialised) purchase
and sale co-operatives. Co-operatives specialising in the sale of
cereals are a comparatively recent development in Europe, and
they are generally found in association with some official or semiofficial institution for the marketing of grain. Such was the case,
for instance, in France and Yugoslavia. In France, a large part of
the 1,205 wheat marketing co-operatives in existence on 1 July 1937
were the outcome of the establishment in August 1936 of the InterOccupational Wheat Office1, a body set up to regulate the wheat
market. By July 1937, these co-operatives had handled 36 million
metric quintals, or five sixths of all grain placed on the market. 2
In Yugoslavia, 169 wheat marketing co-operatives and a number
of general agricultural co-operatives were in contact with the
Company for the Export of Agricultural Products (which enjoyed
practically a monopoly in the export of wheat) ; 28 per cent, of all
the wheat purchased by the Company for export was obtained
from these co-operatives. However, the existence of a central
1
2

Its name was later changed to National Inter-Occupational Cereals Office.
In addition, there were in France 117 milling, and milling and baking,
co-operatives, as well as some 600 rural co-operative bakeries.

FOOD AND AGRICULTURE

body regulating the market does not necessarily lead to the establishment of specialised co-operatives.
In Czechoslovakia, for
example, the general agricultural co-operative societies acted as
the agents of the Czechoslovak Wheat Company, which was
managed jointly by representatives of the agricultural co-operatives,
the consumers' co-operatives, the processing industries, and the
wheat merchants. Under State control it exercised a monopoly
in the purchase and sale and in the import and export of cereals
and the principal feeding stuffs.
Even in less important grain-producing countries the general
agricultural co-operatives occupied a considerable place in the
grain market. In Finland, for instance, the societies affiliated to the
two unions of consumers' co-operatives (K.K. and, more particularly, Y.O.L.) were the largest grain purchasers in the country
until the State took over the national grain supply. Even in small
Lithuania, for example, the Central Union of Co-operative Societies
{Lietükis), which owns two flour mills, in 1938 exported 129,308
tons of wheat and other grains. In Sweden, cereals accounted for
40 per cent, of the sales of the Swedish National Union of Farmers,
whose members in 1938 cultivated 27 per cent, of the country's
total arable area on farms of more than 2 hectares.
The following table gives a more precise indication, for a number
of countries, of the role of co-operative organisations—general or
specialised—in the marketing of cereals.
TABLE IV. CO-OPERATIVE SHARE IN GRAIN TRADE IN SIX EUROPEAN
COUNTRIES
Country and type of society

Year

1939
1937
1940
1939
1938
1939

Czechoslovakia: general.
France: special
Germany: general
Poland: general
Sweden: general
Yugoslavia: special
1

Of grain and seed exported.

Percentage of
national grain
trade

87
80
50
701
40-50
28*

Of all exported grains.

For lack of precise information many countries find no place
in the table, including such large producers and exporters of wheat
as Hungary and Rumania. However, this does not prevent an
estimate of the importance of co-operative organisations in the
grain market in some of the omitted countries.
During the years immediately before the present war the problem of marketing wheat and cereals in general had become a major
preoccupation of European Governments, and in a large number
2 9 *

CO-OPERATION AND PRESENT-DAY PROBLEMS

of countries the public authorities found it necessary to intervene
in the market. Such intervention assumed many varied forms,
but nearly always involved some kind of joint* action with cooperative organisations—especially agricultural co-operatives.
Mention has already been made of France and Czechoslovakia.
In Greece, the efforts of the State to regulate the market took the
shape of purchasing wheat through the agricultural co-operatives
of the wheat producing districts. In Hungary, all the 2,000 or so
village consumers' societies affiliated to the Co-operative Wholesale
and Productive Society of the Farmers' Union (Hangya) are of
the purchase and sale type (and even include the word "marketing" in their name), and they all act as collecting agencies for the
more or less specialised central marketing organisations set up by
and attached to Hangya. In particular, they collect wheat for the
Trading Company of Hungarian Co-operative Unions (Futura),
which directly and indirectly derives a large part of its capital
from the State and plays or used to play a predominant part in the
purchase and export of wheat (and of some other agricultural
products) as agent of the Department of Foreign Trade. In 1942,
purchases of grain for Futura made by Hangya from its affiliated
societies amounted to 35.4 million pengös. Before the war 75
per cent, of the Hungarian wheat export quota to Italy was assigned
to co-operative organisations.
Precise and up-to-date information is lacking for Rumania.
But there is no doubt that the numerous agricultural co-operative
societies (207 wheat-marketing co-operatives and 1,699 non-specialised purchase and sale co-operatives before the war) were closely
associated with the handling of wheat in what is one of the major
wheat-producing countries of Europe, and where the co-operative
movement is highly centralised and closely controlled by the Government (especially since the establishment of the National Cooperative Institute by the Act of 23 June 1938).l
Livestock and Meat
The great majority of the co-operatives engaged in the marketing of livestock and meat are specialised. In certain countries cooperatives of this type have attained a high degree of development
and possess slaughterhouses of the most modern design. Owing
to the conditions of the trade, they generally cover a considerable
territory and have a fairly large membership. The number of such
societies is therefore relatively low; altogether there were about
3,500 in Europe before the war. Nevertheless, they stand second
(after co-operative dairies) both in number of societies and in
1
A number of European co-operative organisations—agricultural and consumers'—also offer facilities for the milling of grain and baking of bread.

FOOD AND AGRICULTURE

membership (about 730,000) among the specialised marketing
co-operatives.
Before the war, livestock and meat-marketing co-operatives
were to be found in at least 17 European countries: Bulgaria,
Czechoslovakia, Danzig, Denmark, England, Estonia, Finland,
Germany, Hungary, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Sweden, Switzerland, and Yugoslavia. Sweden
(217,000) and Denmark (191,000) led in membership, followed by
Germany (142,000), Norway (82,000), and Switzerland (50,000).
Denmark and Germany came first in order of trade, with Sweden
and Norway following. Co-operative organisations also played
quite an important part in some other countries. For instance, the
Federation of Icelandic Co-operative Societies handled the whole
of Iceland's export of frozen mutton, and in Estonia the Meat
Export Company, an institution established and managed with
State support, was granted (by the Act of 12 February 1937) a
State monopoly for export. In Hungary, the societies selling livestock were centralised in the Hangya co-operative for the marketing of cattle.
The following table gives an idea of the part played by
co-operative organisations in the marketing of meat and bacon
in certain countries before the war.
TABLE V. CO-OPERATIVE SHARE IN MEAT AND BACON MARKETING
IN EIGHT EUROPEAN COUNTRIES
National trade
Country

Bulgaria
Denmark
Estonia
Germany
Iceland
Latvia
Sweden

Yugoslavia

Measured by

Exports of live pigs, cattle, poultry
and lard
Entire production of bacon and
other pork products
Meat and cattle exports
Exports of pigs and pig products
Meat production
Total meat exports
Exports of frozen lamb
Bacon exports
Pork marketed
Meat marketed
Bacon exports
Live cattle exports
Exports of livestock and poultry

Co-operative
percentage

16
86
39
100'
7.4
90
100
100'
70
60
89
85
40

i Through a State monopoly granted to co-operative organisations.

Recent data show that development has continued during the
last few years, at least in certain countries. Thus in Germany the
number of societies for the sale of cattle and meat rose from 619
in 1937 to 648 in 1940; during the same period the membership of
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

the Norwegian Central Union for the Marketing and Export of
Bacon increased from 82,900 to nearly 84,500, while the trade of
its affiliated societies grew from 42.5 to 50.5 million crowns. In
Sweden, the Federation of Co-operative Meat Marketing Societies
increased its membership from 207,000 in 1937 to more than 250,000
(with a volume of trade of 159,700 tons) in 1941 and 259,000 in
1942. Membership of the Federation of the Danish Co-operative
Bacon Factories, which normally slaughtered and processed over
334 million pigs annually, increased from 191,000 in 1937 to 193,500
in 1940 and 194,000 in 1942. Over the same period membership
of the 18 societies affiliated to the Federation of the Danish
Co-operative Cattle Export Societies rose from 16,680 to 29,390.l
The smaller Danish Farmers' Meat Supply Organisation has also
increased the number of its members in recent years.
Eggs and Poultry
Poultry products, of which eggs are of course the chief, occupy
a considerable place in the agricultural production of certain countries. It has, for example, been estimated that in Germany, some
years ago, the value of poultry products represented between 6
and 8 per cent, of the value of all agricultural production (and
equalled that of wheat). And Germany, besides being a large
producer, was along with Great Britain a great importer of eggs;
43 per cent, of German egg imports and 52 per cent, of British egg
imports were derived from three European countries: Denmark,
the Netherlands, and Belgium (where the value of poultry products
was normally equal to about half that of all the coal mined in the
country).
The egg trade is traditionally handled by dealers collecting
from farm to farm or from the local markets. Sometimes these
dealers work on their own account or else they work for commercial
firms. Under such a system the producers are entirely at the mercy
of the middleman unless they are able to form a federation to
maintain prices on the more important local markets or unless
there happens to be stiff competition between the dealers.
To remedy this situation, various forms of co-operative began
to participate in the egg trade: consumers' co-operatives in rural
areas (which bought eggs from members and then placed them on
the market), general agricultural co-operatives, and, generally at
a later stage, specialised egg-marketing co-operatives. When
eggs are handled by non-specialised co-operatives, there is a tendency towards specialisation at the top, for example, the establishment of a special department of the Supply and Marketing Organisation of the Farmers' League (Boerenbond) in Belgium.
1

In 1943, 29,950.

FOOD AND AGRICULTURE

A few figures may be given to .show that, in certain countries
at least, the co-operative trade in eggs was of considerable importance. In Denmark, for instance, the two co-operative organisations engaged in the export of eggs, the Danish Co-operative
Egg Export Society and (less extensively) the Federation of Danish
Co-operative Bacon Factories, had an average combined trade
in eggs during 1936-1940 of more that 36 million crowns a year. 1
Before the war, the Egg Export Society alone handled about 20
million kg of eggs annually. In Germany in 1936, 369 societies2
collected eggs to a value of 78,676,000 marks. In 1938, the Central
Union of Co-operative Dairies in Lithuania exported nearly 86J^
million eggs, purchased through 325 co-operative organisations.
The Association of Swedish Co-operative Egg-Marketing Societies,
comprising 42,000 members, marketed more than 7,500 tons of
eggs in 1941.
Before the war, the Supply and Marketing Organisation of the
Belgian Farmers' League and the Hungarian central co-operative
organisation for the marketing of eggs and poultry were both
rapidly developing their trade in eggs. The egg auction co-operatives (41 in 1942-43) are an interesting feature in the Netherlands.
Specialised poultry-marketing societies (4 with 55,150 members
in 1942) are found in Denmark.
For certain countries data are available showing the relative
importance of co-operative organisations in the national production
and export of eggs before the war.
TABLE VI. CO-OPERATIVE SHARE IN EGG PRODUCTION AND EXPORT
IN TEN EUROPEAN COUNTRIES
Percentage of
national output

Country

Bulgaria . . .
Denmark . .
England . . .
Estonia. . . .
Finland....
Germany . .
Latvia
Netherlands
Poland . . . .
Sweden....

25
8
70-75«
7.1
34
35-40'

Percentage of
national export

17
301
100»
184
1002
50
5
46

1
Represents the share of the Danish Co-operative Egg s Export Society alone. The co-operative
bacon factories also made considerable
exports of eggs. Through a State monopoly granted to
co-operative organisations. 3 Of the 14.9 million kg of eggs placed on the homeand
foreign markets.
* By the Central Co-operative Egg Export Association Murta alone. 6 Of the quantity of eggs
wholesaled in the country.

Less than 23 million crowns in 1942.
In 1940, 298. T h e reduction in the number of societies is probably due to
the measures of rationalisation and reorganisation which have been applied to
the agricultural co-operative movement in recent years.
2

CO-OPERATION AND PRESENT-DAY PROBLEMS

Dairy Produce
Co-operative organisations have penetrated more deeply into
dairying than into any other agricultural processing industry.
Co-operative dairies, whether they merely handle liquid milk, or,
as is most often the case, also manufacture butter, cheese, condensed
or powdered milk, and milk by-products, are also by far the most
widespread of all the specialised marketing co-operative societies.
Before the war they represented more than 62 per cent, of all
European specialised marketing co-operative societies and are to
be found in almost every country. For 22 countries of Europe
data on the number of societies are available, relating either to
the years 1940-1942 (table VII) or to the pre-war period, in most
cases 1937 (table V I I I ) .
TABLE VII. CO-OPERATIVE DAIRIES IN TWELVE EUROPEAN

COUNTRIES, 1940-1942
Country

Czechoslovakia1
Denmark
Finland 1
Germany
Great Britain'
Hungary
Ireland (including
Latvia4
Netherlands
Norway
Sweden
Switzerland
Total

Year

1942
1942
1940
1940
1940
1941
1940
1941
1940
1940
1942
1942

Number of
societies

211
1,384
677
9,744
14
1,079
215
175
475
464
756
2,946
18,140

Membership

188,639
80,404
987
158,621
53,015
85,352
221,000

—

1
Bohemia and Moravia only. * Probably includes Sudetenland and Austria. * England only;
there are also five or six dairy societies in Wales. * Affiliated to Titriba. In 1939, there were 192
societies with nearly 101,500 suppliers, of whom 18,370 were members.

The lack of recent information about co-operative dairies in
10 countries (table VIII) does not entirely preclude an approximate
estimate of their present number. Though there may have been
changes during the last few years, these will have been slight and
in both directions, judging by what has happened in countries
for which more up-to-date information is available. In Finland, for
example, the number of co-operative dairies increased from 670
in 1937 to 677 in 1940, while in Latvia there has apparently been
a decrease. Normally the changes would have been small in most
of the countries concerned, as the number of co-operative dairies
was nearing saturation point. It does not seem that war events
have greatly altered the picture, except for some destruction of

FOOD AND AGRICULTURE

TABLE VIII. CO-OPERATIVE DAIRIES IN TEN EUROPEAN COUNTRIES,

1937
N u m b e r of
societies

Country

Italy
Lithuania
Luxembourg
Poland 3
Rumania
Yugoslavia

169
262
2,213
77
3,130
196
268
1,560
267
200

Total

8,342

Belgium
Estonia

Membership

35,142
30,000
280.0001
843
240,000*
14,836
11,819
642,118
30,000
17,081
1,301,839

> For 1,480 societies. • In 1935. • In 1938.

premises and, here and there, suppression or interference with the
activities of the dairies. Therefore, with due reservations' and for
want of a better method, it will not be improper to use the prewar figures as resembling closely those of the present time, and to
add together the totals of the two tables, giving an approximate
grand total of 26,000 co-operative dairies in the 22 countries
considered.
Most of the co-operative dairies were federated, either in general
or in special central organisations. In both cases, but particularly
in that of the specialised organisations (found chiefly in the exporting countries), there was a high standard of equipment. The figures
given below give some notion of the volume of trade of the cooperative dairy organisations.
Denmark, with some 4 million inhabitants, comes first, as the
world's largest butter-exporting country, supplying from 38 to 40
per cent, of the total net exports of all countries. The attainment
of this position and the technical achievements which made it
possible must be ascribed largely to the co-operative organisation
of the Danish agriculturists. Deliveries of milk to the Danish cooperative dairies, which represent 75 per cent, of all the dairies
in the country, totalled some 4,500 million kg annually; their
normal annual butter production was 189.4 million kg and their
cheese production 33.4 million kg. The trade of the dairies averaged
626.6 million crowns annually in 1936-1940, while that of the butter
export societies was 187.1 million crowns annually in the same
period. While the trade of the dairies increased to 782 million
crowns in 1942, that of the export societies declined to 151.9 million
crowns, as a result of war conditions.
In Hungary, deliveries of milk to the co-operative dairies
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

in 1940 amounted to 195 million litreSj of which the central association handled 102 million litres. However, in 1941, owing to shortage
of fodder, these amounts declined to 147 million and 86 million
litres respectively.
Regional associations of co-operative dairies in the Netherlands
sold 35,877 tons of butter, 27,416 tons of cheese and casein, and
6,644 tons of other dairy products in 1940. Before the war the
Norwegian co-operative dairies, comprising from 80 to 90 per cent.
of all milk producers, normally handled some 662,800,000 litres
of milk a year and had an annual butter production of about 36
million lbs.
In Switzerland, the members of the societies affiliated to the
Central Union of Dairy Farmers before the war owned some 730,000
cows on 125,000 holdings; the regional federations of the Union
manufactured butter on a large scale.
In the three tables IX—XI data are given showing the cooperative share of the milk, butter, and cheese trades in a number
of countries. The figures, which relate for the most part to the
pre-war period, are to be regarded as approximations. Furthermore, it is to be observed t h a t the tables are not mutually exclusive.
The first, concerning milk in general, contains some figures which
are the same as or include some of those given in the other two.
Nevertheless, despite possible repetition and overlapping, they
enable some idea to be formed of the economic importance of cooperative organisations in the field of dairy production.
TABLE IX.

CO-OPERATIVE SHARE IN MILK
EUROPEAN COUNTRIES

TRADE

TWELVE

National output
Country

Denmark
France
Germany
Hungary
Iceland
Latvia
Luxembourg
Netherlands
Norway
Sweden
Switzerland
Yugoslavia2
' 1942. » Croatia only.

Measured by

Co-operative
percentage

Total milk delivered to dairies
Total dairy production
Milk supplied to market
Total dairy production
Milk sold
Total number of milch cows
Total number of milch cows
Total milk production
Milk powder produced
Condensed milk produced
Milk producers members of
co-operative dairies
Milk delivered to dairies
Milk marketed
Milk handled (collection and
processing)

90
15-20
70
20
70
38
53
76.7
67.5
34.4
80-901
93.4
90
46.6'

POOD AND AGRICULTURE

As regards butter and the butter exporting countries, it must
be pointed out that not all co-operatively produced butter is cooperatively exported. Where it is, this is sometimes due to the
existence of a co-operative monopoly granted by the State, as in
Latvia (butter, cheese). In Denmark, as the following table shows,
only 50 per cent, of butter exports was handled directly by cooperative organisations; large quantities of co-operatively produced butter were exported through other channels.

TABLE X. CO-OPERATIVE SHARE OF BUTTER OUTPUT AND EXPORT
IN SIXTEEN EUROPEAN COUNTRIES
Country

Austria
Czechoslovakia
Denmark
Estonia
Finland
Germany
Hungary
Ireland
Latvia
Lithuania . . . .
Luxembourg . .
Netherlands . .
Norway
Poland
Sweden
Switzerland . . .

Percentage of
national export

Percentage of
national output

92
9
90
85-90
94
70
42.5'
35
95
85-90
53«
82

40
SO«
100»
88
52
100»
95
100
100
99

93.5
95

1
By 10 co-operative butter export societies, to which 49.5 per cent, of the co-operative dairies
are affiliated ( 1942). * Through State monopoly granted to co-operative organisations. » Of factory
butter production. * Of the total number of milch cows.

TABLE XI.

CO-OPERATIVE SHARE IN CHEESE PRODUCTION AND
EXPORT IN NINE EUROPEAN COUNTRIES
Country

Percentage of
national output

Czechoslovakia
Estonia
Finland
Hungary: cheese
cream cheese
Latvia
Netherlands: cheese

10
70
55.8
40

Poland
Sweden

99.8
73.4»

Percentage of
national export

7
65
58
1001

75.5
58.3

* Through State monopoly granted to a co-operative organisation.
in dairies,

100

Cheese manufactured

CO-OPERATION AND PRESENT-DAY PROBLEMS

Fruits and Vegetables
The organisation of the market in fresh fruits and vegetables,
which play quite an important part in the European dietary, is
chiefly determined by the perishable nature of the produce and
by transport conditions. A large part of the total production is
consumed on the spot by the producers themselves (or their immediate neighbours) or sold nearby in a multitude of small local
markets, or else disposed of directly by the growers in some large
city close to their establishments. Sale in distant markets affects
only a relatively small proportion of the total output and is of
fairly recent origin.
The co-operative marketing of fruits and vegetables, therefore,
is a more complicated and delicate matter than that of cereals
and dairy produce, for instance, and is, for the reasons stated above,
a comparatively late development. As a result, many fruit and
vegetable-marketing co-operatives are not yet federated regionally
or nationally, and there are central organisations for the sale of fruits
or fruits and vegetables in only eight European countries (France,
Greece, Hungary, Italy, the Netherlands, Norway, Sweden,
Turkey). In certain countries, too, co-operatives for marketing
fruits and vegetables are found affiliated to general federations of
agricultural co-operative societies. Owing to this imperfect development of the federal structure, it is difficult and at times impossible
to obtain precise and complete data concerning fruit and vegetable
co-operatives. Subject to this reservation, the information available shows that before the war there were at least 1,300-1,400
specialised fruit and vegetable-marketing co-operatives, spread
over no less than 20 European countries: Bulgaria, Czechoslovakia,
Danzig, Estonia, France, Germany, Great Britain, Greece,
Hungary, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Rumania, Sweden, Switzerland, Turkey, and Yugoslavia.
This figure does not comprise general purchase and sale cooperatives collecting fruits and vegetables on behalf of some specialised central co-operative organisation. Nor, except in a few,
mostly unimportant cases, does it include either the vinegrowers'
co-operative societies or other agricultural co-operatives carrying
out industrial processes (such as oil-pressing societies, potatostarch works, potato distilleries, sugar refineries, etc.). Co-operatives engaged in the production of canned fruits and vegetables
are mostly a wartime development, stimulated by difficulties in
transporting fresh produce.
Some idea of the part played by co-operative organisations in
the marketing of fruits and vegetables may be gained by a brief

FOOD AND AGRICULTURE

consideration of some of the countries where co-operative marketing
of these products has attained a certain importance. Such a survey
will cover fruit-marketing co-operatives (including those for dried
fruits and nuts), vegetable-marketing co-operatives, and those
marketing fruits and vegetables together. For the moment it will
leave out of account the vinegrowers' co-operatives and the industrial processing co-operatives, other than the recent wartime developments referred to above.
In Bulgaria, there has been a considerable wartime development in the export of fruit and vegetables. Owing to transport
difficulties, these perishable products have been largely turned
into preserves: dried fruit and vegetables, jam, and similar products. Co-operative organisations rapidly gained an important
place in the preserves industry, covering 22.3 per cent, of the
production and export in 1939-1941. In 1941, a third of the strawberry-collecting centres belonged to co-operative organisations,
and two co-operative organisations together held first place among
strawberry exporters. Co-operative canning factories cover 37
per cent, of the total production of tomato pulp and jams; 13 out
of 18 undertakings for drying fruit and vegetables belong to cooperative societies. Out of 12 cold storage installations, five, with a
capacity, during 24 hours, of 49 five-ton wagons, and representing
almost 50 per cent, of the total storage capacity, are co-operatively
owned. Before the war there were 23 fruit and vegetable growers'
co-operative societies reported in Czechoslovakia.
In France, a start was made with the establishment of fruit
growers' co-operatives shortly after the war of 1914-1918 and a
more substantial development occurred around 1930-31. But
these co-operatives were unconnected with one another, and it
was not until the creation, in 1933, of the Federation of Fruit and
Vegetable Growers' Co-operative Societies, that they were able
to influence the market.
The statistics available for Germany do not permit the necessary
distinction to be drawn between the marketing and the industrial
processing societies. Before the war, the two groups together comprised some 1,300 co-operatives with an aggregate membership
of 140,000. It included a fairly large number of distilleries and
potato-drying plants. At the end of 1940, the German Union of
Agricultural and Raiffeisen Co-operative Societies had 214 fruit
and vegetable-marketing co-operatives proper affiliated to it.
In Great Britain, in 1942-43, sixteen fruit and vegetable-marketing societies made sales of these products totalling £878,691. In
Greece, all the citrus fruit producers of the island of Crete were
compulsorily members of the Union of Citrus Growers, to which
5

CO-OPERATION AND PRBSENT-DAY PROBLEMS

they delivered their whole crop. The Union thus exercised an
export monopoly.
In Hungary, the network of co-operatives affiliated to Hangya
collects fruits and vegetables in common with other products.
And, as with other products, Hangya set up a central co-operative
for the marketing of fruits and vegetables, which grades and sells
them, and also plays an important part in their exportation.
Italy, a great producer of fruits before the war, was one of
the best organised countries for the marketing of fruits and vegetables, ever since the creation in 1927 of the Department for Collective Marketing of Fruit and Vegetables (Fedexport) of the Federation of Agricultural Co-operative Societies. This Department,
comprising 102 local societies, rapidly extended its field of action
to the whole country; it undertook both collection and marketing,
and did much to develop export business. In 1936 its volume of
trade was 40,000 tons.
In Lithuania, there were 12, and in Luxembourg 44, fruit and
vegetable growers' co-operatives. Norway before the war had 202
co-operatives for the collection of berries, which were then marketed
through a central co-operative organisation. In the Netherlands,
co-operative auctioneering societies (Veilingen) play an important
part in the marketing of fruits and vegetables; as much as 96 per
cent, of the vegetables grown for the market are sold through the
co-operative auctions. 1
In Rumania, the National Co-operative Institute controls jam
factories with an annual production of 500 tons, and also drying
plants for vegetables. In 1942, it was reported to be building two
fruit-refrigerating plants with a capacity of 50 tons each.
Before the war, there were 21 fruit-marketing societies in Sweden,
with 18,000 members; the societies were grouped in a federation.
Switzerland before the war had some 200 fruit and vegetable-marketing co-operatives, with a membership of about 13,750. In addition,
at least five out of the seven regional federations of agricultural
co-operatives were also concerned with the marketing of fruit. One
of them, the Union of East Switzerland Co-operative Agricultural
Societies, which has equipment for storing fresh fruit, for drying
fruit, and for producing apple juice and cider, sold over 2.0002
carloads (of 10 tons each) of potatoes and 1,700 carloads of fruit
in 1941.
Before the war, there were 20 fruit and vegetable growers' cooperative societies in Turkey and at least 40 in Yugoslavia.
The co-operative trade in dried fruit is mostly in Greece and
1
2

There were 180 such co-operative auctions reported in 1942-43.
In 1942, 2,378.

FOOD AND AGRICULTURE

Turkey. In the two main currant-growing regions of Greece, between 40 and 65 per cent, of the growers were co-operatively organised before the war. In Turkey, 25 per cent, of the national output
of figs was handled by co-operative organisations; the Union of
Fig and Raisin Growers of Izmir included over 20,000 growers in
1941. There are also regional marketing co-operative unions of
hazel-nut growers and of pistachio-nut growers. More than 38,750
hazel-nut growers were organised in 15 societies in 1941. At one
time, 15 per cent, of the nut crop was co-operatively handled.
The commodities principally handled by the industrial processing co-operatives are grapes, potatoes, beets, and olives.
The vinegrowers' co-operative societies are chiefly for the manufacture and marketing of wine; a few also engage in the sale of
table grapes. These societies are both more numerous and older
than the fruit-marketing co-operatives proper. Before the war,
there were more than 2,000 of them, spread over at least 11
European countries: Bulgaria, France, Germany, Greece, Hungary,
Italy, Luxembourg, Rumania, Switzerland,Turkey, and Yugoslavia.
France had the largest number of societies, followed by Germany,
Italy, Greece, and Yugoslavia, in that order. The French vinegrowers' societies possessed a storage capacity of 10 million hectolitres, equivalent to 20 per cent, of the average production of France.
In Germany, vinegrowers' co-operative societies1 before the war
accounted for 13 per cent, of the annual production of wine. Cooperative organisations in Bulgaria handled as much as 21.5 per
cent, of the national export of grapes; the central organisation of
the wine and grape growers' co-operatives acts as authorised exporter under the control of the Department of Foreign Trade.
Fifteen per cent, of the Turkish grape crop was marketed by cooperative organisations for some years before the war.
Co-operative grape distilleries have been developed in France
(350) and in Switzerland (about 50).
In a number of countries the growers of potatoes have set up
various co-operative processing plants. Thus there were co-operative potato distilleries in Estonia (80), Germany, Latvia (13), and
also Czechoslovakia, where at one time co-operative distilleries
supplied 22.7 per cent, of the total production of alcohol for agricultural and industrial needs. There were co-operative factories
for the manufacture of potato flour in France, Norway, and the
Netherlands (where at least 80 per cent, of the output was cooperative). In Czechoslovakia, before the war, there were about
30 co-operative societies for the desiccation of chicory.
1

In 1940, 561.
3 0

CO-OPSRATION AND PRBSBNT-DAY PROBLEMS

Co-operative sugar-beet distilleries were set up in several regions
of France, more particularly in the north, where beetroot is an
important rotation crop. Before the war, there were about 60 of
these societies, 45 of which belonged to the Union of Agricultural
Beet Co-operatives. In Bulgaria, the Central Union and Wholesale Society (Napred) participates with other co-operative organisations, including the Co-operative Society of Bulgarian Sugar
Beet Growers, in a large co-operative enterprise for the manufacture of sugar. In Sweden, co-operative associations of beet
growers comprised over 22,000 members and had a trade of
82,400,000 crowns in 1942. In the Netherlands, six co-operative
sugar-beet factories normally used to handle 65 per cent, of the
total output of beet sugar.
Olive oil is manufactured and marketed co-operatively in France
(72 societies with 15,000 members), Greece, Italy (20 societies),
and Spain.
Textiles and Other Products
Co-operative marketing of cereals, livestock, dairy produce,
and fruits and vegetables is of considerable importance, sometimes
exceeding other types, in many European countries. But cooperative marketing has not achieved a role of the same dimensions
in the case of the other products of farming and stock-breeding.
Nevertheless, there are some other products, notably textiles,
tobacco, and honey, which should not go entirely without mention
in this survey. 1
The textile chiefly concerned is, of course, wool; but, in eastern
Europe, flax and, in the Mediterranean, silk are of some importance. In addition, there is some production and co-operative
handling of cotton in Bulgaria and Turkey. In Turkey, for instance,
there were two unions of cotton growers in 1941, comprising seven
societies with 5,666 members in all.
Co-operative marketing of wool has been developed in Bulgaria,
France, Great Britain, and Iceland. In 1940, Bulgaria had 164
wool marketing co-operatives, with an aggregate membership of
nearly 10,000; in the previous year these societies supplied the
textile industry with about one third of its requirements. In France,
wool is co-operatively marketed both by general and by specialised marketing societies. In regard to Great Britain, where large
numbers of sheep are still kept, it may be said that in 1941 English
wool marketing (and a few supply) societies sold wool to the
1
The various types of forestry co-operatives, which play an important part
in Bulgaria, Czechoslovakia, Finland, Rumania, Sweden, and Switzerland,
also perform certain marketing functions (timber for building purposes, wood
for fuel, etc.).

FOOD AND AGRICULTURA

value of £206,000. In Iceland, the Federation of Icelandic Cooperatives normally handles 75-80 per cent, of the country's
export of wool and sheepskins.
Flax used to be co-operatively marketed on a fairly large scale
in Estonia, Latvia, and Poland. Co-operatives also shared in the
flax trade in Czechoslovakia, where co-operative flax mills at one
time accounted for 10 per cent, of the national export of flax, and
in Lithuania, where the co-operative wholesale society Lietükis
in 1938 reported sales of flax amounting to 6,870,000 lits. There
are a number of co-operative linen works in France.
The co-operative marketing of silk is of some importance in
Bulgaria, in France, which possesses a number of sericultural cooperatives, in Italy, where there were about one hundred co-operative establishments for the drying of cocoons before the war, and
in Turkey, where four societies with a membership of 2,169 formed
the Union of Co-operative Cocoon Marketing Societies of Bursa.
Tobacco is co-operatively marketed in Bulgaria, Italy, and
Turkey. At one time nearly a quarter of the national output of
tobacco was handled by the Bulgarian tobacco growers' co-operative societies; these societies now act as agents for the State-controlled Agricultural Co-operative Bank, which enjoys a Government
monopoly for the purchase of tobacco. Italy had 45 co-operative
societies of tobacco growers a few years before the war. In Turkey,
the Hasankeyf Tobacco Marketing Society, with 250 members,
markets a special kind of chewing tobacco mostly used for medicinal
purposes.
Honey is marketed co-operatively to some extent in quite a
number of European countries. In Hungary, for instance, the
beekeepers' co-operative societies used to account for over 60 per
cent, of the total honey exports of the country; in recent years
Hangya has set up, as for other products, its own specialised central
co-operative organisation for the marketing of honey. The Central
Association of Latvian Milk Producers had the exclusive right to
export honey (5,000 kg in 1938). In Lithuania, the Sodyba Union
of Co-operative Societies for Horticulture and Gardening used to
buy honey (as well as fruit and herbs) from its affiliated societies.
There is also some co-operative marketing of honey in Sweden
and in Yugoslavia, where 125 beekeepers' societies were reported
just before the war.
This brief and necessarily incomplete review will perhaps have
served to give some idea of the place of the various European
co-operative marketing organisations in the marketing of the
principal agricultural products. By reason of their number,
their wide distribution, and, often, their high degree of technical
5

COOPERATION AND PRBSBNT-DAY PROBLEMS

development, these organisations (especially when welded into
federations or centrals) are often quite irreplaceable agencies for
the marketing of certain products.
Their role cannot, however, be adequately indicated by purely
numerical data. For they do not just market the products of the
agriculturist or stock-breeder at as fair a price as possible. When
they function successfully, they also serve the community at large,
by introducing order into the market for the products most necessary to life. Their beneficent activities include grading, standardisation, correlation of supply and demand, and so forth. And
apart from their action on the market, these co-operatives exercise
a reflex action on the mode of production itself, through the technical and moral education which they give to the producers who
are their members. They help the agriculturists in their choice
of land and its proper maintenance, in the selection of the best
vegetable or animal species, in suggesting appropriate procedures
for cultivation or harvesting, and in matters of animal care and
nutrition.
The best measure of their irreplaceability is that, despite the
war, they have almost nowhere been dispensed with. The available
reports indicate that they were suppressed in certain parts of
Poland during the German occupation, only to be replaced by
imitations. In certain places their use has been made obligatory,
which is at once a homage to their efficiency and an assault upon
their liberty. Even if not everywhere respected, they have practically everywhere been left in existence. Indeed almost all the data
recently received point t o a growth in the number of such societies
and in their membership.
It is permissible, then, to conclude that as soon as conditions
of production and exchange return to normal, these various cooperative bodies will be able to resume their habitual functions,
not only as a vast mechanism of orderly marketing, but as guides
and regulators of production. This is the role that they filled in
the ten years of agricultural crisis that preceded the war. Their
place in plans of rehabilitation and reconstruction is likely to be
still greater. Lastly, it is to be noted that the agricultural marketing co-operatives, though chiefly concerned with organising the
sale of their members' products, are not and cannot be indifferent
to the final phase of the economic process in which these products
are conveyed to the consumer. Some of them have even assumed
this function themselves and have set up their own organs of distribution, though this is exceptional. But if they wish to ensure this
distribution and to keep an eye on it, the agricultural marketing
co-operatives can utilise the huge network of urban and rural con-

FOOD AND AGRICULTURE

sumers' co-operatives which has been described elsewhere.1 It
may be useful to recall here that the consumers' co-operatives,
besides their apparatus of distribution and transportation, also
possess plants for the processing of agricultural products: flour
and flour products, including alimentary paste products, in Austria,
Belgium, Bulgaria, Czechoslovakia, Denmark, Estonia, Finland,
France, Germany, Great Britain, Lithuania, Norway, Poland,
Sweden, Switzerland; sugar in Bulgaria and Lithuania; jams in
Belgium, Czechoslovakia, Finland, Germany, Great Britain,
Netherlands, Poland; cocoa and chocolate in Belgium, Czechoslovakia, Denmark, France, Germany, Great Britain, Norway, Switzerland ; canned vegetables or fish in Belgium, Bulgaria, Czechoslovakia,
Estonia, Finland, France, Great Britain, Netherlands, Poland;
milk products in Bulgaria, Czechoslovakia, France, Germany,
Great Britain, Netherlands, Yugoslavia; margarine or lard in
Belgium, Denmark, Finland, Great Britain, Norway, Sweden,
Switzerland ; edible oils in Netherlands and Sweden ; soap in Austria,
Belgium, Denmark, Estonia, France, Germany, Great Britain,
Iceland, Lithuania, Poland, Sweden; meat products in Austria,
Czechoslovakia, Germany, Great Britain, Latvia, Lithuania,
Sweden; various spices in Belgium, Czechoslovakia, Denmark,
Finland, Great Britain, Hungary, Switzerland; textiles, cloth and
garments in Belgium, Czechoslovakia, Denmark, Finland, Germany, Great Britain, Netherlands, Sweden; footwear in Belgium,
Denmark, France, Great Britain, Norway, Sweden, Switzerland.
The effectiveness of both agricultural co-operative marketing
organisations and consumers' co-operative organisations as rationalising factors in the economy will be further enhanced in proportion as the two groups are able to increase the number and
strengthen the closeness of the direct economic relations which
they were increasingly tending to develop with one another before
the war.2

Restoration of the Fishing Industry
Brief consideration should also be given to the fishing industry,
first in its immediate bearing on the feeding and rehabilitation of
the countries which have suffered most directly from war devastation and enemy occupation and then under its general aspects,
which are practically universal and, up to the present, permanent
in character. The latter concern almost all countries with a fishing
population.
It is to be feared that in the countries where the pasture land
1

Cf. Co-operative Organisations and Post-War Relief, op. cit., Parts II and III.
Cf. Chapter III: Inter-Co-operative Relations.
5
3 0 *

CO-OPERATION AND PRESBNT-DAY PROBLEMS

and stock have been damaged, the national dietary may be deficient
in meat and other proteins of animal origin for a considerable period.
Fish and other sea, lake and river products can make up for this
inadequacy to some extent. They merit attention more especially
as they represent a net addition to the amount of foodstuffs available, while stock and poultry are in competition for their food with
other animals and men.
For both these reasons it seems desirable that the place held by
fish in the feeding of the countries under review should be rapidly
restored and even enlarged. 1 It appears likely that an effort will
be made in this direction unless the obstacles are found to be insuperable. This probability is confirmed by the fact that the consumption of fish has increased in countries where fishery, though
restricted, has been maintained. In Sweden, for example, the
Stockholm Consumers' Co-operative Society in 1943 bought a fishcanning factory near the city in order to meet the increased demand
of its members for fish products 2 ; it is now distributing fish through
35 special shops and a score of simply equipped kiosks designed to
replace the sales vans used in normal times.
To meet this demand, attention will have to be given in the
period of rehabilitation and reconstruction to the problem of restoring as completely and quickly as possible an industry that is a
source of employment as well as an abundant and immediately
available source of foods with a high nutritive value.
But just as the restoration of agriculture calls for the assembly
and distribution of a large quantity of means of production of
various kinds, so fishermen must have boats, gear, fuel, engines,
bait and also credit if they are to resume and if possible develop
their useful calling.
For fishermen as for agriculturists the question arises whether
it is not possible, and indeed preferable, for supplies of occupational requisites to be distributed by organised bodies capable of
reaching the largest number of persons in an efficient and orderly
way rather than that they should be available only to favoured
individuals.
FISHERMEN'S CO-OPERATIVES: NUMERICAL D A T A

Such organised bodies existed before the war in the shape of
the fishermen's co-operatives and they still exist, though some
have had temporarily to suspend their activities. Actually, in
1
In certain European countries, for example, the annual consumption of
fish2amounted to 40 lbs. and even as much as 60 lbs. per person before the war.
Consumption of fish also increased in Sweden in the latter part of World
War I: in 12 Swedish towns it rose from 71 grams daily in June-July 1917
to 139 grams daily in June-July 1918.

FOOD AND AGRICULTURB

most countries, fishermen were less highly organised than agriculturists. Nevertheless, all the countries of Europe with a sea
coast had fishermen's co-operatives. They were mainly fishery
requirements and credit co-operatives, and, more rarely, marketing
co-operatives; some of them had attained a high degree of development and efficiency. There were also a number of freshwater
fishermen's co-operative societies.
Being less fully organised, fishermen's co-operatives had no
great means of making themselves known through the usual channels of information (reports, periodicals, etc.) and figures relating
to them are therefore incomplete. Nevertheless, it was possible
to list more than 600 societies with a total membership of over
83,000 in Europe (excepting the U.S.S.R.) 1 , in statistics published
in 1939, even though no mention was made of Belgium, France,
Germany and Sweden, all of which have some fishermen's co-operatives.
Before the war there were 36 fishermen's co-operatives in Denmark, with an annual trade oi about 10 million Danish crowns,
and 28 in Estonia. In France, there were well-established fishermen's co-operatives in Brittany, and on the west and south-west
coast. Those on the Atlantic coasts, if not others, were grouped in a
federation. 2 In 1943, Great Britain had 45 local fishermen's cooperatives with a combined membership of 1,500 and sales amounting to £102,000; the societies were affiliated to a national Fisheries'
Organisation Society which seeks to promote co-operation in the
fishing industry. In Greece, there were 37 fishermen's co-operatives
reported in 1936, but only one of these seems to have been of much
commercial importance. In Iceland, societies affiliated to the
Federation of Icelandic Co-operatives operate fishing stations, a
fish-meal factory and a cod-liver oil refinery. Italy, before the war,
had over a hundred societies with a membership of 15,000 fishermen. There were 30 such societies in Latvia, 18 of them for sea
fishermen and 12 for freshwater fishermen. The central organisation, Zvejnieks, to which all primary societies had to belong, supplied
gear and fuel costing 19 per cent, less than those obtainable through
ordinary trade channels, while its marketing operations brought
fishermen higher prices than they could get before. In 1939, the
central organisation was given a monopoly of the wholesale trade
in fish within Riga, the capital. Norway had four fishermen's
co-operative societies in 1940, with a total membership of 21,000
and a trade of 52.5 million Norwegian crowns; membership in1
I.L.O.: Co-operative Societies throughout the World: Numerical Data (Geneva,
1939),
op. cit.
1
There were also some fishermen's co-operatives reported in Algeria and
French Morocco.

CO-OPERATION AND PRESENT-DAY PROBLEMS

creased fivefold since 1937. Spain had an extensive network of
societies known as pósitos marítimos, which enjoyed a large measure
of State support and embraced practically the whole life of the
fishermen and their families (education, old-age and other benefits,
etc., as well as provision of fishing requisites and other economic
functions). In 1934, there were 400 of these fishermen's societies,
with a total membership of 50,000, organised into nine regional
federations which covered the whole Spanish coast and the Balearic and Canary Islands. They owned 116 buildings and operated
53 large fishing craft. Their economic enterprises included co-operative stores, co-operative fish markets and sales organisations, cooperative savings and loan banks and mutual insurance. They also
had 118 schools of their own, where 9,440 children and 4,720 adult
fishermen were taught general subjects, mutuality and co-operation. There is at least one large fishermen's co-operative in Sweden
—the Association of West Coast Fishermen. A few years before the
war Yugoslavia reported 58 fishermen's co-operative associations.
The most important fishermen's co-operatives, however, are
found in the U.S.S.R., where practically all the fishermen—96 per
cent, in 1936—are organised in co-operative societies. At that
time there were 830 local co-operatives for sea fishermen and 810
for freshwater fishermen. The co-operatives for sea fishermen
alone had about 150,000 members. The local societies were the
owners of fishing boats and gear valued a t 70 million and 45 million
roubles respectively in 1935. Part of the fleet was motor-run; the
total strength of the motors amounted to 19,556 hp. in the same
year. In addition, the State in 1936 placed 578 boats with a total
motor power of 15,000 hp. a t the disposal of the co-operatives
through the medium of "machine-stations" (similar to the "tractorstations" of agriculture) 1 , which rent out machines in return for a
cash payment. The co-operative societies make over their catch,
by previous arrangement, to the local organisations of the Commissariat for the Foodstuff Industry. In 1935, the catch of all the
co-operatives together amounted to 8,000,000 tons, or more than
60 per cent, of the country's total production.
The wartime dislocation of European (and Japanese) fisheries
has given added importance to fisheries in the Americas and Asia.
The two leading regions in North America are the North Pacific
coasts of Canada and the United States (including Alaska) and the
North Atlantic coasts of Labrador, Newfoundland, Canada and the
United States. There are also fishing grounds along the coasts of
Mexico and Brazil, and along the coasts of India.
In Canada, there were more than 100 fishermen's co-operative
i Cf. p. 132.

FOOD AND AGRICULTURE

societies reported in 1943-44. No indication is available regarding
their membership or trade, but in 1940-41, the 91 societies then
existing had a total membership of 6,438 and a total volume of
business close to $3,000,000. Since the co-operative shipment of
fish was adopted in Newfoundland in 1938, some 1,200 fishermen
have been organised in marketing societies, which have marketed
lobster to the value of about $350,000 since their inception. In
the United States, according to a survey made in 19361, some 60
co-operative associations, comprising 12,500 fishermen either as
members of the co-operatives or as personnel on members' vessels,
marketed fish with a value of about $9,000,000, representing about
24 per cent, by weight of the fish produced by the fisheries of the
United States.
Fishermen's co-operative societies are also reported in Brazil
(36), Mexico, and, outside America, in India, where 120 societies,
with over 6,000 members, are to be found in Bengal alone.
SOME

PROBLEMS

Fishing populations are generally poor and their co-operative
organisation by itself will rarely be able to solve all the problems
connected with the restoration of fisheries, especially sea fisheries.
Intervention by the public authorities will be indispensable, but
such action will find in the fishermen's co-operatives the requisite
channels and points of application.
The first and financially the biggest problem will often be the
rebuilding of the fishing fleets which have suffered heavy losses in
some countries. In France, for instance, according to a report of
the Minister of National Economy, the steel fishing fleet was reduced from a total of 150,000 tons in September 1939 to only
8,500 tons in August 1944, or 5.7 per cent, of the pre-war tonnage.
In some countries the advances required to build new vessels will
be provided by the maritime credit institution, which is often
organised along the same lines as those for agricultural credit.
But, as in the case of the latter, the advances made can usefully
be sifted and controlled by being passed through the fishermen's
organisations. And if the dilapidated state of the fishing industry
necessitates subsidies (or priorities) for the construction of vessels
and the purchase of gear, these can be allotted to the fishermen's
co-operatives, as has recently been done in Croatia under a plan
for the restoration of fisheries.
But the problem of the fishing industry contains other elements
besides those derived from the war period. It has economic and
social elements that are older and of a more general nature. The
1
By the Fish and Wildlife Service, U.S. Department of the Interior.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

post-war reconstruction programme, extending and consolidating
rehabilitation measures, can be the occasion for providing a lasting
solution to this problem. Such a solution is probably not possible
without the intervention of the public authorities, but equally
requires the organised action of the parties concerned, so that the
two spheres of endeavour may support and complete each other.
The fishermen's fundamental problem at many points resembles
that of the agriculturists in its economic and social aspects; in
certain respects it is more serious and is perhaps less generally
known. Its degree of complexity and acuteness varies from country
to country. But it is essentially the problem of the so-called independent producer's relations with the market—the money
market, the market for occupational requisites, the consumer goods
market, the market for the sale of the product of his labour. The
fisherman is only really independent if he controls his relations
with the market and, if he is not really independent, his position
is generally less enviable than that of wage-earning workers with
equal professional qualifications. Actually his whole economic
situation and, in varying degree, his personal status depend on
the intermediary organs commanding the approaches to the market.
The less he has direct relations with the market, the more complete is his dependence. In extreme and by no means exceptional
cases, one and the same intermediate body (generally a powerful
company) occupies a central position through which the fishermen
have to pass in order to obtain, usually on credit, their fishery
requirements and household goods, and, at the same time, to get
the remuneration for their toil and risk. Such a situation easily
degenerates into a truck system that imprisons the weaker partner
in a complicated network of indebtedness, obligations, and, eventually, economic exploitation. In many countries the fisherman has
partially freed himself, through co-operative action, from the toll
levied on his way to credit, fishery requirements and consumer
goods. It is harder for him to retain or regain mastery of the crowning act which must recompense all his efforts—the marketing of
his catch. Sea products are even more perishable, often incomparably more perishable, than the products of the soil. Even more
than a bumper crop a heavy catch can be a calamity for the producer. Neither fresh fish nor shellfish lend themselves to orderly
marketing which exactly relates supply to real demand. Lacking
their own preserving facilities, the fishermen are a t the mercy, on
the sales market, of the companies with canning plants or, at the
least, and in the majority of cases, of transport concerns. The
situation is aggravated by the fact that the special means of transport and the preserving facilities are often in the same hands.

FOOD AND AGRICULTURE

Unless this problem of transport and preservation can be overcome,
it is generally recognised that the fishermen's social problem cannot
be solved and that as a consequence the fishing industry itself is
in serious jeopardy.
The fishermen can hardly solve this problem on their own.
Though they have been able, to a certain extent, to organise for
their short and medium-term credit needs, for their fishery requisites, and, sometimes, for the provision of consumer goods, they
do not normally have the necessary financial means for the purchase o r construction of canning factories or even, in most cases,
of trucks or wagons specially equipped for the transportation of
their catch. They therefore have to receive external aid. In Belgium, for some years shortly after the last war, the fishermen of
the Ostend coast succeeded, with the help of the trade unions, in
setting up a large organisation known as the Armements ostendais,
with three subsidiary societies: one {La Marée) for the sale of fish,
another (Pescator) for the utilisation of by-products, and the third
for preservation (Frigorifiques du littoral). The fishermen's cooperatives could advantageously establish firm relations with the
consumers' co-operative wholesale societies, since the latter generally have large financial means at their disposal and their huge
distributive network would become available as a market for the
co-operative catch. It may be noted here that some of the European
co-operative wholesales have fish-preserving plants (salt or oil) ;
the English, Estonian, French and Scottish co-operative wholesale
societies even have establishments of this kind on the seacoast,
and the Swedish Co-operative Wholesale Society, during the war,
set up the first fish-oil factory in Sweden. The Swedish co-operative
movement has approached the problem of marketing fish along
the lines suggested above, by the creation, in 1939, of the Cooperative Fish Marketing Society (Svensk Andelsfisk), which is
jointly financed and managed by the Swedish Co-operative Wholesale Society and the Association of West Coast Fishermen. More
recently, the Scottish Co-operative Wholesale Society has extended
its aid to a population that includes fishermen; it decided to take
a half share in the financing and management of a co-operative in
the Island of Skye and undertook to absorb or dispose of the goods
produced by members of the society, including fishery products.
Elsewhere aid is given by the State, as for instance in Latvia,
where the fishermen's co-operatives transported their fish in trucks
belonging to the State. 1 Sometimes State intervention and its
1
As before the war, the fishermen in Latvia are grouped in co-operatives
which appear to comprise more than 2,000 members at the present time. Plans
provide for the rebuilding of the equipment of these co-operatives through the
State network of "motor and equipment stations for the fishing industry .

CO-OPERATION AND PRESENT-DAY PROBLEMS

dovetailing with co-operative action assume more complex forms,
as was the case with the Spanish pósitos already mentioned. The
following example, drawn from the Canadian Province of Quebec,
is recent and covers every aspect of the fishermen's economic and
social problem; it shows very clearly how, by judicious division of
tasks, State and co-operative action can be co-ordinated. '
An

Experiment

For a number of reasons the years 1931-1937 were the darkest
period in the history of the fisheries of Quebec. The fishermen,
who were without resources, unorganised, and dominated by powerful companies, got excessively low prices for their fish (one fifth
and, in certain cases, one tenth of the price paid by consumers)
or else lived by running into debt and depending on an unemployment benefit which, though small, brought more to the home than
the proceeds of fishing. In the course of a few years the situation
was entirely changed. In 1938, the creation of a Superior School
of Fisheries gave the industry an instrument of technical research
(in collaboration with experimental stations established on the
coast) - and also a training centre for the corps of engineers, inspectors and master-fishermen required. In addition, the School
itself, some months after its establishment, set up an extension
department which initiated a successful programme of adult education through lectures, meetings, fêtes, radio broadcasting, pamphlets, and, especially, study circles, and sponsored the establishment of co-operatives among fishermen. Adult education among
fishermen receives a subsidy from the federal Government ($12,000)
and the provincial Government ($15,000). Short and mediumterm credit needs were met by a large increase in the number of
credit unions. In the Gaspé peninsula, the region principally concerned, their number rose from 19 on 31 May 1937 to 40 on
30 April 1944, and their membership grew from 3,184 to 8,188.
A dozen consumers' co-operatives were established to supply household goods and some occupational requisites. Finally, fishermen's
co-operatives proper were set up. Their principal function is to
prepare, grade and pack fish, but they also generally supply fishery
requirements. By 1943-44 there were already 23 such co-operatives
with a membership of 2,388, compared with eight co-operatives
and 1,503 members in 1939. Since the latter year the fishermen's
co-operatives have been grouped in a federation known as the
United Fishermen of Quebec, which is an industrial organisation,
an organ of technical, economic and co-operative education and
also the central economic organisation of the fishermen's co-opera-

FOOD AND AGRICULTURE

tives. In 1942, this federation opened a wholesale and retail sales
agency in Montreal, obtaining the capital required from the Federation of Credit Unions, with a provincial Government guarantee.
The establishment of agencies in other towns is contemplated.
As a result of this technical and co-operative effort, the conditions of production have been radically altered to meet the needs
of consumers. Up to 1932 only 3 per cent, of the production was
marketed fresh or frozen, while 80 per cent, was salted or dried.
Consumer demand for fresh fish steadily rose. In 1942, 52 per cent.
of the production was absorbed by the fresh fish trade and the
percentage had risen to about 69 in the financial year 1943-44.
But the programme of research and technical training and of cooperative education and organisation would not have been sufficient
of itself to put things right. The transport problem, and, most of
all, the preservation problem had to be solved. As its contribution
the State subsidises transportation by truck in areas without
railway service. But its chief intervention has undoubtedly been its
construction of 37 refrigeration plants all along the coast. 1 Two
engineers, paid for by the Government, are stationed a t each of
these—one for day and one for night duty. The plant facilities
are for the use of the neighbouring communities and, more particularly, of the fishermen's co-operatives. The co-operatives pay
a fee of 25 cents for each 100 lbs. of fish refrigerated 2 , and a rental
of 15 cents per 100 lbs. a month for fish kept in storage. The refrigerating plants generally also include a large chamber or individual lockers for the use of local agriculturists.
The experiment has been a great success and, allowing for its
brevity, is quite conclusive. There are special features to it connected with local circumstances and, in particular, with the nature
of the fish handled; cod accounted for more than 85 per cent, of
the total catch in 1943-44. But it also has a general value as far
as its principle and results are concerned. It illustrates the necessity
of attacking all elements of the problem at once and makes it
possible to discern which among those elements lend themselves
to co-operative action and which require external assistance, that,
for instance, of the State. In its general form the solution reached
is adaptable to other local circumstances.

1
Construction costs ranged from $8,000 for the smallest unit to $100,000 for
the J largest.
75 cents for the refrigeration of superior varieties of fish (salmon, smelt,
halibut) and of lobsters.

CHAPTER II
TRANSPORT, POWER AND HOUSING
A number of factors will combine to make the problems of
supplying fuel (coal, petroleum products, peat, wood), transport
and power of tremendous urgency and importance in the immediate
post-war period. These include the enormous destruction and disorganisation of the means of communication, the need for restarting production of the most immediately essential articles of daily
life, even by improvised means, and the fact that recourse will
probably be had, temporarily and in some cases perhaps permanently, to forms of decentralised industry. From this standpoint, it
can truly be said that "if European rehabilitation could be summed up in one word, that word would be fuel".1
Ingeneral, co-operative organisation can make a much less important contribution to the solution of these problems than it can
to those of providing credit and the means of agricultural production, of marketing farm produce and distributing foodstuffs, and
of building dwellings. T h e contribution varies, moreover, even
within the problems considered, depending on whether coal, petroleum products, means of transport or motive power are in
question. Nevertheless, in certain fields it is already of importance,
while in others it is potentially by no means negligible.

Fuel
As regards solid fuels, it can first of all be said that the most
developed co-operative organisations—urban and rural alike—
occupied a considerable place in the distribution of coal ; in the case
of Great Britain and Switzerland they handled as much as 20 per
cent, of the total trade. In the Netherlands, more than 1,500 cooperative societies included the supply of coal among their activities.
In Denmark, there are even two central organisations specialising
in the purchase of coal, and one of these comprises more than 1,000
co-operative societies to which it supplies more than 250,000 tons
of coal a year. Under a different form of organisation, the British
1
Hiram MOTHBRWBLL: "Three R's of Post-War Europe", in Harper's Magazine, Dec. 1943.

TRANSPORT, POWBR AND HOUSING

consumers' co-operatives dealing in coal are grouped in a special
Co-operative Coal Trade Association; in 1941, there were 767
societies affiliated to it, with acombined membership of 7,661,115,
and a coal distribution amounting to 6,765,949 tons. 1 Co-operative
organisations have only rarely engaged in the raising of coal. Since
1916, however, the English Co-operative Wholesale Society has
owned and developed a coal mine at Shilbottle, Northumberland,
which in 1942 provided work for 721 employees 2 ; it also possesses
two workshops for the repair of railway coal wagons. A few coalmining workers' productive co-operative societies were to be found
in Hungary and Rumania. As to secondary fuels, mention may
usefully be made of the peat co-operatives which developed in a
number of countries, such as Germany, the Baltic States, Finland,
Ireland, Sweden, and the U.S.S.R. In Estonia, for instance, there
were 906 such societies, with 2,862 members, in 1937; in Sweden,
83 in 1936. Irish rural supply co-operatives in 1941 bought turf
(and timber) for fuel, owing to wartime coal shortages, and quite
a number secured bogs and engaged extensively in turf production;
peat co-operatives in the U.S.S.R. produced one million tons of
peat in 1943.
Something should also be said here of the considerable part
played by forestry co-operatives in the working of European forests,
as regards the production both of firewood and of timber for building purposes. These co-operatives were found principally in the
following countries (arranged in order of membership strength in
1937): U.S.S.R., 370,000 members; Rumania, 25,062; Bulgaria,
21,576; Sweden, 19,300; Switzerland; Finland; and Czechoslovakia.
There is little recent information on these co-operatives, but what
there is suggests that wartime necessities have given an additional
impetus to their development (beyond normal growth), and these
or similar necessities are likely to continue in the immediate postwar period. In Sweden, for instance, the societies affiliated to the
Union of Co-operative Forestry Societies had a membership of
21,800 in 1938 (an increase of more than 10 per cent, over the
previous year's figure), and at that date the members already
owned altogether 1,941,300 hectares of forest, or 20 per cent, of the
national forest stand. Four years later, in 1942, the number of
members had more than doubled—to 53,000. Between 1940 and
1942, the trade of the Federation increased from 44 million to
1
In 1943, consumers' co-operative societies in the United Kingdom supplied
2 } ^ million houses and other premises registered with them under wartime rationing provisions with more than SJ^ million tons of coal.
1
A similar enterprise has also recently been developed in the United States,
where the Indiana F a r m Bureau Federation has acquired an interest in a bituminous coal mine, with an option to purchase the whole business after three years.

CO-OPERATION AND PRESENT-DAY PROBLEMS

109 million Swedish crowns. This extraordinary growth is ascribed
to the fuel crisis in Sweden and to the Federation's activity in the
collection and distribution of firewood; in 1942, it marketed 70
per cent. (11 million cubic metres) of the 16 million cubic metres
of firewood used for private consumption. Co-operatives in the
U.S.S.R. produced 4 million cubic metres of wood in 1943.
In regard to emergency measures and substitutes, which will
probably continue to be necessary for some time after the close of
hostilities, reference may be made to the initiative taken by the
Swedish Co-operative Union (K.F.), which decided, as soon as
war broke out, to build a factory for the production of charcoal
for gas producers, in order to overcome the shortage of petrol
(gasoline) for motor vehicles. In 1942, this factory delivered 197,000
hectolitres of charcoal for gas generators, 902,000 kilograms of
wood tar, and 140,000 hectolitres of wood alcohol.
European co-operatives enter the market for petroleum products
to satisfy either their own operational needs or else their own and
their members' needs, when the latter (agriculturists, owners of
motor vehicles, etc.) are purchasers of fuel oils and lubricants.
Though there are not the complete and accurate data for estimating
what these needs may amount to in the near future, it is known
that already in 1938 the co-operatives of the United Kingdom,
Sweden, Denmark and Norway alone had an annual consumption
of some 62 million gallons of petrol. This estimate—incomplete,
inasmuch as it covers only four countries—and the likelihood of
increased use of the petrol engine in both transport and agriculture
together warrant the assumption that there will be a considerable
demand for fuel oils and lubricants by co-operative organisations
of all categories in all European countries.
If this is so, there will probably be an effort to organise this
demand, and, in particular, to satisfy it from a co-operative source,
in accordance with the tendency already noted. 1 This source exists
in the shape of co-operative petroleum supply associations in the
United States and Canada. Since 1935, and particularly since
1937, one such association, the Consumers' Co-operative Association
of Kansas City (C.C.A.), was making shipments of petroleum
products to co-operatives in England, Scotland, France, Estonia,
Belgium, the Netherlands, Bulgaria (and Canada). 2 The patronage
refunds due on these deliveries were converted into shares, so that
co-operative wholesale societies in some of these countries are now
1
2

Cf. Co-operative Organisations and Post-War Relief, op. cit., p. 12.
In addition, shortly before the war, co-operatives in Australia and Ireland
showed
their interest by enquiring about the prices and conditions of delivery
f
or C.C.A.'s petroleum products.

TRANSPORT, POWER AND HOUSING

even members of the American co-operative organisation which
supplied them.
These shipments to European co-operatives were not very large
and they were interrupted by the war. But they were a beginning
and are an indication of possible developments in the future. The
rural purchasing co-operative associations in the United States
were still young at this time—Consumers' Co-operative Association
was only eight years old—their purchasing power was just starting
to develop, and they owned no oil wells, no pipeline and no refinery.
During recent years the situation has considerably altered. According to an estimate made by the Farm Credit Administration of the
United States Department of Agriculture, these co-operatives
distributed 650 million gallons of fuel oil to farmers in 1942, or 22
per cent, of farmers' total requirements in that year. In 1944,
they owned nine gasoline (petrol) refineries, one lubricating oil
refinery, more than 360 producing oil wells and more than 1,000
miles of pipeline. An additional gasoline refinery of considerable
importance is owned by Canadian co-operatives.
Probable increased and organised demand for petroleum products by European co-operatives 1 , and, at the supply end, the
position gained by co-operative organisations in the United States
and Canada in the production and refining, as well as in the sale
of these products, are the underlying factors in plans now being
studied for the correlation of European co-operative demand and
co-operative supply from the North American continent.
Certain instruments of international co-operative trade and even
of international co-operative production have already been elaborated. There are the Scandinavian Co-operative Wholesale Society
(Nordisk Andelsforbund), which dates from 1918, the International
Co-operative Wholesale Society, effectively established in 1929,
the International Co-operative Agricultural Purchasing Society
(Intercoop) of the same year, the International Co-operative Electric
Bulb Factory (1931), and the International Co-operative Trading
Agency (1937). These instruments have not yet all taken final
shape or attained full efficacity. Nevertheless, their existence, and,
in the case of some, their experience, pave the way for fresh developments. According to plans recently published, a place for international co-operative trade in petroleum products is envisaged
among such developments in the future. The Committee on International Co-operative Reconstruction (established by the Cooperative League of the U.S.A. in 1942) has drawn up plans which
1
The large Swedish co-operative organisations most concerned with the distribution of petroleum products have just set up (1945) a National Federation
of Petrol Consumers (Sveriges Oljekonsumenters Riksförbund).

3 1

CO-OPERATION AND PRESENT-DAY PROBLEMS

define the structure and scope of an international trading and
manufacturing association, which would be established either
through amalgamation or federation of existing international cooperative agencies or else in collaboration with them.
The plan, which in principle covers every continent and a
large variety of commodities, would be carried out by stages. The
stage regarded as most urgent and, in some respects, most important, is that concerned with petroleum products. It provides for
the establishment of a fund of from 6 to 12 million dollars for the
setting up of enterprises (wells, pipelines, refineries) capable of
handling from 10,000 to 15,000 barrels of crude oil daily. Two
thirds of the necessary financial resources would be furnished by
contributions from the principal co-operative organisations of
Europe and North America, and the remainder by means of a loan.
It is impossible a t this juncture to say if the plan will be carried into
effect, and, still less, what form it will take. Yet it merits attention, first of all for its boldness, and also on account of the interest
which it aroused both a t the Conference on Co-operative Reconstruction at Washington in January 1944, and among European
co-operative organisations informed of it.

Transport
In most European countries the joint transport of passengers
or freight is generally regarded as a public service, whether this is
directly administered by the public authorities or merely operates
under the control of and upon conditions agreed with the latter.
The contribution t h a t co-operative action can make to the solution
of the transport problem in the rehabilitation period must not,
therefore, be exaggerated. There are, however, instances of cooperative action in the transport field, which, though not directly
connected with post-war problems, are suggestive in this regard.
From time to time co-operative institutions have had to
undertake the organisation of public services, as their principal or
else as their subsidiary purpose. This has been the case, for example, in isolated areas or in large territories with a scattered population, and, speaking more generally, in places where the costs of
establishing and maintaining the service seem disproportionate to
the probable number of its users, e.g., co-operative post-offices in
India; credit co-operatives laying on water and electricity supply
in rural districts of Bulgaria; water supply co-operatives in Germany and Switzerland; rural telephone co-operatives in Finland,
Canada and the United States; and a co-operative forest fire insurance association in Norway which maintains its own fire pre-

TRANSPORT, POWBR AND HOUSING

vention posts to help prevent the spread of fires and so contributes
to the protection of the common national heritage.
Similarly, there are co-operatives that undertake the building
and maintenance of parish or other rural roads and of the bridges
on them: in some cases these are special co-operatives for the purpose, in others they are societies with a different original and chief
function (often rural credit co-operatives). Finally, there are instances of bus and lorry (truck) and of ferry and boat transport
services organised on a co-operative basis. Sometimes these enterprises are in the nature of consumers' co-operatives, in which case
the members of the association will be those who require to travel
or to move their goods, and sometimes they are workers' productive
or labour-contracting co-operatives set up and operated by workers
who find in them a means of livelihood. They can also combine
the characteristics of both the consumer and the producer types
in varying degree. Co-operatives of the consumer type generally
meet local needs not otherwise satisfied, while those of the second
type can grow to large dimensions and operate over long distances.
Interesting examples of transport co-operatives of the consumer
type are found in Canada: in British Columbia, there are seven
transport co-operatives with a total of 1,835 members and owning
83 vehicles of various sizes, which take their members, who are
employed in mines and smelters, to and from their work; in Quebec,
the inhabitants of the Magdalen Islands in the Gulf of the St.
Lawrence have recently established a sea-air transport co-operative
to connect them with the mainland. In Finland, where means of
communication are difficult, bus and ferry services have been
organised on a co-operative basis.
Along with transport co-operatives of this type, mention m a y b e
made here of a class of enterprises half-way between co-operative
and public action, which may be termed "public co-operatives". 1
These co-operatives have an affinity with co-operative action, in
that they are managed by their users (direct or indirect) in association and by them alone, that the number of the members of the
society is not limited in advance, and that eventual surpluses return
in one form or another to their users. They are related to public
action by the facts that membership in the association is confined
to bodies corporate and that the creation of such enterprises depends, at least in part, on a decision of the public authorities. In
the transport field, this formula has produced successful results
which have not perhaps received the attention they deserve.
1
In French "régies coopératives". Cf. Bernard LAVBRGNB: L'ordre coopératif (1926) and Les régies coopératives (1927). See also Les régies coopératives et
leur aptitude à résoudre la question sociale (Co-operative Union and Wholesale
Co-operative Society of Switzerland (U.S.C.), Basle, 1940).
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

Examples of this type of enterprise are the Interdepartmental
Transport Syndicate in the French Jura, and the National Society
of Local Railways in Belgium, which, founded in 1884, operated
some 2,500 miles of railroad before the war.
I n a rather wider field, mention may be made of the co-operative
society of municipalities recently established in the Department
of Antioquia, Colombia. More than 60 out of the 90 municipalities
in the Department belong to this society, which in 1943 built 13
aqueducts, 15 electric power houses, 27 schools, 3 abattoirs and 2
telephone exchanges throughout the wide area of its activities,
as well as undertaking numerous repairs to existing buildings. 1
Transport co-operatives of the workers' productive or labourcontracting type have developed chiefly in Italy, Mexico and Palestine, and there were some ten of them in Hungary before the war.
The Italian transport co-operatives numbered 380, with 20,000
members, in 1937, most of them affiliated to the central co-operative
federation of the country. They included a railway co-operative
owning a short stretch of railway, a navigation co-operative owning
boats and barges, a boat-building co-operative, as well as co-operatives providing taxi and lorry (truck) transport service. In Mexico,
according to statistics prepared by the Department of Co-operatives
of the Ministry of National Economy, there are 265 transport cooperatives (with a total membership of 9,730), and 170 of these
are affiliated to one or other of the 17 statutory federations of
transport societies. Most of the societies operate road freight or
passenger transport services, while a few run small-gauge railways
or river or sea shipping enterprises. The majority are quite small,
with from 10 to 50 members, but there are 12 with 100 or more
members, and one, engaged in river transport, has over 900. The
bus services in the Federal District are co-operatively controlled.
Transport co-operatives are also an important element among
workers' productive and service co-operatives in Palestine. Of the
23 societies reported, 14 are for carriage of freight and 9 (with some
2,000 member-employees) carry probably the greater part of the
country's urban and inter-urban passenger transport. The passenger
societies have a capital of £ P 600,000 and an annual turnover of
£ P 1,500,000. A central purchasing agency has been established
for the supply of spare parts, accessories and other requisites to all
these societies. Under the impetus of war needs the Hamgapor cooperative in Haifa has retreaded 20,000 tires and has become the
chief rubber manufacturer in the country. 2 All these organisations
1
The society's programme of works for 1944 included the erection of 44
aqueducts, 18 power stations, 5 hospitals and other important structures.
* The Co-operative Union and Wholesale Society of Sweden (K.F.) also
manufactures tires for motor vehicles (and bicycles).

TRANSPORT, POWER AND HOUSING

have been able to make an appreciable contribution to the war
effort and have been awarded contracts to the value of £ P 750,000
by the military authorities, for the carriage of goods and passengers.
Their central purchasing organisation has collaborated with the
Government in the collection of tires and spare parts. After the
war they will probably be able to continue providing services which,
at the time that they were established, had no attraction for profit
enterprises.
These few examples serve chiefly as a reminder of the fact that
co-operation springs from necessity and the maxim of "self-help".
They are purposely drawn mostly from experiments made in
isolated areas or new territories, since in transportation, public
service, and some other fields such regions are in much the same
situation as the war-devastated areas. During the immediate postwar period, so many and great will be the needs in some countries
that the public authorities cannot reasonably be expected to satisfy
them completely and a t once (and profit enterprises may find that
their satisfaction is not a paying proposition). Sometimes the
needs will be so pressing that they must be satisfied by resourceful
improvisation of a temporary nature, and co-operative action is
essentially organised collective self-help.
Such collective action in transport matters can be either encouraged or discouraged, depending on the nature of the regulations made in this field, or simply on the operation of priorities for
materials, vehicles, fuel, and so on. While co-operatives do not as
a rule ask for special privileges, nevertheless, the allocation of
priorities involves the exercise of judgment and gives advantages
which are bound to be discriminatory. So the question will arise,
when transport co-operatives are set up, whether (as was suggested
in the case of agricultural machine co-operatives) 1 the public interest does not require that they should receive a preference as
representing a form of democratic economy that aims neither at
profit nor at power.

Electric Power
Like transport, the distribution of electric power is normally
regarded as a public service, and in densely populated areas, such
as large urban and industrial centres, is generally effected by public
authorities (State, municipalities, etc.) or by big companies, which
are very often operating concessions, with their rights and duties
carefully defined by the granters.
However, its public service character is sometimes expressed
i Cf. p. 13.
5
3 1

CO-OPERATION AND PRESENT-DAY PROBLEMS

by the adoption of the co-operative form of distributive enterprise.
The classical example of this is found in Argentina, where in 1944
there were 61 electricity co-operatives of an urban type, with a
combined membership of 72,566, and a productive capacity of
22,520,762 kilowatts. A notable feature of these Argentine cooperatives is that municipalities are sometimes members of them as
well as individuals. In 1937, there were some 300 urban electricity
co-operatives, with a membership of 85,000, in Switzerland. By
1940, the number of societies, most of which were fairly small
enterprises, had fallen to 287. Mention may also be made of a
plan under consideration shortly before the war for the co-operative
supply of electricity to the town of Charleville in France.
In rural areas the problem has special features. The construction of a network of power lines to serve relatively few consumers
is an undertaking which either does not pay at all or can only be
made to pay with difficulty. Such an enterprise, therefore, discourages private capital in search of a return on its investment,
while it is likely to place too heavy a burden on the finances of the
public authorities who might otherwise undertake it. It is interesting to note that it is mostly since the war of 1914-1918 that the
problem of rural electrification has been seriously tackled in Europe. As an indication of the progress made it may be mentioned
that in Germany 80 per cent, and in Sweden 65 per cent, of rural
undertakings had electric current in 1937; in France, 80 per cent.
of the rural population were similarly served.
Rural electricity co-operatives have developed in a number of
European countries. The following table shows their number and
(where possible) their membership in eight countries shortly before
the war:
Country

Czechoslovakia
Denmark
Finland
France
Germany
Italy
Spain
Sweden
Total

No. of societies

2,122
283
183
47
4,808
197
6
1,887
9,533

Membership

91,561'
—
11,400
447,267
415,847
107,000
10,688
—
1,083,763

•Of 1,512 societies only.

In some countries the electricity co-operatives accounted for an
appreciable part of the national distribution of power. In Denmark,
for instance, these co-operatives sold 100,000,000 kilowatt hours
annually, 20-25 per cent, of the total power sales of the country.
Co-operatives constituted about one third of the total number of

TRANSPORT, POWER AND HOUSING

organisations supplying power in Germany in 1935. The data
available for Italy show that the electricity co-operatives in that
country did an annual business of some 200 million lire before the
war. In Sweden, approximately one half of rural electrical distributive facilities were co-operative. Apart from the countries
mentioned in the table, reference may be made to Hungary, where
some 2 per cent, of the rural population received its electricity
supplies from co-operative sources, and also to Austria, Bulgaria,
Estonia, Latvia, Poland and Yugoslavia, in all of which countries
there were a few electricity co-operatives.
Outside Europe the greatest development of rural electricity
co-operatives has taken place in the United States; since 1936,
when Congress passed the Rural Electrification Act which established the Rural Electrification Administration (R.E.A.) on a
permanent basis, the number of rural electricity co-operatives has
grown from 50 to 850 associations, with 1,210,000 persons participating. Between the end of 1934 and the close of June 1941, the
national percentage of farms with central station electric service
rose from 10.9 to 34.9 (2,126,150 farms).
Rural electricity co-operatives are of various types. The rarest
are those which produce as well as distribute electric current: one
such co-operative, in Czechoslovakia, had one of the biggest electricity works in Central Europe. However, societies of this type
tend to disappear as rural electrification proceeds in a systematic
way. At the other extreme are societies which merely distribute
current bought from the manufacturer of power. In between the
two types are those in which the co-operatives participate in some
degree in the financing and working of the public utility or other
undertaking which produces electric current. The majority of the
electricity co-operatives in Czechoslovakia were of this type.
Except in the limited number of cases where the co-operatives
produce their own current, relations with other bodies, whether
private or governmental, are involved. Thus, in the case of the
Czechoslovak societies of the last-mentioned type, the co-operatives
are connected with undertakings which are a sort of public cooperative service administered jointly by the central Government
and the provinces, local authorities and the local co-operative
societies directly interested. The financing of the construction of
each electrified sector had to be undertaken largely by the users
themselves, i.e., as a rule, by their co-operative associations and by
public bodies. The individual consumers of current joined together
in co-operative societies with the object of raising the necessary
money, which was then converted into shares in the public utility
undertaking, in the technical and financial administration of which
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

they participated. As regards the relations with other bodies of
societies which only distribute current, a good example is provided
by the Swedish societies which conclude individual contracts with
the public water-power authorities, construct the overhead lines,
purchase transformers and connect their members' farms or other
premises with the supply. Maintenance and supervision of the
lines and repair of consumers' apparatus are the responsibility of
the employees of the societies, though they are assisted by advice
given by the water-power authorities. Sometimes the share capital
subscribed by the members of the societies is supplemented by
loans (which the members guarantee) obtained from special
Government funds or contracted with banks.
In the United States, the Rural Electrification Administration
has authority to make loans to public bodies and agencies, to
private utility corporations, and to non-profit co-operative associations of rural consumers, for the purpose of financing the construction and operation of generating plants, electric transmission and
distribution lines. By the end of 1941, the R.E.A. had made allotments aggregating more than $4,250,000 to 869 borrowers,
783 of whom were co-operative enterprises. Co-operative associations financed by the R.E.A. reported an operating revenue of
$33,400,701 for the year ending 31 December 1941, and by that
date 329,544 miles of line had been put into operation, serving
850,458 consumers. The success of the R.E.A. programme has
thus been based on effective collaboration between the public
authorities and associations created by farmers in order to provide
themselves with electric power.
The pattern found in rural electrification is thus similar to that
in long-term credit, housing, fish refrigeration and other fields
where provision for a temporarily or permanently poor population
involves the investment of large sums of capital. There is a dearth
of ordinary commercial enterprises able or willing to fill the need,
while the persons most directly affected are powerless to act by
themselves. The public authorities then step in to aid the latter
to help themselves, which they do by helping each other through
co-operative association. This pattern of events is so well established
that it is safe to predict that it will recur in the post-war period.
For the problem of rural electrification will be more urgent than
ever before. Not only will destroyed networks have to be restored,
but projects interrupted by the war will have to be completed in
order to satisfy the urgent need for improved agricultural technique
and better standards of rural life. Post-war circumstances, such as
the necessity of utilising local raw materials and labour, may
necessitate measures of industrial decentralisation. Such a de-

TRANSPORT, POWER AND HOUSING

centralisation, which has been made possible by the electric motor,
would be a further justification and occasion for a programme of
rural electrification.

The Housing Problem
The housing problem holds a large place in most of the plans
for the post-war period, and for evident reasons. First, there
is the legacy from the past ; for despite the progress made in certain
countries during the last twenty years, the problem of providing
homes for families of the low and middle-income groups was nowhere entirely solved. A second factor is the stoppage or slowing
down of building activity during the present war. Though the
countries principally affected have been the belligerents (building
activity in Belgium decreased by 89 per cent, in 1939-40)1, yet other
countries have not escaped. Switzerland, for instance, experienced
a 47 per cent, drop 2 , while figures for Argentina show an annual
decrease of 250 million pesos in the amount spent on building. 3
Finally, in a large number of countries there has been widespread
destruction of homes: in Belgium alone, according to figures published in March 1943 (during the German occupation) by the Commissariat for Reconstruction in Brussels, more than 200,000 dwellings were destroyed or damaged during eighteen days of active
fighting and two years under war conditions (up to 30 June 1942).4
In its nature, then, the problem is not new, since it is in part a
chronic problem, and in part the same as that after the First World
War. It is new only in its dimensions: in Great Britain, the Minister
of Health has stated that from 3 to 4 million new houses will have
to be built after the war, and that it is planned t o build 300,000
houses in the first two years after the end of hostilities. 5 In the
United States, it has been unofficially estimated that the nation will
require to build one million dwellings annually over a period of ten
years or more, in addition to the repair and modernisation of 32
million existing ones. 6
The problem obviously varies a good deal in some of its details
from one country to another, owing to differences of climate, re1
2

B A N Q U E N A T I O N A L E DE LA B E L G I Q U E : Bulletin d'information,
M a r . 1940.
SCHWEIZERISCHE NATIONALBANK: Monatsbericht, M a r . 1940.

Estimate of the Argentine Industrial Federation, cited in C.G.T. (Buenos
Aires), 19 June 1942.
4
Cf. International Labour Review, Vol. X L V I I I , No. 4, Oct. 1943, p . 490.
6
Parliamentary Debates, House of Commons, 15 Mar. 1944, col. 271 (cf. Marian
BOWLEY: "Housing Problems in Great Britain", in International Labour Review,
Vol. L, No. 5, Nov. 1944, p . 60S).
8
Statement a t a National Conference on Post-War Housing, held in Chicago
(New York Times, 11 Mar. 1944).
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

sources, customs, standards of living, and so forth. It is not proposed here to study the problem in all its diversity or to attempt
any exhaustive analysis. Beyond calling attention to the fact that
the circumstances of war have made it much more acute and urgent in some countries than in others, it suffices to single out some
of the characteristics of the problem that are common to all the
various countries, and particularly those features which more closely
concern the role of co-operative organisations in the search for a
remedy.
NECESSITY FOR COLLECTIVE ACTION

At least two characteristics require special stress. One of them—
the problem's vast extent—has already been noted. The dimension
of the problem is indeed such as to constitute no mere external aspect, b u t a fundamental element of which account has to be taken
in the quest for any solutions. The other main characteristic which,
taken in conjunction with the question of size, helps to indicate the
choice of methods consists of those elements of the problem which
forbid its solution on a purely individual basis, at least in the case
of families of small or moderate means. Because of their possible
influence on certain solutions, these elements merit brief discussion.
(1) I t is generally recognised that private enterprise is not in a
position to provide low or medium-income families with suitable
homes embodying proper health standards. Building operations
are inevitably costly, involving as they do the use of a great variety
of materials and consequently the payment of a host of middlemen
supplying them. In addition, the variety of the operations calls for
the employment of a large number of different skills, thus limiting
appreciably the use of the simplified techniques of concentrated
industry. And, for the same reasons, the smaller a project is, the
greater the cost, since a small project means an incomplete utilisation of men and materials.
Thus the cost of building to some extent explains why the problem of providing cheap housing cannot be satisfactorily solved with
any ease, and certainly never on the basis of individual contracts.
This high cost is one of the first considerations leading prospective
tenants or owners to associate for the purpose of house building.
(2) The normal effect of the scarcity of houses after the war will
be to raise the price of houses and the cost of building, .unless
measures to the contrary are taken, particularly as there is also
likely to be a relative shortage of materials (which continued
priorities may intensify) and a possible shortage of labour. Unbridled competition for homes by those requiring them would aggravate the situation still further, and the solution would be hardest

TRANSPORT, POWER AND HOUSING

in just those countries where the need will be greatest and most
urgent. It scarcely seems possible to avoid or correct such a situation except by introducing order and discipline into the housing
market. In other words, there will have to be a certain degree of
regulation and the organised collaboration of the interested parties.
(3) Houses for lower-income families are rarely built to order,
and when they are put up for purely commercial purposes very little
trouble is generally taken to discover and satisfy the reai needs of
the prospective occupiers. It has to be recognised that the building
industry is too often less concerned with providing convenient,
pleasant, and health-giving homes to meet the needs of family life
than with putting on the market a commodity which will meet with
ready sale if the demand for houses is pressing. However, as the
general standard of living goes up and food and clothing needs are
more fully satisfied, requirements in the matter of housing become
more precise. The post-war years may see an intensification of the
insistent claim of consumers to. specify the kind of house they wish
to live in. Yet the low-income families cannot have their way on
this question acting as isolated individuals.
(4) A further obstacle to the satisfactory working after the war
of the system of individual building contracts—and this applies
not only to low-income families—is its incompatibility with modern
town planning conceptions. There has been a considerable advance
along these lines in public thinking, and post-war housing plans are
all in varying degree imbued with the idea. It is probable that the
reconstruction of the more heavily bombed towns will be more or
less inspired by these conceptions. If this proves to be the case,
here will be a further circumstance favouring some form of collective arrangement rather than the individual building contract. The
elaboration and execution of a general plan requires contacts with
the interested parties, but these can hardly be established with a
multitude of individuals. They are easily made, however, with
organised groups.
CO-OPERATIVE ACTIVITIES

The problem of providing houses for lower-income families—in
the cities and, more recently, in rural areas—increasingly engaged
the attention of the public authorities in the inter-war period, particularly in the countries of Europe. The same problem, but on a
far greater scale, in the years following the present war is bound to
necessitate, in some form or other, much more general, more vigorous, and more systematic action by the authorities. The vastness of
the problem will also call for contributions from numerous sources,
and these contributory efforts will require co-ordination both among
themselves and with the measures of the public authorities.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

Certain features of the problem, briefly described above, further
require the existence and collaboration of groups of the interested
parties. Among such groups are the co-operative organisations, and
these must now be examined.
Co-operative organisations will certainly concern themselves
with the housing problem, to the solution of which they believe
they can bring some contribution. In industrial areas their interest
and experience are of long standing: urban populations have tried
to satisfy their housing needs no less than their food needs through
co-operative action.
Distributive Co-operative Societies
Fairly often, at least in the early period, one and the same organisation was given the task of solving the two problems, whether
it was established at the outset as a combined consumers' and housing co-operative or whether, originally founded as a consumers' cooperative, it later extended its activity to housing, in obedience to
the common tendency of consumers' co-operatives to interest themselves progressively in all the needs of their members. Thus, in
Germany, one of the oldest and biggest consumers' co-operative
societies, the Hamburg society, included among its objects (and in
its name) the construction of houses in addition to providing for
its members' consumer and savings needs. In the same way one of
the oldest Argentine consumers' co-operatives—El Hogar Obrero
(The Worker's Home), the parent society of the country's consumers', credit, and housing co-operatives—was intended from the
beginning to provide housing credit, and has built and continues to
build small family dwellings as well as large apartment houses.
After the last war, the first achievement of the Co-operative Union
and Wholesale Co-operative Society.of Switzerland (U.S.C.) was
the establishment of the celebrated village of Freidorf, near Basle.
Until about 1914 the British consumers' co-operative societies invested considerable sums (some £9 million up to the end of 1912)
in house building, while at the present time a large number of them
maintain "house purchase departments" offering credit facilities
through which thousands of their members have become house
owners. In yet other countries, particularly in those of Scandinavia and in Czechoslovakia, consumers' co-operatives have extended loans at low rates of interest to the housing co-operative
societies.
Housing Co-operative Societies
If consumers' co-operatives have abandoned or, more often,
reduced their housing activities, this has generally been due to the

TRANSPORT, POWER AND HOUSING

difficulty of carrying on simultaneously two such dissimilar operations as real estate business and the purchase (or production) and
distribution of goods. A further reason for such a reduction of
activity by consumers' co-operatives in the housing field has been
the fairly rapid growth of special co-operatives, which the consumers' societies very often have helped to form and to which they
have given support. The development of these specialised cooperatives in urban and industrial areas is another sign of the importance of the housing problem among people in the lower-income
groups.
Housing co-operative societies are among the most recent types
of co-operative organisation to be developed. It is noteworthy that
in most of the European countries such societies were established
or developed chiefly after the last war, as an aid to the solution of
the housing problem produced or aggravated by the period of
hostilities.
Being of recent origin, these co-operatives have not yet always
managed to federate, and statistical information regarding them is
consequently incomplete. However, it is sufficient to point out that
co-operatives of this category existed in 22 countries of Europe, and
that Continent alone accounted for one half, or 10,747, of the total
number of such societies reported in all parts of the world.
Co-operative housing societies are of widely different types,
depending on the particular nature of the needs to be met and the
variety of problems requiring solution. But they are roughly
divisible into two groups: (1) co-operatives that are essentially
savings and credit societies, providing their members with advances
to enable them to build or buy houses; and (2) co-operatives that
build houses for sale or rent to their members. 1 Co-operatives of the
second type were far the more numerous in Europe, accounting for
about nine tenths of the total number of housing societies, though
they only represented about one third of the total membership.
No hard and fast distinction can be drawn between these two
types, since housing co-operatives, like most others, show a tendency to add subsidiary functions to their original and chief function, either to aid the discharge of the latter or to provide their
members with additional services. In Great Britain, for example,
the building societies, in addition to their credit functions, centralise
the purchase of building materials through their federation, which
also places a staff of architects and experts at their disposal. Conversely, in Sweden the federation of tenants' co-operative societies,
1
Co-operatives with a membership composed of building workers and with
the object of providing the latter with employment are an entirely different type
of society.

CO-OPERATION AND PRESENT-DAY PROBLEMS

extending its original function of helping to form societies and providing them with technical and legal advice, has taken up the purchase and manufacture of building materials and also encourages
the members of the societies to save in order to provide funds for
building.
Both types of housing society demonstrated their effectiveness
in the inter-war period. In Great Britain, for instance, the building
societies 1 financed more than half of the houses newly built or purchased between 1919 and 1938, while in Sweden the tenants' cooperatives, whose real development dates from 1916, accounted for
10 per cent, of the building in the immediate post-war period and
for a far higher proportion later. Housing co-operatives were responsible for 20 per cent, of the more recent structures in the Netherlands, and 33 per cent, of the modern dwellings in Copenhagen.
Attentive observers have been impressed with the achievements of
this kind of co-operative. Miss Elizabeth Denby, in a book giving
the results of her own experiences in London and of first-hand observation in the principal European countries, discusses the relative
merits of municipalities, public utility housing societies, and cooperatives as agencies for the construction of houses for the people.
Her conclusion is that "co-operative housing organisation . . .
probably constitutes the soundest basis yet devised for financing
the supply of new buildings". 2 At all events, the part that these
organisations were able to play after World War I raises the question
of their employment in tasks of the same nature occasioned by
World War II.
There is every indication that the housing co-operative societies
are preparing themselves for these tasks and that wherever circumstances permit they will receive the support and collaboration
of the consumers' co-operative societies in the exceptional effort
that will have to be put forth. 8 In Great Britain, the Building
Societies Association has set up a committee, under the chairmanship of Viscount Sankey, to study the lines on which building
societies can participate in post-war housing developments and at
the same time assist in improving housing standards for the people.
The vastness of the problem has led the English Co-operative
Wholesale Society, the Scottish Co-operative Wholesale Society, and
1
In 1940, their resources amounted to £756,000,000, or more than nine
times the 1919 figure of £77,346,603.
* Elizabeth DBNBY: Europe Re-housed (London, George Allen & Unwin Ltd.,
1938), p. 41.
* The trade unions can also make a contribution, either in the form of collaboration with existing housing co-operatives, or independently. In the United
States, some of the large workers' organisations have proposed extensive house
building programmes, to be carried out on a co-operative basis and under union
auspices.

TRANSPORT, POWER AND HOUSING

the Co-operative Permanent BuildingSociety to consider ways of pooling their experience and financial resources. Similarly, the consumers'
co-operatives in Switzerland are correlating their efforts with those
of the housing co-operative societies. In the United States, the
Co-operative League of Consumers' Co-operatives has decided to
appoint a committee which will make plans for a vast building programme to be launched at the end of the war. T h e idea has even
been advanced that one of the co-operative contributions to the
building programme might be the establishment of an international
co-operative organisation financed by co-operatives in the various
countries and using materials obtained from these national cooperative enterprises.
HOUSING CO-OPERATIVE SOCIETIES AND
HOUSING POLICY

The success of the co-operative effort now in preparation depends of course on proper provision being made for it within the
general housing programme. It will also be necessary for co-operative organisations to mobilise quickly far larger sums of capital
than they normally dispose of. The building societies' funds are
generally derived from their members (some of whom are merely
depositors or lenders), but their scope would be considerably increased if means could be found of utilising a part of the reserves
accumulated by some of the consumers' co-operative organisations
or by other institutions interested in the housing problem.
As to the housing co-operatives proper* these will certainly have
to look to other sources of capital than their own members' savings.
The smaller the incomes of the members, the greater this necessity
becomes. These societies normally complete their resources by
•loans obtained from private institutions, municipalities, or the
State. For their participation in the housing programme to be of
maximum effectiveness, they must draw to an even greater degree
on these traditional facilities and, in addition, must in future depend
more than hitherto on help from consumers' co-operatives as well as
from credit co-operatives, insurance co-operatives, and social
insurance institutions. Particularly when their members are drawn
from the very low-income groups, the housing co-operatives are
accustomed to receive State assistance in the form of mortgage and
other loans at low rates of interest and even of direct or indirect
subsidies. Sometimes, for instance, capital is provided by social
insurance institutions, with the State making itself responsible for
a part of the interest on such advances. In most of the countries
concerned, then, there is already legal provision, though it may be
5

CO-OPERATION AND PKBSSNT-DAY PROBLEMS

capable of improvement, for housing credit and loans to housing
co-operatives. In the low-cost housing field a link has indeed been
rapidly established between co-operative action and the action of
the public authorities. In fact, in many European countries the
housing co-operatives were the agencies for the execution of a social
housing policy whose successful application in large measure depended on the public authorities being able to utilise the disinterested
services of responsible and easily controlled organisations possessing
the necessary technical and social qualifications.
Reconstruction

Co-operatives

There is one particularly relevant example of this beneficial and
indispensable conjunction of the efforts of the public authorities
and co-operative organisations in the housing field. The experiment
in question, besides being fully characteristic, entirely successful,
and unusually conclusive because of the vast scale on which it was
carried out, derives its educational and practical value from the fact
that it was made under conditions closely similar to those likely to
prevail in the immediate post-war period. This was the experiment
with the "reconstruction co-operatives" in France, after the War of
1914-1918.
After some preliminary attempts made in 1918, co-operatives of
this type really began to develop in February 1919. They rapidly
spread and by 1 January 1924 there were 2,311 of them, with an
aggregate membership of 168,266.'
As with all sound co-operatives, these organisations met a real
need. People whose property had been destroyed or damaged were
faced with a whole set of problems, all of them complex and difficult.
If each claimant had remained on his own, he would have had to
find his way about in the legislative enactments governing the reconstruction of the devastated regions and providing for the compensation of persons who had suffered damage. He would have had
to observe exactly the formalities necessary in establishing his rights
of ownership, reaching an estimate of the damage sustained, receiving the advances to which he might be entitled, and so forth.
He would have had, besides, in competition with all the other
claimants, to look for an architect or contractor, and have plans
1
For additional information on the working and achievements of the reconstruction co-operative societies in France, reference may be made to the following: Pierre C A R A U D : L'œuvre des sociétés coopératives de reconstruction dans les
régions dévastées; R. ROUSSEAU: Les coopératives de reconstruction dans les régions
libérées. For a good summary, see V. J. TERESHTENKO: " T h e Work of the Reconstruction Cooperatives in France after the First World War", in Monthly
Labor Review, Aug. 1943.

TRANSPORT, POWER AND HOUSING

and estimates made of the work to be done. The problem was
further complicated by the fact that the labour force employed had
to be accommodated in areas where most of the houses had been
destroyed, while materials had to be brought to places which
lacked railways as a result of military operations, etc. Yet another
difficulty was the existence of road, street, and sewage works and
other public facilities calling for general plans that sometimes
affected individual plans. While the State had established the
appropriate legislation, financial resources, and administration, and
had laid down principles and a general frame of operations, it was
too far removed from individual problems to be able to go into all
their ramifications and make all the daily adjustments necessary
for their solution. In short, the State could not replace the indispensable action of the parties concerned.
The functions assumed by the reconstruction co-operatives correspond fairly closely to that multitude of problems which could not be
dealt with either by the State in its aloofness or by the claimants acting individually. Such problems included the establishment of claimants' rights, securing estimates of damage, managing the compensation funds, drawing up building plans, organising and supervising
their execution, choosing architects from a panel drawn up by the
departmental authorities, passing contracts, dealing with problems of
a financial and technical nature, determining the relative urgency of
works awaiting execution, etc. These manifold and complex functions are reducible to a simple formula: acting as a disinterested,
competent, and easily controlled mediating agency between the
claimants on the one hand and the State, architects, and contractors on the other.
For the co-ordination of their activities and programmes, the
organisation of audit and centralised legal services, the adjustment
of their mutual relations, collaboration with the public authorities,
the organisation of buying in common, and the raising of loans, the
co-operatives of a single or several neighbouring districts began,
from June 1919 onwards, to form co-operative unions, and, as a
next step, federations. Finally, in the spring of 1921, a General
Confederation of Reconstruction Co-operative Societies was established, which soon comprised all the co-operatives and their unions.
The object of the Confederation was to co-ordinate the activities
of the unions and their federations, to draw up standard forms of
contracts to govern the relations of the co-operatives with the
architects and contractors, to negotiate with the architects' and
contractors' central organisations and with the Government, to
float loan issues of the co-operatives, etc.
The reconstruction co-operative movement was an entirely
3 2

CO-OPERATION AND PRESENT-DAY PROBLEMS

spontaneous creation and membership in it was voluntary. 1 The
spontaneity and accepted value of these organisations and of their
achievements are shown b y the fact that in each of its phases development of the movement preceded the corresponding legislation.
The first real reconstruction co-operative was established in February 1919, but this new type of co-operative was not legally
recognised until 17 April of the same year, and it was only on 15
August 1920 that its legal status was fully defined. Similarly, the
General Confederation of Reconstruction Co-operative Societies
arose out of a conference held in Paris on 26 January 1921 and
began to function effectively on 1 March 1921, while the Act giving
it legal recognition was not passed until 31 March 1922.
Reconstruction co-operatives undertook building activities in
2,716 out of 4,434 communes destroyed or damaged in the French
battlefield area. In the Department of the Marne they operated in
all except 10 of the 268 communes. In this same Department these
co-operatives, in the space of a few years, almost entirely rebuilt
the city of Rheims, where only 15 out of a total of 14,000 houses
had been left intact. It is estimated that altogether the reconstruction co-operatives were responsible for 58 per cent, of all building
work and 27 per cent, of all repair work in the devastated regions of
France.
The merit of their services was unanimously recognised and
gained them various privileges. Since their organising expenses
were proportionately lower than those of individual contractors,
their work more efficient, and control of their activities easier, they
were entitled to receive advances up to 90 per cent, of the amount
of damage estimated to have been suffered by their members,
instead of the 75 per cent, limit imposed in the case of individual
claimants. Moreover, because of the special projects undertaken
by some of the cooperatives, an Act of 12 July 1921 gave them the
right to issue public loans, a right made subject later to the authorisation of the Minister of Finance (Act of 31 December 1922). A
succession of Ministers of Liberated Areas testified before the
French Parliament to the great economies in time and money
effected by the reconstruction co-operatives as well as to their indispensable role as intermediaries between the State and individual
claimants, and still more precisely, as the State's authorised agents.
As early as December 1919, the Minister of Liberated Areas declared :
"Whenever I see a co-operative available to replace the State's
efforts, I shall be eager to put a t its disposal all possible facilities,
1
However, for obvious reasons of financial stability, the relevant Act (of 15
Aug. 1920) prohibited withdrawal by members from their co-operatives once
they had joined.

TRANSPORT, POWER AND HOUSING

materials, staff, and, if necessary, a grant". During the same
period this Minister told the Senate that the organisation of cooperatives was one of the conditions necessary for the accomplishment of the reconstruction programme.
The experiment with the reconstruction co-operatives in France 1
is suggestive in more than one respect. Considered only in relation
to the problem of housing, it perhaps offers for the immediate future
a broad model for a building programme stimulated, guided, and
financed by the sole authority capable of providing the necessaryimpetus, direction, and financial means, namely, the central Government, yet decentralised in its execution and entrusted at the
point of need to the smallest unit available—the co-operative association of the persons directly concerned. However, the experiment
takes on an even wider significance, viewed more broadly as an
instance of experiments in integrating State action with co-operative action without impairment of the principles, methods, and
peculiar efficacy of the latter. These quite numerous experiments,
which developed particularly during the last ten years before
World War II, will have to be more closely studied later. 2

1
A similar experiment in Belgium originated in 1916.
' O. Part III.

CHAPTER

III

I N T E R - C O - O P E R A T I V E RELATIONS
An outstanding feature of the co-operative movement, and
the characteristic which makes it, in the strictest sense of the
term, a movement, is the unremitting and many-sided effort which
it devotes to carrying out to its final conclusions the idea of association. From this idea it derives not only its origin and principle, but
also its direction, vital impulse, and ethic. This idea is the source,
moreover, of methods and achievements which can help to define
the role of the movement in the work of economic and social rehabilitation and which merit examination from that point of view.
There may also be drawn from it a general conception of production
and exchange which, beyond the immediate post-war period, entitles
the co-operative movement to a place among the economic forms
and forces qualified to build a more ordered, better balanced, and
more just economy.
Within the co-operative movement the association of persons or
families in small or large societies is merely a first stage, which
almost everywhere is passed as soon as it is reached. Depending on
their affinities and the nature of their common needs, the primary
societies in turn associate in regional, national, or even international
federations, and this federative structure brings to each society the
advantages of a concentration of forces without impairing the autonomy of the parts or the flexibility of the whole.
But it is not only co-operatives of the same type or having common needs that form ties of association or collaboration. The same
tendency is found between co-operatives of different types that
have complementary needs which they try to satisfy through a
complementary exchange of goods or services. These exchange relations may be established between co-operative organisations with
functions as dissimilar as those of consumers' co-operatives, workers' productive co-operatives, handicraftmen's co-operatives, credit
co-operatives, housing co-operatives, insurance co-operatives, rural
supply co-operatives, agricultural marketing co-operatives, etc. 1
It is to such relations that the term "inter-co-operative relations"
1

Cf. Co-operative Organisations and Post-War Relief, op. cit., pp. 12 et seq.

INTER-CO-OPERATIVE RELATIONS

is more particularly applied. They are not established by the simple
and almost automatic process that brings together co-operatives
desirous of solving their common problems together, but involve
more laborious agreements and, in some cases, a greater inventive
effort. Therefore, though instances of such relations are already
fairly numerous, it cannot yet be said that they are general. Moreover, there is considerable diversity in the methods by which they
have been effected.
The most notable development of inter-co-operative relations,
not only locally or regionally, but also at the national and even international level, has been between marketing co-operative organisations of primary producers (agriculturists, stock-breeders, fishermen) and consumers' co-operative organisations. Since it is these
economic exchanges between organised producers and organised
consumers that constitute the most readily observable type of
inter-co-operative relations, they alone will be taken as a basis of
discussion in the following pages. This choice is not only justified
by the number and successful outcome of past experiments of this
kind and the lessons to be drawn from them, but also has regard to
the prospects opened up and problems raised by the development
of such relations, as well as to the fact that the question has recently
been brought into prominence by discussions proceeding and plans
being studied within the co-operative movement itself.

Advantages of Direct Inter-Co-operative Relations
Reason suggests and practice has demonstrated that any machinery which establishes direct and systematised trading relations
between organised producers and organised consumers brings to
both parties and to the community at large considerable economic
and social advantages.
First, such relations represent a simplification of the economic
process. A still more radical simplification would no doubt be the
distribution of products by the marketing co-operative societies to
the ultimate consumer through agencies under the control of the
societies, or, conversely, either the production of commodities by
the consumers' co-operatives themselves or their purchase of them
directly from individual producers.
But, in general, such a simplification is either impossible or inadvisable. Dr. G. Fauquet, one of the closest and most continuous
students of the theoretical and practical problems of inter-co-operative relations, has written thus upon this question:
For reasons of a general kind every endeavour, whether of agricultural cooperative societies or of consumers' co-operative societies, to cover independently
3 2 *

CO-OPERATION AND PRESENT-DAY PROBLEMS

of one another all the chain of operations which separates production from consumption, comes into conflict with limitations which inhere in the very nature of
the co-operative system of organisation. On the one hand, the efficiency of marketing co-operative societies is essentially a function of the cohesion that they set
up between associated producers and of the internal discipline to which the producers submit. Now the results of this cohesion and of this discipline weaken in
proportion as, in the chain of operations which separate the producer from the
consumer, we pass from one phase to another more and more distant from the
producer. Thus in the phases which are nearest the consumer, the efficiency of
the consumers' co-operative society will be more effective than that of the producers' co-operative society.
In cases where consumers' co-operative societies buy from individual producers not co-operatively organised, there is the disadvantage of excluding the benefits which for the quantitative and qualitative improvement of production may be
secured from the control which agricultural producers exercise over themselves
by their membership in an agricultural marketing co-operative society.
So far as the direct exploitation of agricultural properties is concerned, the
fact that these properties will be managed by consumers' co-operative societies
does not appear to be in itself a necessary source of technical progress. The
question arises for these properties, as for every other property requiring paid
labour, whether peasant exploitation (on condition that it is supplemented by
co-operative organisation) does not represent a socially and economically superior
method. In fact, experience on this point in Great Britain of local co-operative
societies and of wholesale societies is far from encouraging.1

The collective organisation of producers and of consumers, and
the division of functions between the two groups, so far from constituting a loosening of the direct contacts between the two parties,
is a necessary condition of them.
Compared with the usual channels of commerce, which often
involve a whole series of relays through agents, factors, and
brokers, in addition to the three main stages of collection, wholesaling, and retailing, inter-co-operative relations undoubtedly represent a simpler and more direct route between the point of production
and that of ultimate consumption.
This simplification has immediately visible and often measurable
effects. It results, for instance, in a considerable economy, since
inter-co-operative trade relations eliminate numerous incidental
expenses, such as commissions, profits, publicity charges, etc. The
economies so effected benefit both parties to the transaction.
Inter-co-operative relations of this kind also tend to constitute
an organisation of the economic process: supply and demand, instead of being merely indirectly and perhaps accidentally linked
(by circumstances of time or place), are brought into direct and
permanent contact with each other. Knowing better the true needs,
1
Cf. G. FAUQUBT: "Principal Types of Cooperative Relations between Producers and Consumers of Agricultural Products , in Annals of Collective Economy
(Geneva), Vol. I l l , No. 1, Jan.-Mar. 1927, pp. 65-66.

INTER-CO-OPËRATIVE RELATIONS

as regards both quantity and quality, of the buyers, the producersellers can up to a certain point adjust production to these needs.
Conversely, the buyers can control their purchases in keeping with
the possibilities and conditions of production. Changes in the tastes
and habits of purchasers and, on the other side, modifications in
productive technique and capacity are quickly noticed, enabling
the necessary adaptations to be made smoothly and with a minimum
of delay. In this way sharp price reductions or sudden breakdowns
of the produce market, which in turn worsen conditions of employment and standards of living, are avoided. From these direct relations there springs the possibility of a series of contractual arrangements tending towards order, equilibrium, continuity, and fair exchange. These arrangements may cover such questions as the time
of or delays in delivery, or provide for the warehousing of goods on
the basis of mutual recognition of needs. In every case their tendency is to end speculation and introduce elements of orderly marketing, as supply is at each moment exactly adjusted to the requirements of real demand.
Inter-co-operative relations do not bring only economic advantages nor do they merely introduce simplification and order into the
process of exchange between primary producers and consumers. At
a time of general rebuilding, covering moral behaviour and social
cohesion as well as the material structure, it is not inappropriate to
recall Dr. Fauquet's observation that such relations reintroduce
human and moral considerations into the exchange of goods and
services, thereby achieving that reintegration of the economic in
the social which is the very essence of co-operative effort :
When and wherever the urban economy and, later, the commercial and capitalist economy develop, all social bonds between producers and consumers are broken,
not merely by the physical distance separating the two groups, but still more by
the impersonal and abstract nature of purely economic relations.
However, if intcr-co-operative relations are established, elements of a moral
order reappear, in varying but always appreciable degree. Throughout the cooperative chain forged by common efforts, the goods which pass along it no longer
represent mere economic values.mere dehumanised commodities. Co-operators
both of town and of countryside develop an awareness of the bonds uniting them.
Between them is established a fellow-feeling which gradually wins acceptance for
rules of equity and reciprocity in their dealings with each other and for respect of
one another's conditions of life and labour. Inter-co-operative relations thus
bring new life to the old moral conceptions of the "fair price" and the "fair wage".
Like all co-operative development, they help to re-establish the ascendancy of the
social over the economic.1
1
G. FAUQUBT: Le Secteur coopératif. Essai sur ¡a place de l'homme dans les
institutions coopératives et de celles-ci dans l'économie (Basle, L'Union suisse des
coopératives de consommation; Paris, Les Presses universitaires de France; and
Brussels, Les Propagateurs de la coopération, 1942, 4th edition), pp. 35-36.

CO-OPERATION AND PRESENT-DAY PROBLEMS

Gains of economy, order, stability, and equity in the processes
of exchange; the repercussions of these upon the prosperity of the
community at large; the rehumanising and remoralising of economic
relationships; the rediscovery of the basic identity of interests between the sellers and buyers of goods and services ; the consequential
strengthening of human solidarity nationally and internationally—
all these are the objectives, at first perceived indistinctly and later
with increasing clarity and definition, that co-operative doctrine has
set itself in establishing and fostering the development of inter-cooperative relations. This conception has for long met with many
obstacles in practice. On the national level a certain resistance has
arisen from the supposed clash of interests and mutual prejudices of
sellers and buyers. Such difficulties, often artificially stimulated for
political purposes outside the co-operative movement, have been
inimical to democratic growth. Internationally, legal or de facto
monopolies and the shifting stream of regulations governing foreign
trade have made relations between co-operatives of different countries difficult. Moreover, both nationally and internationally, a
necessary precondition of the establishment of firm relations between primary producers and consumers is a certain degree of development of their respective co-operative organisations. This precondition was not fulfilled a t once or everywhere. Nevertheless, the
fundamental tendency of the co-operative movement towards its
own unity has already enabled a considerable number of obstacles
to be overcome. Inter-co-operative relations, national as well as
international, have been established and developed, particularly in
the inter-war period. Progress became increasingly rapid in the last
few years before World War II.

Some Instances of Inter-Co-operative Relations
Developments of this kind, usually hidden among the day-today activities of the co-operative associations, are not easily discoverable. They are outside the ambit of official statistics and more
often than not escape description or even mention in the annual
reports of the co-operatives themselves. They can therefore only
be detected by means of special enquiries, such as those undertaken
by the International Committee for In ter-Co-operative Relations,
or through systematic and patient research, like that made by Miss
Margaret Digby first in 1928 and again ten years later. 1
It is mostly from these sources that the following brief factual
review is drawn, supplemented, in so far as war conditions have
allowed, by occasional more recent information. Not many of the
'Cf. Margaret DIGBY: Producers and Consumers: A Study in Co-operatWt
Relations (London, P. S. King & Son, 1938, 2nd edition).

INTËR-CO-OPERATIVE RELATIONS

examples, therefore, are very up to date and some may appear rather
old. A few may even no longer be operative. But a far larger number
have probably never been recorded. What is of importance here,
however, is not so much to give a full and accurate picture complete
in every detail as to show that a clear tendency exists and that its
vitality is such that, even if temporarily interrupted by the war, it
will certainly reappear as soon as conditions permit and renewed
observation becomes possible.
It will be convenient to divide the material into two parts, and
to consider in the first place instances of inter-co-operative relations
within particular countries and, secondly, those less numerous examples of transactions involving inter-co-operative relations between one country and another.
INTER-CO-OPERATIVE RELATIONS WITHIN COUNTRIES

During the inter-war period domestic trading relations between
consumers' and agricultural co-operative organisations developed
in varying degree in a number of European countries.
Austria
Before the Anschluss (incorporation) of Austria with Germany,
considerable purchases of grain and flour were made by consumers'
co-operatives direct from the agricultural movement, while for the
supply and marketing of cattle a joint undertaking, the Co-operative
Cattle Union, was established by agricultural and consumers' cooperative societies. Local distributive societies obtained over 60
per cent, of their butter supplies from agricultural marketing cooperatives, and also a part of their supplies of fruit. Similarly, the
consumers' Co-operative Wholesale Society derived a part of its
fruit supplies and not less than 20 per cent, of its egg supplies from
agricultural co-operative organisations.
Bulgaria
The federation and wholesale organisation of the Bulgarian
distributive co-operatives, Napred, purchased large quantities of
cereals and fruit from agricultural co-operative societies, and also
obtained all its supplies of milk and dairy produce from agricultural
co-operative dairies. It also maintained permanent relations with
the beet-sugar factory and salt pit run by agricultural co-operative
societies; a large part of the production of these two enterprises was
absorbed by the societies affiliated to Napred, which sold the remainder on the ordinary market as agent of the producers.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

Czechoslovakia
Before grain marketing was placed in the hands of the Czechoslovak Grain Company (in which there was organised collaboration
between consumers' and agricultural co-operatives), the Co-operative Wholesale Society (V.D.P.) had an agreement to buy grain
from Kooperativa, the Supply Association of Agricultural Cooperative Societies in Bohemia, in preference;—prices being equal
—to other sources. At one time the V.D.P. obtained 10 per cent, of
its grain supplies from Kooperativa, and nearly 60 per cent, either
from Kooperativa or from primary agricultural co-operatives or
individual growers. In rural districts, the local distributive societies
were accustomed to obtain nearly all their butter requirements
from local co-operative dairies. In regard to urban consumers' cooperatives, it may be mentioned that for a number of years there
was an agreement between these and the agricultural organisations
whereby the former undertook to open no more dairy departments
of their own and to draw their supplies of butter and other dairy
produce from the agricultural co-operative dairies or the central
dairy organisations.
Denmark
The Danish consumers' societies distributing butter obtained
their supplies direct from agricultural co-operative dairies and in
certain cases direct from co-operative butter export societies. The
Danish Co-operative Egg Export Society also sold eggs to some
extent to urban consumers' co-operatives within the country, while
the Danish Society for the Production and Marketing of Seed supplied the seed requirements of the consumers' co-operative stores
dealing in this product.
Estonia
Local co-operative dairies and consumers' stores in Estonia
carried on some intertrading; at one time 10 per cent, of the eggs
marketed by agricultural co-operative organisations were estimated
to go to consumers' co-operative societies.
Finland
The Central Union of Finnish Distributive Societies (K.K.),
representing the predominantly urban side of the consumers' movement, obtained about 28 per cent, of its butter supplies direct from
co-operative dairies, in addition to 19 per cent, derived from the
Federation of Finnish Co-operative Dairies (Valio).

INTER-CO-OPERATIVE RELATIONS

France
1

Some 70 per cent. of the wheat crop in France was marketed
through farmers' co-operative silos, but the mills and bakeries of
the distributive co-operative societies could only absorb a small
proportion of the co-operatively stored wheat. There was also interco-operative trading in milk and dairy produce, either through
agreements concluded between local consumers' and local dairy cooperatives or through agreements to which the Co-operative Wholesale Society was a party. Similar arrangements were developed in
regard to eggs and fruit. The Co-operative Wholesale Society
derived from 20 to 30 per cent, of its fruit requirements from agricultural co-operatives, the proportion in the case of grapes being as
high as 80 per cent. The Wholesale dealt only with co-operative
societies approved by the Federation of Fruit and Vegetable Growers' Co-operative Societies. Direct purchase by consumers' co-operatives from wine producing co-operatives was also fairly common. A
special law was passed in 1936, intended to facilitate the creation of
joint organisations and joint undertakings by agricultural and consumers' co-operatives, but circumstances do not appear to have
permitted much development in pursuance of the Act.
Germany
Purchases of livestock, herring, eggs, and potatoes by consumers' co-operatives from producers' co-operatives were reported in
Germany. In the case of eggs, the consumers' societies absorbed
about 10 per cent, of the total output of the central agricultural
co-operative organisations. These and other inter-co-operative
relations were developing steadily, until the transfer of the funds
and properties of the consumers' movement to the Labour Front
brought them to an end.
Great Britain
Co-operative intertrading developed between the farmers'
marketing organisations and the Co-operative Wholesale Society
(C.W.S.), and also between the former and the retail consumers'
societies. Purchases consisted of fruit in fairly large quantities,
grain, dairy produce (mainly milk and cheese), fat stock, and eggs.
No complete statistical statement is possible, but according to Miss
Margaret Digby*, the Co-operative Wholesale Society purchased
some £500,000 of produce from British agricultural co-operative
societies in 1935. In regard to eggs, it is reported that in 1930 nearly
50 per cent, of the Co-operative Wholesale Society's domestic sup» 80 per cent, in 1937.
For a more detailed treatment of this subject, see Margaret DIGBY, op. cit.,
Chs. VI and VII.
1

CO-OPERATION AND PRESENT-DAY PROBLEMS

plies came from agricultural co-operatives. In the same year cooperative purchases of eggs by the wholesale and the retail consumers' societies represented 20 per cent, of the total egg output of
the co-operative marketing societies. The most interesting form of
inter-co-operative trading was that developed in the case of the
Herts, and Beds. Bacon Factory, which became a joint co-operative
undertaking of producers and consumers. A little over 50 per cent.
of the total share capital was held by the Co-operative Wholesale
Society and the rest by farmer members; the Co-operative Wholesale Society purchased 90 per cent, of the factory's output.
Hungary
The nature of the activities of the bulk of the Hungarian consumers' co-operatives and the structure of their central organisation,
Hangya, are such that, though co-operative intertrading between
producers and consumers of agricultural produce took place on a
large scale, it is difficult to convey a precise picture of what happened.
In effect, 90 per cent, of these co-operatives are rural in character
and, in addition to supplying their members with foodstuffs, domestic articles, and agricultural requisites, also undertake the marketing
of the members' cattle and other agricultural products. A portion
of these products is distributed locally within a kind of co-operative
closed economy. The larger part, however, is assembled by seven
central marketing societies, which are in fact branches of Hangya.
The Hangya urban consumers' co-operatives obtain their supplies
of fruit, vegetables, eggs and other commodities from the village
consumers' co-operatives, either directly or, less often, through the
appropriate central organisation. In the case of dairy produce, both
the village and the urban consumers' co-operatives obtain their
supplies from the Central Association of Co-operative Dairies,
either directly or through their own central organisation.
Iceland, Latvia,

Lithuania

The situation in Iceland, and, mutatis mutandis, in Latvia,
Lithuania (and also Estonia) was similar to that in Hungary. In all
these countries, where the co-operative movement is mostly rural
in character, farmer members of consumers' co-operatives sold part
of their produce to their societies, and there was also some intertrading, especially between local consumers' co-operatives and cooperative dairies or butter-exporting co-operative organisations.
Luxembourg
Co-operative intertrading was important in this country, where
the agricultural co-operatives marketed as much as 70 per cent, of
their output with the consumers' co-operative movement.

INTER CO-OPERATIVE RELATIONS

Netherlands
Some business relations existed before the war between consumers' and producers' societies in the trade in fruit, eggs, and dairy
produce.
Nonvay
The consumers' co-operatives (which in normal times used to
handle about 25 per cent, of the farm butter produced in Norway)
bought both from local co-operative creameries and also from the
Central Export Agency of Norwegian Co-operative Dairies. There
was also some co-operative intertrading in other products, but
most of the consumers' societies were strongly rural in character
and sometimes themselves bought and exported produce, especially
eggsRumania
An unusual development was the supply of foodstuffs (6,500 to
9,000 tons annually) by Rumanian marketing societies of the plains
to credit, requirements, and forestry co-operative societies in the
mountain regions, where food can only be produced during a small
portion of the year. Maize, the common food grain of the country,
was the commodity principally supplied.
Sweden
Co-operative intertrading has become quite common in Sweden,
and through a system of firm contracts and joint undertakings has
developed organised forms which have a suggestive value for the
future. The Co-operative Union and Wholesale Society (K.F.) and
its affiliates together derived their butter supplies to the extent of
nearly 80 per cent, from co-operative dairies or their central organisations. These transactions arose not by mere accident or habit,
but were governed by a contract between the distributive societies
and the Swedish Dairies' Association by which the societies agreed
to take the whole output of certain dairies, the price being based on
the quotation for the whole country, with variations for transport,
quantity, and similar factors. In the case of fluid milk there was a
similar contract in force in Stockholm, while in Malmö a joint cooperative undertaking was established. In Stockholm, a group of
farmers' creameries known as the Milk Central, which retailed 30
per cent, of its output (representing two thirds of the city's milk
supplies) through its own shops, agreed to refrain from opening new
shops in consideration of the Stockholm Consumers' Co-operative
Society's purchase of all its milk from the Central. In Malmö, the
milk distributing business is owned jointly by farmers' and con5

CO-OPERATION AND PRESENT-DAY PROBLEMS

sumers' co-operatives, with one third of the earnings going to the
farmers' organisation, one third to the consumers' organisation, and
one third to reserve.
In regard to meat, mention may be made of the arrangement
made between the consumers' co-operatives selling prepared meat
and the farmers' organisations having almost a monopoly of livestock slaughtering, in which the field of action of both sides in
regard to processing was laid down, and an agreement similar to
that prevailing in the case of the Stockholm Milk Central concluded.
An interesting example of a co-operative joint undertaking is
offered by the Swedish Co-operative Fish Marketing Society (Svensk
Andelsfi.sk), set up by the Co-operative Union and the Association
of West Coast Fishermen, to encourage fish production during
World War II. In 1941, the trade of the new society amounted to
6,430,000 Swedish crowns, and it has already salted a very large
quantity of fish botli for t h e Co-operative Union itself and for the
Government Food Commission.
Switzerland
The Swiss Wholesale Co-operative Society (U.S.C.) used to
obtain all its domestic egg supplies, all its cheese supplies (except
for a small amount imported from Italy), and some of its supplies
of domestic butter from Swiss agricultural co-operatives. These cooperatives were also the main source of the Wholesale's fruit requirements and a partial source of such supplies to some of the societies
affiliated to the Wholesale. Direct purchases of agricultural produce
from the farmer by the Wholesale and its affiliates have increased
considerably during recent years: in 1943 they bought 15, 749.8 tons
of fruit (compared with 6,814.5 in 1938), 6,374.6 tons of fresh vegetables (3,939.9), and 34,180.4 tons of potatoes (16,873.4).
In a number of cases (especially milk and dairy produce) cooperative intertrading in Switzerland has assumed permanent and
organic shape : in several towns milk delivery contracts are in operation, while in Geneva a joint undertaking developed—the Dairy
Union'—which amalgamated the house-to-house services and rival
shops of the Swiss Distributive Co-operative Society and the (agricultural) Associated Dairies.
INTERNATIONAL INTER-CO-OPERATIVE RELATIONS WITHIN EUROPE

Before the war, international economic relations between distributive and marketing co-operative societies within Europe 2 had
' T h e Dairy Union has been the subject of study by the International Committee
for Inter-Co-operative Relations (cf. Docs. C.I. 9/30 and C.I. 18/30).
s
Instances of intertrading between European consumers' co-operative organisations and overseas producers' co-operative marketing organisations will be
found in Co-operative Organisations and Post-War Relief,'op. cit., pp. 137-141.

INTBR-CO-OPERATIVE RELATIONS

developed furthest in the dairy produce market, though there was
also some intertrading in wheat, bacon, eggs, and other commodities.
Wheat
Between 1923 and 1936, the English Co-operative Wholesale
Society obtained part of its grain requirements from the U.S.S.R.,
through the Russo-British Grain Export Company, in which the
C.W.S. and two British private firms were in partnership with
several Russian co-operative and State organisations. The object
of the Company was to purchase grain in bond in Russian ports or
in cargo and to dispose of it in Great Britain, France, Italy, and
South European countries. The C.W.S. had the first offer of grain
coming on the market, at the market price, and received a rebate on
its purchases. In 1926-27, 20 per cent, of the grain handled by the
Company was bought by the C.W.S. After the first few years the
Company's trade diminished—it exported as much as 685,800 tons
of grain in 1926—but revived in the period 1930-1933. However,
by 1936 the Russo-British Grain Export Company had been wound
up, and thenceforward the small Russian grain imports of the
C.W.S. were obtained directly from Exportkhleb, the State grain
export organisation.
Bacon and Pork
In 1936, the English Co-operative Wholesale Society imported
bacon to a value of £3.6 million. Two thirds of its imported supplies came from Denmark, and over 65 per cent, of this amount was
bought from co-operative sources, either through the five C.W.S.
depots maintained in Denmark or through the Danish Co-operative
Bacon Trading Company (incorporated in Great Britain). This
Company, which handled about one third of the total Danish bacon
exports to Great Britain, had functional and structural characteristics which qualify it partially, but not fully, as a co-operative joint
undertaking in the international field: its capital was furnished
mainly by Danish co-operative slaughterhouses, with a small part
contributed by importers, including the English and Scottish cooperative wholesale societies; its surplus was divided equally between purchasers and suppliers.
Ireland was the next most important source of bacon supplies to
the C.W.S., with some 35 per cent, of the total directly co-operative.
Imports by the C.W.S. of pork from Denmark and Ireland and
of mutton from Iceland, though not extensive, were from 40 to 70
per cent, directly co-operative in origin.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

Eggs
The position in regard to the international co-operative trade in
eggs cannot be shown statistically, but may be illustrated by examples showing the extent to which certain European co-operative
wholesale societies have entered into such trade relations.
The English Co-operative Wholesale Society used to import eggs
from more than 20 countries, Denmark being the chief supplier,
with nearly half the total, 83 per cent, of which came from co-operative sources. Ireland was the next most important European supplier, with almost as high a co-operative percentage as Denmark.
Supplies from Estonia and Finland were also mainly co-operative.
The C.W.S. likewise made small co-operative imports from Poland.
Some English retail consumers' co-operatives appear to have purchased eggs from agricultural co-operative societies in the Netherlands, while the Scottish Co-operative Wholesale Society made
purchases of eggs from co-operative sources in Denmark.
The German consumers' co-operative movement, in the days
when Germany (with Great Britain) was one of the largest egg importing countries in Europe, bought eggs from the agricultural cooperative movements of Denmark, Finland, Latvia, the Netherlands, Switzerland, and the U.S.S.R.
,
In Switzerland, the Wholesale Co-operative Society U.S.C.
received over 2 million eggs in 1931 from Austrian agricultural cooperatives; it also obtained supplies from the Danish Co-operative
Egg Export Society.
It may be mentioned that sometimes consumers' societies in rural
areas, e.g., Poland and Switzerland, purchased eggs and exported
them to consumers' co-operative organisations abroad.
Butter and Cheese
Inter-co-operàtive trade in butter (together with eggs and fruit)
has been the subject of an enquiry by the International Committee
for Inter-Co-operative Relations (1933). Speaking of relations between co-operative societies of different countries in regard to butter, the Committee reported:
These are clearly of importance, but the information given is as a rule insufficient to allow of estimating their volume exactly by means of direct calculations . . .
It will be remembered, however, that the Danish co-operative societies have
for many years been in touch with the English Co-operative Wholesale Society
through the medium of the depots opened by the Wholesale Society in Denmark.
The Valio Society in Finland reports that it has similarly been in touch with the
English Wholesale Society, as also with the German Wholesale Society, during
recent years. The National Union of Co-operative Dairies in Hungary has also
got into touch with the distributive societies of Germany and Italy, and at the

INTER-CO-OPERATIVE RELATIONS

end of 1933 it supplied the English Wholesale Society with 17 wagonloads of
butter. Among the foreign purchasers-of the produce of the Netherlands agricultural co-operative dairies mention is made of distributive societies. At the time
when Switzerland was still an importing country, the Swiss Union of Distributive
Co-operative Societies obtained 78 per cent, of the butter it imported from Danish
co-operative societies. In Czechoslovakia, the butter imported was supplied solely
by the central organisations of the co-operative dairies of Denmark, Estonia,
Finland, Latvia, and Lithuania.1

According to the same report, Danish butter (which is almost
wholly produced by co-operative organisations) in 1932 formed 58
per cent, of the total value of butter purchased abroad by the
central organisations of the distributive co-operative societies of
the main importing countries. The English Co-operative Wholesale
Society, for instance, derived nearly 40 per cent, of its butter imports from Denmark in normal times. Other directly co-operative
European sources of supply to the English Wholesale Society were
Estonia (from co-operative dairies through the Estonian Co-operative
Wholesale Society), Ireland, the Netherlands, and Sweden. The
Scottish Co-operative Wholesale Society also bought butter from
co-operative sources in Denmark.
Part of the cheese imports of the English C.W.S. came from
co-operative organisations of Denmark and the Netherlands. In
addition to drawing on these European co-operative sources, the
C.W.S. (and likewise the Scottish Co-operative Wholesale Society)
drew supplies of dairy produce from the New Zealand Produce
Association, which represents the producers' co-operative movement
in New Zealand (through the New Zealand Producers' Co-operative
Marketing Association), and the consumers' co-operative movement
in Great Britain (through the English C.W.S. and, later, the Scottish C.W.S.). 2
In Belgium, the large consumers' co-operative society in Antwerp at one time made purchases of cheese from Netherlands and
Swiss co-operatiyes through the medium of the International Cooperative Wholesale Society.
Fruit
It is extremely difficult to assess the extent or even to detect the
instances of inter-co-operative trading in fruit. However, a few facts
may be given by way of illustration.
From 1926 onwards the French Consumers' Co-operative Wholesale Society was in touch with Greek co-operative societies market1
General Statement on the Part Played by Agricultural and Distributive Cooperative Organisations and by their Mutual Relations in the Butter Trade (Doc.
C.I. 9/11).
* For a description of the structure and activities of the New Zealand Produce
Association Ltd., see Co-operative Organisations and Post-War Relief, op. cit.,
Appendix IV.

3 3

CO-OPERATION AND PRESENT-DAY PROBLEMS

ing currants, which also sold to the consumers' movements of some
other countries.
In Great Britain, the C.W.S. for a number of years obtained 20
per cent, of its raisin and fig imports from a Turkish federation of
agricultural marketing co-operative societies. The same federation
at one time also supplied figs to the co-operative wholesale society
Hangya in Hungary.
Hangya derived its orange imports mostly from Fedexport, a
branch of the Italian Federation of Agricultural Co-operative
Societies (and from the Pardess Co-operative Society of Orange
Growers in Palestine).
In Switzerland, the Wholesale Co-operative Society U.S.C.
generally tried to cover a part of its imported fruit requirements
(mostly citrus fruits) by purchases from producers' co-operative
organisations abroad.
INTER-CO-OPERATIVE TRADING THROUGH INTERNATIONAL
CO-OPERATIVE AGENCIES

It is not always possible to observe or state the mechanism of
these inter-co-operative relations. Sometimes they are effected
through simple direct contacts between large national organisations
and at other times through special bodies, such as the Danish Cooperative Bacon Trading Company.
The International Co-operative Wholesale Society, while not
itself engaging in trading operations, helped to establish certain of
these relations. For instance, as already mentioned, it assisted a
Belgian consumers' co-operative to obtain cheese from Netherlands
and Swiss co-operatives. Of a more general nature was the arrangement reached between the International Co-operative Wholesale
Society and the International Commission of Agriculture in regard
to the exchange of information which might facilitate trade relations
between consumers' and agricultural co-operative organisations. 1
More recently, the International Co-operative Trading Agency
Ltd. was instrumental in arranging for the supply of poultry and
grapes from Yugoslav agricultural co-operatives to the Scottish
Co-operative Wholesale Society and for the shipment of tea, coffee,
and spices in payment for them. It has taken tomatoes, potatoes,
and oranges from the French co-operative societies in Morocco, and
in return sent them tea and cocoa from the English and Scottish
Joint Co-operative Wholesale Society. The Netherlands cooperative movement has used it as a channel for forwarding butter,
cheese, and bacon to Scotland, receiving porridge oats in return.
1
For the text of the arrangement, see I.L.O.: Activities of the International
Committee for Inter-Co-operative Relations (Geneva, 1935), p. 30.

INTER-CO-OPERATIVE RELATIONS

Nature of Inter-Co-operative Relations
For convenience of treatment the examples of domestic inter-cooperative relations have been listed country by country, while those
of transactions of an international character, have been treated on
a commodity basis. However, in order to obtain a more precise idea
of the true nature of such inter-relations, it is useful to classify them
also according to their common characteristics, and, in particular,
according to the different forms in which they may occur.
The principal forms encountered may be roughly classified into:
(a) ordinary commercial transactions; (6) contractual relationships;
and (c) the establishment of jointly managed enterprises.
Ordinary commercial transactions between co-operative organisations are no different from those that the respective parties might
enter into with private business. They introduce no new principle,
but repetition of them may set up a stable business relationship and
prepare the way for closer ties in the future. On the other hand,
firm or long-term contracts and joint enterprises tend to establish
on an organic basis an uninterrupted chain from agricultural producer to ultimate consumer.
The provisions of long-term contracts or special agreements
differ widely in their details, having to meet a wide variety of local
conditions: provisions as to quantities to be delivered or purchased;
as to grading according to variety or quality; as to procedure for
establishing prices or merely for determining what is the prevalent
market price. In each case the purpose of such agreements is to
provide by means of reciprocal obligations a stable basis for the
development of business relations over a given period of time or
covering a stated amount of goods.
The following examples from the milk trade, collected by Dr. G.
Fauquet 1 , illustrate the variety of local conditions to which the contracting organisations have to adapt themselves; they also show
how collaboration between organised producers and organised consumers has managed to yield a satisfactory solution to the difficult
problem of supplying large cities with milk. In France, for instance,
the consumers' co-operative society in the Paris area before the war
drew its milk from various sources. Among other arrangements it
had a contract with a co-operative dairy which bound it to accept
delivery of all the milk delivered by the producers to their co-operative. This contract was signed in 1917 and was renewed each year
without the principle underlying it ever being called in question.
The results were indeed such that the consumers' co-operative, in
agreement with the dairy, requested the French Agricultural Co1
"Principal Types of Co-operative Relations between Producers and Consumers
of Agricultural Products", loc. cit., pp. 70-71, 74 et seq.
5

CO-OPBRATION AND PRBSBNT-DAY PROBLEMS

operative Federation to call a meeting to discuss the possibility of
establishing similar contracts with other agricultural co-operatives,
either already existing or to be set up later. The dairies expressed
themselves in favour of an extension of direct sales to the consumers' co-operative, a t least as regards dairies which had not already
established their own sales depots.
It will be noted that in this instance the agricultural co-operative
could not cover the entire needs of the consumers' co-operative.
Sometimes, however, the position is reversed: the consumers' cooperative cannot absorb the whole output of the co-operative dairy,
but pledges itself not to take milk from any other producer. This
was the case, for example, in Stockholm.
The same situation existed in La Chaux-de-Fonds in Switzerland, but a different solution was arrived at. In this town the consumers' co-operative has a contract with the various local associations of milk producers in the neighbouring valley. Under the
terms of this contract the consumers' co-operative has to market all
the milk delivered by the producers' associations; any surplus of
liquid milk must be turned into cheese by the consumers' society,
for sale to its members or elsewhere.
As to the various co-operative undertakings, found both in the
national and in the international field, these differ from each other
appreciably in their purposes and structures. Though they seem to
be met with more frequently in the course of milk and dairy produce
intertrading (Malmö, Geneva, New Zealand Produce Association),
yet instances are provided by the meat trade (Danish Co-operative
Bacon Trading Company), the wheat trade (Russo-British Grain
Export Company), and the fish trade (Swedish Co-operative Fish
Marketing Society). Differences in the structure of such undertakings are considerable: there was State intervention in the case
of the Russo-British Grain Export Company; the Danish Co-operative Bacon Trading Company, which grew up without any preconceived plan and remains incomplete in character, represents a
joint enterprise in process of formation rather than in being; complete types are the Malmö and Geneva milk enterprises, the Swedish
Co-operative Fish Marketing Society, and (outside Europe) the
New Zealand Produce Association.
But they all have certain common characteristics. Whenever
they are situated at a suitable point in the economic chain connecting producers and consumers, they can satisfy the complementary
marketing and supply requirements of both parties through a single
operation. In their purest form they are established, financed, and
managed jointly by the producers' and consumers' co-operative
organisations, which have equal rights and equal obligations in
regard to them.

INTER-CO-OPERATIVE RELATIONS

COMPARISON OF D I F F E R E N T FORMS OF INTER-CO-OPERATIVE
RELATIONS

It is not possible to lay down any absolute rule as to when cooperative joint undertakings are to be preferred to firm contracts,
or one form of contract to another. The choice will rather depend on
the economic, geographic, and perhaps even psychological circumstances of each case. But there is no doubt that inter-co-operative
relationships, whether in the one form or the other, bring into plav
new principles and motives deserving of some attention.
Firm or long-term contractual agreements between co-operatives
of different type have much in common with the now well recognised
procedure of "collective bargaining" in the industrial world. In so
far as these two practices reintroduce the principle of equity and
reciprocal obligation, the one into the relations between sellers and
buyers and the other into those between employers and employed,
they may be said to contribute to the rehumanisation of economic
relationships.
Both practices prevent one party from imposing upon the other
and avoid the necessity of recourse to the public authorities or other
arbitrator of their mutual relations. It is true that both joint undertakings and collective bargaining exist and operate within the
general legislative framework and under the final control of the
public authorities, yet within this framework and subject to this
control, the two practices have shown themselves to be more efficient and elastic methods than direct legislative provision.
Reciprocal obligations between co-operative organisations of
different type have also the same stabilising effects as the practice
of collective bargaining, and these effects extend to the economic
as well as to the social field. The fact that producers undertake to
produce and supply commodities under certain conditions, and
that the purchasers, on their part, assume a fair share of the risks
run by the sellers, makes for security and stability, both in the
sphere of marketing and in that of supply. It may even lead to order
and relative stability—subject to natural contingencies—in production. The better adjustment between supply and demand expresses itself in a relative stability in prices. Stability does not, of
course, mean that prices are frozen, but merely the possibility of
avoiding sudden and sometimes catastrophic changes; the contacts
established enable jolts and jars to be foreseen and avoided or a t
least diminished. Any adjustments found necessary will be the
result of mutual agreement and can' be made with due caution and
by degrees.
In a report submitted in November 1943 to the International
Co-operative Conference held in London, Mr. George Walworth.

CO-OPERATION AND PRESENT-DAY PROBLEMS

Agricultural Adviser to the British Co-operative Union, drew
attention to a further advantage of such contractual relations. He
showed how they could become factors of technical progress, since
the need for careful sorting and grading is increased in the measure
that agreements contain precise stipulations as to price or methods
of fixing prices. To quote his words, "there is no question of adopting fixed contracting prices for commodities regardless of grade,
quality or pack". 1
The general rationalising influence that firm contracts involving
mutual obligations exercise on agricultural production was clearly
recognised by the International Co-operative Conference. The advantages of such contracts were summarised thus by Mr. Walworth :
With such an arrangement between co-operatives, the producer knows the
type and extent of his market, can concentrate on ideal production and handling,
and can utilise waste produce or inferior grades for processing or farm use, thus
minimising transport and wastage in distribution.'

It is worth remarking that what is here given as the result of a
particular form of inter-co-operative trading corresponds very
closely to one of the objectives proposed to Governments by the
United Nations Conference on Food and Agriculture in connection
with measures "to secure the provision of adequate processing,
transportation, and distribution facilities required for improving
the nutritional levels of their populations". In a note appended to
a recommendation on this subject, it was stated :
Among the objectives of this action are better utilisation of foods not consumed in fresh form, the avoidance of loss of value of perishable foods, the prevention of waste, and the stabilisation of marketing conditions to induce as far as
possible an adequate and even flow of goods to consumers.'

Co-operative joint undertakings obtain the same and additional
results through other more elaborate and intimate arrangements.
While they may perhaps be regarded as the most perfect form of
inter-co-operative trading, this does not mean that they are necessarily the most appropriate form in all cases or that they can be set
up without careful preparation and planning. First of all they presuppose a high degree of development in each of the parties involved,
as well as a fully matured co-operative consciousness. They also
require a careful selection of the most convenient point of contact
between the parties. Such a point will vary according to the commodity concerned and also according to the relative degree of
development of the parties.
1
"Relations between Co-operative Consumers' and Agricultural Producers'
Organisations", in Review of International Co-operation (London), Nov.-Dec. 1943,
p. 184.
' Ibid.
' United Nations Conference on Food and Agriculture. Final Act and Section
Reports (Washington, D.C., U.S. Government Printing Office, 1943). Cf.
International Labour Review, Vol. XLVIII, No. 2, Aug. 1943, pp. 139-1S6: "The
United Nations Conference on Food and Agriculture".

INTER-CO-OPBRATIVE RELATIONS

From the examples given it would appear that joint co-operative
undertakings are particularly suitable: (a) for trading over long
distances (in which case they perform the functions of import and
export agencies) ; and (b) where the commodity has to undergo some
transformation or a series of transformations which directly interest
both the agricultural marketing and the consumers' co-operative
organisations. In the latter case, the processing plant is the convenient point of contact between the two parties, as it is there that a
common interest arises. When the product has to pass through a
whole series of transformations, the joint manufacturing undertaking will be found higher or lower in the series according to the
degree in which the parties have respectively forced their way
towards the source of supply (consumers) and the final sales outlet
(producers). For instance, both consumers' and agricultural marketing co-operatives are interested in the transformation of wheat
into flour or bread, and this common interest can lead to the establishment either of a joint fiourmill (when the consumers' organisation is relatively strong) or of a joint bakery (where the agricultural co-operative has pushed nearer to the point of contact with
the ultimate consumer). But whichever the enterprise, it will, when
once established, serve equally the marketing needs of the agriculturist and the supply needs of the consumer.
Joint undertakings are without doubt a novel and specifically
co-operative solution to the problem of producer-consumer relations. "It is, indeed, not sufficiently observed", said Charles Gide,
in a lecture he gave on the future of co-operation, "that
every co-operative form is nothing else than the solution of a
conflict. For what is a consumers' co-operative, if not the suppression of the conflict between vendor and purchaser ? What is a credit
society ? The suppression of the conflict between lender and borrower. And the productive society ? The suppression of the conflict between employer and employed." Co-operatively organised
consumers buy together and sell to themselves; the members of a
credit co-operative lend among themselves the funds they collectively have saved or have obtained on the basis of their joint liability ;
the members of a workers' productive society collectively act as
their own employer. In other words, in each case the interests of
the two parties are merged in the same person. It is the same with
joint undertakings. It is no longer a question of reconciling or
attempting to reconcile divergent interests. The supposed conflict
is resolved, and with it the problem. Within the common enterprise the partners have the same interest, of the same kind and to
the same degree, namely, the good management and successful
operation of the common enterprise from which they both draw
equal benefit.
5

CO-OPERATION AND PRESENT-DAY PROBLEMS

It is primarily for the co-operative societies themselves and for
their central organisations to establish, develop, and multiply these
inter-co-operative relations, to adjust the means to the varied circumstances that present themselves, to improve steadily on methods
already in use, and to invent new ones for meeting new cases.

A Considered Policy
This review of inter-co-operative trading activities, incomplete
and cursory as it must be in the circumstances, is nevertheless sufficient to show the existence of a definite trend. The experiments
made in the inter-war period generally had a successful outcome;
they grew steadily in number and at all points demonstrated their
conformity with co-operative teaching as regards both principles
and social and economic objectives.
Indeed it may be said that what was in the beginning a natural
trend has developed into a considered policy. This policy has
gradually been worked out both within countries and on the international level, by means of theoretical discussions and practical
experiments which have progressively brought to light the nature
of the problem, the difficulties which beset it, and the best way of
overcoming these difficulties as they arise.
The International Co-operative Alliance, at its second Congress
held in 1896, declared that it was "desirable to establish in all countries committees for the organisation . . . of international commercial
relations between co-operative societies". The question of interco-operative relations arose in some form or other at most of the
following Congresses, but it is particularly in the last thirty years,
beginning with the 1913 Congress, that a definite movement
towards more practical measures can be noted. During this period
the subject has received some attention at all the triennial Congresses of the Alliance.
The World Economic Conference held by the League of Nations
in Geneva in May 1927 paid tribute to the economic value of close
organic relations between agricultural and consumers' co-operative
societies. A special resolution of the Conference was passed in the
following terms:
Agricultural co-operative societies will contribute to a still greater rationalisation of economic life in proportion as they develop their relations with the consumers' co-operative societies. Direct commercial relations between producers
and consumers, and between associations of producers and of consumers, eliminate
superfluous intermediaries, and, when they are sufficiently widespread, result in
the establishment of prices which are advantageous to both parties. In addition
to material profit, there is a moral advantage; by direct commercial relations producers and consumers learn to know each other and to take account of the special
characteristics and requirements of the other party. The producers' and con-

INTER-CO-OPERATIVE RELATIONS

sumers' co-operative societies learn to appreciate the value of direct relations in
accordance with their common principles. The clear realisation of the possibility
of mutual collaboration and mutual confidence in business transactions are essential to a practical solution of the question of direct commercial relations between
producers' agricultural co-operative societies and consumers' co-operative societies—a question which for a long time past has been settled in theory.

In particular, the World Economic Conference recommended
that:
These efforts of agricultural and consumers' co-operative organisations should
be encouraged and furthered by the creation of a committee representing national
and international co-operative organisations of agriculturists and of consumers—
a committee which should be entrusted with the establishment of a programme of
research and documentation, as well as with the task of elucidating the lessons
taught by past experience, with a view to bringing about new achievements.1

In December 1929 an informal conference of representatives of
the International Co-operative Alliance and of the International
Commission of Agriculture was convened at Paris by Albert Thomas,
the first Director of the International Labour Office, to explore the
means of further promoting organised inter-co-operative relations.
As a result of this and two subsequent meetings, the International Committee for Inter-Co-operative Relations 2 was established
in February 1931, having as its object the development of moral
and economic relations between agricultural producers' and consumers' societies. At the national level, thirteen special committees for the guidance and encouragement of inter-co-operative
action have been formed in eleven European countries.
Again, the development of inter-co-operative relations received
particular attention at the International Co-operative Conference
held in London on 25 November 1943 under the auspices of the
International Co-operative Alliance. As already mentioned, one of
the papers presented to the Conference dealt with this subject, and
after discussion resolutions were adopted emphasising that "collaboration between consumers' and agricultural co-operative organisations is of particular importance in view of the great problems of
rehabilitation with which the movement will be confronted after
the war", and recommending that "the basis for collaboration must
be the conception of the co-operative movement in all its ramifications as an economic and spiritual whole, and the recognition that
mutual understanding and unity of purpose are indispensable to
successful co-operative action". And, while recognising that "the
concrete shape of the relationship between co-operative organisations could vary from country to country according to conditions in
each—economic, social, legal, political, etc.", the Conference re» LB AGUE OF NATIONS: The World Economic Conference. Final Report (Series
L.O.N.
Publications, 1927, II. 46(a), Geneva, 1927).
s
For the achievements of the Committee, see Co-operative Organisations and
Post-War Relief, op. cit., p. 18.
5

100

CO-OPERATION AND PRESENT-DAY PROBLEMS

commended that "a definite division of functions of consumers' and
agricultural producers' societies must be agreed upon, and, wherever
possible, a jointly administered central organisation established as
a firm foundation for collaboration". 1
A Conference on International Co-operative Reconstruction held
at Washington, D.C., on 19-20 January 1944 adopted recommendations in much the same sense, including one which called on the
co-operative movement to "expand international co-operative
business between the various national co-operative movements,
consumer and producer". As an expression of the desire for such
action, mention may be made of the presentation at the Conference
of a proposal for an Internationa» Co-operative Trading and Manufacturing Association, which would supplement or share in the
efforts of existing international co-operative trading agencies' to
develop and rationalise international co-operative trade.
*
•
*
It obviously lies with the co-operative organisations themselves
to take the necessary steps to implement such recommendations
and proposals. There is every indication that the co-operative
movement, in the course of and as a means to its complete and
methodical reconstruction, will steadily push forward the development of inter-co-operative relations.
Nevertheless, legislative and other measures taken by public
authorities can aid or retard such efforts, both nationally and in the
international field. The better these inter-co-operative developments are known and their implications understood, the more likely
they are to receive legislative and administrative encouragement.
In particular, national laws hindering such developments can be
repealed or facilitating legislation introduced. Similar encouragement to inter-cö-operative trading might well be exercised at the
international level, in view of the fact that international co-operative trade is to a large extent a self-liquidating arrangement,
making Government credits or advances unnecessary. These cooperative measures of simplification require at least the nod of State
authorisation, especially in a period of strict governmental control
of foreign trade, and the avoidance, in the planning of quotas and
similar measures designed to create an ordered economy, of unnecessary obstacles to the full development of such a mode of international trade.
1
For the complete text of the recommendations, see Review of International
Co-operation, loc. cit., p. 189.
* Cf. Co-operative Organisations and Post-War Relief, op. cit., pp. 7-8 and
141-144.

PART II
Social Problems of Rehabilitation

CHAPTER IV
EMPLOYMENT
The terms employment and unemployment will be used here
in a broad sense, to cover the situation, not only of wage earners,
but of independent and semi-independent workers; of those engaged
in agriculture as well as in all forms of industry, including handicrafts, cottage industry, and both small- and large-scale industry.
The problems of reabsorption and redistribution of manpower
as such, together with plans for demobilisation and the transition
from war to peace production, are outside the scope of this study.
It is proposed merely to place selected tasks falling within this
framework in apposition with the functions and characteristics of
certain co-operative forms, to determine what contribution the
latter can make to their solution.
The nature and importance of this contribution will vary from
country to country, depending on the problems, plans and general
situation prevailing in each. Among differentiating factors are a
country's wartime position (belligerency, devastation, occupation,
or their absence), its degree of industrialisation, the state of its
agricultural technique, the amount of cultivable land it has available, and over- or under-population of agricultural regions.
Before co-operative forms of employment in industry and on
the land are considered, some of the social results of co-operative
activities in the restoration of primary economic functions may be
passed rapidly in review.
If it be admitted that for agriculturists, fishermen and handicraftsmen it is the equivalent of unemployment to be dispossessed
of their means of production (land, vessels, tools, etc.) through
bankruptcy, or to fail to earn a livelihood (because of too high costs
of production or too low prices for their produce, or a combination
of both), then it follows that co-operative organisations, by supplying the necessary credit, by furnishing trade requisites or domestic
goods at lower prices, and by marketing products a t more remunerative prices, help to ensure the stability of their members' occupations and to increase the purchasing power that they derive from
their work. Since the same person may be and fairly often is a
5

104

CO-OPERATION AND PRESENT-DAY PROBLEMS

member of more than one co-operative society1, it is not easy to
estimate with accuracy the number of families so protected, but
it is certainly considerable. It is sufficient to recall that before the
war agricultural co-operatives and non-agricultural occupational
co-operatives throughout the world comprised almost 75J^ million
members, with more than 30 million in Europe alone (without the
U.S.S.R.).
When to these figures there is added the number of employees
of co-operative societies of all types*, it may fairly be said that the
re-establishment and, more still, the development of co-operative
activities in the various fields would react favourably on the level
of employment and on working conditions, both directly in the
co-operative sphere and, to a less extent, outside it, where the cooperative influence is felt.

Co-operative Forms of Employment of Industrial Workers
As regards industrial workers, the co-operative contribution
will be discussed under three heads: (1) co-operatives among the
unemployed, as an organised way of utilising demobilisation bonuses, discharge grants, doles, etc. ; (2) workers' productive and labour
(or labour contracting) co-operatives as they affect organisation and
working conditions in the building and public works industries;
and (3) the possible contribution of co-operative organisations of
the occupational type to the restoration of production of consumer
goods in countries whose economies have been dislocated.
The first two headings fall within the classical methods of
palliating the consequences of unemployment or of preventing its
incidence, while the second is also related to the problem of national
equipment; they therefore concern all countries, though in varying
degree and from different points of view. The third heading concerns only certain countries, but these are quite numerous.
CO-OPERATIVES AMONG THE UNEMPLOYED

However perfect the plans for creating full employment and
however efficient their execution, some residual unemployment
is not altogether unlikely, e.g., in temporarily or permanently depressed areas or among disadvantaged groups, such as disabled
ex-soldiers or workers, marginal or over-age workers, etc.
1
On the other hand, general statistics do not show the membership of all
the societies reported.
* Their number is not inconsiderable, especially in consumers' co-operatives,
though nowhere nearly as high as in the United Kingdom (with 306,000 employees
of wholesale and retail societies in 1941).

EMPLOYMENT

105

In the past, the spontaneous or directed reaction of groups
afflicted or threatened with loss of suitable employment or gainful
occupation has sometimes been a collective endeavour to find a
means of livelihood by a pooling of the members' human and material resources.
Such co-operative action among unemployed has been experimented with in widely scattered parts of the world, e.g., the
operation of disused commercial plants—a bakery, for example—
by young unemployed men in Poland; subsistence production on
the land for groups of unemployed in England; in New Zealand,
the taking over by co-operative groups of a contract for railway
construction abandoned by a private contractor; in the U.S.S.R.,
the organisation, in 1929, of "collectives" similar in some respects
to the "self-help co-operatives" in the United States which will
be considered later. In the first two instances goods were not
produced for sale to the public, but only for the use of members
of the group or other unemployed persons.
The War of 1914-1918 led to the encouragement and organisation
of workers' productive societies among disabled men: about 400
such societies were founded in Czechoslovakia (including some
societies for the making of orthopaedic appliances) ; in the U.S.S.R.,
there were in 1939, 2,300 federated workers' productive societies,
whose 240,000 members consisted of persons of limited working
capacity as well as disabled persons.
In China, displacement of thousands of people by invasion,
coupled with the need of providing civilians and the army with
manufactured goods, stimulated the creation of the workers' productive societies known as "industrial co-operatives". In June
1942, there were more than 1,500 such co-operatives, with a membership of 22,700, in affiliation with the central headquarters of
Chinese Industrial Co-operatives ; their monthly production totalled
24 million Chinese dollars. According to one closely connected with
the movement from its inception, "the conditions existing in the
1,300 little industries that have been set up by co-operative methods
are not perfect, but they contain the seeds that can make for happier
and creative living 1 ".
More consciously connected with unemployment were the
"self-help co-operatives" formed among unemployed people in the
United States, particularly in the West, following on the economic
depression of 1929. These organisations, which were of several
kinds, represented "the co-operation of unemployed men and women
who come together in groups to get for themselves the things they
1
Rewi ALLEY: The Chinese Industrial Co-operatives (The China Information
Publishing Co., Chungking, 1940).

106

CO-OPERATION AND PRESENT-DAY PROBLEMS

cannot get as well in any other way". 1 In the early stages of the
depression (1931-1933), they were essentially barter groups through
which the unemployed traded things among themselves and with
other people, or where they exchanged, not goods, but services, or,
again, where the group as a whole traded its labour for goods or
services, e.g., harvesting a crop in exchange for food. From 1934,
the emphasis shifted to production; the Division of Self-Help Cooperatives of the Federal Emergency Relief Administration set
up by the Relief Act of 1933, with power "to aid in assisting cooperative and self-help associations for the barter of goods and
services", assisted this new development.
These production groups did many things: "landscape gardening, farm labour on shares, dairying, butchering, raising of poultry
and rabbits, canning of fruits and vegetables, plumbing, fishing,
grinding of grains, logging, carpentry, house-repair work, house
wrecking, art work, dentistry, printing, making of bakery goods,
brooms, bedding, box shook, crates, cider, cloth, clothing, furniture
(also upholstery), maple syrup, pickles, soap, hand-made rugs, and
rubber mats (from automobile tires); repair and manufacture of
clothing, furniture, shoes, radios and stoves; operation of store,
commissary, cafeteria, beauty shop, barber shop, blacksmith
shop, coal mine, foundry, garage, laundry, sawmill, and wood
yard". 2
For every dollar of Government money, the co-operatives gave
their members an average of $2.25 worth of goods and services.*
Between 1931 and 1938 more than half a million families were
affiliated with "self-help" organisations in 37 States; from 1933
to 1938, public funds totalling about $4,730,000 (not including
Government administrative costs) were expended on production
enterprises of the self-help co-operatives. Productive enterprises
were generally under the supervision of the State relief administrations. By the end of 1938, the number of self-help organisations
(barter and production) in the United States was already considerably less than in the peak years of the depression.
Since self-help co-operatives rarely had money enough to pay
the workers, they sometimes issued certificates for work done,
redeemable in goods or services, known as "scrip". Care was ex1
Self-Help Co-operatives, An Introductory Study (Division of Self-Help Cooperatives, Federal Emergency Relief Administration, Washington, D.C., undated),
p. 3.
2
Idem, p. 8
a
During the 1933-34 depression, the Department of Welfare of the State
of California made a study of the costs of relief given through some 300 selfhelp co-operatives in Los Angeles county and found that it cost only one seventh
as much to take care of a family through the self-help co-operative as it did through
a direct dole.

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107

ercised in the issue of scrip that it should be backed by goods or
services of a kind that people needed.
Particularly in the case of rural self-help co-operatives, it not
infrequently happened that permanent co-operative enterprises
developed out of the emergency organisation. For instance, a selfhelp co-operative organised in 1935 by a group of farm families in
Idaho constructed a small lumber sawmill in order to supplement
its members' income during the winter and to build necessary farm
buildings. Later production was entirely for war use. This and
similar co-operatives were organised with the assistance of the
U.S. Farm Security Administration which was confined chiefly to
small farmers unable to obtain financial credit from any other
source. Rural self-help co-operatives relieve unemployment (due
to lack of land, machinery, sire service, marketing or transport
facilities, etc.) or underemployment (through undersized farms
or unfavourable climate for year-round operations) by enabling
groups of farmers to open up land (e.g., collective acquisition of a
bulldozer), operate a tractor, set up a cannery or cheese plant,
form a forest "harvesting" association, and so on. In certain cases,
these activities are performed by small and quite informal cooperative "groups", analogous to the "co-operative buying clubs"
which sometimes precede the formation of a consumers' co-operative
society in the United States. 1
An unemployed group of 15 families in a village in the State of
Idaho, using as a revolving fund a grant of $1,750 from the Federal
Emergency Relief Administration, managed by group action to
provide themselves with homes and other buildings valued at ten
times that amount. 2
Of the "self-help co-operatives" in the United States it has been
said3 that while they
obviously cannot be expected to take the place of either direct or work relief,
they appear to offer an acceptable form of public aid to a limited group, particularly older and under-employed workers who can meet at least part of their
needs through their own efforts. Despite their many limitations, the co-operatives
have furnished a certain amount of work and training to persons in need of total
or partial public support, and they have often also provided recreational and
social facilities. It is also significant, in evaluating this form of public aid, that
surveys of public opinion and of the attitude of the members themselves have
1
Cf. Joe J. KING: "Rural Co-operative Self-Help Activities in the Pacific
Northwest",
in American Sociological Review, Dec. 1943, pp. 706-710.
5
Among other examples of "self-help housing co-operatives", in which members contributed their own labour as well as cash, mention may be made of the
Penn-Craft Community in Pennsylvania and the Tompkinsville Housing
Society in Nova Scotia, Canada, in both of which the members were mostly
coal3 miners without full employment.

U.S. NATIONAL RESOURCES PLANNING BOARD: Security, Work and Relief

Policies (Government Printing Office, Washington, D.C., 1942).
3 4

108

CO-OPERATION AND PRESENT-DAY PROBLEMS

been generally favourable, although with reservations concerning their effect
upon retailers.

If economic situations similar to those prevailing in 1931rl935
arise in the post-war period it is likely that there will be a similar
need for "self-help co-operatives". Co-operative leaders in the
United States have expressed the view that consumers' co-operative
organisations "should step in and take the leadership in the development of such co-operatives in order to tie them as closely as
possible in with the consumers' co-operative movement and establish
them on a more permanent and socially useful basis". 1 Such a connection between the "self-help co-operatives" and the existing cooperative movement would help to secure continuity between the
relief and rehabilitation periods and to make the most of the capacities for self-help and mutual aid developed by participation in these
emergency organisations.
BUILDING AND PUBLIC W O R K S

The building and public works industry, combining skilled and
unskilled labour in happy proportion, has always been thought
capable of absorbing a considerable amount of idle manpower.
Because of the number of professions and crafts that it directly or
indirectly concerns, there is even a general—and perhaps excessive—
inclination in times of economic depression to believe that a revival
in the activity of this industry can largely suffice to set the economic machine working again.
There can be little doubt, at all events, that the industry can
look forward to a good many years of expansive activity in view
of the urgent and necessary tasks awaiting execution in the devastated countries: the rebuilding or restoration of ports, roads, railways, bridges, tunnels, canals, stations, and other public buildings,
factories and dwellings, while possible and certainly useful works
in all countries will be the building of homes and the carrying out
of a vast programme of national equipment.
But such a vast programme will present problems of finance
and also of efficient organisation in its execution, especially if it is
"to assure the prompt and orderly use of human and material resources, avoiding on the one hand rush demands for materials which
leave contractors temporarily in short supply, and on the other
hand inadequate development of demand". 2 It will also raise the ques1
W. J. CAMPBELL: "A Report on Cooperative Post-War Planning", in Consumers' Cooperation, Dec. 1943.
' See the Public Works (National Planning) Recommendation 1944 (No. 73),
adopted bv the 26th Session of the International Labour Conference (I.L.O.:
Official Bulletin, Vol. XXVI, No. 1, 1 June 1944, p. 75).

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109

tion of what special measures will be necessary to assure the protection of the considerable body of workers engaged on these works.
In reality all these problems are more or less linked together. For
the dimensions of the task will necessarily call for the assistance of
the public authorities as providers of capital and credit. Under
these circumstances they will possess the responsibility as well as
the right and the means of exercising a certain control over the
organisation and execution of the works, over the application of
the capital and credit they supply, and over the working conditions
of those employed on the various schemes.
Like long-term credit, housing and rural electrification, this is
another case where the authorities, called on to provide stimulus,
guidance or control in a field of social or economic life, will have to
seek means of execution that are at the same time elements of order
and discipline.
Workers' Productive and Labour-Contracting Co-operatives
Possibilities are offered in this connection by two related forms
of co-operative: workers' productive co-operatives and labour-contracting co-operatives or co-operative labour groups or gangs. A
workers' productive co-operative exercises the full responsibility
of an entrepreneur as regards capital, technical direction, commercial policy, etc. A labour-contracting co-operative, on the other
hand, generally has little or no capital and does not bear the multifarious responsibilities of a complete undertaking; it replaces, in
its relation to its member-workers and to those who employ it, the
subcontractor or foreman. Both types aim a t securing the workers'
independence and his dignity in the performance of his work.
Between the two types there are, of course, transitional forms:
labour co-operatives with some capital equipment, or workers'
productive co-operatives with very little.
In continental Europe, and more particularly in Czechoslovakia,
Denmark, France, Italy, and Switzerland, a large proportion of
the workers' productive co-operatives were building and public
works societies. In France, for example, out of 474 workers' productive co-operatives in 1939, 274 were of this type, and by 1943
their number had grown to 309 (out of 526). They were among the
most important contractors for the building of pavilions at the
Paris Exhibition of 1937.
In all the countries named except France, and, a t one time, in
Germany, the building and public works societies had even organised separate federations.
It is, however, in Italy and, outside Europe, in Palestine, that
they have probably attained the highest degree of organisation. In
5

110

CO-OPERATION AND PRESENT-DAY PROBLEMS

Italy, workers' productive and labour co-operatives were an outstanding feature of the co-operative movement before the war.
Some of these societies were engaged on building and public works,"
and even on shipbuilding. The members of these groups generally
worked in squads of about 15 in carrying out any particular contract, since it was found that esprit de corps was more easily maintained in small groups.
The various societies were generally grouped in provincial
federations, whose principal functions were the distribution of contracts involving a number of different services among the societies
or groups, the production, in some cases, of building materials and
the maintenance of heavy machines, such as trucks and roadcrushers, used by the societies in their work, and thirdly, the examination of tenders, general direction over the execution of the
work (often through committees of architects and other technicians).
It seems that sometimes large societies exercised all or some of these
functions themselves.
The labour co-operatives were particularly strong in the provinces of Bologna and Ravenna. In the city of Ravenna they built
the town hall and also a large school; the society in Faenza held a
contract for the maintenance of all the roads in the province and
built a palace for government offices.
The provincial federations in turn belonged to a national federation of workers' co-operative societies.
Outside Europe, co-operative building and contracting has
developed furthest in Palestine, where co-operatives in which new
immigrants were trained as buildingvworkers developed into labourcontracting co-operatives. These were later federated in an organisation called Solel Boneh, the contracting department of the Federation of Jewish Labour (Histadrut), which in turn employed its
member societies as well as unregistered co-operative groups of
workers on the execution of its building and public works contracts.
Solel Boneh and a similar organisation, the Tel Aviv Contracting
Co-operative Office (Misrad Hakablani), have both been utilised
by the public authorities for the execution of numerous projects,
ranging from the construction of temporary camps to the erection
of buildings, fortifications and port works. Since 1939, Solel Boneh
has carried out works to the value of £P7.5 million, while the Tel
Aviv Office in the 13 years of its existence carried out works valued
at £P 3.5 million, including £P 700,000 in 1942 alone. These two
central organisations have recently been amalgamated.
In New Zealand, co-operative contracting has been used in the
construction of public works for fifty years, and has also been
regarded as a method of administering relief works for the unem-

EMPLOYMENT

111

ployed. 1 In 1939, three eighths of all the workers employed by the
Government on public works were under the co-operative contract
system. The method now in use is laid down in an agreement made
in 1939 between the New Zealand Workers' Union and the Public
Works Department, under which a written contract containing
elaborate provisions is made between a representative of the Department and the members of the workers' group engaged on each
project. On all public works jobs the Workers' Union has a local
committee and inspector who exercise control over prices and represent the men in all disputes arising out of co-operative contracts.
While these workers' societies concerned with building and
public works are not numerous, they have a tendency to spread,
and, as the examples show, are capable of forming a solid system of
enterprises and subenterprises of proved efficacy.8 The persistency
with which these co-operatives are established claims attention and
suggests that they meet a part of the demands of labour. Security
is the chief preoccupation at the moment, but as this basic need
gets satisfied, the demand will grow that work shall be performed
under conditions which guarantee the independence and dignity
of the person. Those most attached to this principle include in
their conception of security opportunity for the free exercise of
individual capacities for work, foresight and group action. It is
difficult to estimate the prospects of such organisations in the postwar period, but it is perhaps indicative that the Swiss Co-operative
Union has recently included labour co-operatives on its studycircle syllabus and has a special booklet prepared on the subject. 3
As early as 1921, on the occasion of a report submitted by Albert
Thomas, the first Director of the International Labour Office, the
Eleventh International Co-operative Congress (Ghent) discussed
the part that labour co-operative societies could play in the organisation of industrial work.
Owing to the opportunities which they give to certain categories
of workers who feel the need for Independence and creative expression of their faculties, these organisations should certainly not
be overlooked and would even seem to merit encouragement. The
bodies responsible for financing, organising and controlling large
1
And in the mining, saw-milling and various other industries. See, Dr. Anthony
E. C. HARE: "Co-operative Contracting in New Zealand", in International
Labour Review, Vol. LI, No. 2, Feb. 1945, pp. 167-190.
» This type of organisation of work has developed not only in the public
works and building industries but in other industries and in a number of countries. For a particularly typical example, see Charles MARAUX: "The Commandite: Co-operative Work in the French Printing Industry", in International
Labour Review, Vol. XII, No. 5, Nov. 1925, pp. 693-711.
' Dr. G. FAUQUET: L'Organisation du travail par équipes coopératives (Bibliothèque coopérative populaire: No. 24: L'Union suisse des coopératives de consommation (U.S.C.), Basle, 1943).

3 4 *

112

CO-OPERATION AND PRESENT-DAY PROBLEMS

reconstruction schemes or other public works undertakings will
appreciate the advantage to the work of being able to deal with
organised, disciplined and easily controlled groups of workers with
a sense of responsibility. Since one of the objects of the works is
to create and widely distribute purchasing power, there is the further
advantage in dealing with such groups that the whole of the amounts
paid for labour will be received by the persons actually performing
it, without deductions of a parasitic nature. Moreover, encouragement given to these organisations helps them to rid the building
industry of the economically and morally reprehensible practice
of "job-work", which involves sweating and other abuses. Besides
being a satisfactory substitute for this undesirable method of hiring
labour, labour co-operatives help to develop democratic forms of
organising work and so to further the démocratisation of the whole
economy.
It is reasonable to assume that in the course of any public works
scheme a large number of contracts will be drawn up by the public
authorities or under their control. For some time it has been generally accepted, in democratic countries a t least, that the latter, in
contracting for the execution of constructional work, should concern themselves with the working conditions under which the operations in question are carried out. In this connection specifications
might explicitly prohibit job work, with adequate penalties for
non-observance.
Workers' productive co-operatives can be encouraged by the
extension of credits and also by favourable treatment by the public
authorities in tendering for contracts, as was the case in France.
It is difficult to improvise workers' productive co-operatives,
but labour-contracting co-operatives and co-operative labour groups
are much more easily organised, and their formation, in collaboration with or under the control of the trade unions, could be encouraged in contracts made by the public authorities. In return,
the workers' productive co-operatives and the labour co-operatives
or groups could be made to assume certain obligations, such as the
employment of disabled persons, the employment of apprentices,
and vocational training.
FORMS O F SCATTERED INDUSTRY

The occasions and forms of employment so far discussed concern problems that under one aspect or another and in varying
degree can arise in almost every country. But there are also problems peculiar to certain countries only. The one now to be examined
is principally related to countries whose apparatus of industrial

EMPLOYMENT

113

production has been wrecked by the devastation of war or enemy
occupation, or, often, by a combination of the two. 1 This dislocation of industry will inevitably have consequences in the social as
well as in the economic field, and particularly in the sphere of employment.
Destruction of factories and loss or complete breakdown of
machinery in such countries, coupled with difficulties in obtaining
necessary credits promptly, scarcity of certain raw materials,
dislocation of communications, and lack of transport make it unlikely that every branch of industry can start again immediately
in its most modern form and so absorb rapidly a great quantity of
manpower.
It is therefore not unreasonable to foresee a period—of varying
length, according to the industries and countries concerned—in
which the problem of employment will largely be covered by the
formula: "find work for as many people as possible with a minimum of capital expenditure and a minimum of imported raw materials". In other words, because of the interruption or inadequacy
of communications, local or regional needs will have to be met
primarily through use of local or regional resources in manpower
and raw materials. New sources of wealth and employment will
perhaps have to be sought in material and intellectual fields hitherto
neglected. During this period recourse will almost certainly have
to be had to the manifold forms of scattered industry—some of
which are today regarded as out of date—included in the complex
amalgam of cottage industries, home workers, handicraftsmen
proper, and a whole series of intermediate forms of such production.
Not only in Asia, but also in European countries (including the
most industrialised), these forms of industrial production till
recently gave and can still give employment to a large number of
workers. Rarely absorbed by industrial concentration, they have
in some cases been little affected by it and in others have derived
a new vitality from preparatory or complementary operations performed to satisfy its needs.
Cottage Industry and Home Work
Cottage industries are found mainly in agricultural countries,
more particularly in regions where overpopulation or climatic conditions force agriculturists to seek a supplementary source of income. They play an important part in China, India, Japan, Nor1
Certain of the observations which follow also to some extent concern the
underindustrialised countries. But the problem facing these countries of course
includes other elements not considered here.

114

CO-OPERATION AND PRESENT-DAY PROBLEMS

way, Rumania, Sweden, the U.S.S.R., and Yugoslavia, as well as
elsewhere.
Home work often occurs as a degenerate form of a cottage industry, especially where the latter produces for a distant market.
The formerly independent workers, having lost contact with the
market, become home workers attached to an entrepreneur who
supplies them with the necessary raw materials and markets the
product of their labour. This combination, which Le Play terms
"collective factory", is at the present time chiefly found in cities.
In particular, it is predominant in the clothing industry throughout
the world, including the most highly industrialised countries.
Widespread though they are, these extremely varied forms of
industrial production are not easily brought within the realm of
statistics. In industrial censuses they are sometimes included
among handicraft enterprises, sometimes they are counted separately and often they are not counted a t all. It even happens—in
the case, for instance, of the "collective factory"—that they are
classified with large-scale industry. The following data given for
some countries chiefly refer to handicrafts proper.
Handicrafts
In Germany, for example, before the advent of national socialism, 87 per cent, of all industrial establishments employed less than
five persons. Not long ago the same was true of France, while in
Switzerland more than one third of the industrial workers were
classed as handicraftsmen. In the less industrialised countries the
percentages of handicraftsmen are even greater. In the Balkan
countries, 40 per cent, (and sometimes even more) of the industrial
population were engaged in handicrafts and small industry. In
Bulgaria, statistics give the number of handicraftsmen as 71,800,
but it has been estimated that there are 100,000 or even
130,000-140,000 of them altogether, including home workers 1 ; in
other words they comprise almost half the total number of persons
given as employed in industry, mining and quarrying in the 1934
census. In Greece, more than 100,000 enterprises employ less
than three persons. 2
In the U.S.S.R., despite the immense strides made in industrialisation, the production of the small industries still plays an
important role and with Government backing this has increased
as a result of the war.
In general, the small industries and handicrafts produce mainly
consumer goods, especially articles of prime necessity such as
1

Das Deutsche Handwerk, 7 Mar. 1941.
« Idem, 11 Apr. 1941.

EMPLOYMENT

115

cloth, garments, footwear, headgear, gloves, brushes, baskets,
cutlery and pottery. Some idea of the nature of this handicraft
production is given by the following figures relating to Bulgaria
and Poland.
In Poland there were in 1937 altogether 373,529 artisans, including tailors (25.4 per cent.), bootmakers (15.3 per cent.), blacksmiths (8.6 per cent.), joiners (5.1 per c e n t ) , bricklayers and
masons (3.6 per cent.), locksmiths (2.9 per cent.), carpenters
(2.5 per cent.), wheelwrights (2.1 per cent.), housepainters (1.9
per cent.), tinsmiths (1.7 per cent.). Butchers, bakers and hairdressers also formed important groups.
In 1936, Bulgaria had more than 69,200 handicraft undertakings, comprising 71,385 skilled craftsmen and 53,545 other
employees. 42,513 were one-man firms; 4,176 employed more than
five men. The gross value of handicrafts production was 4.5 million
leva in 1935, rising to 7.5 million leva in 1939. The skilled craftsmen
were distributed among the various trades as follows: weaving
(20 per cent.), woodworking (17.5 per cent.), food and beverages
(16.5 per cent.), metal-working (15.1 per cent.), building and
allied trades (12.3 per cent.), tanning (10.4 per cent.), miscellaneous
(8.2 per cent.).
The foregoing figures suffice to show t h a t there is a place for
these simple enterprises using mostly local raw materials and
needing a comparatively small capital. It can safely be said that
in the rehabilitation period, a t least, they will and should be given
encouragement.
Though these small units of production are widely dispersed,
they are accessible through the bodies linking them together:
craft associations and similar institutions for the protection of
their occupational interests, and, more especially, co-operative
organisations for the satisfaction of their economic needs. These
co-operative societies have as their chief objects the procurement
of credit for handicraftsmen (by joint organisation of their savings
and by loans obtained on the joint responsibility of the group)
and the supply of the raw materials and tools necessary to their
trade. Before the war, there were in Europe more than 13,250 such
urban credit and handicraftsmen's co-operative societies 1 , spread
over 18 countries. The following table, showing the number of
such co-operatives in 1937 in the 11 leading countries (in order
of membership), will give some idea of the number of handicraft enterprises accessible through co-operative organisations.
It is to be noted t h a t the figures are only approximate, as a single
handicraftsman may be affiliated to more than one co-operative.
1

This figure includes some co-operative societies of small traders.
5

116

CO-OPERATION AND PRESENT-DAY PROBLEMS

The total membership of the urban credit and handicraftsmen's
co-operatives is not far short of five million and may well be greater,
as membership figures are not known for a considerable percentage
of the co-operatives reported.
Country

Germany
Czechoslovakia
Poland
Rumania
Austria
Bulgaria
Switzerland
Yugoslavia
France
Latvia
Lithuania
Total:

No. of societies

Membership

4,579
2,495
2,064
655
498
429
295
409
156
207
103
11,890

1,675,660
1,547,433
727,618
208,478
185,832
184,292
90,314
89,600
80,270
72,421
25,775
4,887,693

There were also a considerable number of such societies in
Belgium (649), Italy (440), and the Netherlands (296), but data
relating to their membership are not available.
The handicraftsmen's co-operatives in Hungary, though less
numerous (S3), nevertheless comprised more than 7,000 members
and had developed a considerable activity, particularly in the
making of furniture.
In the majority of countries, these handicraftsmen's co-operatives are grouped into federations and other central organisations,
especially in the credit field. Moreover, in a number of countries,
e.g., Czechoslovakia, Sweden, Switzerland, Yugoslavia, associations have been formed to help market handicraft products, particularly those of an artistic character. In Sweden, the consumers'
co-operative wholesale society {Kooperativa Förbundet) proposed
in 1935 to the owners of small enterprises and to the craftsmen
that a special organisation, with agents in different parts of the
world, should be set up for the export of the products of handicraft
and small industry. Kooperativa Förbundet expressed its willingness to contribute a capital sum of 500,000 Swedish crowns for this
purpose.
Workers1 Productive Societies
A large number of workers' productive co-operatives have
former handicraftsmen as their members and some of them have
evolved out of handicraftsmen's co-operatives. Besides those connected with the building and public works industries 1 , there were
also in Europe workers' productive societies turning out clothing,
household articles and other consumer goods.
»Cf. pp. 109-112.

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117

In France, for instance, out of 526 co-operatives affiliated to
the Federation of Workers' Productive Co-operative Societies in
1943, 22 produced textiles and clothing, 29 were woodworkers'
societies, 38 made metal and electrical goods and 12 made glassware
or works of art.
In 1942, there were 90 productive co-operative societies in the
United Kingdom with a total membership of 18,296 and an aggregate trade of £8.7 million; sales of cotton, linen, silk and woollen
goods totalled more than £500,000 and those of boots, shoes and
leather nearly £2 million—almost all such sales being made to
consumers' co-operative organisations. In 1935, the productive
co-operative societies accounted for more than one third of the
total output of co-operative clothing and for one quarter of the
output of co-operative footwear.
Woodworkers' co-operatives were important not only in France,
but also in Hungary, Italy and Yugoslavia. Some of the Italian
workers' productive co-operatives made glassware.
In the U.S.S.R., almost all the handicraft and small-scale industries, especially those using local raw materials, are organised
into workers' productive co-operatives. In 1937, there were some
15,000 industrial or workers' productive co-operatives, with a total
membership of 2 million. As already noted, some of them were
organised for the benefit of disabled persons. Their production
figures regularly in the general annual plan and in the five-year
plans for the development of the Soviet economy. During the war
they played a considerable role, as is shown by the production
quota assigned to them in the plan for 1942: 5,500,000 spoons,
2.500,000 knives, about 4,000,000 forks, 45 million yards of cotton
cloth, 24 million pairs of stockings, 14 million combs, the repair
of 57 million pairs of boots and shoes, the manufacture of furniture
to a value of 72 million roubles. 1
In most of the countries named the workers' productive societies,
like those of the handicraftsmen, are accessible through federations
or other central organisations.
Application of the Forms of Scattered Industry to Rehabilitation
Their Regional Character.
As regards the utilisation of these forms of scattered industry
as sources of employment, it is to be observed t h a t they
1
For 1945 the production quota isas follows: 10,500,000 pairs of footwear,
4,500,000 pairs of felt boots, 17,500,000 pairs of stockings and socks, 75,000,000
spoons, 8,000 tons of household soap, 175,000,000 roubles' worth of furniture, etc.
Altogether this production will have a value of 8,650 million roubles (cf. Izvestia,
Moscow, 23 May 1945; Soviet News, London, 26 May 1945).

118

CO-OPERATION AND PRBSBNT-DAY PROBLEMS

generally occur in the shape of trades more or less narrowly specialised by regions and therefore lend themselves to use in post-war
conditions requiring the maximum use of local resources and productive facilities. These various trades have grouped themselves,
either from the beginning or in course of timei around certain raw
materials or around craftsmen whose professional skill and equipment have been handed down and improved from generation to
generation. Sometimes they have developed around a concentrated
industry which they brought into existence and with which they
live in a kind of symbiosis or else, as in the case of the clothing industries, around large metropolitan centres of consumption like
London, Paris, New York and Vienna.
The Russian "nests of kustari" probably represent the classical
type of such regional craft specialisation, but similar instances may
be found in most of the countries of Europe. The best known are
perhaps those in France: the horn industry, later the tortoise-shell
industry, and later again, the plastics industry (bakélite) at Oyonnax; pipe making and diamond cutting a t Saint-Claude; precious
stone cutting at Septmoncel ; silk and velvet ribbons in the SaintEtienne district; Cévennes silk woven goods (hosiery); woollen
fabrics from Ste. Marie-aux-Mines; Cambrai lawn and cambric;
glove making in the Grésivaudan Valley; cutlery in Thiers, and so
on. Without any attempt to be exhaustive, mention may be made
of the Solingen cutlers in Germany, of Belgian damask, of the glovemaking in the Bologna district in Italy; also of watch and clock
making in the French and Swiss Jura, of musical boxes, and later
gramophones at Sainte-Croix in Switzerland, and, in Yugoslavia,
the furniture-making centre of St. Vid, Terzic for leatherwork, and
the village of Kropa, which has specialised in iron work (especially
nails and screws) for four hundred years.
The disappearance of these forms of production and work in
the face of concentrated industry has long been prophesied but has
not yet occurred. 1 I t is doubtful if these predictions will come true
in the immediate period of post-war rehabilitation. On the contrary, it is probable that under the conditions of disorganisation
likely to prevail, the contribution of such forms of industry will be
an indispensable element in the improvisation of rapid measures to
overcome unemployment and the scarcity of consumer goods. In
the emergency situation they will continue to render and a t the
same time to develop the services which they have been giving in
many countries during the war. They will also have a considerable
1
Cf. G. RABINOWITCH: "The Handicraftsman and Modern Industry",
in International Labour Review, Vol. XVII, No. 6, June 1928, pp. 818-839, and
also La notion de l'artisanat et son êvoluticn, Essai d'analyse et de définition (Confédération générale de l'Artisanat français, Paris (undated)).

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role to play in the immense task of vocational training or retraining;
the handicraft workshop, in particular, has always been in Europe
and still is the training ground of a large number of skilled workers
employed in large-scale industry.
It is not possible here to go fully into the question, but a moment may be spent to consider whether the effort of reconstruction
proper, particularly if it involves a real attempt to start afresh, is
or is not likely to deal the death blow to all the forms of scattered
industry.
Only the future will tell, and the answer doubtless depends in
large measure on the capacity these forms of industrial production
show for the solution of their problems, which are not always or
principally of a technical or economic nature. The surviving rural
cottage industries and handicrafts owe their continued existence
partly to the fact that they have, generally speaking, been able to
solve their economic and technical problems through co-operative
organisation, particularly when working for a distant market, and
partly to the fact that they satisfy certain needs better than any
other form of production.
But their major problem concerns working conditions, especially
in the case of home workers employed by the "collective factory".
It is among them that the most wretched conditions are found,
though to say that this form of production is rooted in the poverty
and exploitation of those engaged in it would be to generalise unduly. Thanks to employers with a social sense, to organisation, in
some cases, of the workers concerned, and, most frequently, to
legislative progress, conditions have materially improved in certain
industries and certain countries. But the legislative effort made in
the last twenty years has not touched every country. Even in those
which it has touched, it has not always been fully effective, either
.owing to failure to define properly the responsibility of the entrepreneur of the "collective factory", or because the means of checking the application of the law have proved inadequate.
Co-operative Organisation.
Besides trade union action putting forward claims and bargaining on behalf of home workers and besides legislative measures for
their protection, there is co-operative action which works for their
liberation. By renewing or maintaining the workers' direct relations with the market and thus eliminating the entrepreneur, it
restores or guarantees to the workers full responsibility in, and full
benefit from, their labour.
Conforming to the particular circumstances of each case, cooperative organisation assumes a variety of forms, ranging from
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CO-OPERATION AND PRESBNT-DAY PROBLEMS

the simplest to the most elaborate. For instance, the co-operatives
found in the Julian Alps in Slovenia may be mentally grouped to
form a series leading from the simple purchase and sale agency to
the workers' productive co-operative society. The co-operative at
StradiZce went beyond the first stage from the start, because, in
addition to supplying requisites and marketing products, it operates
a common workshop for the cleaning and preparation of the horsehair which its members weave into sieve material in their homes.
At St. Vid, the cabinet-makers, who are handicraftsmen rather
than home workers, work in their individual workshops, but also
have a joint workshop with machines purchased jointly. The nailmakers of Kropa have established a real workers' productive cooperative possessing the most primitive and therefore inexpensive
equipment as well as the most modern and efficient machinery, so
that it can switch from hand to machine manufacture and vice versa
according to customers' requirements and the number of orders
received. The co-operative a t Ter2ic is a t once a workers' productive society providing tanners with work and a supply co-operative providing independent shoemakers with leather.
This same diversity is found in other countries as well. In
France, for example, the gem cutters' co-operative a t Septmoncel
is of much the same type as the co-operative a t Stradi2ce. The
neighbouring pipe and diamond cutting co-operatives at SaintClaude resemble the Kropa co-operative and the group of French
workers' productive societies. In the U.S.S.R., the different types
of co-operative known as industrial co-operatives cover the same
range. Observation of these transitions from one co-operative type
to another at the same time leads to awareness of the continuous
chain of intermediate types linking together handicraftsmen proper,
home workers, jobbers and workers in cottage industries, and their
problems are seen to be fundamentally the same in each case.
As the examples given show, in some countries the co-operatives
grouping these categories of workers occupy a more important
place than is generally imagined.
Industrial

Decentralisation.

The powers of adaptation, organisation and survival shown by
these forms of scattered industry may be thought to take on a new
significance when set side by side with certain tendencies easily
discernible in the evolution of industrial production. The steam
engine gathered round itself increasingly large masses of labour
and gave birth to the great enterprises of concentrated industry.
Yet the mass production which was the direct result of this concentration marks the beginning of a new direction: the breaking up of

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121

the productive process into an increasing number of distinct operations a t the same time makes possible the division of the large
enterprise into workshops which for all technical purposes can be
separate from each other and from the financial and commercial
headquarters. In some industries the workshops producing certain
standardised parts can even be geographically a t some distance
from each other and from the place of assembly, as is the case with
the préfabrication of houses, which may be considered as an extention of the technique of mass production. Finally, the small electric motor and the spread of rural electrification enable motive
power to be dispersed, when necessary, to the smallest village and
the humblest workshop.
This development represents one of those not infrequent cases
where progress takes the form of an apparent return to the past.
The use of motive power and mass production which seemed inevitably to call for increasingly large industrial plants have reached
a point in their evolution where the almost unlimited capacity of
expansion of the former and technical developments in the latter
appear to lead to a partial breaking up of large-scale industry.
These observations do not of course apply to industries in which
the productive process cannot be interrupted, like those, for instance, that depend on a necessarily continuous chemical transformation. It is similarly possible that the manufacture of certain
finished articles or the préfabrication of standardised parts in small
scattered workshops will not always be economically justified.
Whether it is or not can be decided in each case only by an analysis
of the processes involved, a study of the market, and calculation
of all the costs.
There is no doubt, however, that this division can be advantageous for certain industries. Over twenty years ago Henry Ford had
already arrived at this conclusion: "The belief that an industrial
country has to concentrate its industries is not, in my opinion, wellfounded. That is only a stage in industrial development. . . The
combination of little plants, each making a single part, will make
the whole cheaper than a vast factory would." 1 Moreover, is not
the break-up of the large concentrated industries, which Ford predicted as inevitable, already occurring ? The electric motor, for
instance, has permitted the breaking up, at least partially, of the
textile industry in the Laval district (France), and in Silesia (Germany). The same thing has occurred in the silk spinning and
glove making industries in Italy and in the silk weaving industry
in the Isère valley in France, as well as elsewhere.
1
My Life and Work (in collaboration with Samuel Crowther) (New York,
1922), p. 191.

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CO-OPERATION AND PRESENT-DAY PROBLEMS

The processes of préfabrication seem applicable, and have sometimes already been applied, to the clothing and footwear industries,
to the manufacture of typewriters, radio sets, clocks and watches
(the parts for the last two items can even be prefabricated in individual workshops), and also to the building of houses. 1 More
generally, in a large number of European countries the production
of certain war materials has led, as is well known, to a decentralisation of industry.
The social advantages of such a dispersal are so considerable
that despite the force of inertia, the spectacular successes of concentrated industry and the common cult of bigness, they have been
the principal inspiration of the growing movement for the decentralisation of industry. In the field under discussion, that of employment, the new techniques make a fresh and essentially human contribution. Before their appearance, the worker, when obeying the
law of supply and demand in employment, had to go and serve the
machines wherever they happened to be located and also the
capital locked up in them. But from the moment and in the degree
that machines are ready to move to the worker and place themselves
at his service, and that work, under certain conditions of organisation, can be brought nearer to the worker's home, a new industrial
revolution has begun. The data of the problem of labour supply
and demand have been profoundly altered, and old habits of thought
may be abandoned. From this moment of technical change, man's
striving for progress may be directed to substituting mobility of the
workshop for mobility of the worker. In this way and in this respect
labour ceases to be a commodity and the worker recovers some of
his attributes as a man, including the right to a full personal and
full social life. A further, though subsidiary consideration is that
the worker thus brought close to his natural social environment and
to the land acquires a greater measure of security and stability in
his employment. I t is suggested by some that these new techniques
will enable underindustrialised countries, with their traditions of
cottage industry, to carry out a good part of their programme of
industrialisation without uprooting vast masses of manpower and
without having to build up huge urban concentrations for the
storage of future "reserve armies of labour".
Naturally the various elements composing the scattered industry now in process of development should be properly correlated
for purposes of control and co-ordination. What has been said in
the foregoing pages will perhaps be enough to suggest that the
natural form of organisation for scattered industry, more parti1
Since 1926 Swedish co-operatives have been prefabricating houses for erection by the purchaser himself.

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123

cularly at its lower stages, is the co-operative one, in which the
small workshops—whether individual, family or co-operative—are
linked together either by a purchase and sale co-operative or by an
assembly workshop, as circumstances may demand. The examples
given show that this constructive process has begun; they point
the way, perhaps, to new co-operative ventures in a field the extent
of which cannot easily be gauged a t the present time.

Co-operatives and Employment on the Land
Nearly all countries, belligerent or not, and whether their economy is mainly agricultural or mainly industrial, have plans directed
to securing employment on the land (as a chief or subsidiary occupation), or a better utilisation of the manpower engaged in agricultural
production, or, again, better working and farming conditions.
In some cases the problems to be solved are war-made, such as
the resettlement on the land of men who left it for military service,
war industry or some other national service, or who were driven
from it by invasion or deportation. In other cases it is a question
of putting into cultivation new or incompletely utilised land under
some land settlement or migration for settlement scheme. Elsewhere the plans and projects express a traditional or recent policy
of protecting and developing the small family holding on broad
social grounds. Finally, all these plans, and particularly the plans
for land settlement and encouragement of family holdings, may
be linked to land reform programmes of varying thoroughness.
The number of workers concerned in such plans differs from
one country to another, but is, in the aggregate, considerable. The
execution of the plans, and, still more, their successful outcome
demand careful preparation and constant attention at every point.
All these projects (subject to reservations as regards the problem
in countries with rural overpopulation) have this feature in common, that they seek to create the conditions of stable and remunerative employment in the interests of the agriculturist and the community alike. For, on the land, farming conditions can only be
satisfactory, technically and economically, when agricultural employment is stable and remunerative. Stable employment implies
the existence of a well-defined legal relationship between the land
and those farming it: there must be ownership, long-term tenancy
or other similar arrangements, either on an individual or on a
collective basis.
The right of permanent or long-term occupancy is not of itself
sufficient to make employment stable and remunerative. The
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CO-OPERATION AND PRESENT-DAY PROBLEMS

holding has to be made ready for operation: the land has to be
improved (or even cleared), drainage ditches have to be dug, the
farm house and other buildings must be constructed, and sometimes
local roads have to be built. The cost of this generally exceeds
and may even be double that of the land itself. In order to start
operations, it is also necessary to assemble the technical means of
production (fertilisers, seeds, feeding-stuffs, tools, machinery, etc.),
and for the agriculturist to possess the technical knowledge and
ability required. Finally, in all those cases where any considerable
part of the production is destined for the market, a solution must
be found for the problem of organising its disposal; in its absence
all the other problems will have been solved in vain.
It is obvious that a land reform programme, a land settlement
scheme, or, more generally, any programme which aims at establishing people on the land cannot be limited to procuring the land for
those who are to farm it. All the other problems must be solved as
well. Actually, a large number of the schemes in preparation or
already made known provide the means of solving them more than
did the programmes of the past. Some of these problems must
normally be solved, and others can be partially or wholly solved,
by the authority organising or encouraging land settlement. But
in the plans themselves or in the absence of complete plans, there
is room for the effort—generally the organised collective effort—
of the parties concerned. For each of the problems awaiting solution there exist proved co-operative methods of approach.
ACCESS TO THE ENTERPRISE

The problem of securing access to the land may contain elements
which demand solution in a particular form. This is so, for instance,
when the owner of. a large estate declines to enter into a multitude
of sale, tenancy or share-cropping agreements with small prospective
cultivators; or when he refuses to break up the estate except on
unconscionable terms which competition between the families
needing land enables him to exact; or again, when there is a parasitic head lessee standing between the applicants and the absentee
owner.
To overcome these difficulties or obstacles the agriculturists
can organise on a co-operative basis and choose between solutions
reducible to the three following types:
(1) Their association can be a co-operative allotment society,
which purchases the estate and divides it into parcels to be transferred to the members outright ;

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(2) It can be a land-leasing co-operative, which
members parcels of an estate which it has bought or
(3) It can be a co-operative for joint cultivation,
or leases the estate, keeps it undivided and sees to its

125
rents to its
leased;
which buys
operation.

This division into three types naturally simplifies and schematises a more complex reality. There are variants of each type and
each exhibits mixed and intermediate forms shading off into the
others. One or other of the co-operative forms of access to the land,
in one or other of its variations, will be found adaptable to the
widest range of circumstances.
Allotment or land-leasing co-operatives are found in places as
remote from each other in space and circumstances as the island of
Cyprus and the United States, where the Farm Security Administration encouraged their development. They have played a particularly important role in Czechoslovakia, Finland, Greece, Hungary,
Poland, Yugoslavia, and several other countries in the application
of land reform measures or of legislation tending to encourage small
agricultural holdings, and, in at least one instance, in the execution
of a plan for the settlement of refugees. In Hungary, such co-operatives (which began to be established in 1907) do not have a separate
corporate status, but each of them forms a special section of a
credit co-operative which acts as head tenant and guarantor as
between its members and the estate owner. In Greece, they were
used as far back as 1912, when the large estates of Thessaly and
Thrace were expropriated; they are compulsory in the sense that
no land transfer can take place without an allotment co-operative
being formed and that the latter cannot be dissolved until the
whole purchase price has been paid. It is interesting to note that
co-operative allotment societies served in the settlement of some
150,000 families brought from Turkey to Greece in 1923 and 1924.
In Rumania, when the land reform was in progress, there were as
many as 2,400 allotment and land-leasing co-operatives, which
distributed about 2 million hectares of land; they were compulsory,
as in Greece.
The forms of joint cultivation will be examined later. It is
enough here to recall the role played by the Kolkhozy in the U.S.S.R.
as an indication of the use to which such forms might be put in a
fundamental reorganisation of agriculture, and the experience of
the agricultural communities in Palestine, suggesting their possibilities in schemes of migration for settlement on the land. To sum
up, then, the choice between the different co-operative forms of
access to the land will not be determined by the particular occasion
of establishment on the land (spontaneous decisions or legislative
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CO-OPERATION AND PRESENT-DAY PROBLEMS

action, land reforms or land settlement schemes, etc.)- The choice
will depend on the form of the establishment, that is to say, on the
mode of land allocation or distribution adopted: small family holdings and medium holdings, or, at the other end of the scale, large
holdings. Whether the land is to consist of small, medium or large
holdings will not be decided on theoretical grounds, but according
to the systems of cultivation that have to be applied to the land
itself. Large holdings suit extensive systems of cultivation, characterised by a relatively small contribution of capital and labour, or
systems involving a fairly advanced division of labour and the
maximum utilisation of groups of workers variously specialised.
Intensive systems, characterised by a considerable contribution of
capital and labour, call for small family and medium holdings.»
The small family holding is particularly suitable where the labour
factor outweighs the capital factor and where work is so distributed
through the year that an agriculturist's family can carry out all
the tasks required without normally having to bring in outside manpower. The medium holding presupposes a more important capital
contribution than labour contribution and such a distribution of
work through the year t h a t the agriculturist has to bring in outside
manpower in considerable amount and for long periods. Finally,
systems of cultivation do not depend on the farmer's caprice; they
are strictly related to the natural and human conditions of the
particular milieu. Natural conditions include climate and the nature
and condition of the soil, while among human factors are density
of population, the demands of the market, means of communication, and also the economic and financial situation and the general
needs of the country.
These general considerations 1 serve to show that there are no
grounds for considering a priori any one system of cultivation or
mode of land distribution superior in absolute terms to another.
Nor, in consequence, can there be any question of giving an unconditional preference to any particular co-operative form of access
to the agricultural undertaking. But depending on whether the
individually run enterprise or the jointly managed enterprise is
decided on, and, consequently, on whether allotment or landleasing co-operatives or some form of co-operative for joint cultivation is selected, different forms of co-operative action will be adopted
for the preparation, organisation and operation of the holding.
These forms will now be examined.
1
They are derived in part from an article by Olindo GORNI: "Les réformes
foncières en Europe orientale et centrale; leurs causes économiques et sociales",
in Annales d'histoire économique et sociale, Paris, 3rd year, pp. 207-226; and in
part from an unpublished memorandum on land reforms prepared by the same
author for the I.L.O. Cf. also Olindo GORNI: "Land Reform in Rumania", in
International Labour Review, Vol. XXII, No. 4, Oct. 1930, pp. 445-482.

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Co-operative Forms for the Organisation and Operation
of Agricultural Holdings under Individual Control
The allotment and land-leasing co-operatives do no more than
solve the problem of gaining access to the undertaking. They
effect this by a division of the property into lots and once this is
done they can be dissolved. Sometimes, however, they remain in
being, and, turning into temporary co-operatives for joint cultivation, organise or put into shape the holdings that they first helped
to constitute. In Greece, the members of the allotment co-operatives
were even obliged to proceed jointly to the necessary works of
drainage and irrigation. When the allotment or land-leasing cooperatives disappear, they give place to new co-operatives which
carry out these preparatory tasks. Co-operatives for land improvement, co-operatives for the supply of drinking water, co-operatives
for the building and maintenance of local roads, telephone cooperatives, etc., often spring up in this way. Similarly, in the land
settlement area of Abitibi, in the Canadian Province of Quebec,
the instinctive and traditional mutual aid which sustains the
arduous life of the settlers led to the formation of work groups
(syndicats de travail) for ensuring or carrying out the clearance of
the land and sometimes for carrying out the initial ploughing, for
digging wells and building barns.
As the phase of preparation and organisation yields to that of
operation, new co-operative organisations are established which
meet the new needs of the holdings and consolidate the economic
position of the agriculturists. When the lots to be worked are the
result of a recent breaking up of a large estate, co-operatives may
be formed to keep as joint property the inventory items which
cannot be divided: tractors, mills, dairies, barns, etc. It would
appear that the present land reform1 in Poland, for example, is
being carried out under these conditions. Similarly, credit co-operatives, which generally date from the preparatory period, can assist
in the formation, financing and operation of other co-operative
societies designed to help the agriculturists' families to obtain
technical means of production of good quality a t fair prices, to
assemble their products, grade them, prepare them for sale and
place them on the market. Some of the co-operatives set up during
the preparatory period can continue, with the same functions when
these correspond to lasting needs or with new ones. For instance,
co-operative groups for mechanised land clearance may change into
threshing or machinery co-operatives. In addition, alongside these
co-operatives that are directly auxiliary to agricultural holdings
1

Beginning of 1945.

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CO-OPERATION AND PRESENT-DAY PROBLEMS

proper, other co-operatives may be formed for the organisation of
the supplementary occupations of the peasant family (weaving,
embroidery, woodwork, etc.). 1
Finally, co-operative organisation in all its forms is not merely
the projection and economic support of the farm enterprise, but
can help in the formation and development of the agriculturist's
vocational skill, the possession of which is another essential condition of stable and remunerative employment on the land. The
experimental farms and schools of agriculture, which are usually
Government establishments, are the natural centres of rural vocational education and technical progress, and they are indispensable
and, as a general rule, effective instruments. But their radius of
action may be limited and their influence cannot always spread
rapidly among the whole body of cultivators. The latter do not
always have the necessary time, are hesitant to embark on journeys
that are perhaps difficult or costly to make, and, moreover, have
not always an unlimited confidence in the opinions of the official
experts. To a large extent technical capacity has first to be gained
on the land and in the social milieu of the agriculturist. The rural
co-operatives, as organised forms of this social milieu,
may be said to constitute the most convenient distributing system for conveying quickly to the agricultural population expert counsel and advice. For that
advice is thus conveyed, not to isolated individuals, but to a permanent coherent
group, whose activity continues and confirms that of the transient individual
expert. They cease to be the bloodless precepts of academic theory and become
th¿ living practical standards of education by experience. They cease, for the
farmer, to be instructions, mistrusted because official, and perhaps also obscure;
they become methods of action, used and recommended by his fellows, his friends,
those to whom he has given his personal confidence and entrusted the direction
of his community. Their acceptance may be attached as a condition to the granting of credit, so that the borrower is obliged by his loan agreement to start on
the road of technical progress; or again, their faithful observance may be encouraged and rewarded by the higher price which the best disciplined farmers
receive from the marketing co-operative societies for the better quality of their
products. It is no exaggeration to say that both by the discipline they impose
and by the means they offer of easy submission to it (supply of selected seed,
fertilisers, pest killers, equipment, technical advice, etc.), the co-operative societies
are practical vocational schools; they teach the smallholder to save time and
trouble, to improve the quality of his products and to market them in a way which
reduces to a minimum the costs of grading, preservation, transport and sale.2

Co-operative and Collective Forms of Farming
The effect of the forms of co-operation just described is to bring
within the reach of small family holdings the financial means and
1
Cf. pp. 113-116. Cf. also, Co-operative Organisations and Post-War Relief,
op rit., pp. 75-76.
' European Conference on Rural Life, 1939: Co-operative Achan %n Rural
Life (League of Nations, Geneva, 1939), pp. 30-31.

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129

technical equipment enjoyed by the large landowner. In a sense
they can be said to re-establish, in a federative form, the technical
unity of the large estate which was divided. The co-operatives for
joint cultivation, on the other hand, maintain this unity from the
start and have to exercise, in a centralised form, all the functions
that small family holdings entrust to several more or less specialised
co-operatives. It should be added here—as examples given later
will illustrate—that collective cultivation can suit medium-size
holdings as well as large ones.
Their unity of administration and direction, their direct contacts with the market and the relationship of their members among
themselves and to the joint enterprise give these co-operatives
broadly the same organisation as the industrial workers' productive
co-operatives and most of them could legitimately be called agricultural workers' productive co-operative societies.
As in an industrial workers' productive co-operative, the general
administration and the technical, financial and commercial direction arc in the hands of a management committee elected by the
members. This committee is responsible for the division of the
work among groups of workers which sometimes resemble labour
co-operatives in certain features. The work can be remunerated in
accordance with a variety of methods, depending on the particular
country and particular co-operative concerned. Usually payment
is made partly in cash and partly in kind (for instance, housing,
fuel, and, nearly always, farm produce); sometimes, besides certain
supplies, the members receive an advance for subsistence; finally,
the association decides, at the end of the financial year, how any
surplus shall be allocated.
In exceptional cases, these co-operatives for joint labour can
be temporary concerns, limited, as already mentioned, to the period
of preparation and organisation of a number of small holdings.
They can be of an incomplete character where there is a system
of small holdings. They can be of an incomplete character where
there is a system of cultivation comprising certain jobs done individually on individual lots as well as other jobs performed jointly,
either on the individual lots but using jointly owned machinery,
or on another piece of land jointly owned or leased. Comparable
to these temporary or incomplete forms are certain borderline
cases when the joint enterprise is in reality serving family undertakings for a strictly limited purpose: for instance, the joint cultivation of fodder for animals that will be cared for b y their individual
owners.
Agricultural workers' productive co-operatives or co-operatives
for joint cultivation are therefore not all uniform in structure; on
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130

CO-OPERATION AND PRESENT-DAY PROBLEMS

the contrary, they lend themselves to a large variety of combinations capable of fitting a variety of circumstances. The role that
they can play in the application of land reforms, in the execution
of plans of land settlement and migration for settlement on the
land, depends on this very elasticity, and comes out perhaps more
clearly from a consideration of some of the main types of agricutural workers' productive co-operatives from the standpoint of
the causes or purposes for which they originated: those, for instance,
of Italy, the U.S.S.R., and Palestine.
Affitanze Collettive.
In Italy, the agricultural workers' productive co-operatives
have existed for a quarter of a century. Their experience is instructive, not only by its length and independence of general political
circumstances, but also because of its entirely spontaneous character. In an examination of the co-operative forms of employment
on the land, it should first be stressed that these co-operatives are
the outcome of an effort by a section of Italian labour to combat
unemployment. It is also interesting to observe how, without
previous plan, b u t by continuous growth in meeting a succession
of problems, they developed out of labour co-operatives. 1 For
they were formed out of and in development of the co-operatives
of braccianti, which were themselves established to deal with unemployment by organisation of work and the elimination of subcontractors in all operations connected with the land (navvying
for public works as well as agricultural labour). Among the tasks
undertaken by these labour co-operatives was the "redemption"
of uncultivated lands. Little by little, the co-operatives of braccianti, after accomplishing the task of creating new land, decided to
work it themselves as a means of prolonging and stabilising their
employment. 2
Such, then, was the origin of the Italian co-operatives for joint
cultivation (affiitanze collettive a conduzione unita). The property
farmed is generally of medium size and suited to systems of intensive cultivation. When summer work demands a larger labour
force than that provided b y the membership, the co-operative has
to take on some day labourers. When, on the contrary, the members
cannot all be employed throughout the year, they are given work in
rotation and those who are temporarily unemployed undertake
earth works (roads, canals, etc.) during the winter months and
»Cf.
pp. 109-110.
1
Cf. Manlio SANCISI: De l'action syndicale à l'action coopérative. L'expérience du prolétariat rural en Italie (1870-1922). Preface by Dr. G. Fauquet
(Geneva, Imprimerie populaire, 1940).

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131

are usually organised in co-operative labour groups for this purpose.
The co-operatives for the joint cultivation of the land are grouped
in regional federations which help them with their accounts, give
them technical advice, and, fairly often, supply them with agricultural and other requisites.
Kolkhozy.
Joint farm operation in the U.S.S.R. comprises special features
which distinguish it in certain respects from the comparable Italian
experience. Its chief instrument is the kolkhoz, an agricultural form
of the artel or labour co-operative, which began to spread after
the 1917 revolution, but did not become really general till 1930, the
second year of the first five-year plan. (There were 57,000 of them
in 1929 and 242,000 in 1938.) From this time on, the kolkhozy
ceased entirely to be spontaneous organisations. They afford a solution to the problems raised by the peasants' land seizures and, in
this sense, bring final form and order into the efforts at land reform ;
they become elements of a centralised and planned economy, and
as the plan aims at the industrialisation of the country, they have
the distinctive characteristic of being the instruments of the mechanisation of agriculture. They are also the chief agents for the
execution of the plans of agricultural production.
The kolkhoz is to be distinguished from the sovkhoz, which is an
agricultural enterprise managed directly by the State and employing wage earners. The kolkhoz is an association managed by a
management committee elected by its members. Any agriculturist
of good repute has a right to membership provided he is ready to
pool his land and resources and to accept the rules and regulations
of the association. The land is State property, but the kolkhozy
have the right to occupy their farms in perpetuity. In addition to
•the land collectively held and operated, each family on a collective
farm possesses a lot for its own use. The size of these lots varies
from five eighths of an acre to two and a half acres according to the
district. Each family on the collective farm is also entitled to own a
limited number of animals: poultry, rabbits, cows (1-10), sheep
(10-50), etc. Work is organised by groups (as in the Italian cooperatives), each group being responsible for carrying out a definite
task. Remuneration for the work, or, in other words, the division
of the joint income, is made on the basis of the work-days contributed by each member. A positive or negative coefficient may be
applied to the work-day according as the output is higher or lower
than that regarded as normal, or as the work to be done requires
more or less skill. The definition of the work-day unit and the
different coefficients are fixed by the management committee,
5

132

CO-OPERATION AND PRESËNT-DAY PROBLEMS

subject to approval by the general meeting of members. Payment
for work is made in cash and in kind. Credit needs are satisfied
through the State Agricultural Bank.
As one of the objects of collective farming has been the mechanisation of agriculture, it is natural that the State machine-tractor
stations should be a central feature of the system. There were
6,647 of these stations in 1941, with 496,000 tractors and 140,000
harvester combines. Their relations with the kolkhozy are governed
by contracts whose principal object is to provide for the rental of
the station's machinery and services to the kolkhoz in return for
a fixed amount of agricultural produce. The station also performs
certain of the functions t h a t under the Italian system belong to
the regional federations: it helps the kolkhoz to solve its administrative and technical problems; it is a sort of pool of agricultural,
veterinary, mechanical and other experts on which the kolkhoz
can draw according to need. In addition, the machine tractor
station is the chief link between the State and the kolkhoz for the
making and execution of plans and the collection of agricultural
produce.
Finally, it should be added that, once the prescribed deliveries
have been made to the State and to reserve funds, the kolkhoz is
at liberty to sell the surplus in the "collective farm markets". Quite
often its income is increased by earnings from secondary occupations, such as handicrafts, cottage industries, and fisheries. The
families on collective farms are also allowed to market their own
produce at "collective farm markets". In 1940, these markets
absorbed almost 20 per cent, of all agricultural produce. 1
Kvutzoth.
By general consent Palestine provides an example of successful
migration for settlement and co-operative farm operation occurs
there as a mode of colonisation.
Two forms of co-operative farming are found: the incomplete
moshav-ovdim and the extremely comprehensive kvutza. In 1943,
there were 70 settlements of the former type and 134 of the latter.
In both cases the land is owned by the Jewish National Fund and
not by its occupants, who must farm the land themselves without
the help of paid workers.
1
For further details of collective farming; in the U.S.S.R., see, for instance,
G. RABINOWITCH: "The Kolkhozes in the Economy of the Union of Socialist
Soviet Republics", in Rural Sociology, Vol. VIII, No. 3, Sept. 1943; N. BAROU"Collective Farming in the U.S.S.R.", in Review of International Co-operation,
July 1942; and N. BAROU: "Soviet Agricultural Co-operation", in Year Book
of Agricultural Co-operation, 1943-1944 (Manchester, Co-operative Wholesale
Society Ltd., 1944), pp. 154-160.

EMPLOYMENT

133

The moshav-ovdim is a kind of a co-operative village, that is
to say, a village in which all economic functions are, as far as possible, carried out by co-operative organs. But in general the land
is cultivated by the individual smallholder. In certain of these
settlements, however, wheat is cultivated on a joint basis and each
settler receives a share of the crop proportional to the area he has
sown.
The kvutza (plural kvutzoth) goes much further. Contrary to
what might be expected from the strictness with which the principle
of collectivisation has been applied, it is not the product of a preconceived idea. Its features have emerged, stage by stage, out of
experience. In the first place the very idea of group colonisation
arose out of the early failures of inexperienced settlers meeting
intolerable living and working conditions. But the first kvutza,
founded in 1908, though it adopted the practice of joint labour,
did not immediately give up the division of the annual surplus
among the participants. It was the problematical nature of these
surpluses that led it to get rid of any individual appropriation
within the community. It may be said, then, that though the
kvutzoth developed systematically 1 like the kolkhozy, they were at
the same time a spontaneous creation, as was the case with the
Italian co-operatives for joint farm operation.
In the kvutza not only the farming but all the economic functions of the community and its social life as well are organised on
a collective basis. Meals are prepared in a common kitchen and
are eaten in a common dining-room. Even the education of the
children is carried out jointly. Naturally the income of the enterprise is shared, but exclusively in the form of food, clothing, shelter,
recreation, medical care, education, etc., and, contrary to the Soviet
system, the division does not take into account the quantity or
quality of the work done by the member. There is no use for money
within the kvutza.
The size of the settlement is generally restricted, but varies
with the system of cultivation and the number of members in the
kvutza, with an average of S acres per member. The settlement is
organised on the basis of a plan which in its broad outlines has been
drawn up by the general meeting of members. The plan takes
into account not only economic considerations, but also social ones,
among others being the need of finding employment for each of the
members. In its relations with the outside world, the kvutza utilises
co-operative channels almost exclusively: the Workers' Bank
1
To the extent that young people preparing to settle in Palestine underwent preliminary training in manual labour, agricultural labour, and community
living in their country of residence.

134

CO-OPERATION AND PRESENT-DAY PROBLEMS

(Bank Hapoalim) for its financial transactions, and the Central
Marketing Institution of Agricultural Co-operative Societies
(Tnuva) and the Palestine Co-operative Wholesale Society (Hamazhbir Hamerkazi) for the marketing of its produce and the purchase
of its supplies.
The surplus on the year's business is not divided ; after making
provision for reserves it is used to raise the standard of living
(nutrition, clothing, housing, etc.) or, by far the most common, to
bring in new members and thereby enlarge the settlement. 1
Other Instances.
The example of Italy shows that joint farm operation cannot
be regarded as just a recent development. Nor is it to be regarded
as really an exceptional practice. Besides the examples already
given as representative types, others are to be found in several
countries, not only of Europe, but also of Asia and America.
In Bulgaria, the collective farm movement sprang up spontaneously among the peasants and was later encouraged by the
public authorities as a remedy for the excessive division of holdings;
since 1939 it has been placed under the control and management
of the Agricultural and Co-operative Bank of Bulgaria. 2 In Yugoslavia, the traditional and still existing institution known as the
zadruga is comparable to a co-operative for joint cultivation. In
the zadruga the members of a family group (whatever the degree
of relationship and including kinsmen by adoption) live and work
together on jointly owned property. It is hard to tell what has
become of the Spanish "collectivities", but there were 123 of them
reported in 1938.
As for Asia, there were several hundred, co-operatives for joint
cultivation in Japan in 1938; a few are also reported in India, where
the President of the 14th (July 1944) Conference of Registrars of
Co-operative Societies recommended that this method of farming
should be studied.
Similar interest has been shown in Australia, where the Rural
Reconstruction Commission, in its third report to the Commonwealth Government, recommended the establishment of co-operatives for communal farming, but on a purely voluntary basis. At
present the federal Government is operating communal farm machinery centres, which lease machinery to farmers.
1
For a detailed study of the kvutza, see H. F. INFIELD: Cooperative Living in
Palestine (New York, The Dryden Press, 1944), and also Report by the Registrar
of Co-operative Societies on Developments during the Years 1921-1937 (Jerusalem,
1938).
* On the basis of the experience acquired, a new Act concerning agricultural
co-operatives, promulgated in April 1945, provided co-operatives for joint cultivation of land with a legal framework.

EMPLOYMENT

135

On the American continent, the difficulties experienced by
small and medium farmers in western Canada have led to interest
in the possibilities of collective farming of large tracts of land.
The question is being keenly discussed in the co-operative press of
the prairie Provinces. In August 1944, a conference held under the
chairmanship of the Minister of Reconstruction of the Province of
Saskatchewan and attended by representatives of farm organisations, the provincial and federal Governments, the armed forces
and veterans' organisations, discussed the use of co-operative
farming in establishing returned soldiers on the land. Plans are
being prepared. Some actual beginnings have already been reported
in the three prairie Provinces as well as in Nova Scotia. In most of
the experiments there is co-operation for limited purposes; certain
services are jointly provided or certain well-defined tasks are performed collectively. In Saskatchewan, however, application was
made in August 1944 for the registration of a co-operative which
seeks to operate a farm of 150,000 acres of arable and pasture land.
In the United States, the Farm Security Administration encouraged
twenty or so experiments in co-operative farming of varying size.1
I n the countries where interest has been aroused in forms of collective farming these are often regarded as a modern revival of the
village communities which in every country for centuries gave
agricultural organisation its pattern and agricultural employment
its stability, while expressing man's deep social instinct. In countries
where communal traditions have not yet been entirely obliterated,
it has been possible to graft new co-operative institutions on to
them. This is so, for instance, in Mexico, where the land reform
has restored communal ownership of the land (ejido) by all the inhabitants of a village. The ejido or collective holding is cultivated
sometimes by individual methods and sometimes by collective
methods. The best-known example of collective farming is that of
the cotton-growing region of La Laguna, where nearly 285,000
acres of land are farmed by 221 agricultural workers' productive
co-operatives comprising 28,500 families.2 Similarly, in Peru "agricultural settlements of collective labour" are beginning to be established on the basis of the old Indian communities.
This rapid review of the methods of joint farm operation may
suffice to bring out their common features as well as the characteris1
For a general study on co-operative farming, with special reference to the
F.S.A. experiments in thi» field, see J. W. EATON: Exploring Tomorrow's Agriculture. Co-operative Group Farming: A Practical Program of Rural Rehabilitation (New York, Harper and Bros., 1943).
* Cf. Clarence SENIOR : Democracy Comes to a Cotton Kingdom. The Story of
Mexico's La Laguna (Mexico, D.F., Centro de Estudios Pedagógicos e Hispanoamericanos, 1940).

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CO-OPERATION AND PRESENT-DAY PROBLEMS

tics that distinguish them. Their capacity for adapting themselves
to the widest variety of geographical, economic and historical conditions and the fact that they recreate in modern structures an
age-old tradition will perhaps give them new scope in post-war
plans of land reform, land settlement and migration for settlement.
At all events, it may be said that they complete the vast existing
network of co-operative organisations that, suiting their form to
systems of cultivation, size of holding and mode of tenure, ensure
and protect stable and remunerative employment on the land. 1

The Co-operative Economy and the General Level
of Employment
The forms of co-operative just examined were considered from
a particular standpoint, as agencies providing access to employment
or stabilisation of employment o r a s commendable means of organising work in industrial and agricultural occupations. The contribution that co-operative organisations can make in this way to the
execution of plans for reabsorbing manpower is by no means inconsiderable. It remains, however, to see if this exhausts the possibilities offered by co-operative organisations in helping to avert
the threat of widespread unemployment.
While organisation and stabilisation of employment often
enough mean the creation of jobs, this is not always the case, and
in any event co-operative institutions in so far as they do so only
benefit their own members and employees. The question is whether
they are able, by their action or through the new forms they give
to the economy, to create occasions of employment in their vicinity
and so help to raise the level of employment in the community at
large. Persons well qualified to speak declare that they do. Sir
William Beveridge, for instance, speaking about consumers' cooperatives to a group of American journalists in the summer of
1943, declared that "the consumers' co-operative movement has
an important role in organising productive industry to canalise
demands of consumers and to maintain steady employment". 2
The First Lord of the Admiralty in Great Britain, Mr. A. V. Alexander, in a speech a t Rochdale on 19 December 1943, expressed
the view that if the nation's whole retail trade were placed on a
co-operative basis, the purchasing power of consumers would be
1
Cf. also Henrik F. INFIELD: Cooperative Communities at Work (New York,
The'Dryden Press, 1945), for an analysis and comparison of the co-operative
communities of the United States, Mexico, U.S.S.R., and Palestine.
8
As reported in Canadian Co-operator, Aug. 1943.

EMPLOYMENT

137

increased by at least £300 million annually through the mechanism
of the savings refund or so-called "dividend", and he affirmed that
in such case "at least half our normal peacetime problem of unemployment would be solved by the consequent demand for goods
and services". 1 These statements, inspired chiefly by the spectacle
of the British co-operative movement, merit attention, and there
should be investigation of the facts in support of them and, if
possible, an explanation of these facts.
STABILITY OF EMPLOYMENT IN CO-OPERATIVE ENTERPKISES

First it may be asked how stable is employment in the co-operatives themselves and how this measure of stability has been affected
by the economic depressions of recent times. The directors and
managers of co-operative enterprises are not, of course, immune
against business errors, and co-operative institutions may find
themselves in difficulties and, as a result, have to reduce their
staff when there has been bad management or a defection by the
members. However, it is a fact of common observation that as a
whole they resist economic fluctuations better than enterprises run
for profit. This was noticed, for instance, by Mr. Houston Thompson, 1 ^ former chairman of the Federal Trade Commission in the
United States. Reporting on his visit to European countries after
the last war, he declared: "I found the co-operatives to be a stabilising factor in the inflation-ridden economic system. In Denmark, the leading banker who opposed co-ops committed suicide
when his banks failed and practically took the whole economic
system with him. The co-ops, being decentralised, stood up . . . "
A consequence of the co-operatives' greater resistance to disturbances of economic life is more stable employment of the workers
engaged in them. Among others available, the example of the
British co-operatives may be given to show the trend of employment in them during the last depression.
The total number of workers of all categories employed in the
distributive and productive services of British consumers' cooperatives and their two wholesale societies rose from 226,610 in
1929 to 272,449 in 1935—an increase of 45,839. During this period
in which the British co-operative movement experienced a 20.2
per cent, rise in the number of its employees, the number of totally
unemployed persons registered with the labour exchanges of Great
Britain and Northern Ireland increased by 89.5 per cent. The
number of persons registered as totally unemployed was highest
in 1932, when it stood at 2,136,052, or 137.19 per cent, more than
1

As reported in The Cooperative Consumer (Kansas City), IS Jan. 1945.
5

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CO-OPERATION AND PRESENT-DAY PROBLEMS

in 1929. Even during this period of intense unemployment, the
co-operative movement slightly increased the number of its employees to 241,583 in 1932 (i.e., by 6.6 per cent, or 14,973 persons).
Instead of comparing in absolute figures unemployment in the
United Kingdom with the rise in employment in the co-operative
movement, comparison may be made between employment in
the country as a whole and that in the co-operative movement.
Using index numbers calculated on the basis of 1929 = 100\ it is
found that the index of employment in co-operative enterprises
went up to 120 in 1935, whereas the general index was only 101.5,
and during the period 1929-1932 the co-operative index advanced
6.6 points, while the general index fell 8.6 points. 2
This example is particularly significant, since the size of the
figures involved nullifies the influence of minor and accidental
variations. But it is not exceptional. Between 1928 and 1934 the
volume of employment in European consumers' co-operatives—
the only ones for which a complete series of exact figures is available—rose in all countries, with the possible exception of Austria.
In countries such as Czechoslovakia, France, the Netherlands,
Sweden and Switzerland, it increased even more than in Great
Britain, varying, according to country, from 25.5 per cent, to
187.10 per cent. Even if the example of Great Britain alone is considered, it would be instructive if the causes could be established
which account for the difference between the development of unemployment and employment in the country a t large and the
development of employment in co-operative enterprises.
The first consideration is that, food needs being those least
capable of reduction, it is natural in a time of crisis for the food
trade and industry to be less affected than many other trades and
industries. The British co-operative movement is mainly a consumers' co-operative movement and its trade activity is principally
concerned with foodstuffs. In 1932, during the period under examination, foodstuffs accounted for 80 per cent, of co-operative
trade (75 per cent, at the beginning of 1940). This percentage is
still greater in the case of the consumers' co-operatives of most
of the other countries. Another explanatory factor is that the cooperative movement is constantly growing and that the consumers'
co-operative movement, particularly, tends to quicken its rhythm
'Cf. I.L.O.: Year Book of Labour Statistics, 1942 (Montreal, 1943). The
indices used here refer to persons employed in mines, industry, transport and
commerce in the United Kingdom. They were prepared on the basis of statistics
of compulsory
unemployment insurance.
2
At the same time the fixed assets of co-operative enterprises (land, buildings,
plant) rose from £48,406,257 in 1929 to £50,534,021 in 1932 and £54,822,932
in 1935.

EMPLOYMENT

139

of growth during economic crises; when its membership is increasing, it is natural that there should be a corresponding rise in the
number of its employees.
DISTURBANCES OF ECONOMIC EQUILIBRIUM

It is to be doubted, however, whether these two considerations
can account entirely for a phenomenon that is so distinctive and
widespread. Co-operators advance some additional and, in their
view, more fundamental explanations. They do not, of course,
claim that there is a co-operative remedy for unemployment, the
more so as this most dreaded among social evils is the symptom
and result of disease rather than the disease itself. Attack must
be made on the cause, not on the symptom. The cause must be
sought in the uncompensated disturbances of equilibrium from
which the prevalent economic system suffers and on which some
of its elements even thrive. The machinery of price establishment
is out of gear ; there is no necessary and constant relation between
cost prices and sale prices, between productivity and production,
between production and needs, between needs and the purchasing
power of those with the needs.
Price Oscillations
Lord Keynes has stressed the instability of prices and its consequences. He has pointed out, for instance 1 , that during each of
the ten years preceding 1938 the price of rubber was at some date
double the price at some other date in the year, that with cotton
the average excess of a year's high price over the year's low price
was 42 per cent., with wheat 70 per cent., and with lead 61 per
cent. He showed that these differences were not primarily due to
monetary or exchange fluctuations. It is evident that such an
instability of prices of foodstuffs and raw materials (which naturally
reacts on the prices of manufactured goods) must lead, particularly
when it occurs over a relatively short period, to serious disturbance
of the economic process and, in consequence, to disturbance in
the employment field.
Co-operative enterprises rarely have either the ambition or
the means to impose a particular price on the market directly.
But they are not without influence on the general trend of prices
as regards a fairly large number of important products or services.
This influence is towards stabilisation. It is true that individual
buyers and sellers of goods or services may try to obtain respectively
falling and rising prices. But collectively and even individually
1

Economic Journal, Sept. 1938.

140

CO-OPERATION AND PRESENT-DAY PROBLEMS

they have the same overriding interest in stable prices. Moreover,
co-operative organisations comprising buyers or sellers have a
business interest, whatever their functions, in avoiding violent
price fluctuations. While they may be powerless to prevent them,
they do nothing to provoke them and try to reduce them. In their
own particular sphere, at all events, either by direct action or indirectly through the mechanism of the savings refund which tends
to reduce prices to real costs, co-operatives maintain an equilibrium
between prices and costs and thereby act as a stabilising factor in
the determination of prices.
Distribution of the National Income
Being mainly negative, the action of co-operative organisations
in checking price instabilities is not always easy to trace. It is
easier to see how co-operative business methods tend to eliminate
from the co-operative sector of the economy and, partially, from the
surrounding territory another—and perhaps the most direct—cause
of unemployment, namely, the incomplete absorption of production by the market owing to faulty distribution of the national
income. The productivity of labour, which is increased by technical
progress and improved organisation, grows more rapidly than the
effective purchasing power available to absorb the production.
This is particularly marked in the case of industrial production.
In this connection reference may be made to the report published
in 1929 in the United States by the Committee on Recent Economic
Changes, of the President's (1921) Conference on Unemployment,
of which Mr. Herbert Hoover was chairman. This report 1 shows
that between 1922 and 1927, the general productivity of labour
went up by an average of 3.5 per cent, per annum, nominal wages
by 2.8 per cent., and real wages by 2.1 per cent., while profits of
industrial companies went up 9 per cent, and distributed dividends
6.8 per cent.
Though there has been an advance in wages, then, this has been
less than the advances in the productivity of labour and in profits.
This smaller increase in wages results in a lessened demand for
goods and, consequently, in an increased amount of unabsorbed
products. The clogging of the market tends to slow up production
and to diminish employment. At the same time, however, the larger
rate of increase in profits, which has little effect on demand for
consumer goods but allows the investment of capital in new productive facilities, has a tendency to augment the potential of pro1
Recent Economic Changes in the United States (New York, McGraw Hill,
1929), Vol. I I .

EMPLOYMENT

141

duction, and, eventually, production itself. While the creation of
new productive facilities gives employment, it also tends to aggravate the disproportion between production and absorption of consumer goods. This leads to a slowing down or stoppage of production, either as a result of a collapse of prices if the law of supply
and demand is operating or, if it is not, by a slump in trade. On
the other hand, if the additional profits are not reinvested in
industry, they stand idle and are without benefit to the economy.
They accumulate in the hands of those whose income is larger than
their expenditure and reduce the purchasing power of the community. The problem always comes down to the necessity of increasing over-all purchasing power by augmenting that of the
social groups which are numerically greatest and the least well-todo.
The economic effect of social security systems is to bring about
such an increase. It is also brought about by the co-operative
economy, which from this standpoint may be regarded as a means
of distributing the national income. This is clear when it is remembered that the co-operative enterprise is a service and not
a profit enterprise, is owned and managed by its users, and that
the latter belong to the social groups with deficient purchasing
power. Its whole business mechanism is geared towards provision
of the most economical service: first, the cost of the service is
reduced to a minimum, and, secondly, the user pays as nearly
as possible its real cost.
The cost of the service is reduced in various ways. In the first
place, the federal structure of the co-operative movement, with its
central machinery (financial, commercial, legal, statistical, etc.)
put a t the disposal of co-operative enterprises, enables the smallest
of these to effect the same economies as the large concern run for
profit. Secondly, the co-operative enterprise normally effects
additional economies1: only a fixed and limited interest or no interest at all is paid on share capital; directors do not receive any
percentage of the profits; superfluous middlemen and commissions
are eliminated; the nature of the relationship between the enterprise and its users makes extravagant commercial publicity unnecessary; still further economies are effected when co-operative
1

Cf.

A. M. CARR-SAUNDERS, P. SARGANT FLORENCE, Robert PEERS

and

others: Consumers' Co-operation in Great Britain. An Examination of the British
Co-operative Movement (Harper Brothers, New York and London, 1938). See,
in particular, pp. 375, 396 and 397, for figures showing that the general operating
costs of consumers' co-operative societies amount to 13.9 per cent, of total sales,
compared with 18 per cent, in the case of independent grocery shops, and 18.2
per cent, for chain-grocery stores. Operating costs of co-operative wholesale
organisations are given as 1.3 per cent, of sales, as against 9 or 10 per cent, for
ordinary wholesale grocery firms.
5

142

CO-OPERATION AND PRESENT-DAY PROBLEMS

enterprises with complementary needs (marketing and purchase,
borrowing and lending, etc.) can satisfy them by mutual exchange
cf goods or services. 1
The economies effected by the well-managed co-operative enterprise benefit its users. Such benefit may reach them in more than
one way. Most frequently it will be through the mechanism of the
surplus refund, which is the most obvious feature distinguishing
co-operative from profit business. It introduces into the economy
an entirely new principle, whose full significance as a means of transforming the system of exchange has not always been grasped. It
is also through the surplus refund that the co-operative enterprise
constitutes an organ for the redistribution of the national income.
Assuming that the business is not running at a loss, there will
be a surplus shown at the end of the year. In a profit enterprise
this surplus would be called "profit" and be distributed among the
shareholders in proportion to the amount of capital each has invested and risked in the business. In a co-operative enterprise, on
the other hand, each member receives a share of the surplus in
proportion to his patronage of the business.2 In other words, each
of the transactions of the member with the enterprise only resulted
in a provisional settlement at the time it was made and final settlement, with completion and adjustment of the transaction, occurs
when the surplus is divided. The result of this adjustment is to
return to the member any sums he has paid in excess of the real
cost of the service rendered or, in the case of a marketing or labour
co-operative, to pay to him monies withheld out of proceeds of sale
of goods or out of payments for work done. Such return will not
be complete, because a portion of the surplus will have been placed
to reserves; but subject to this reservation the price of the service
will have been reduced to the real cost of supplying it.3
It follows that in a workers' productive co-operative the final
remuneration of the worker-members and their purchasing power
practically keep pace with the productivity of labour. Similarly,
with all the other forms of co-operative, such as rural supply, credit
and consumers' co-operatives, the mechanism of the surplus refund
operates to put at the disposal of low-income families sums which
under the prevailing economic system would accumulate outside
1
2

Cf. Part I, Chapter III: "Inter-Co-operative Relations".
The surplus may also be devoted, in whole or in part, to social purposes,
such as various kinds of insurance, children's nurseries, holiday homes, which
create or release purchasing power or give rise to employment. As pointed out
on p.
134 it is used in the Palestinian kvutza to create employment directly.
3
It may also be noted that the reserves are generally applied to the expansion
of the business and consequently give rise to employment. In particular, one of
the chief objects of deferred refunds forming individualised reserves is the acquisition of capital equipment.

EMPLOYMENT

143

the consumer goods market. These sums are not negligible, as the
following instances will show. Thus in Great Britain, the consumers'
co-operatives, selling at State-fixed prices which are the same for
all traders, are returning more than £30 million annually to their
members. In Switzerland, the consumers' co-operatives distributed
more than 450 million Swiss francs in surplus refunds between
1869 and 1939; in France in 1939, they returned a t least 125 million
French francs to their members either as refunds or in various
social advantages. Dr. Joseph C. Knapp, principal agricultural
economist in the Farm Credit Administration in the United States,
has estimated that the country's seventeen largest rural supply
co-operatives alone saved their members $17,702,605 in 1943.
Orientation of the Economic Process
Among the causes of unemployment there is one on which cooperators lay particular stress. This is the defective orientation of
the economic process, the lack of correspondence both quantitatively
and qualitatively between production and real needs—more especially the needs of the masses.
It is held that there is a fundamental difference between the
co-operative economy and the profit economy. The enterprise run
for profit and the capital invested in it to yield a return naturally
organise production with a view to securing the highest or surest
profit possible. The co-operative enterprise, as a service enterprise,
organises it to meet needs. The quest for profits may satisfy needs,
but not necessarily.
In the first place, the profit enterprise has no direct and intimate relations with real needs and cannot always gauge them with
certainty. As the president of Consumers' Co-operative Association of Kansas City has pointed out: "One of the great unknown
quantities facing every business a t the moment is the nature of
the backlog of consumer demand for durable and consumer goods
immediately after hostilities cease". 1 On the other hand consumers'
or housing co-operatives are
in permanent touch with those whose requirements they supply. They are
acquainted with their way of life, their purchasing power and the way in which
they spend their income. Consequently, they are in a better position than any
other organisation to make purchases which fulfil the necessary conditions as
regards quality and price, and, in a word, to carry on all their activities on the
basis of requirements which have been ascertained or sufficiently closely estimated.2
1
The Cooperative Consumer (Kansas City), 31 Aug. 1944.
» International Labour Conference, Sixteenth Session, Geneva, 1932: Report
of the Director, pp. 56-57.

3 6

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CO-OPERATION AND PRESENT-DAY PROBLEMS

A committee of directors or managers of co-operatives can thus
easily and rapidly collect the particulars which make it possible to
guide orders for materials and production.
Secondly, the search for profit very often turns or tends to
turn production away from a market already partly occupied towards a market waiting to be built. I t endeavours to stimulate
new needs and thereby introduces a dynamic factor into the economy, though without necessarily bringing progress. It is also apt to
introduce uncertainties and disturbances of economic equilibrium.
T h e search for profit aggravates (and at the same time partly explains) the difficulty of estimating future demand, because it leads
to the supply of real and basic needs being abandoned before they
are fully satisfied.1 It also explains the paradox of the importance
attached to the art of salesmanship—with schools being founded for
teaching it—at a time when consumers are competing with each
other to obtain necessary goods in short supply. The seller has to
use his ingenuity to market a product for which a demand does not
exist, but must be created. A service undertaking is concerned to
satisfy expressed needs.
It is true that the line separating real needs and artificially
created needs is a shifting one. I t is truer still that indisputably
basic needs which are left unsatisfied or insufficiently satisfied are
extremely numerous. Co-operative enterprises not only have the
means of knowing what these needs are, but have been set up in
order to satisfy them. T h a t the British co-operatives were able to
maintain and even increase their means of production and the
number of their employees during a period of economic depression
was due to the fact that they fulfilled their role, which is to adjust
their types of manufacture to the real demand of their members.
The same observation applies, of course, mutatis mutandis, to cooperatives of other categories. Furthermore, it should be noted
t h a t the mechanism by which co-operatives create their working
capital also operates in such a way as to relate size of capital equipment automatically and as closely as possible to the total needs
to be satisfied. As is known, the rule of proportion mentioned in
connection with the division of the annual surplus also applies to
the contribution made by each member to the expenses of operating
the joint enterprise. He makes a contribution in proportion to the
services he expects to receive from the enterprise—a contribution
roughly proportionate and in advance, when it is measured by the
1
In the United States a questionnaire addressed to industrialists revealed
that almost 25 per cent, of them wished to manufacture electric household appliances and air-conditioning equipment after the war (Bulletin de la Chambre
de Commerce du district de Montréal et de la Chambre des jeunes, Sept 1944).

EMPLOYMENT

145

number of shares he must subscribe, strictly proportionate and
automatic, when it is effected through the mechanism of deferred
refunds and individualised reserves. 1 While this rule is primarily
based on considerations of equity, it also operates to establish an
exact relation or fairly close correspondence between the real needs
of the enterprise and the capital invested in it. In this way the
danger of overequipment, leading to a disturbed equilibrium and
unemployment, is removed.
Finally, when production is indifferent to real needs—as regards
both their quality and their quantity—it is less concerned to satisfy
them fully than to satisfy them exactly to the extent that will
bring the greatest or most sure profit. Concern for security becomes
more powerful than ambition and love of risk. Prices are kept
artificially high on a market which could otherwise be much wider.
Thus originate the restrictive tendencies which are so characteristic
of certain sectors of the present-day economy.
It is not always easy to measure how far such restrictive tendencies and artificially high prices are causes of unemployment.
Nor is it always possible to discover in the unrecorded history of
the co-operative movement experiments sufficiently detached to
be used as proof of effective action against these tendencies. However, fairly sure conclusions may be drawn from the history of the
co-operative movement in Sweden during the last 25 years and from
the close s^udy made of certain of its aspects 2 , and this instance
provides figures which illustrate some of the considerations advanced above.
The Swedish Co-operative Union, by fighting or negotiating
with the cartels, achieved considerable price reductions of a number
of widely consumed products. Exact figures are available for certain
articles: a reduction of 59.2 per c^nt. for margarine (in 1921-22);
of 11 per cent, for flour (1923-24), despite a rise in the cost of wheat;
a 46.7 per cent, decrease in the price margin between flour and
wheat; a reduction of 58.8 per cent, in the price of rubber footwear
(galoshes); of 15 per cent, for linoleum (1929); of 37 per cent, for
electric light bulbs (1931); of 55.4 per cent, for petroleum (19281932); of 26.3 per cent, for packaged rolled oats (1929-1933); of
1
This rule is not observed in consumers' co-operatives, where it would be
useless and a source of complication. But it is found in the majority of agricultural processing and marketing co-operatives, in most housing co-operatives,
and in a large number of credit co-operatives.
' Cf. Georges LASSERRE: Coopératives contre cartels et trusts—L'expérience
suédoise (Fédération nationale des coopératives de consommation, Paris; Union
suisse des coopératives de consommation, Basle; Les propagateurs de la coopération, Brussels, 1939). Information on the methods used by the Swedish co-operatives in their struggle against cartels may also be found in Herman STOLPE:
"Co-operation and Monopolies in Sweden", in International Labour Review,
Vol. XVIII, No. 1, July 192S, pp. 46-57.

146

CO-OPERATION AND PRESENT-DAY PROBLEMS

more than 50 per cent, for artificial silk fibre (1935); and of about
15 per cent, for superphosphates (1938).
These price reductions benefited the whole Swedish population.
In the case of certain products it is possible to show what these
reductions mean in terms of annual savings on the normal national
consumption: more than 600,000 Swedish crowns in the case of
margarine; rubber footwear, 6-7 million crowns; superphosphates,
2-3 million crowns; electric light bulbs, 6 million crowns 1 ; and
linoleum, 3 million crowns. On these articles and by this means
of action alone a total annual saving of some 17-20 million crowns
was effected, resulting in a corresponding increase in the purchasing
power of the Swedish people.
But the chain of effects caused by this action must be pursued
further. Any reduction in prices sets going a series of mechanisms
in the economy. In varying degree, according to the commodity
concerned 2 , consumption increases, and, with it, production. Increased production affects the industry directly concerned and has
other consequences as well. In the industry concerned it naturally
creates a tendency towards increased employment and, since there
is more compíete utilisation of the means of production (with no
increase in the fixed charges), lowers the average cost of production.
In the final analysis this means an increase in the real income
of the community. The increase in production also has its effects
outside the industries concerned, as the sums saved by purchasers
through the reduction of prices in the particular industry are available for the purchase of other goods and so stimulate production
and employment in other industries.
Mr. Georges Lasserre's study of the Swedish experiment measures the effects of price reduction in terms of increased production and employment as regards at least two of the products mentioned: margarine and galoshes.
Before the intervention of the Swedish Co-operative Union
(1921), the factory price of margarine was very high 3 : 3.41 crowns
per kg in 1919, 3.04 crowns in 1920, and a slightly lower figure,
2.45 crowns, in 1921. Production was more or less stagnant over
the same period: 12,203 tons in 1919, 14,844 tons in 1920, and
12,631 tons in 1921. Immediately after the Union intervened,
prices fell to 1.51 crowns per kg in 1922 and then almost uninterruptedly to 1.15 crowns in 1929. At the same time the total
Swedish production of margarine went up to 17,622 tons in 1922
1
The cost of building the co-operative electric light-bulb factory was only 3
million
crowns.
1
While the possible increase in consumption is limited and variable, it often
proves to be larger in practice than was thought likely beforehand.

» Georges LASSSRRB, op. cit., p. 29.

EMPLOYMENT

147

and then without interruption to 55,243 tons in 1929, representing
an increase of 39.51 per cent, between 1921 and 1922 and of 337.36
per cent, between 1921 and 1929. Finally, between 1921 and 1929
the number of persons employed in the margarine industry also
rose by 22.04 per cent, despite a 68.55 per cent, increase in mechanisation (number of horsepower).
The experiment with galoshes 1 is somewhat less conclusive, as
the figures used to show the growth of employment refer to the
Swedish rubber industry as a whole and not to production of rubber
footwear only. It is pointed out, however, that over the period
considered (1926-1929) the increase of employment which occurred
is almost wholly attributable to this branch of production. This
increase amounted to 38.67 per c e n t , despite the progress in mechanisation (an increase of 32.44 per cent, in the number of horsepower employed).
Strictly speaking, these examples do no more than establish
and measure the relationship between co-operative action and rise
in employment in the articles, country and periods of time considered. However, they serve at the same time to illustrate the
mechanism whereby co-operative action has led to the same results
in other countries and under other circumstances, e.g., Denmark,
France, Switzerland, Great Britain (particularly in struggles against
the Proprietary Articles Association), as well as in Canada and
the United States (reduction of the excessive price of fertilisers,
feeding-stuffs, electric appliances, agricultural machinery, etc.).
These instances help to explain not only the stability and security
of employment in co-operative enterprises, which were dealt with
at the beginning of this chapter, but also the role of the co-operative
movement as an economic regulator tending to prevent unemployment in the community at large.
This preventive and curative action is directly connected, as
has been shown, with the special business methods of co-operative
organisations. Co-operators regard it as the product of a more
general cause, since the business methods of a co-operative enterprise are dictated by its nature as a service undertaking, just as
the business methods and policy of a profit enterprise are derived
from the primary concern that capital shall yield a return. It may
not be profitable to make loans to the economically weak or for
this or that purpose; it may not be profitable, under certain circumstances, to build houses, or to supply drinking water, telephones or
electricity in certain areas. More generally, it may not pay to
produce necessary artLies or to produce them in sufficient amount.
i Idem, p. 45.
5

148

CO-OPERATION AND PRESENT-DAY PROBLEMS

It may be unprofitable, particularly in a period of economic depression, to develop an enterprise and increase production. On
the other hand, those who have need of some service always find
it to their interest to procure it for themselves, provided they can
bear its real cost. And it is always an advantage to those who are
related to an enterprise, not on a profit-on-capital basis, but on a
service-to-user basis, that the service provided should be developed and improved, even in time of depression and sometimes
particularly at such a time.
There is no necessary and constant identity between the conditions most favourable to the increase or security of capital, on
the one hand, and, on the other, technical progress, volume of production, and social well-being. But there is a necessary and constant
relationship between a service and the most efficient ways of rendering it. The reason why the co-operative economy is a balanced one
is that it is a service economy existing for the advantage of lowincome families and under their control.

CHAPTER V
IMPROVEMENT OF THE STANDARD OF LIVING
All the post-war rehabilitation and reconstruction plans include
among their objectives the raising of the standard of living of the
mass of the people, together with full employment. These two
aims are regarded as complementary and even as forming an indivisible whole, as was stressed in the resolution concerning social
provisions in the peace settlement (No. 1) adopted by the International Labour Conference at its 26th Session (Philadelphia, 1944).
In the preceding chapter a review was made of the forms of cooperatives able to organise and stabilise employment and of the
mechanisms of the co-operative economy which tend to eliminate
unemployment. It remains, therefore, to examine briefly the influence of co-operative methods and action as regards the improvement of standards of living, including in the term, in particular,
income derived from work, mode of life and social security.

Influence on Real Income from Work
There is no need to say much about the influence of co-operatives
on earnings. As regards independent or semi-independent workers
in agriculture, handicrafts and fisheries, earlier chapters have indicated the role played by co-operatives of all types in reducing
costs of production, in improving and standardising produce and
in obtaining remunerative and stable prices: all of them factors
which increase earnings. Workers' productive co-operatives, too,
when frtily established, and labour-contracting co-operatives,
lead to similar results.
Information on the wages and working conditions of employees
of co-operative organisations is complete and reliable only in the
case of the consumers' co-operative movement, but it points to
increased earnings.
In Great Britain,
it was the co-operative store which first introduced the weekly half holiday.
Minimum wages for male labour and a scale for women workers were fixed by
5

150

CO-OPERATION AND PRESENT-DAY PROBLEMS

the C.VV.S. before the W a r (1914-1918). Trade Union membership was made
compulsory on all C.VV.S. employees in 1919, a n d many retail societies either
anticipated or followed this lead. 1

An enquiry made by the International Labour Office shortly before
the war and covering most of the principal European consumers'
co-operative organisations showed that they endeavoured, in close
contact with the trade unions, to provide their employees with
exemplary wages and working conditions and that they were often
ahead of social legislation. In Finland, France, Great Britain,
Norway, Sweden, and Switzerland, working conditions in these
co-operatives were governed by collective agreements. In most
cases, wages automatically followed changes in the cost of living
in accordance with a sliding scale ; the rate of wages usually varied
with length of service. In some instances, particularly in France,
Sweden and Switzerland, a "collective bonus" system was in force,
under which a wage supplement was paid varying with the increase or decrease in the trade of each shop or department. In
France, Norway, and Switzerland, employees received half or the
whole of their wages while performing their military service. In
France, payment of wages during periods of illness was generally
backed by sickness insurance and some of the large co-operatives
paid the insurance premiums themselves ; women employed for more
than a year were entitled to three months' leave with full pay at
childbirth (half before and half after). In Finland, Great Britain,
Norway, and Switzerland, sick employees received wages for
periods varying according to country and with length of service
and which might be as much as three months with full pay and
three months with half pay. In the six countries considered, the
co-operative organisations also gave their employees holidays with
pay, the length of which generally varied with length of service,
ranging from six working days to one month. In most cases, wages
were also supplemented in one way or another by old-age insurance
schemes and other social services (sanatoria, holiday homes, etc.).
Finally, the foregoing chapter pointed out the stability of
employment and, consequently, of income enjoyed in co-operative
enterprises: "the bulk of the male employees remain in co-operative
service all their lives or until they qualify for a pension. All but a
small fraction of these workers are pensionable as a right—a rare
1

A. M . C A R R - S A U N D E R S , P . SARGANT F L O R E N C E , Robert P E E R S and o t h e r s :

Consumers' Co-operation in Great Britain, op. cit., p . 44. While trade-union
membership is universal among co-operative employees, only 5-10 per cent.
of the workers in general distributive industry a r e members of trade unions.
Cf. E. TOPHAM and J . A. H O U G H : The Co-operative Movement in Britain (London,
Longmans Green and Co., 1944), p p . 41-42.

IMPROVEMENT OF THE STANDARD OF LIVING

151

condition in the general retail trade and in most other callings." 1
It is evident, however, that the level of nominal incomes and
wages is not sufficient to gauge the level of workers' possible consumption. The purchasing power of wages, i.e., real wages, and
what has been termed "social wages" (social insurances-, maternity
benefits, pensions, etc.) also depend on the prices of the goods and
services of interest to all workers. Increasingly, then, social policy
is found to include price control measures among its features.
The various facts and considerations adduced in the foregoing
chapter may suffice to indicate what effective support consumers'
co-operative organisations (and purchasing co-operatives generally)
can give to such a policy of control. Their action is not confined to
reducing costs of distribution for the direct benefit of their members.
Their influence is wider. In the first place, as service undertakings
they form standards of reference which can and often do assist the
public authorities to fix prices and margins at a reasonable level.
Secondly, wherever such co-operatives are firmly established and
well managed, they tend to regulate prices around them, as many
observations and experiments attest. Some of these, made in
Belgium, Canada, France, Germany, Great Britain, Hungary,
Sweden, and Switzerland and involving a great variety of methods,
were cited in a brief memorandum prepared for the International
Economic Conference held in Geneva in 1927.2 But co-operative
history is full of examples of the prevention or checking of unjustified, excessive or too rapid rises in prices by the action of consumers' or purchase co-operatives; it also provides well-documented examples of the influence exerted by the mere "presence"
of purchase co-operatives: prices rising from one locality to another
in proportion to its distance from a co-operative, prices going down
in a locality as soon as a co-operative is established in it, etc.

Mode of Life
Being associations of persons, co-operative societies are in fact
usually associations of households; their enterprises extend, complement or replace the activities of the households, and, as the history
of their development shows, they tend, as time goes on, to organise
as many of its activities as possible. It is in this way that co-operative institutions affect some of the factors making up the mode
of life of the social groups that are economically weak: improve1

Cf. E TOPHAM and J. A. HOUGH, loc. cit.

INTERNATIONAL ECONOMIC CONFERENCE: Results of Certain of the Enquiries

for Instituting a Comparison between the Retail Prices in Private Trade and Those
of Distributive Co-operative Societies (C.E.I. 11, Geneva, 1926).
5

152

CO-OPERATION AND PRESENT-DAY PROBLEMS

ment of their housing and dietary conditions ; organisation of their
leisure, cultural activities and amenities; protection of their health.
ENVIRONMENT

The contribution that the various types of housing co-operative
can make to a social housing policy has already been indicated by
instances drawn from the history of the last twenty-five years. 1
The consumers' co-operatives have already entered the field of
furniture making, particularly in Great Britain, Switzerland, and,
more recently, Sweden. They not only endeavour to reduce the
cost, but also to turn out furniture which will bring real comfort
and simple beauty to the home. They are even interested in forming their members' tastes. A monthly review, prepared by the
Swedish Co-operative Union (Kooperativa Förbundet) for co-operative study circles, deals with all problems relating to the home;
in addition to questions of child care and nutrition, space is devoted
to modern trends in furnishing and to interior decoration.
Similarly, the rural electricity co-operatives not only assist
farm operations but also represent a means of transforming and improving the conditions of rural life2; the telephone co-operatives
end the isolation of rural families.*
LEISURE

There are also the various social services established by co-operative organisations either as additional functions gradually grafted
on to their original functions or as separate enterprises. The organisation of leisure particularly concerns urban and industrial areas,
where the spheres of life and work are more distinct from each other
than in the country. In all countries, besides publishing numerous
magazines for home reading, co-operative institutions therefore
organise evening parties, lectures and moving picture shows; they
encourage and help to support allotments (workers' food gardens) ;
they have initiated or encouraged many other activities as well.
Their nature varies from country to country: in Belgium, 400 or
more "people's houses" which are centres of community life (restaurants, halls for meetings and shows), and similar institutions in
Finland and Czechoslovakia; in France, the National Committee
on Leisure, with its libraries, music schools, sports societies, popular
fêtes, excursions, and visits to museums, factories, garden cities,
vocational schools, etc.; in Great Britain, photographic competi1
Cf. pp. 67-77 above, and also Co-operative Organisations and Post-War
Relief, op. cil., pp. 49-54.
* Cf. pp. 64-66 above, and Co-operative Organisations and Post-War Relief,
op. cit., pp. 77-78.
' Idem, p. 77.

IMPROVEMENT OF THE STANDARD OF LIVING

153

tions, arts and crafts exhibitions, as well as orchestras, choral
societies, and drama groups, often of a very high standard, and
where the artists' or performers' use of their leisure adds to the
audience's enjoyment of theirs. In Great Britain again and in the
United States, there are co-operative cinema enterprises organised
by consumers' co-operatives or with their assistance. In France,
a large consumers' co-operative (Amiens) had its own theatre with
a seating capacity of 1,500.
Besides occasions for relaxation and recreation, mention should
be made of the facilities offered to co-operators for completing their
general education or improving their vocational training. 1
For spending holidays there is organised travel at home or
abroad; there are hotels, inns and holiday homes or camps (Czechoslovakia, Finland, France, Germany, Great Britain, Sweden,
Switzerland, and the United States). Sometimes, as in Great
Britain and Sweden, co-operative institutions collaborate with the
trade unions in travel and holiday organisations.
HEALTH

In the field of health and medical care, reference may be made
to the co-operative pharmacies in Belgium, Bulgaria, Great Britain,
Italy, Switzerland, etc., and to the health co-operative movement
in Yugoslavia, Bulgaria, India, Japan, Poland, and Spain, with
the corresponding medical co-operatives and co-operative hospitalisation schemes in Canada and the United States.
There are also the complementary functions in the 'îealth field
of consumers' co-operatives, workers' productive co-operatives,
rural credit co-operatives, various agricultural co-operatives and
insurance co-operatives: convalescent homes, creches and sanatoria
for children in Belgium, Czechoslovakia, France, and Great Britain;
medical, surgical and dental clinics in France and elsewhere, and
hospitals, as in Denmark and Hungary; the numerous mutual
insurance associations in the Netherlands, mostly in connection
with the consumers' co-operatives, owning their own central pharmacy; the sending of children, as part of the campaign against
tuberculosis, to special rest camps or preventoria at the seaside or
in the mountains, as has been done notably in Belgium, France,
Germany and Italy.
NUTRITION

Co-operative organisations seem particularly well qualified to
contribute to the solution of yet another problem—that of nutri1

Idem, pp. 19-34.
5

154

CO-OPERATION AND PRESENT-DAY PROBLEMS

tional improvement. The food deficiencies of large sections of the
population in every country were the object of numerous studies
and consultations during the years immediately preceding the
war; the situation has since grown worse in most of the countries
and the problem occupies a larger place than ever in plans for the
future.
The problem is how to make accessible to the largest possible
number of people the necessary range and quantity of foods of
wholesome, constant and controlled quality, together with the
requisite knowledge and facilities to enable these foodstuffs to be
used under conditions favourable to health and economically
practicable.
It is not only a problem for nutrition experts ; it is also a problem
of production, prices, improvement and control of quality, and
education. It is therefore largely a matter for the agricultural
producers' and the consumers' organisations. The former, cooperatively organised, are in very many countries responsible for a
large part (often the greater part) of the production and marketing of various important commodities, while the latter are the
commonest organised form of popular food distribution. Something
has already been said about the useful contribution that can be
made by co-operative organisations of these two main types to
efforts to increase production by extending the area of cultivable
land (irrigation, drainage, soil improvement, etc.) and improving
techniques (selection of plant and animal species, better fertilisers,
better methods of cultivation and breeding), and also to improve
the costs of production and distribution.
Their intervention can perhaps be especially useful in present
or future efforts to improve and gurantee the quality of foodstuffs,
and in the necessary but difficult task of consumer education.
This is the conclusion which may be drawn from the enquiry undertaken by the Committee for Inter-Co-operative Relations in
1936-37, at the request of the International Labour Office, and with
the collaboration of 22 agricultural co-operative organisations in
15 countries of Africa, America, Asia and Europe, and of 14 consumers' co-operative organisations in 12 European countries and
the United States of America. 1 The Committee concluded its
enquiry with the following general observations:
Hygienists do not confine themselves, in the present state of scientific knowledge, to determining the composition of the food ration of a man, according to
a^je, occupation, climate, etc.
1
I.L.O.: The Co-operative Movement and Better Nutrition; Standard Definition
of Foodstuffs; Education of Producers and Consumers (Studies and Reports, Series
B (Social and Economic Conditions), No. 24, Geneva, 1937).

IMPROVEMENT OF THE STANDARD OP LIVING

155

They are also aware, and have insistently called attention to it, of the importance of another problem of a practical character: that of assuring to consumers the quality and genuineness of the food products placed at their disposal;
that is to say, of obtaining and giving a guarantee that such products comply
exactly, uniformly and constantly with definitions established with precision
and scrupulously observed.
The foregoing information shows the means employed by the co-operative
organisations for solving this problem. It has also another scope. It furnishes
an occasion for elucidating the problem itself, reflecting on it, and recognising
its extraordinary complexity.
How is it possible to secure that, from numerous orchards and pastures,
widely dispersed and varied, cultivated by producers not possessed of considerable financial and technical resources, apples or oranges of the same variety,
the same quality, the same colour, etc., or butter of an identical chemical composition, taste, and smell shall, week by week, and year by year, be put not only
on the local and regional, but even on the international markets ?
If the pieces proceeding in a practically unlimited series from an embossing
machine are all identical with each other and perfect, this is due to the perfection
of the machine and the perfect homogeneity of the metal plates with which it is
fed.
If the products issuing from a multitude of rural undertakings appear on
the market in a practically unlimited series, homogeneous and of irreproachable
quality, it is no exaggeration to say that such uniformity and quality is due to
the co-operative organisation.
It is true that, especially in food-exporting countries, the State frequently
ensures the control of the finished product and gives its guarantee, or superimposes its control and guarantee on those of the co-operative organisation. Apart,
however, from the fact that this is not always the case, it is a fact worthy of
remark that in almost all cases the initiative for a control and for a guarantee
mark has come from the co-operative organisations, which have preceded and
even guided the action of the State, and that State control has not been imposed
on the co-operative organisations but demanded by them, and that they collaborate actively in such control.
Finally, the control of the finished product is merely the end and consecration
of a long preparatory process from which it derives its virtue. It eliminates
defective products. It does more: it marks the end to be attained, it fixes the rules
and definitions or at least invests them with a certain constraining force. It creates
the necessity for observing such rules and definitions, but it does not furnish the
means for doing so.
The isolated producer does not possess these means and may not even know
of them. As regards some of these means at least, it is not sufficient to procure
them for him, or to teach them to him. He must procure them for himself or
accept them voluntarily and without reserve, since their effectiveness depends
in large measure on his adhesion to them.
If agricultural producers have been able to carry their technical resources to
the degree of perfection which has been seen, they owe this first of all to the
financial means which their associated forces have been able to provide and thanks
to which laboratories have been instituted and continual research carried on.
But this alone would not have been enough; if they have been able *o develop
their own sense of responsibility, identify themselves individually—during their
daily round of work—with the common task of progress, and to compete together
therein; if they have been able to submit to the most exact prescriptions, the
most meticulous checks, and even accept punishment—all of which would have
3 7

156

CO-OPERATION AND PRESENT-DAY PROBLEMS

been intolerable if imposed by an outside authority: they have been able to do
so because the discipline to which they submit is the expression of the aims and
the will of their societies, is based on rules they have themselves framed or voluntarily accepted, and thus draws its compulsory strength from within themselves.
As regards the distributive co-operative societies, emphasis should be placed
on their sustained and varied efforts for the enlightenment and guidance of consumers—efforts towards what may be called the latters' "food education", on
the basis of the knowledge acquired by specialists in food hygiene, and even in
some cases by taking a direct part in such researches.
It is further desirable to mention the assistance which they are able to render
to the public authorities in the repression of fraud and in all action directed to
progress in the matter of food.
Lastly, the enquiry has been of undoubted help in drawing attention to the
care exercised by the distributive co-operative societies, on their side, in the
choice and verification of the goods which it is their duty to distribute, and the
inspection, check and test which they apply to the manufacture and preparation
of the goods they produce themselves. In this connection, their most characteristic efforts take the form, first of all, of precautionary measures relating to
the preservation, handling and packing of foodstuffs, and secondly, the establishment of laboratories for analysis, which apply severe tests to raw materials
for manufacture, the process of manufacture itself, the finished products and the
goods offered for sale to the central organisations and their affiliated bodies.
The work of the consumers' and of the agricultural co-operative societies in
this field is thus mutually complementary.
The products which the agricultural marketing co-operative societies put
on the market are not all delivered direct to the actual consumer. Wherever,
however, they are directly received for transformation or preparation by the
distributive co-operative organisations an uninterrupted and complete chain of
provisions extends from the place of production to the household of the consumer, which fully ensures and guarantees their character as well-defined and
wholesome food products.
In cases where such direct contacts are established between agricultural
co-operative organisations and distributive co-operative organisations, they may
even, as certain replies have shown, lead to confident collaboration between the
parties concerned, which makes it possible to simplify the controls and to bring
the nature and quality of the products more completely into harmony with the
requirements of consumers.
Inter-co-operative relations appear, therefore, to secure not only an economic
advantage by the elimination of superfluous expenditure, but also an advantage
as regards genuineness and hygiene in the trade in foodstuffs.
In the countries for which information is available, it seems that
wartime circumstances have led Co-operative organisations to
extend and make more detailed application of the action already
reported by the International Committee for Inter-Co-operative
Relations. Some instances, drawn from various countries, may be
given of cases where co-operative organisations, either through
recent achievements or through plans for the future, have manifested their concern to advance nutritional progress by control of
products, information and consumer education.

IMPROVEMENT OP THE STANDARD OF LIVING

157

In the United States, the Office of Price Administration, when
seeking in 1943 to prevent hidden price increases by means of
cheapened quality, wished to make grade labelling of canned fruits
and vegetables compulsory, in accordance with standards laid
down by the Agricultural Marketing Service of the U.S. Department of Agriculture. The majority of the manufacturers and
wholesalers opposed the measure, while the consumers' co-operative
organisations gave it vigorous support. A compromise solution
was arrived at, which enabled merchants to know the precise
quality of goods they buy and sell, without making it obligatory
to give this information to the ultimate consumer. The consumers'
co-operative organisations decided to continue grade labelling,
despite difficulties in obtaining supplies. This case illustrates the
traditional effort of consumers' co-operatives to eliminate false
description and adulteration of goods. It also shows how in this
field as in others there is a natural conjunction of co-operative
action and that of the public authorities.
The testing laboratories of the consumers' co-operative organisations, already found, for instance, in Belgium, Denmark, Finland,
Great Britain, Hungary, the Netherlands, Poland, Sweden, and
Switzerland, are beginning to spread in such countries as the United
States, where the consumers' co-operative movement is younger.
They protect consumers by testing goods and also by giving" information and warnings. This latter aspect of their work seems
likely to develop further, judging by the recent establishment, in
both Sweden and Switzerland, of housewives' committees whose
job it is, with the help of the testing laboratories of the co-operative
organisation, to examine goods, specially articles newly put on
the market and substitutes, and report on their merits. Both
these committees were set up and operate with the help of women's
•co-operative guilds. The Swedish committee also includes representatives of the chief women's organisations, the press, the Association of Rural Industries, and the Institute of Hygiene. It will not
only advise the public, but will also guide the Swedish Co-operative
Union in its programme of production.
The sphere of information clearly borders on t h a t of education.
Co-operative organisations do not merely warn their members
against adulterated products or sharp practices in advertising;
it is also within their province to give shopping guidance to the
housewife, in the light of the knowledge acquired by nutritional
science. As early as 1927, before resolutions and recommendations
were adopted on the subject by the official international organisations, the International Co-operative Women's Guild had prepared
a report on the nutritive value of foods and had proposed that the
5

158

CO-OPERATION AND PRESENT-DAY PROBLEMS

associations affiliated to it should open a campaign in favour of
wholesome nutrition. Similarly, long before the present war, the
International Co-operative Ailiance studied means of raising the
standard of nutrition. The work of education goes on, and sometimes new means (films, radio, etc.) or improved methods have
been introduced. In 1941, immediately before the fruit-canning
season, a film on fruit and vegetable preserving wa9 shown to more
than 100,000 Swedish housewives. In Great Britain, Sweden and
Switzerland, problems of nutrition have been dealt with by experts
in lectures, in the co-operative press and in pamphlets and have
been discussed in study circles. The Swiss Co-operative Union and
Wholesale Co-operative Society has published an excellent booklet,
clearly written and well documented, and at the same time directed
towards practical problems, as its title "Food Health and the
Family Budget" indicates. 1 In the United States, a certain number
of consumers' co-operatives have established Consumer Centers
which give useful information and advice.
From their educational and informational activity, co-operative
organisations seem disposed to move into the field of scientific
research. Some of the testing laboratories are moving in this direction, or, in some instances, lead to the establishment of a special
research laboratory. The idea of setting up funds for scientific
research work is spreading among the large central consumers'
co-operatrve associations in the United States. Such a fund has
already been created in Sweden; the research fund established by
the Swedish Co-operative Union has led to the creation of Nor disk
Biokemisk Industri, which manufactures vitamin products, and
it has also led to the vitaminisation of margarine. Along the same
lines, the Swedish Co-operative Union has been able during the
war to develop the drying of rose-hips rich in vitamin C.
It seems that co-operative organisations, especially consumers'
and agricultural co-operatives, have a vast new field of activities
open to them as a result of the steadily increasing interest shown
by consumers' societies in nutritional questions, of scientific progress in this field during recent years, of improvement in the technical processes of food manufacture and preservation, and of the
co-operatives' own research in nutrition. Particularly in the United
States, the co-operatives of these two important categories have
already entered the field of fruit and vegetable dehydration and
are preparing to play an increasingly large part in spreading this
process, which makes it possible to have a varied diet all the year
1
Dr. H. MûLLBR:/fygtène alimentaire et budget familial (Bibliothèque coopérative populaire, No. 1; Union suisse des coopératives de consommation,
Basle, 1941).

IMPROVEMENT OF THE STANDARD OP LIVING

159

round, without much loss of vitamin content. In the countries
where food refrigeration is not yet common, some of the central
consumers' co-operative organisations have been considering the
possibility of manufacturing and distributing inexpensive refrigerators. It has been suggested that in rural areas communal refrigerating plants with individual lockers might be built, of the type
which has developed extensively in Canada and the United States
during the last ten years. Such plants could be associated with
existing co-operatives that already produce or use, or could use
refrigeration (dairies, slaughterhouses, agricultural co-operatives
marketing extra-perishable produce) ; the rural credit co-operatives
could help to finance them.
The co-operative movement has its testing and research laboratories; it possesses its own means of production; in some countries
it has started special health-food stores; it has trained dieticians,
and effective channels pf education ; it enjoys the confidence of its
members; it has enlisted the services of women members on a
voluntary basis to advise housewives shopping at co-operative
stores; it has established information centres for consumers. These
activities, which seem likely to be developed and co-ordinated as
time goes on, give an idea of the contribution t h a t co-operative
organisations in general and consumers' co-operatives in particular
can make to efforts at food reform. Making a synthesis of these
elements, the President Emeritus of the Cooperative League of
the U.S.A., Dr. J. P. Warbasse, who is himself a physician, has
outlined a plan of action which would give a fresh impetus to the
efforts already made in this direction. The consumers' co-operative
organisations, Dr. Warbasse points out 1 , are not run for profit,
but to serve the needs of consumers; their methods should be in
harmony with this purpose; concerned with their members' interests, they cannot be indifferent to the good or bad effect of diet
upon their health; the manager of each co-operative store, therefore, or one of his assistants, should be carefully trained in the
problems of nutrition and be able to give competent and disinterested advice to housewives and other customers 2 ; and the co1
Dr. James P. WARBASSB: "The Food Store, A Health Center", in Rochdale
Cooperator, Jan. 1944.
* The big rural supply co-operatives in the United States similarly give their
members guidance on the way to feed cattle; instead of recommending the artificial feeds with the most expensive formulae, they advise those that are most
suitable. The largest of them, the Cooperative Grange League Federation
Exchange (G.L.F.) of Ithaca, New York, with a membership of over 125,000,
instructs its managers and staff that it is not their duty to make the largest sales,
but to consider the fanner's real needs; it tells them, for instance, to take into
account the quantities of hay, grain and alfalfa available to a farmer seeking
advice on the best and most economical means of providing his cattle and poultry
with the correct ration of protein, vitamins and fats.

3 7

160

CO-OPERATION AND PRESENT-DAY PROBLEMS

operative store should become a real people's health centre. Eventually, says Dr. Warbasse, it should become a social and cultural
centre, with educational and health activities, a library, a motion
picture theatre, children's day nursery and playground, etc. 1 Such
a project, already partially realised here and there, if carried out
in its totality, could give a new vigour to, and open up a new chapter
in, the consumers' co-operative movement. In any case, it shows
the serious thought being given among co-operators to the role
that their organisations could play in any programme aiming at
better nutrition.

Social Security
Another factor in the improvement of the standard of living is
the removal or reduction of the particular hazards which attend
the economic situation of low-income families and individuals.
Loss of productive equipment or other personal possessions through
theft, fire or other cause, illness or accident, unemployment, permanent or temporary incapacity, death of the breadwinner, or
indebtedness: these all place on small incomes a burden which
may upset their delicate balance for quite a long while and, in some
cases, irreparably.
The systems of social assistance and social insurance which
together constitute social security are designed to cover risks of
this kind. The importance of social security systems in the history
of social progress is shown by the way they have developed in
recent years, geographically, structurally, and in the risks covered,
and by the place that they occupy in plans for the immediate
future.
Historically, the social security institutions based on compulsory mutual aid have developed out of the spontaneous mutual
aid practised among neighbours and fellow workers for individual
protection against the hazards of life. Social security represents a
systématisation and generalisation of these earlier voluntary efforts.
But it does not put an end to them, as it does not remove their
cause.
Institutions for voluntary mutual aid still have a useful role
to play. In the first place, since they involve activities inspired by
conscious foresight and intentional solidarity, they are preferred
by some people for their educational value and are perhaps the best
adapted to certain circumstances. Secondly, they take the place
' On a more modest scale, the "health houses" (zdravstevni dorn) of the Yugoslav health co-operatives were centres of cultural life in the villages.

IMPROVEMENT OF THE STANDARD OP LIVING

161

of and sometimes prepare the way for the establishment of compulsory social security systems where the latter do not exist; where
these do exist, the voluntary institutions fill in the gaps and in any
case are a useful addition to them. 1 Finally, as is not infrequently
the case in some systems of social insurance, the voluntary institutions can be entrusted with local administrative functions in certain
branches of compulsory insurance.
INSURANCE

An important place among these voluntary insurance institutions is held by co-operative institutions. As with the co-operative
organisation of leisure and health, these sometimes take the form
of "social services" of local or central co-operatives and sometimes
of separate institutions which very often develop out of the social
service activities. In the social service category are the welfare
and mutual-benefit funds of many consumers' co-operatives in
urban and industrial areas. These funds are sustained either by
direct appropriations from the trading surplus or by voluntary
contributions of members or by a combination of the two methods.
They are used to distribute to members allowances in cash (and
sometimes in kind) in case of unemployment, sickness or accident,
and also special grants on the occasion of marriages, births, deaths
and so on.
The insurance co-operatives proper protect their members, in
both town and country, against a variety of risks, the chief being
those of life, accident and fire. In the country, they also give protection against loss of cattle, hail and other weather risks. Before
the war, the insurance institutions set up in a dozen European
countries by consumers' co-operatives insured their members for
more than $2,250 million (life, accident and fire alone) 3 ; the British
Co-operative Insurance Society, which is a joint department of
the English and Scottish co-operative wholesale societies and
provides nearly 3,500,000 members of consumers' co-operatives
with insurance, is one of the most important insurance institutions
in the United Kingdom and has "next to the Prudential [Assurance
Co. Ltd.] the lowest expense ratio of any industrial office".3
Throughout the world there were 60,000 agricultural and rural
1
"The State in organising security should not stifle incentive, opportunity,
responsibility; in establishing a national minimum, it should leave room and
encouragement for voluntary action by each individual to provide more than
that minimum for himself and his family." Social Insurance and Allied Services,
Report by Sir William Beveridge (London, H.M. Stationery Office, and New York,
The Macmillan Company, 1942), pp. 6-7.
* Cf. Co-operative Organisations and Post-War Relief, op. cit., pp. 47-49.
• Social Insurance and Allied Services, op. cit., p. 257.

162

CO-OPERATION AND PRESENT-DAY PROBLEMS

mutual insurance co-operatives with a combined membership of
6 million—according to co-operative statistics. 1
From the most recent reports it seems that urban insurance
co-operatives, at least, have continued to develop in neutral countries such as Sweden and Switzerland (where the amount insured
by the Co-operative Life Insurance Society increased tenfold in
the 25 years 1918-1943), and also in Finland. In the rural districts,
mention may be made of the remarkable progress made by certain
types of insurance co-operative or mutual insurance company in
the United States, the most striking example perhaps being that
of the insurance institutions of the Ohio Farm Bureau Federation.
In less than 20 years the automobile insurance company of the
Federation has risen to fourth place among insurance institutions
doing this type of business in the United States 2 ; in 1944, it was
operating in 14 States and had assets amounting to $13,764,626.
Meanwhile, in 1934, the Federation set up a fire insurance company
which in 1944 had policies in force totalling $492,742,100. In
1935, it established a life insurance company and in 1942, acquired
a private business operating in this field ; the total amount insured
by the two lifec-ompanies was $210,507,080 in 1944. On 31 December 1944, the combined assets of the Farm Bureau insurance
group exceeded $38 million; since 1935, the group has extended
its activities to urban and industrial areas.
CREDIT

To the risks just mentioned must be added another which always
finds a place in plans of social security, the risk of indebtedness,
so disastrous to the small-income family.
The role of the rural credit co-operatives in this connection is
well known. 3 But the role played in the past and now by the cooperative institutions of urban and industrial areas is far from
negligible.
Too little attention has been paid to the consumers' co-operatives' business rule of cash trading. It has been established by
numerous enquiries how much the free disposal of earnings and
even the independence and dignity of the wage earner are menaced
by the practice of sales on credit. By reacting against the custom,
1
Cf. Co-operative Organisations and Post-War Relief, op. cit., p p . 80-82. A
still larger number appear in the statistics of friendly societies. In the United
States, for example, there are more than 1,800 mutual insurance companies,
with policies in 1941 totalling \Zy2 million dollars and covering half the total
farm property t h a t is subject to insurance.
* I t is not itself strictly a co-operative organisation, but is managed by the
Federation.
1
Cf. pp. 18-26 above and Co-operative Organisations and Post-War Relief,
op. cit., pp. 61-63.

IMPROVEMENT OF THE STANDARD OP LIVING

163

the consumers' co-operatives have performed a real work of social
and economic liberation, just as they have done a job of education
in organising in various ways their members' savings. The result
of the provident funds mentioned above and of other savings funds
on which members draw in case of need, is that thrift replaces
borrowing.
Low-income families may nevertheless have legitimate credit
needs which cannot be met by the savings funds of the consumers'
co-operatives. Loans may be required for such things as the purchase of furniture on marriage, acquisition of a productive thing
like a sewing-machine, perhaps even a refrigerator. The big banks
are not equipped to handle these small loans. The municipal pawnoffices found in some countries or various charitable or semi-charitable institutions render services in this field, but on too small a
scale or under hampering conditions. Outside these institutions,
the urban wage earner is obliged to turn to instalment buying or
else to small loan agencies and "salary-buying loan sharks" 1 for
satisfaction of his legitimate credit needs. The savings and credit
co-operatives of urban areas were established to get rid of these
dangerous and exploitive practices. These co-operatives retain the
essential features of the rural credit co-operatives: personal credit,
homogeneous membership, etc., with the necessary modifications
to meet the needs of wage earners. There were or are a few societies
of this type in Europe, especially in Austria and Switzerland. But
their chief development has been in Canada and the United States.
The first society was founded in Canada at Levis, Province of
Quebec, in 1900; in 1942, there were 1,500 of these credit unions
throughout the Dominion, with an aggregate membership of
300,000. Many of them are urban, but the majority are either rural
or semi-urban, semi-rural. In the United States, they are almost
exclusively urban, but have begun to spread in rural areas; the
movement, after hardly 20 years of existence, counted 10,601
societies with a membership of 3,159,457 in 1942; at this date
these credit unions' total assets amounted to $340,188,694, and
loans granted during the same year totalled $249,660,061
($362,291,005 in 1941).

1
An enquiry made under the auspices of the Russell Sage Foundation, New
York, in the spring of 1926 revealed that wage earners often had to pay interest
at the rate of from 260 to 3,600 per cent, under this widespread practice.
5

CHAPTER VI
DEMOCRATIC MANAGEMENT OF THE ECONOMY
This long and cruel war, total and almost universal in character,
will have had manifold and deep repercussions on men's minds no
less than on events. Such repercussions will probably nowhere be
short-lived, but their duration and degree of seriousness in the
different countries will depend on the nature and extent of the
sacrifices endured.
In the majority of countries, and particularly in those which
have suffered most, physical rehabilitation will have to be accompanied by a psychological rehabilitation, the one aiding the other.
Restoration of economic functions, the endeavour to secure the
fullest possible employment and to raise the standard of material
living represent only one aspect of reconstruction. The period of
convalescence will require the intervention of moral forces, a new
vigour in the sentiments of justice and solidarity; it will entail,
for individuals and groups alike, the renewal of self-confidence,
mutual confidence, confidence in the future and the awakening of
new hopes—hope in the new and as yet imperfectly defined promise
of a new social order. It is unlikely that health will be regained by
a simple return to the past.
The war period has revived and the post-war period, by unavoidable trial and error, will seek to satisfy, a number of aspirations already felt, including the aspiration towards a more democratic management of the economy. Already formulae are being
devised and tested to ensure that the economy will be carried on,
more than in the past, for the common good and under the control
of those it is to serve.

A Sector of Democratic Economy
Co-operators propose their own formulae, already tested by
experience, in addition to and in conjunction with those just mentioned. The co-operative movement, they declare, is not only, in
the words of Albert Thomas, "an important fragment of planned
economy", but is also a democratic sector of the economy.

DEMOCRATIC MANAGEMENT OF THE ECONOMY

165

One outward sign of its democratic character is its steady
growth. A necessary, though not of itself sufficient, condition of
any democratic institution is that it must first correspond to the
people's will. Is not the very fact of the growth of co-operation
proof of this condition's fulfilment ? And those who want to have
co-operation are not content merely to demand it; by their own
efforts, at their own risk and without recourse to compulsion, they
bring it about and practise it.
Co-operators do not rely only on outward signs to justify their
claim. They recall the popular origins of the co-operative movement, the social groups it embraces, its philosophy, aims, methods
and structure. 1 As in any human ¡ndertaking, there may here or
there be lags between the doctrine and its application, the purpose
aimed at and the purpose attained, the ideal and its achievement.
Any democratic system has its problems, the most important of
which is to bring about a steady increase in real democracy. The
co-operative system, then, has its own problems and strives to
find a solution for them. But with this reservation—to the extent,
that is to say, that the members do in fact exercise their rights and
assume their responsibilities—each co-operative enterprise is a
successful democracy in microcosm. Co-operators even venture to
think that certain forms of democratic government in co-operative
organisations merit careful study. In particular, they point to the
precise and balanced division of responsibilities between the executive bodies and the controlling bodies—a division which leaves the
executive a wide freedom of action subject to a vigilant control
which gives aid or registers disapproval, but without undue interference.
Without going into details of the organs of co-operative democracy, which with minor variations and under different names are
very much alike in all countries, it is enough to recall the sovereign
function performed by that organ common to all co-operative
institutions, the general meeting of members.
It is true that the proportion of members regularly attending
the general meeting is not always large (generally much smaller
in urban and industrial centres than in the rural areas). But those
who participate in the general meeting are the most active and best
informed members, who have voluntarily made it one of their
civic duties to watch over the common interest in their co-operative.
By regular attendance and through their keen interest, they are
able to familiarise themselves rapidly with the various aspects of
the life of their society and thus to fulfil intelligently and efficiently
1
Cf. Co-operative Organisations and Post-War Relief, op. cit., Part I: "Characteristics of the Co-operative Movement", pp. 4-36.

166

CO-OPERATION AND PRESENT-DAY PROBLEMS

their self-appointed task. A large number of them are members
of the guilds and other groups operating within the co-operative.
Because of their developed social consciousness, those who take
part in the general meeting are normally in contact with the larger
number of members who show a less active but nevertheless real
interest in the affairs of their society; they can thus reflect faithfully what may be called the public opinion of the membership and
rally it, on important issues, in support of common action. The
general meeting, then, does effectively play its part in the cooperative organisation and has a real influence on the latter's life.
Moreover, this role and influence are incomparably greater in a
co-operative organisation than in a joint stock company. The
shareholders of such a company come to the general meeting with
a single preoccupation, quantitative and relatively simple: the
productiveness of their invested capital. It is known beforehand
that such a preoccupation exists, and it is also shared by the directors, who therefore have little to learn from the general meeting.
Co-operators, on the other hand, are not only jointly owners of the
enterprise, but are personally and directly the users of it. Each
member therefore comes to the general meeting with a much more
complex and varied purpose, which takes into consideration all the
manifold elements making up the quality of service expected of
the enterprise. The general meeting of a co-operative organisation
is thus a necessary source of guidance and information for the
managers who are fully informed there of the members' wishes.
It is also a source of information for the members themselves, who
learn at it all they need to know about the progress of the business
and are thereby enabled to contribute any needed assistance to
the common enterprise. Finally, the general meeting, besides being
an organ of mutual information, is also, of course, the body through
which the membership exercises its control, protects itself if occasion
arises, and chooses those who are to manage its interests.
Furthermore, unlike stock companies, the co-operative society
is equalitarian both in conception and in operation. It is open
without distinction to anyone who can use it and so cannot legally
become the tool of any particular group at the expense of others.
And within it all the members have the same rights and duties:.
each has one and only one vote in the general meeting1 and may
be elected to the various offices. Finally, appointment of a man
to the board of management because he has his fellows' confidence
means that he is invested with a function, not that he enjoys special
privileges or a power of domination over others. The directors of
* There are still a few exceptions to this rule, but they are never full exceptions
and their number is diminishing quite rapidly.

DEMOCRATIC MANAGEMENT OF THE ECONOMY

167

a co-operative society do not form and have not the feeling that
they form an aristocracy; they are chosen leaders who remain at
the service of those who commissioned them.
The powers exercised by the general meeting, coupled with the
various measures assuring to the members the daily exercise of
rights and duties divided among them equally, thus give those
associated in a co-operative society the opportunity and feeling of
effective participation in the management of their own affairs.
They can also help and feel that they are helping by their vigilance
and other forms of collaboration to manage these affairs for the
common good. As a result, for instance, labour is sovereign in a
workers' productive co-operative society, since it assumes the
entire management of the enterprise, or in a labour-contracting
co-operative, since it is subject to no rules but its own. 1 Similarly,
and for the same reasons, in a consumers' or rural supply co-operative the purchaser is master, while the primary producer has control
over the product of his labour, and the saver and borrower over
their savings and loan transactions within their respective cooperatives. In short, to quote a formula which might serve to
define economic democracy, "co-operation locates the origin and
exercise of power at the very origin of needs. Man, then, remains
his own master and the organisation is his servant".'
The foregoing observations refer to primary co-operative
societies. It need hardly be said that they are equally valid throughout the mounting stages of the federal structure of the co-operative
movement. The democratic rules governing the mutual relations
of the members of a primary co-operative apply mutatis mutandis
to those between co-operatives of the same type within their federating body. They likewise apply to the relations between co-operatives
of different types, in so far as such relations exist and are developed.
This last point merits a moment's attention. The experiments in
"inter-co-operative relations" 8 are sufficiently numerous and conclusive to demonstrate that co-operation is an economic system
allowing within itself the organised collaboration of a large number
of different economic forces. In particular, co-operation has shown
itself able to establish a sphere of understanding between urban
and rural populations, a necessary condition for a firm national cohesion as well as for the political and economic progress of democracy.
» The labour-contracting co-operative "is, in a particular sense, the participation of the workers in the management. In this instance, however, it is not
a partial influence on the management of the whole enterprise, but complete
management of a part." Charles MARAUX: "The Commandite: Co-operative
Work in the French Printing Industry", in International Labour Review, Vol.
XN, No. 5, Nov. 1925, pp. 650-667.
' Dr. G. FAUQUBT: cp. cit., p. 50.

• See pp. 78-100 and Co-operative Organisations and Post-War Relief, op. cit.,
pp. 13-19.
5

168

CO-OPERATION AND PRESENT-DAY PROBLEMS

If it be granted that economic democracy cannot rest solely
on a system of consultations and representations, but also needs a
foundation of economic institutions with a democratic constitution
and mode of working, and if it be also granted that co-operative
enterprise is a democratic form of enterprise and consequently that
the co-operative movement as a whole represents a sector of democratic economy, then, say the co-operators, the effort to build economic democracy should, among other things, aim at encouraging
the growth of co-operative management and the enlargement of the
co-operative sector.
Co-operators also point out that co-operation does not influence
only its own sector of the economy; it has several other ways of
helping the building and working of the democratic economy
generally. In both the economic and political fields, the. success
of democracy will not be solely judged by the degree of material
satisfaction that it brings to individuals, but also by the degree to
which individuals participate actively and of their own free will
in the achievement of the common good.
To secure this participation, democracy will have to fashion
its own economic system ; it will need in its service administrators
who are accustomed or willing to attune their thought and action
to the demands of the common good. For, as past experiments in
economic democracy have shown, good intentions cannot reach
the goal unless they are backed by the requisite knowledge and
talent, nor does business experience alone suffice unless it is subordinated to new purposes and a new ethic. The co-operative
movement, with experience in almost every branch of business,
is a breeding ground of administrators of the type which the democratic economy needs. Usually drawn from the ranks of the people
and still in contact with them, such administrators represent the
people and strive to realise its aspirations. Moreover, they have
learnt to handle affairs and have grown in capacity with the development of the sometimes considerable enterprises which they
created or direct. Finally, democracy will have to bring into play
and perhaps to devise the techniques which can ensure, in the economic field, the collaboration of millions of people; in other words,
the creation of a public opinion capable of exercising control, if
participation is not to degenerate into, submission. Will not cooperators, or at any rate the more active ones, who have a knowledge
of economic realities and the problems of management, and are
already often influential in their respective communities, form
within this wider public opinion a core of well-informed citizens,
trained and ready to give all possible assistance ?

DEMOCRATIC MANAGEMENT OP THE ECONOMY

169

Co-operative Democracy and Political Democracy
An examination of the methods of political democracy is outside
the scope of this study. But if, with the effort of reconstruction,
there is to be a spiritual and social rehabilitation, and if this effort
aims at an improvement (and where it has been destroyed, a restoration) of democracy, it may not be without utility to repeat the
commonplace that if political democracy is to be solid and vital, it
must be rooted in economic and social democracy. It may therefore be worth trying to see how the economic and social democracy
being achieved within the co-operative movement can help to
strengthen and perhaps to revitalise democratic structures generally.
In all the countries directly affected by the war the social
fabric will be more or less strained. In the countries t h a t have
suffered most, and particularly in those which have been under
military occupation, it will largely have been destroyed. Community life, the life of most associations (especially those most
strongly organised) and family life itself will have been sadly impaired or else destroyed through the absence from home of conscripts or prisoners, through deportations, or through service in
guerrilla units. The sole exceptions will be the underground organisations and, to some extent, the co-operative institutions (as
businesses if not as associations). But with this exception, groups
will have been broken up into numbers of isolated persons individually subject to the authoritarian police State. This splitting-up
process, joined to and reinforcing the modern world tendency towards the formation of a mass mentality, will have worked against
the democratic current. For any process that tends to turn a
nation into a mere agglomeration of people exposes it to the risk
of falling a too easy prey to mass propaganda and, finally, to loss
of its sense of responsibility, of its means of control, and even of
its freedom of thought. The answer to this danger, which contemporary history has shown to be a grave one, and the soundest
basis of true democracy is the existence of a host of small groups
endowed with independent life and activity, freely responsible and
freely joined together, such as local government bodies, trade
unions and other essentially popular organisations. Among the
cells of a reorganised and revitalised social fabric, co-operative
organisations of all types will have a role as centres of democratic
life and sources of initiative directed to the common good.
Besides this role, which co-operatives will share with other
people's institutions, mention may be made of another which is
more particularly their own and is due to their character as econo5

170

CO-OPERATION AND PRESENT-DAY PROBLEMS

mic institutions and to the way in which they are linked to form a
co-ordinated whole. The efforts made to put political democracy
on the firm basis of a democratic management of the economy
stimulate search for a complement to the purely political representation and participation of citizens in the changing State organs.
Liaison bodies must be found or established, in the economic field,
between individuals and the community. It is doubtful whether
there can be found for the liaison a formula capable of answering
all needs whatever the time and place. But to judge by the experience of the past fifteen or twenty years, it can hardly be doubted
that co-operative organisations will have a place in consultations.
In all the countries where the co-operative movement is strongly
developed, it has been recognised as an indispensable source of
concrete information, as one of the places where the people's economic will is formed, and as the natural organ for the expression of
this will, whereby the individual is put in contact with the State
without loss of his individuality. 1 Co-operative organisations, as
instruments for transmitting upwards, and there interpreting, the
needs and aspirations with which they are in daily contact, are
equally well equipped to transmit downwards the needs expressed
by and the impulses coming from the central organs of the economy.
Thus without any loss of autonomy, by the mere fact of their solidarity with the wider community in which they operate, co-operative
institutions find their place in the economic structure of the political
State.
Co-operators do not confine the role that their institutions can
play in the rebuilding of democracy to that of supplying essential
constituent elements to the democratic social body and of acting
as liaison organs between individuals and the community. They
consider that co-operatives have another and, in their view, perhaps
a still more fundamental role. They think that there cannot be real
reconstruction in general and democratic reconstruction in particular, without a broad and persistent effort of re education, for
the paramount need of democracies is for well-informed and active
citizens. They hold that it is within genuine people's institutions,
especially within trade union and co-operative organisations, that
habits of passive obedience can be most quickly dissolved and that
a sense of democratic discipline and re°ponsibility can be restored.
The patient and many-sided effort traditionally brought to the
task of education by co-operative institutions is well known. 2
Of all the people's movements, the co-operative movement has
perhaps been the one to understand best that, in a continually
1
1

Cf. Part III, Chapter II: "Forms of the Co-operative Contribution".
Cf. Co-operative Organisations and Post-War Relief, op. cit., pp. 1^-34.

DEMOCRATIC MANAGEMENT OF THE ECONOMY

171

and rapidly changing world, education must not confine itself to
preparing the young for life, but must be a continuing process so
that adults may remain receptive all their life to new ideas. In
this connection, reference may be made, in particular, to the activity
of the study circles where minds are formed and informed, and
concrete and responsible action is prepared in an atmosphere free
from oratory, away from ready-made and uncritically received
ideas, and out of the reach of catchwords made meaningless by
excessive repetition.
This activity of adult education and democratic training goes
on quite naturally in the life of co-operative organisations, as the
co-operative institution, "through the means which it employs
and the qualities which it demands of its members and which it
develops in them" 1 , is a real school of human development, citizenship and democracy. As the First Lord of the Admiralty in Great
Britain, Mr. A. V. Alexander, declared in a Rochdale Day broadcast address to the American continent: "I came to public service
through the co-operative movement, in which I learned the tasks
of administration and democratic discipline . . . There is no finer
training for responsibilities of citizenship than service in a democratic organisation like the co-operative movement, which stresses
the responsibilities of freedom as well as its privileges."*
Understanding of the meaning and use of freedom, recognition
and exercise of its responsibilities, these are indeed the hallmarks
which should grace the citizen of a democracy. If national cohesion
is to be rebuilt and fostered, if human relations are to be well
ordered internationally, if great civilisations are to flower, there
must also be a vigorous sense of common interest, the perception
of common aims, the spirit of interdependence and the will for
solidarity. By steady widening of the definition which they give
to their ever-growing sphere of common action, and in the daily
exercise of their rights and duties, co-operators can gradually
attain to this universal outlook. Thus, while the development of
the democratic economy is aided by the ethic, methods and the
human element of co-operative management, co-operative education, both that preceding and preparing for co-operative action
and that resulting from' it, helps to form within the democracies
the ideals and leadership of which they stand in need.

Dr. G. F A U Q U E T : Le Secteur coopératif, op. cit., p . 44.
Reported in The Cooperative Builder (Superior, Wisconsin, U.S.A.), 20 Jan.
1944.
s

PART III
Conditions and Forms of the Co-operative
Contribution to the Rehabilitation and
Reconstruction Effort

PROBLEMS OF THE CO-OPERATIVE CONTRIBUTION

Earlier chapters and a previous study have called attention to
the number of co-operative societies and of the families whom they
serve; to the practically unlimited variety of .their economic and
social functions and the place, nearly always important, and sometimes preponderant, that the latter give them in the national life of
almost all countries; to their wide dissemination, coupled with a
high degree of mutual cohesion assured by their federal ties; and,
finally, to the fact that by giving their members experience in the
responsible management of enterprises, co-operatives contribute
to the building of a democratic economy and are effective instruments of economic, technical and social education for workers of
all categories. In this way some idea has been conveyed of the
features that fit co-operative organisations to make an important
contribution to the solution of certain post-war problems. Moreover, the leaders of the co-operative movement, conscious of their
responsibilities and also convinced that the development of cooperative institutions is at times an indispensable condition of
rehabilitation, in both its immediate and more permanent aspects,
are everywhere preparing for the role that circumstances indicate
to them. They point out, however, that the willingness and
readiness of the co-operative organisations are not the only factors
determining the extent and^fficacy of their contribution. Such a
contribution is assured by the very nature of co-operative activity.
But its importance will depend in part on the degree to which the
movement is asked to participate and, most of all, on the way in
which it can be fitted into the general framework of the intervention
that the public authorities of most countries will be led to make in
the economic field.
For though co-operative organisations and public authorities
may often have the same objectives, thus making their collaboration possible and desirable, their methods of action are clearly very
different. In view of the peculiar character of co-operative organisations, which are at once voluntary associations and undertakings
subject to very special rules of working and management, the
question arises under what conditions and by what methods this
collaboration can be best developed. In certain of its aspects, at
3 8 *

176

CO-OPERATION AND PRESENT-DAY PROBLEMS

least, this question inevitably introduces the more general problem
of relations between co-operative organisations and public authorities. And, for a proper appreciation of the problem, it will probably
be necessary to look at it, not only from the standpoint of the immediate tasks of rehabilitation, but also, at certain moments, from
the broader one of the general organisation of the economy.

CHAPTER VII
CONDITIONS OF CO-OPERATIVE ACTION
When co-operators try to define the external conditions which
would give the maximum scope and effectiveness to co-operative
action in post-war tasks, they limit themselves to very simple yet
fundamental wishes. In general they ask for no privileges. They are
even afraid that any privileges granted might weaken the sense of
responsibility and the spirit of initiative. If they are pressed by a
particularly friendly Government to say what it can do to make
the task of co-operative institutions easier, they simply ask for
assistance in their work of teaching and training, since they regard
that work as directed to a purpose of general interest and therefore a legitimate recipient of State aid. Some even ask only that
the State should help in a wide programme of adult education, for
they are convinced, it seems, that properly informed adults would
quite naturally seek co-operative solutions to some of their problems.1
The other claim of co-operators, emphatically and unanimously
advanced, is that any obstacles to the free development of cooperative organisations and free expansion of their activities should
be removed and that the State should not interfere with their principles and methods of working.

Teaching and Training
The interest taken by the public authorities in the teaching of
co-operation and the training of co-operative officials varies considerably from one country to another. It is least strong and sometimes practically non-existent in countries where the co-operative
movement is older and more developed.
in the State universities of Europe special chairs of co-operation are rare. In France, there were such chairs at Lille and Lyons
1
Cf. for example, the evidence of Dr. M. M. Coady before the Special Committee on Reconstruction and Re-establishment of the Canadian House of Commons, Minutes of Proceedings and Evidence, No. 12, 13 May 1943 (Ottawa, 1943),
pp. 297, 314, 318 and passim.
5

178

CO-OPERATION AND PRESENT-DAY PROBLEMS

und the one occupied by Charles Gide at the Collège de France in
Paris. Other chairs for the teaching of co-operation were the chair
(established in 1920) of the Faculty of Rural Economics and Veterinary Science of the Royal Hungarian University of Technical and
Economic Science in Budapest, that of the Faculty of Law and
Economics of Riga University, replacing, from the beginning of
the university year 1926-27, the few courses on co-operation
given ever since 1919, and also that at the University of Kaunas
in Lithuania. With these and perhaps a few other exceptions (e.g.,
certain Polish universities), co-operation had hardly more than an
accessory place in courses on sociology or political economy in
institutions of general higher education. 1 It figured more prominently in specialised higher education : in the commercial colleges,
for instance, in Poland and Turkey, and more particularly in the
agricultural colleges in France, Hungary, Latvia and elsewhere.
Some of these courses were established with the collaboration of
co-operative organisations.
The position is much the same as regards institutions for general
secondary education in which students are sometimes taught
about co-operation in courses on citizenship. Real teaching of cooperation* is only found in the vocational secondary schools, as in
Bulgaria (complementary and practical schools of agriculture,
commercial schools, schools of cabinet-making, mechanics, electricity, and domestic economy), in Latvia (commercial and agricultural schools), in Luxembourg (industrial and commercial
schools and agricultural schools), and in Poland, where commercial
education included three types of institution entirely devoted to the
teaching of co-operation (introductory co-operative schools, intermediate co-operative schools, higher co-operative schools).
From the little information available it does not seem that the
teaching of co-operation often occupied an important place in
elementary and higher elementary education. In France, some
idea of the co-operative movement was given to students in teachers'
training schools and in higher elementary schools; more important,
perhaps, was its well-developed school co-operative movement. 2
In Luxembourg, the winter agricultural courses (elementary) included classes on co-operation. In Poland, where school co-operatives were very numerous, an interesting feature was the inclusion
of teaching of co-operation in courses on geography and arithmetic.
1
It may be noted, however, that the University of Geneva (Switzerland)
has recently introduced a Certificate of Co-operative Studies, which is obtainable
by bachelors and doctors of economic and social science, and at the same time
has considerably enlarged the place allotted to the teaching of co-operation in
four1 of its faculties.
For further information on the school co-operative movement in various
countries, see Co-operative Organisations and Post- War Relief, op. cit.. pp. 27-28.

CONDITIONS OF CO-OPERATIVB ACTION

179

During recent years there has been a considerable increase in the
number of school co-operatives in Turkey.
While these examples do not perhaps cover the whole place
occupied by co-operation in the various stages of public instruction
in Europe, they probably account for most of it. As regards the
teaching and training activities of the co-operative organisations
themselves, it does not seem that the public authorities gave any
considerable assistance towards them. A few instances, however,
may be noted: the French, Polish and Turkish school authorities
encouraged the school co-operative movement; some chairs of cooperation have been created in secondary or higher agricultural
schools at the request of agricultural co-operative organisations;
the Czechoslovak, Finnish and Polish Governments subsidised the
education of managers, employees and members of co-operative
organisations 1 ; and the Greek law on co-operation (of 1938) provided for the establishment of a co-operative school offering a
diploma which would have to be obtained by all officials responsible
for the supervision of co-operatives.
A fairly large number of Governments periodically issued
statistics, either on the co-operative movement as a whole, or,
more frequently, on certain forms of co-operation. But, with this
exception, it is difficult to think of any regular official publication
which gave the public information on co-operative activities.
Outside Europe the picture is somewhat different, mainly owing
to the interest shown by a large number of Governments in the
development of co-operative organisations, and to the direct or
indirect contribution that they make to such development, more
especially by encouraging the teaching of co-operation.
In India, eight or even ten universities give extensive courses
on the history and theory of co-operation, on the different types
of co-operatives and on the organisation and working of the cooperation movement in that country. In the Universities of Agra,
Calcutta, Lucknow, Mysore and the Punjab this instruction has
to be taken to obtain certain university degrees. In addition, there
is the extremely important role played now and in the past by
the officials, British and Indian, on the staffs of the registrars of
co-operative societies, as regards both co-operative education and
the organisation, guidance and stimulation of the movement.
In nearly all the British colonies and possessions Government
officials have been appointed with much the same functions; these
registrars, most of whom have received special training, have in
1
The Swedish Government has likewise given financial assistance to certain
œntral organisations of agricultural co-operatives for the development of their
educational and supervisory activities.

180

CO-OPBRATION AND PRESENT-DAY PROBLEMS

general obtained excellent, and, in some cases, remarkable, results
from their efforts.
Most of the republics of Latin America, though using partially
different methods, have made similar endeavours. Some of them
(Brazil, Cuba, Peru) have written the development of the cooperative movement into their constitutions. Argentina, Brazil
(and its component States), Chile, Colombia, Ecuador, Mexico
and Peru have set up special departments to guide and supervise
co-operative organisations and, first of all, to spread or help to
spread knowledge of co-operative principles and methods by every
available means. In Venezuela, a course on co-operation was
instituted in October 1942 by the Department of Labour and
Communications. In Argentina, the Universities of Buenos Aires
and La Plata and, in Colombia, the University of Cauca have
special chcirs for the teaching of co-operation. The Institute for
Economic Research of the National University of Mexico makes
investigations and publishes studies for the information and guidance of the co-operative movement.
In the majority of these countries, and particularly in Argentina,
Brazil and Venezuela, encouragement has been given to school cooperatives and they are often specifically provided for in co-operative legislation or else made the subject of special regulations.
In the United States, consumers' co-operation is taught in a
number of scattered public schools, both urban and rural, in many
parts of the country, and in some of them such instruction is supplemented by the establishment of school co-operatives. In some
of the States, e.g., Colorado and Oregon, the further stage is reached
of having the co-operative movement or some aspect of it included
in courses of study in secondary schools. In higher education, cooperative subjects (often including both agricultural and consumers' co-operation) are taught in the land-grant (State) colleges
and universities in 42 States. Three States have passed special
legislation on the teaching of co-operation in their educational
institutions. In 1935, Wisconsin passed a law which provided that
co-operative marketing and consumers' co-operation should be
taught in the high and vocational schools of the State. It also
required that adequate instruction in the principles of co-operation
should be given in universities, State teachers' colleges and county
normal schools. In North Dakota, the 28th Legislative Assembly
in 1943 passed a law providing for the establishment of a course
on co-operation (methods of administration, history, principles,
organisation, etc.) in State teachers' colleges and the teachers' college
of the University. In Minnesota, there is no State law requiring
teaching about co-operation, but in 1937 the Legislature passed a

CONDITIONS OF CO-OPERATIVE ACTION

181

law' giving the Department of Education a special appropriation
to be used in the preparation of courses on co-operation.
In Canada, the elementary and junior high school syllabus
approved for use in Catholic schools in the Province of Quebec
authorises the teaching of co-operation in the senior grades. Some
idea of the co-operative movement is given to pupils of elementary
schools in Manitoba (in the geography course) and in Saskatchewan
(in the course on citizenship and character education).
Secondary school curricula in most of the provinces include the
teaching of co-operation in courses on other subjects: agriculture
(Alberta, Quebec, Saskatchewan), history (Manitoba, Saskatchewan), commerce (Quebec), and political economy (Quebec). In
Nova Scotia, the course of studies of the senior grades of the secondary schools includes "adequate information on the philosophy,
progress, methods of co-operation, and its place in the programme
of social reconstruction". In addition, at least three provincial
Departments of Agriculture have introduced courses on co-operation into their intermediate schools which give occupational training
courses in agriculture and household science.
As regards higher education, it is to be noted that the provincial
Governments have recognised the importance of co-operation in
rural and national economics and have encouraged its progress, in
collaboration with co-operative organisations, by making a place,
which is often considerable, for the teaching of co-operation in
the nine agricultural colleges in Canada (three in Quebec Province,
none in New Brunswick or Prince Edward Island, and one in each
of the six other provinces) and also in their extension courses (winter
or evening courses open to the public) . Co-operative subjects are
taught to a varying extent in the provincial Universities of Alberta,
British Columbia and Saskatchewan, and also in the Universities
of St-Francis Xavier (Nova Scotia), Ottawa (Ontario), and Laval
(Quebec). The Dominon Department of Fisheries gives a grant
to the extension departments of the Superior School of Fisheries
in Quebec, St-Francis Xavier University, and the University of
British Columbia for co-operative education among fishermen.
Finally, the help given by the public authorities of the United
States and Canada to the formation and development of the cooperative movement is perhaps best indicated by the number and
variety of publications issued and distributed by their federal and
State or provincial Governments, and the support given by some
Canadian provincial Governments to the publishing activities of
the co-operative organisations themselves. The official publications
range from textbooks and monographs down to handbooks and
pamphlets giving useful information on the way to form, direct
5

182

CO-OPERATION AND PRESENT-DAY PROBLEMS

and manage a co-operative organisation. The objectivity of some
of these publications and the practical nature of others have certainly done much, in the last ten or fifteen years, to forward the growth
of a vigorous co-operative movement.
To sum up, it may be said that the desire of co-operatives to
obtain State assistance in their teaching and training activities
has already been to some extent satisfied, though apparently less
in Europe than elsewhere.

Legislation
Actual or possible obstacles to the free operation and development of co-operative organisations are of various kinds. There
may be inadequacy or, sometimes, entire lack of specific legislation
setting out their precise legal status and giving them a correct and
6trict definition. Not infrequently, too, their functioning is impaired or their activities are limited by fiscal or general economic
measures expressly aimed at them or unintentionally affecting
them.
CO-OPERATIVE LEGISLATION

The gaps which are still sometimes found in co-operative legislation are largely explained by the way such legislation came into
being and developed. Co-operative organisations, being a spontaneous and independent outgrowth from the poorest social strata,
were a t the beginning too weak and too dispersed to catch the
attention of the legislator. They had to develop a t first more
or less extra-legally or else, though essentially associations of
persons carrying on an economic enterprise, accommodate their
activities as best they could to rules designed for stock companies.
Even today there are still several countries in which co-operative
associations are not governed by special laws. However, these
cases are exceptional. In the course of years the majority of countries have made legal provision for the co-operative movement,
in their civil law, in their commercial or industrial law, or in one or
more special enactments. The provision made is sometimes satisfactory in the aggregate, b u t even so is capable of improvement.
It is often defective in some important point, owing to living needs
having outstripped the law. Co-operative legislation is modelled
on co-operative custom and has done little more than record this as
:t appears in the memorandum, articles of association and by-laws
of societies, and as it has been modified by contact with experience,
and strengthened by the action of the co-operative federations and
given currency by the spread of the movement.

CONDITIONS OF CO-OPERATIVE ACTION

183

However, the legislator has not always freed himself from the
timidities and hesitations of the early period, and certain legal
enactments governing co-operatives, including some of the best
and oldest provisions, still impose on their field of activity and
mode of operation restrictions which were justified by considerations of prudence at the time but have since lost their raison d'être.
Nor has the legislator always been entirely successful in freeing
himself from ideas which served to define and regulate societies
based on capital when laying down the legal status of co-operative
organisations. Certain definitions of the co-operative society, by
their lack of precision, can be and are in fact applied to stock companies. Others are too narrow or only explicitly provide for certain
forms of co-operative society, thereby excluding from co-operative
law other forms regarded as authentically co-operative by cooperative doctrine and custom. This inability to recognise and express the principles common to all co-operative societies is at the
same time an inability to recognise and express those which are
special to them. The consequences of this double failure are found
in the provisions of the laws in which it occurs. Questions relating
to acquisition or loss of membership, rights and duties of members,
the mode of forming share capital and the nature of the shares, the
liability of members for the society's debts, the establishment of
reserves and the nature and role of such reserves, the division of
the annual surplus, etc., all of which are questions of special significance and fundamental importance in co-operative societies, are
sometimes dealt with by reference to legislation on stock companies,
whether by making the rules for stock companies partially or wholly
applicable to co-operatives or by having the rules of co-operative
societies appear merely as exceptions to general company law.
Where this confusion of ideas exists in legislation, it is naturally
reflected and aggravated by the law's interpretation and application. It obviously impairs the functioning of co-operative organisations. It also hinders the co-operative movement in its work of
teaching and spreading co-operative principles. Hence the desire
of co-operative organisations, in quite a number of countries still,
to enjoy a legal status appropriate to themselves, that is to say,
in clear and strict conformity with their needs and conceptions, and
their desire, in a growing number of countries, to be governed by a
single comprehensive statute applying to all co-operative organisations and to such organisations alone.
FISCAL AND ECONOMIC LEGISLATION

Traces of the same confusion appear in fiscal legislation and in
that concerning the functioning of the economic system in general.
5

184

CO-OPERATION AND PRESENT-DAY PROBLEMS

This is not the place to enumerate them in detail ; for the needs of
this study it will be sufficient to call attention to some of the most
common or most recent types of hesitations or mistaken interpretations.
As regards taxation, it is true that many legislations have taken
the popular character of co-operative organisations into account.
They have therefore simplified the formalities connected with the
establishment of a society and thereby also reduced their cost.
But in certain countries, the fiscal law placing a tax on the reserves
or profits of businesses has shown itself puzzled by the indivisible
character of co-operative reserves and also by the surplus distributed among the members. This distribution of surplus is regarded as a profit, whereas it really eliminates profit and is simply
the refund of an overcharge.
I t has even happened that where national commercial and industrial companies pay a lower rate of tax on income from capital
than that paid by foreign companies and by natural persons, cooperative organisations have been taxed at a high rate because
they are not companies within the meaning of the law.
Finally, it not infrequently occurs that the revenue authorities
treat some types of co-operatives differently from others, through
failure to appreciate the community of their principles and rules of
operation.
This uncertainty about the nature of co-operative organisations
leads to an equal uncertainty as to the place they should be given
in the economic system and as to the role that they play in it or
could play in it if they were free to do so. For instance, the interpretation placed on the anti-trust legislation (Sherman Act) in the
United States for a time threatened the development of the cooperative movement in that country. It was eventually necessary
to pass a special law, the Capper-Volstead Act of 19221, to remove
this menace ; incidentally, this was for a long time the only federal
act to contain provisions defining co-operative associations.
The numerous measures of regulation and rationalisation taken
by the Governments of most countries in the economic field since
die world depression have naturally affected the working of cooperative societies and the development of the co-operative movement.
The restrictions put on industrial and agricultural production,
and on imports and exports, succeeded, though not in every case,
1
The earlier Clayton Act (1914) had already laid down that labour, agricultural, and horticultural organisations which are instituted for purposes of
mutual help, which do not have capital stock, and which are not conducted for
profit, should not be held or construed to be illegal combinations or conspiracies
in restraint of trade under the anti-trust laws (§6).

CONDITIONS OP CO-OPERATIVE ACTION

185

in checking an excessive fall in prices, in restoring certain equilibriums and in protecting certain enterprises. But such restrictions
often led, in the case of the co-operative organisations, to a slowing
down or stoppage of some of their activities or of their development.
For by these measures the co-operatives were given quotas (production, import, export) which necessarily referred to a past state
of affairs and made no allowance for their growth (even at a time
of crisis) and for the real needs of their members. Among other
things there were instances of consumers' co-operatives being
forbidden to sell at prices lower than those fixed by the regulations;
in the fixing of price margins, a consumers' co-operative wholesale,
through a false interpretation of its nature and role, was sometimes
classed among "owners of retail shops"; others had lower price
margins imposed on them than their competitors, because their
costs were less; agricultural co-operatives were proceeded against
for having paid their members a return based on the regulation
price and representing simply a saving effected on the cost of
management. There are countries in which restrictions have been
placed on the number or size of the branches permissible to consumers' co-operatives. On the grounds of "rationalisation" cooperative organisations have been obliged to deal with capitalist
import and export enterprises which have thus enjoyed at least
a temporary monopoly. There are even cases where co-operative
organisations have been in danger of having to enter cartels or of
being legally compelled to do so.
These typical examples are of course far from being universal.
But they have provoked a reaction where they have occurred and
also in the co-operative movement generally. Co-operators, though
theoretically and in practice opposed to the system of "all against
all" competition, consider that to suspend or hamper competition
at the expense of institutions which represent a type of organised
economy "is a very poor occasion on which to sacrifice freedom
and is, in fact, a departure from the object in view". 1 They hold,
moreover, that certain measures affecting them also affect the right
of association and the natural right of each individual in a democratic order to dispose of the products or remuneration of his labour
as he may see fit. To put the matter briefly, since most Governments, particularly in the last fifteen years, have intervened more
and more widely and directly in the economic field, with the result
that their action impinges on that of co-operative organisations
with growing frequency, co-operators have been led to define their
1
Co-operative Organisations and the Intervention of Public Authorities in the
Economic Field. Conclusions of an enquiry undertaken by the Internationa
Committee for Inter-Co-operative Relations (I.L.O., Geneva, 1939), p. 12.

186

CO-OPERATION AND PRESENT-DAY PROBLEMS

attitude generally in regard to efforts in the direction of an organised
economy and, in particular, in regard to the interventions of public
authorities in the economic field.
Their views on these two points may be found in a large number
of articles and discussions. It may be useful, however, to recall that
the question was the subject of a special enquiry undertaken by
the International Committee for Inter-Co-operative Relations just
before the war. The highly representative character of this Committee, a joint organ of the International Co-operative Alliance
and the International Confederation of Agriculture, gives a special
authority to the conclusions which it drew from this enquiry and
it is legitimate to look t o them for the most complete and exact
expression of co-operative thought at the time. As these conclusions were reached on the basis of written opinions obtained from
35 national organisations in 26 countries, they give, not so much
an exact reproduction of the attitude of each of these organisations,
as a sort of composite picture in which the different shades of
opinion expressed are combined. But it may be assumed that on
such a wide basis of enquiry the principal features of the co-operative attitude have been brought out. Their general correspondence
with co-operative philosophy also allows the assumption that these
are fairly permanent features, even though recent years may have
introduced new shades of opinion here and there.

Co-operative Institutions and the Planning of the
Economy
The conclusions of the International Committee for Inter-Cooperative Relations were not inspired by any preconceived idea
and they follow easily a general line which keeps clear alike
of extreme laissez faire doctrine and an exaggerated devotion to
planning.
After pointing out that the co-operative movement is developing in the existing structure of the contemporary world a form of
planned economy1, the Committee declares:
Co-operators have thus no hesitation in recognising the existence of a common
motive behind their own efforts and all other sincere moves towards an organised
or planned economy—namely, the need for order and the firm desire to introduce
the considered will of man as a determining factor in economic life. But their
attitude, although not unfavourable, is not uncritical, and they are not prepared
to adhere without reservation to the most ambitious theories of economic planning or organisation, still less to subscribe indiscriminately to all the attempts,
systematic or piecemeal, to put these theories into practice.
1
See, on this question, Co-operative Organisations and Posl-War Relief, op. cit.,
Part I: "Characteristics of the Co-operative Movement".

CONDITIONS OF CO-OPERATIVE ACTION

187

It goes on to explain its "middle way" position:
They [co-operators] condemn the unrestricted war of selfish interests, in all
its forms, because it leads to disorder and cruelty; but they would not deprive
progress of the contribution which the free play of initiative and invention can
make to it. They would like to be able, by the organisation and practice of
solidarity, to limit and so to render supportable the risk entailed by economic
activity and by the fact of existence; but they refuse to carry such a policy to
the point at which the sense of responsibility disappears with the disappearance
of the risk.
They deny that, under guise of a doctrine of liberty, the supreme control of
economic affairs, national or international, should be left in the hands of the
great financial companies; and they feel surprise and resentment, as at a gross
misconception and a grave injustice, whenever Government action fails to make
the essential distinction between big business groups, whose object is profit, and
co-operative organisations, whose object—whatever their size—is one of service.1

On the role of experts in the organisation of the economy it says:
They were not the last to realise the importance of research, thought, organisation and foresight in any effort deliberately to establish and maintain in economic life that equilibrium which the liberal school expected from the free play
of individual action; and so they greet with satisfaction and gratitude the necessary appearance of "experts" on the public scene. But though they welcome
them as eminent servants of economic life, they are not prepared to accept them
as its infallible, omniscient, all-powerful lords. Their experience is that if anything has harmed the idea of economic planning as much as absolute authoritarianism, it has been the irresponsible, but none the less imperious whims of
amateurs, giving orders to "grow more" one day, to "uproot" the next. The
economic system should not, in their view, be placed at the mercy of the experiments, fancies, or manias of irresponsible "experts" who may well be nothing
but doctrinaires. Themselves at daily grips with the thorny problems of real
life, they have been able both to build up their confidence in the powers of the
human spirit and to realise its limitations. Practical men, who have learned modestly from experience, they prefer the expert who faces his task with due humility,
the expert who does not imagine that a single man or a single body of men have
the knowledge and genius required to grasp the whole complexity of the economic world and direct its destinies without restraint.

While recognising, of course, the value of acts and regulations,
the Committee considers that legislative action has its limitations:
They know and teach the benefit of discipline, but do not confuse it with
compulsion, which they consider inapt to establish and maintain order or to
secure the prevalence of truth.
They subscribe to Lacordaire's celebrated dictum that—"Between strong
and weak, rich and poor, or master and servant, liberty is oppression and the
law sets free". But they know also that there are more wrongs in heaven and
earth than acts and regulations can put right.
Neither have they waited until their attention was drawn to the disorders,
unjust profits and underserved misery which flow from the fluctuations—too
sudden, too frequent or too wide—in rates of exchange; from excessive discrepancies between the price at which the producer sells and that at which the con1
Co-operative Organisations and the Intervention of Public Authorities in the
Economic Field, op. cit., pp. 8-9.

188

CO-OPERATION AND PRESENT-DAY PROBLEMS

sumer buys, or between the prices of manufactured goods and of farm produce;
and from analogous phenomena. They know that one of the essentials of economic order is to discover more stable conditions, a better equilibrium; and it is
to the search for these that their own efforts are directed. But, in their view,
stabilisation and balance do not mean stagnation, and Government action should
have neither the object nor the effect of crystallising all forms of activity and
all types of economic relationship.1

After these last observations the next step is to examine a little
more closely, with the help of the same and some other documents,
the co-operative attitude towards interventions of public authorities in the economic field.

Co-operative Institutions and the Public Authorities
The intervention of public authorities in the economic field is
not new and co-operators have not failed to observe that it has
often been instigated by business circles themselves, as when they
demand protective tariffs or expect the Government to finance
and sometimes to rescue from difficulty large railway and shipping
enterprises and similar undertakings.
But though there is nothing new in such interventions, they
have greatly increased in number during the last fifteen or twenty
years, particularly since the economic crisis of 1929 and, of course,
during the present war. This increase, then, has taken place during
a period of decided advance for the co-operative movement. . It
is this fact which explains the growth from this time on of thought
within the co-operative movement on the respective roles of cooperative organisations and of the State in economic planning.
But the discussion has been carried on with a dispersion of effort
and does not seem to have led to a complete unity of doctrine. A
really thorough examination of the question is therefore not possible
and would in any case be out of place here. Without entering into
the details of the discussion, it is sufficient, but essential, to indicate
the different tendencies that have emerged and to try to single
out the tendency that seems to be dominant at the present time.
Though there are co-operators who show a disposition to allow
the State a considerable place in the planning and control of the
economy, others are afraid of seeing it entrusted with excessively
large powers which would quickly become uncontrollable. Dr.
James P. Warbasse, founder and President Emeritus of the Cooperative League of the U.S.A., is perhaps the most uncompromising representative of this last attitude. " I assert", he writes,
that the mere expanding of the functions of the political State is not in itself
a virtue; nor can it be regarded even as radical. My own critical scrutiny shows
1
Co-operative Organisations and the Intervention of Public Authorities in the
Economic Field, op. cit., pp. 9-10.

CONDITIONS OF CO-OPBRATIVB ACTION

189

it to be a reactionary tendency; for as State control and ownership become wholly
dominant, the multiplication of officials and the mechanised increase of officialdom set the stage for autocracy and the abnegation of democracy.1

Further on he adds: "The philosophy of stateism rests on cumpulsion which moves on towards totalitarian domination over
the individual and his freedoms. It begins as socialist reform and
ends in autocracy." 2
In so far as these declarations express apprehension of the
possibility that the State may become all-powerful, they may be
said to reflect the general trend of co-operative thought. Even cooperators who would hesitate to go so far cannot accept the idea
of a "unitary, monolithic and absolute" State wielding excessive
powers in the economic field ; they are almost as resolutely opposed
to it as they are to the power of private monopolies and cartels,
and for much the same reasons.
This does not mean that they deny the State all economic
function. Dr. Warbasse, whose opposition, despite its vigour,
is not unqualified, regards it as a necessary evil. As he writes in
the article already quoted: "I am not here objecting to the expansion of the State. As a reform measure, in a capitalist society, it
often becomes necessary. . . I am questioning the expediency of
co-operators giving themselves to this end."'
Elsewhere he writes again: "I have no quarrel with the compulsory political State. I believe in it for the multitude of non-cooperative and unsocial souls. It is necessary to supply needs and
services when the people cannot supply themselves individually
or in their voluntary associations." 4
On this point too it can be said that the thought of Dr. Warbasse
is in accord with the doctrine and general tendency of the cooperative movement, in preferring voluntary solutions to compulsory solutions whenever possible.
In practice, however, most co-operators are prepared to make
concessions. The extent of such concessions varies according to
the degree to which their makers are influenced by doctrines other
than the co-operative one and also according to the degree to which
they take account of the limitations inherent in or imposed on cooperative action at the present time or in the immediate future.
It may be useful to give a concrete illustration of this complex
attitude in which are combined devotion to liberty, considerations
1
Dr. James Peter WARBASSE: "Co-operatives to be Absorbed by the State",
in Review of International Co-operation (London), May 19&3, p. 66.
1
Idem, p. 68.
s
Idem, p. 66.
1
James Peter WARBASSE: "Leading Cooperation to Ruin", in Consumers'
Cooperation, New York, Mar. 1943, p. 38.

190

CO-OPßRATION AND PRESENT-DAY PROBLEMS

of order, search for justice, pursuit of an ideal and a sense of what
is possible. It may be found in the replies made to one of the questions asked by the International Labour Office in a questionnaire sent in 1942 to accessible co-operative organisations. The
question was: "Define your attitude towards continuance for
some time of: (a) rationing, (fe) State control of raw materials,
(c) State control of stocks, (d) State control of prices, (e) State
control of home trade, and (/) State regulation of international
trade". 1
In some cases separate answers were given for each heading and
in others a single answer covering the question as a whole. They
are not very numerous, but come from countries as diverse as
Canada, Mexico, Sweden, Switzerland, the United Kingdom, and
the United States, and from organisations operating mainly in
rural areas, as well as from those of an urban and industrial character. Despite this diversity of origins, they show a large measure
of agreement in their general trend, and the observations, qualifications and reservations accompanying them, so far from being contradictory, are complementary and together reveal an attitude
which is broadly common to all the organisations that replied.
With very few exceptions, the organisations replying showed
themselves in favour of the maintenance of the different controls,
or of some of them, for a certain period; at the same time they
stressed more or less strongly that the measures should be regarded as temporary and be dispensed with as quickly as possible;
in other words, as soon as thev cease to be "necessary and desirable".
The only two real exceptions were in regard to State control of
home trade. The Ohio Farm Bureau Cooperative Association
(U.S.A.) considers that maintenance of its control will definitely
not be necessary, and the Swedish Federation of Co-operative
Meat Marketing Societies is of the opinion that it will probably
not be necessary. Some other organisations accept the maintenance
of such control explicitly (Co-operative Union and Wholesale Cooperative Society of Switzerland (U.S.C.)) or appear to accept it
by implication (Co-operative Union of Great Britain, Consumers'
Cooperative Association of Kansas City (U.S.A.)).
The replies received are summarised or reproduced below.
First come the answers, item by item, of the organisations which
gave replies on each of the controls specified, and then the answers
defining a general attitude.
Midland Cooperative Wholesale of Minneapolis (U.S.A.), and
1
The questionnaire referred to the period which would begin when hostilities
ended.

CONDITIONS OP CO-OPBRATIVE ACTION

191

the Swiss Co-operative Union and Wholesale Co-operative Society
unreservedly accept the maintenance of rationing for some time
after the war. The other replies, including those that are negative
in form, really say the same thing, though with some variations.
The Ohio Farm Bureau Cooperative Association is for its maintenance for "as long as supplies of essentials are scarce". In Canada,
the Associated Growers of British Columbia would maintain rationing, but "not beyond the necessities brought about by the war",
while the Swedish Federation of Co-operative Meat Marketing
Societies would like it dropped "as soon as possible after the end
of hostilities". To understand correctly the attitude of the Cooperative Union and Wholesale Society of Sweden, it is necessary
to recall that this organisation petitioned the Swedish Government as early as the summer of 1939, asking that a satisfactory
system of rationing cards should be prepared for the chief articles
of food; and that as early as March 1939 the organisation, while
approving in principle the State control of prices during wartime,
stressed that such control could not be effective and could even be
harmful unless combined with the rationing of goods in short supply.
Though it approved and even advocated certain measures of control the Swedish Co-operative Union expressed the view that "when
there is no longer a shortage of goods the market should once more
become free in the sense that rationing or other forms of State
restriction of consumption which are now both necessary and
desirable should cease".
The temporary maintenance of control of raw materials is considered necessary by the Midland Cooperative Wholesale of Minneapolis and the Swiss Co-operative Union, while the Ohio Farm
Bureau gives no categorical answer, but observes that "conservation of national resources and prevention of private monopoly
would decide".
The same organisations, together with the Swedish Federation
of Co-operative Meat Marketing Societies, consider some continuation of State control of stocks as necessary or as probably and
temporarily necessary.
They have much the same attitude regarding control of prices.
It should be maintained "in certain cases", according to the
Swedish Meat Marketing Federation; "probably, especially with
rationing", in the view of Midland Cooperative Wholesale of
Minneapolis. The Ohio Farm Bureau recalls that after the last
war "prices hit peak one year after hostilities ceased".
State regulation of international trade will have to be maintained for a time, according to the Swiss Co-operative Union; the
Swedish Meat Marketing Federation regards it as "very probably
3 9 *

192

CO-OPERATION AND PRESENT-DAY PROBLEMS

necessary". The Ohio Farm Bureau says: "the State will have
to be a medium for expression of national policy with respect to
trade between nations, unless supra-national agencies come into
being".
Next come the replies of co-operative organisations which defined their attitude towards all State controls generally.
The answer of the Co-operative Union of Great Britain is categorically affirmative; nevertheless, it looks for the removal of
controls when the time comes. Its Executive Committee, it is
stated, therefore "considers it desirable, and in the interests of the
community, that Government control should continue for such a
period after the war in which supplies are inadequate on account
of national and international conditions, or as is necessary to allow
of the smooth liquidation of wartime controls".
The Swedish Co-operative Union has opposed in the emergency
"every system of restrictions which confines freedom of movement
. . . if there has been any feasible alternative". This is an attitude
held as a matter of principle and must be interpreted in the light
of the observations made in the preceding paragraphs.
The reply of the Consumers' Cooperative Wholesale of Kansas
City is particularly explicit:
State controls "clear across the board" probably must be maintained for a
longer period after this war than was the case at the close of World War I, if
runaway inflation is to be avoided. After conversion to peacetime production
is made, and long denied consumer wants are in a fair way of being met adequately,
then co-operatives generally will want to see relaxation of governmental economic
controls.

Starting negatively, the reply of the Manitoba Co-operative
Wholesale Ltd. (Canada) is very significant:
The general attitude of this organisation towards State control is that it
should be abolished as soon as possible, as said State control will protect interests
which are already heavily established. If, on the other hand. State control should
protect the natural resources of the country and see that they are properly developed for the people of Canada, the co-operative attitude would be very definitely in favour of these sorts of regulations.

This declaration, expressing the general social outlook of cooperative organisations, may be compared with that made on the
same occasion, not by a co-operative organisation, but by the
Bureau of Consumers' Co-operatives of the Mexican Department
of Labour and Social Insurance:
The Bureau considers—and believes this to be the view of the co-operatives
under its control—that it is desirable to maintain all the State controls mentioned
in the question for a period the length of which will depend on the work of national and international economic reconstruction and, most of all, on the welfare

CONDITIONS OP CO-OPERATIVE ACTION

193

of the common people of each country, in order to protect the lower income
groups, i.e., the workers, against the consequences of unrestricted trade.

Looked at from the standpoint of what they have most deeply
in common, these various replies seem to reveal not only a willingness to seek a reasonable compromise between a principle and
practical necessities, but also, explicitly or by implication, recognition of a certain possible convergence of co-operative action and
State action.
As Dr. Fauquet says: "On condition that the State is independent of special interest groupings, there is a community of purposes
between State action and co-operative action: both tend to win
acceptance for the idea of organised service as against struggle for
profit". 1
Whenever State action and co-operative action converge on the
same objective, they are or can be complementary, despite the fact
that they use different methods. This is the idea expressed, for
instance, in an editorial article which appeared in the Canadian
Co-operator: "We have no blue-print of a Co-operative Commonwealth. When it comes. . . it seems probable the technique adopted
will be partly voluntary by co-operative societies, and partly compulsory by the State as the circumstances suggest to be the most
useful, efficient, economical and desirable." 2
This was also the conclusion reached by the International Committee for Inter-Co-operative Relations. It presented the conception in an extended form which made room for three instead of
two sectors in the economy:
Refusing to engage in academic disputes, indeed to some extent laying their
own theoretical preferences aside—in other words, striving to remain within the
bounds of present facts and possibilities—they consider that, in the economic
system now being constructed, freedom without check (but not without risk
or supervision), planned compulsion by the State, and that "organised liberty"
which the co-operative movement represents, all have their contribution to
make.'

This idea of mixed economies had already been clearly presented by Dr. Fauquet in the first edition (1935) of his Co-operative
Sector* and led him to the following reflections on the "complex
and variable" relations which exist or can be established, among
others, between what he calls the "co-operative sector" and the
"public sector":
1
Dr. G. FAUQUET: Revue des études coopératives (Toulouse), Jan.-Feb.-Mar.
1943,
p. 19.
1
"Co-operation and Stateism", in Canadian Co-operator (Brantford, Ontario),
June8 1943, p. 6.
Co-operative Organisations and the Intervention of Public Authorities in the
Economic Field, op. cit., pp. 12-13.
4
Le Secteur coopératif, op. cit. See particularly the Introduction.

194

CO-OPERATION AND PRESENT-DAY PROBLEMS

As soon as co-operators, taking a positive view of the realities of the past and
present, accept the idea of mixed economies and reject the abstract idea of a
pure economy, and are persuaded that economic development occurs as a succession of mixed economies of variable composition, then they have no fundamental objection to make to measures that may be decided on by the public
authorities either to ensure the working of public services or to take in hand the
over-all regulation of the economy. . .
Co-operators can accede to forms that are intermediate between public action and co-operative action (public co-operatives (.régies coopératives), delegation of public utility functions to co-operatives).
They may equally find in public action an effective means of control over
those parts of the economic process which are strongly held by capitalist economy and can be captured only with difficulty, or not at all, by co-operative
economy.1

A large number of leaders or supporters of the co-operative
movement in various countries 2 have stressed the mixed character
of contemporary economies that have reached a certain degree of
development, and it is interesting to note the coincidence, of their
views with those expressed by leading administrators and public
men holding widely different political outlooks.
Mr. Leon Henderson, for example, formerly head of the Office
of Price Administration in the United States, speaking at the Congress of the Cooperative League at Chicago in November 1944,
declared: " I t is not a choice between reliance on business enterprise
or being completely dominated by a State economy. It is, rather,
one of a mixed economy." 3
Mr. John Bracken, leader of the Progressive-Conservative
Party in Canada, gave this comprehensive definition of "free enterprise" in a broadcast speech: "Free enterprise means private enterprise where it can serve better than any other, and co-operative
enterprise in the fields where it can best serve, and Government
development in the fields where public ownership and operation
will give the best social dividends." 4
Mr. Henry Wallace, when Vice-President of the United States,
put the matter thus: "I have always believed that the Swedish
people have the ideal democratic approach: corporate form of
business where corporations do the best job, Government super1
2

Le Secteur coopératif op. cit., pp. 47-48.
Cf., for instance, C. R. FAY: Co-operation at Heme and Abroad (P. S. King
and Son Ltd., London, 1939), Vol. IÍ, p. 25; R. A. PALMER (General Secretary
of the British Co-operative Union): "British Co-operation and the State", in
Review of International Co-operation, Mar. 1944 (in reply to Dr. Warbasse's
article quoted in the text); Murray D. LINCOLN, in a speech made at the annual
meeting (1943) of the Ohio Farm Bureau Federation, cited in Ohio Cooperator,
IS Nov. 1943; Joe GILBERT in Midland Cooperator, 9 June 1943; W. C. GOOD.
President of the Co-operative Union of Canada, in his evidence before the Special
Committee on Reconstruction and Re-establishment of the Canadian House of
Commons, Minutes of Proceedings and Evidence, No. 11, 12 May 1943, p. 266.
* As reported in "Pennsylvania Cooperative Review, Nov. 1944, p.9.
4
As reported in Canadian Co-operator, July 1943, p. 17.

CONDITIONS OF CO-OPERATIVE ACTION

195

vision where it is needed, Government ownership where the Government does the best job, and co-operatives where they do the best
job. . . It is a four-way approach. . . "l
The tendency, then, which seems to be dominant in the complex pattern of co-operative thought and also runs parallel to a
strong current of modern economic thinking, is t o recognise and
define within a mixed economy the place which belongs to State
action in certain fields where such action is considered indispensable
and as regards the over-all management of the economy. However,
co-operative organisations, aware of the limits and conditions of
State action 2 , at the same time try to define their own role in a
mixed economy and the means of correlating it with that of the State.
In this connection they point out that the State has to find
means for the carrying out of the plans it has prepared, that its
action inevitably becomes diluted as it moves away from the
centre and that if it is to remain effective it must make use of intermediary agencies.
The question is which means and what agencies are to be employed. In the human endeavour to acquire knowledge and devise
methods of action there is no dearth of investigators able to reconstruct the past from history or of poets able to build the future
by imaginative effort. But there is equally need for minds capable
of observing, interpreting and utilising the present. For while it is
useful to seek in the past means of influencing the future, and both
useful and necessary to foreshadow the future in well-laid plans,
it is also necessary, for solid results, to prepare for the future by
fashioning our present. In other words, it is first necessary to
take a careful inventory of the present and to recognise the seeds
of the future in it as well as the lessons of the past. 3 Finally, in
looking for means of action, preference should not be given to those
of untried value, but rather it should be asked if there are not
among existing ones some whose development would fit in with
the general intention of the plans in question. This suggestion has
already been advanced by the International Committee for InterCo-operative Relations in the following terms:
In the search for executive organs, the desire to save time, thought and money
induces Governments to abstain from creating new institutions out of the void
1
Cf. The Cooperative Builder (Superior, Wisconsin), 23 Sept. 1943.
2
Opinions as to what constitute these limits and conditions abound in cooperative literature. See, for instance, the message of R. A. PALMER, Acting
President cf the International Co-operative Alliance, on the occasion of International Co-operation Day {Review of International Co-operation, June 1942) ;
Sir Thomas ALLEN, former Vice-President of the International Co-operative
Alliance {idem, June 1943)' ; and Dr. G. FAUQUET, op. cit., in chapter on "Etatisme
et Coopération", pp. 45-52. '
* Just as both surviving and newly developed non-capitalist forms are found
alongside the prevalent capitalist forms in the mixed economy of to day.
5

196

CO-OPERATION AND PRËSENT-DAY PROBLEMS

until they have reviewed and examined such as already exist, and sometimes
to choose among the latter those which by character and experience are fitted
for the object in view.1

Recalling the federal structure of the co-operative movement,
the Committee also pointed out the advantages of such a structure
for the preparation as well as the execution of plans:
This structure, based on elementary economic units, has obvious advantages
for the preparation iof a plan or for its execution; for in so far as it is deliberately
organised or planned, an economic system must first of all be well informed.
The collection of the necessary information is partly the duty of the statistician;
but not more than partly, for statistics can grasp only generalities and averages
and not the current realities of life. In order to remain in touch with problems
and needs; to realise at any moment their real character, their real proportions;
to have a sure vision of the goal; to choose, adapt or devise the means best fitted
to reach it; to foresee or to observe in good time all the direct or indirect, shortor long-term repercussions which the use of such means will produce; to grasp
the new problems which arise out of all these factors when they arise and to
propose a solution for them: to achieve all this, a more sensitive mechanism, a
mechanism which can penetrate, not intermittently but permanently, into the
depths of economic and social life, must be available and must be used with
knowledge and skill. This mechanism, this instrument of research and achievement, can be provided by the co-operative societies, because they stand close
to man, to his labour and his needs—and because they are at his service.'

The Committee added:
In offering this instrument the co-operative organisations realise that they
are also suggesting a method—at least whenever such an instrument and method
can be used. In the name of their own experience, they say that every effort to
put the economic world in order must proceed from contact—permanent contact
—between reality and thought. They mean by this, not that it is enough to create
theories and to put them to the test of experience, for this type of experience
would be the most expensive of amusements. They mean that ideas themselves
should be conceived in the womb of present reality and ripened by day-to-day
action before they take shape as methods; and that methods, once shaped, must
undergo continual adaptation through contact with experience.'

And it concluded :
The co-operative organisations believe, then, that if excessively bureaucratic
forms of economic planning are to be avoided, if some of the advantages of the
experimental method are to be introduced between the lines of purely mathematical conceptions, there can be little choice but to call for their aid and advice
—as has indeed already been done in a number of countries.4

Dr. Fauquet, too, discusses in somewhat more detail the link
between State action and co-operative action:
Since their federal structures bring together their component units in a rising
scale of integration, co-operative organisations offer the State—if it is ready to
1
Co-operative Organisations and the Intervention of Public Authorities in the
Economic Field, op. cit., p. 13.
» Idem, pp. 13-14.
» Idem, p. 14.
'Ibid.

CONDITIONS OF CO-OPERATIVE ACTION

197

take advantage of it—a chain of intermediaries between the directive centres
of the economy and the depths of social life.
The link so established is not a rigid one, but elastic and capable not only
of transmitting directives from above, but also of correcting and mitigating
errors in them.
The equilibrium of the laissez faire economy was assured, at least in theory,
by the automatic reactions of the market: the managed economy may hope to
find a similar regulative action in the free play of the elements grouped federally
in co-operative organisations.1

To the problems, then, already mentioned as the chief preoccupations of the co-operative movement at the present time and
for the immediate future—the continuous enlargement and renewal
of educational activity 2 , and the constant effort to achieve unity
of the co-operative movement (particularly through the development of inter-co-operative relations) 3 —must be added a third.
Since co-operative organisations and the public authorities, though
using different means and methods, have to operate, in part, in
the same field, and since their interventions, under certain conditions, can be convergent or complementary, it is necessary to seek
the forms and methods most appropriate for linking them together
and ensuring their mutual support. In particular, during the period
of post-war reconstruction search must be made "within any
general plan" for the place and role which suit co-operative organisations—which correspond, in other words, to their abilities while
safeguarding "respect for their peculiar principles and their administrative autonomy". 4
This problem may be examined under the following two heads:
(a) consultation and representation of co-operative organisations in
the bodies through which the economic and social policies of Governments are planned,, executed and controlled; and (£>) direct
assignment of public utility functions to co-operative organisations.
The war and immediate pre-war periods yield numerous examples of tasks entrusted to co-operative organisations or to representatives of them. It is not necessary, nor would it be possible
under present circumstances, to catalogue them all. The selection
given merely seeks to illustrate in a concrete manner the nature,
form, variety and, sometimes, the extent of the assistance that cooperative organisations have been called on to render to the public
authorities.
1
Dr. G. FAUQUET: Le Secteur coopératif, op. cit., p. SI.,
• Cf. Co-operative Organisations and Post-War Relief', op. cit.. Part I, Ch. IV:
"The Co-operative Movement and Education", pp. 19-34.
*4 Idem, Part I: "Characteristics of the Co-operative Movement", pp. 4-36.
Co-operative Organisations and the Intervention of the Public Authorities in
the Economic Field, op. cit., p. 15.

CHAPTER VIII
FORMS OF THE CO-OPERATIVE CONTRIBUTION
Consultation and Representation
Agricultural and consumers' co-operative institutions have
reached a fairly high stage of development in a large number of
countries and it is natural that they should generally have been
consulted upon the fixing, regulation and control of prices, upon
rationing, and upon the organisation of production and marketing
of foodstuffs and other agricultural produce. However, some of
these co-operatives play such a role in the general economy of their
country, have acquired such a competence, and represent interests
of so great importance t h a t a tendency is found, as some of the
following instances show, to associate them with consultations of
a broader character.
P R I C E REGULATION,

RATIONING

Before the present war the public authorities, over-riding
market conditions, had already begun to regulate the prices of
agricultural products, and already co-operative organisations had
been invited to share this responsibility. Some instances of this
trend will be given.
In Australia, co-operative organisations held two out of the six
seats on the Australian Wine Board which fixed export prices.
Under a Colombian law (No. 134 of 1931), consumers' co-operatives
and purchase and sale co-operatives were (by §13) considered to
be agencies for price regulation in the areas in which they operated
and it was laid down that they "shall be consulted and represented
in all existing or future official bodies established to bring down
the cost of living". In France, agricultural co-operatives held 18
seats and consumers' co-operatives three seats on the board of
administration of the National Inter-Occupational Wheat Office,
which, among other things, fixed the prices paid to the producers
of wheat and the prices at which it was supplied to the millers.
The consumers' co-operatives were represented in the national

FORMS OP THE CO-OPERATIVE CONTRIBUTION

199

committee and departmental committees for price control, and
also in the flour and bread price-fixing committees. Price fixing
was also one of the functions of the Czechoslovak Grain Company,
in which co-operative organisations had a three-fifths majority
(two fifths for agricultural co-operatives and one fifth for consumers' co-operatives). The Czechoslovak co-operative dairies
played an important role in the provincial committees responsible
for fixing the prices of dairy produce.
During the war there was a great increase in the number of
bodies entrusted with the regulation, fixing and control of prices
and often with the rationing of essential commodities as well.
In Western Australia, and perhaps in other States of Australia,
price-fixing boards benefit by the presence and advice of co-operators. In Canada, a number of co-operators serve in various capacities on the Wartime Prices and Trade Board. In Iceland, the
Federation of Co-operative Societies holds one of the five seats on
the Price Regulation Committee. The Co-operative Union and
Wholesale Society of Sweden is also represented on the State Price
Control Board, and the Federation of Co-operative Meat Marketing Societies has participated in various committees concerned
with the introduction and application of the meat-rationing system.
In Switzerland, the President of the Federal Price Control Committee was a former president of the committee of management of the
Swiss Co-operative Union and Wholesale Society. In the United
Kingdom, the General Secretary of the Co-operative Union sits
on the Central Price Regulation Committee and the co-operatives
have a representative on each of the local price regulation committees. In the United States, a number of co-operators have been
members of various committees (Consumer Goods Distribution
and Use Panel, Farm Equipment Suppliers' Advisory Committee,
etc.) set up to advise the Office of Price Administration.
ORGANISATION OF PRODUCTION AND MARKETING

In a large number of countries co-operative organisations have
been invited to express their opinion on proposed measures for the
organisation of production and marketing, particularly as regards
consumer goods of agricultural origin. Sometimes the views of the
large national co-operative organisations are sought directly, and
sometimes there is consultation in permanent or temporary committees and councils on which co-operative 'organisations are
represented.
First, some facts from the pre-war period may be given, which
perhaps still apply in a more or less modified form. In Australia,
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CO-OPERATION AND PRESENT-DAY PROBLEMS

co-operative organisations were represented on the following boards
established by the Commonwealth Government: on the Australian
Dairy Produce Board, 9 out of 17 seats were held by co-operative
butter factories; one of the 5 members of the Canned Fruits Export
Control Board represented co-operative canneries, and one member
of the Australian Meat Board was nominated by co-operative
mutton and lamb exporting organisations. The co-operatives
of Western Australia were represented on the Royal Commission
on Wheat and Baking Industries of 1934; in New South Wales, 2
out of 7 members of the Dairy Products Board were nominated by
dairy co-operatives. In Czechoslovakia, representatives of agricultural co-operation were often invited by the Minister of Agriculture to formulate draft laws and ordinances. In Denmark, the
Central Committee of Co-operative Organisations held a number
of seats on the Agricultural Council, which exercises an influence
on the country's economic policy. In Finland, most of the measures
adopted for organising the agricultural market were taken at the
instigation of the central co-operative unions. In France, cooperative organisations had secured seats on most of the interoccupational committees responsible for fixing quotas on imports
of agricultural products or agricultural requisites. In Luxembourg,
4 of the 12 members sitting on the Milk Commission represented
co-operative federations and central organisations. In Norway,
the Marketing Council established in 1930 with a membership of 8
persons, included representatives of the following co-operative
organisations: Central Federation of Norwegian Dairy Societies,
Norwegian Central Union for the Marketing of Meat, Norwegian
Farmers' Co-operative Egg Export Association, and the Co-operative Union and Wholesale Society of Norway. The Egg Export
Association also nominated members to the special committee set
up for price regulation and exports. In Poland, co-operative organisations were represented on the Foreign Trade Council and also
on the official committees for grading butter and cheese ; they were
also consulted about all proposed measures which could directly
or indirectly affect them. In the United States, the co-operative
organisations generally have special committees which collaborate
with County and State Colleges of Agriculture in making recommendations to the legislative assemblies of the States or to the
Congress of the United States; in addition, when a bill concerning
agriculture is being drawn up, the Secretary of Agriculture is
accustomed to summon the leaders of the co-operative movement to
hear their opinion; co-operative organisations are also generally
represented on the committees responsible for making recommendations on or collaborating in the drafting of such bills. In

FORMS OF THE CO-OPERATIVB CONTRIBUTION

201

Yugoslavia, 3 out of 15 seats on the council responsible for allotting
livestock export quotas were held by co-operative organisations.
Quite numerous instances have been reported during the war
period. In Argentina, the agricultural co-operative organisations
are represented on the National Commission for Grains and Elevators and the National Commission for the Dairy Industry. Similarly, the consumers' co-operative organisations are represented
on some of the bodies established by the public authorities for the
planning and control of production and distribution; the co-operatives consider, however, that their present representation is inadequate. In Ireland, the agricultural co-operative organisations have
nominated representatives to the Agricultural Production Consultative Council and to similar councils concerned with eggs and
livestock. The Co-operative Union and Wholesale Society of Sweden
is represented on the State Food Commission. In Switzerland, two
members of the Supervisory Council of the Co-operative Union
and Wholesale Co-operative Society and the director of the Swiss
Peasants' Union sit on the Committee for the supervision of import
and export trade; the Swiss Peasants' Union is generally consulted
on all wartime economic measures affecting agriculture. In the
United States, co-operators sit on a large number of (federal) industry and commodity advisory committees and in organs of
some of the State Governments.
REPRESENTATION OF A M O R E GENERAL, N A T U R E

The general or particular competencies acquired by co-operative
organisations or their representatives are sometimes utilised in the
widest and most various fields, and it would not be without interest to list all the responsibilities in which the co-operative move.ment has been invited to share, either before the outbreak of war or
during it. However, only some instances can be given here.
In Argentina, the Union of Argentine Co-operative Societies is
represented in the National Mortgage Bank; it occupies one out
of five seats on the National Agricultural Council responsible for
applying the Act of 21 August 1940 on land settlement. In Australia, besides the instances of representation already given, it may
be mentioned that t h t Australian Wheat Board includes some cooperators amnng its members and that in 1939 its General Manager
was the General Manager of the Westralian Farmers Ltd.—a cooperative organisation. Similarly, the General Manager of two
fruit handling co-operatives was appointed Vice-Chairman of the
Apple and Pear Board; the General Manager of the Westralian
Farmers Ltd. participated in the World Wheat Conference of
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202

CO-OPERATION AND PRESENT-DAY PROBLEMS

1939 and the Federal Conference on Shipping in 1929, and he is
at present Consultant to the Commonwealth Government on
Shipping. The War Contracts Board, the Transport Board, and
the Liquid Fuel Control Board also avail themselves of the advice
of representatives of co-operative organisations. In Canada, the
President of the Associated Growers of British Columbia is a
member of the Agricultural Advisory Committee set up by the
Dominion Department of Agriculture; the President of the Manitoba Pool Elevators sits on the advisory committee of the National
War Finance Committee; and the Manitoba Co-operative Wholesale Ltd. is consulted by the Wartime Prices and Trade Board.
In France, delegates of the consumers' co-operatives had seats not
only on the central committee of the Inter-Occupational Wheat
Office and on the Superior Council of Co-operation, but also on the
National Economic Council, the Superior Council of Labour, the
Railways Advisory Committee, the Superior Council of Social Insurance, and the General Council of the Bank of France. In Great
Britain, the English Co-operative Wholesale Society is represented
on some thirty wartime committees established by the Government or under Government auspices, and the Scottish Co-operative
Wholesale Society is similarly placed; generally speaking, English
co-operators report that they are today much more closely associated
with the solution of national economic problems than they were
during the First World War. In Sweden, the Co-operative Union
and Wholesale Society (Kooperativa Förbundet) is represented, not
only on the State Price Control Board and the State Food Commission, but also on the State Industrial, Trade, Transport and
Fuel Commissions. 1 In Switzerland, the consumers' co-operative
organisations are represented on 14 wartime trade associations
(which have the legal form of a co-operative society) responsible
for carrying out wartime economic measures. The President of
the Co-operative Union and Wholesale Co-operative Society is
Vice-President of the Swiss Central Office of Importers of Foodstuffs.
In the United States, the President of the Consumers' Cooperative
Association (North Kansas City) is a member of the National
Petroleum Advisory Committee; the co-operative movement is
represented on the Economic Stabilization Board ; and the National
Council of Farmer Cooperatives has been recognised by the Office
of Defense Transportation as spokesman for all agriculture on
transportation matters.
1
In the post-war programme of the Swedish trade unions it is suggested that
credit should be distributed in accordance with plans drawn up by mixed bodies
on which the Government and co-operative organisations would be represented,
as well as capitalist enterprises.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

203

PLACE OF CO-OPERATION I N THE PERMANENT MACHINERY
OF GOVERNMENT

The foregoing examples relate to the help (mostly in the form
of advice) that' co-operative organisations have been called upon
to give in the fields in which they are active and therefore admittedly have a certain competence and responsibility. They do
not concern the facilities available to the public authorities for
receiving advice on the co-operative movement itself. For making
known their preoccupations, needs and problems, trade, industry
and labour have at their disposal liaison bodies (usually in the
form of ministerial departments) connecting them with the political
and executive apparatus of the State. What is the position in this
respect of the co-operative movement, which can also have its
special problems occasioned by its structure, mode of business and
particular objectives?
In almost every country there are one or more administrative
services performing some functions in connection with the co-operative movement. At the very least there are services responsible
for compiling statistics of all co-operative societies or co-operative
societies of certain types. Fairly often there is a registration service
which provides the basis for the statistics and also ensures that the
rules and activities of co-operative societies conform with the law.
There are sometimes services which audit or supervise the auditing
of the accounts of co-operative organisations.
Some co-operators, concerned to preserve their independence
vis-à-vis the State, feel that these useful or necessary services are
sufficient. Others regret that the co-operative movement as such
has no suitable means of making its voice heard when its own interests are at stake. This seems to have been the opinion of the
International Committee for Inter-Co-operative Relations:
Owing to their powers of growth rather than to their principles, co-operative
organisations have opponents. Yet their most dangerous enemy is not ill-will
but ignorance. Every time co-operative organisations have suffered from Government action or omission, it must be frankly recognised, however strange it may
seem, that they owe their misfortune very largely to the failure of public opinion
in general, of Government departments and of most Members of Parliament,
to understand clearly the real character, the legal position, the peculiar structure,
and the special administrative details of the co-operative movement.1

Among the bodies suited to securing permanent collaboration
between the co-operative movement and the public authorities
should be mentioned the councils or committees which have been
set up in a number of countries to advise Governments on co1
Co-operative Organisations and the Intervention of the Public Authorities in
the Economic Field, op. cit., p. IS.

204

CO-OPERATION AND PRESENT-DAY PROBLEMS

operation. France, for example, has had, since 22 February 1918,
a Superior Council of Co-operation for the consumers' and workers'
productive co-operatives, and these two classes of organisation
together occupy more that half the seats on the Council; in addition,
by a Decree of 28 March 1935, a Superior Council of Agricultural
Co-operation, on which agricultural co-operative organisations
were well represented, was established in the Ministry of Agriculture, with the task of advising the Minister on the measures
which should be taken to assure the development of agricultural
co-operation. By a law passed on 30 May 1944, Egypt has just
created a Superior Advisory Council of co-operative societies, with
the novel addition of regional co-operative advisorv councils to
complete the structure.
The liaison between the co-operative movement and the central
administrative machinery is all the more strongly established when
co-operation is consciously and firmly regarded ,as a factor in the
general policy of the country. In India, in most of the British colonies, and in almost all the nations of the American continent,
special administrative departments ensure this liaison and are in
a position to inform the legislative and executive authorities about
the co-operative movement.
Usually, however, these departments have only a limited scope
and means of action. They are generally more or less heterogeneous
elements in larger administrations whose central interest is not
the co-operative movement. Through the chances of parliamentary
and political circumstance they have been tacked on to the Ministry of Labour or Social Affairs, Ministry of Agriculture, Ministry
of National Economy, or other ministry. Often they are dispersed,
without any connecting links, among several administrations each
of which is interested separately in one or other of the many forms
of co-operative organisation. Because these departments are dispersed and are in the position of appendages, the legislative and
executive authorities cannot get a comprehensive and therefore
true picture of the co-operative movement. Since co-operative
organisations are in contact with a large number of economic and
social problems, it is felt that the co-operation services in public
administrations should be in a position to collaborate suitably with
other departments (labour, agriculture, economy, health, education, public works, fisheries, finance, trade). They should not
therefore be subordinated or attached to any one of them.
This seems to be the most widely held opinion among the cooperators who have considered this question, and some steps have
already been taken towards implementing this doctrine. It appears
that in the British colonies and possessions a tendency is develop-

FORMS OF THE CO-OPERATIVE CONTRIBUTION

205

ing to grant independence to the services responsible for the cooperative movement: the Co-operative Societies' Department of the
Federated Malay States has been independent since its inception in
1922; the Co-operative Department of Ceylon became independent
in 1930, and that of Nigeria in 1936. In France, a commission has
been attached (7 April 1938) to the Premier's Office "to study the
present situation of co-operation and to propose to the Government what measures should be taken to improve it and establish
a permanent liaison between the different forms of co-operative
action". But the most notable example is doubtless that provided
by the Canadian Province of Saskatchewan, whose Government
has recently created, alongside other departments, a Department
of Co-operation and Co-operative Development. This department
has the express function of assisting the development of the cooperative movement, by helping to organise co-operatives and to
make a proper interpretation of legislation, and by giving any
necessary aid in research work, auditing and management. The
Government considers of vital importance "the co-ordination in
close, harmonious working relationships of the various branches of
the co-operative movement in the province and in other provinces
of the Dominion, as well as similar movements having similar aims
in Great Britain and other countries adopting the principles of cooperation as a way of life and as a way of doing business". 1
REPRESENTATION IN INTERNATIONAL ECONOMIC AND SOCIAL
ORGANISATIONS

In the inter-war period the question of the representation and
collaboration of the co-operative movement on international bodies
arose chiefly in connection with the International Labour Organisation. Representation of the co-operative movement is not provided
for under the Constitution of the International Labour Organisation, but the collaboration of co-operative organisations is called
for by the latter's purposes and activities. As early as its 4tb
(1922) Session, the International Labour Conference recognised
that co-operative organisations "form a factor in the economic life
of the world which cannot be neglected and that in consequence it
should be possible for them to be able to give their opinion directly
on all questions of labour legislation affecting them to the same degree as private enterprises" 2 , and on 14 November 1920, the Di1
In a report of an interview given by the Hon. Lachlan F." Mcintosh, Minister
oí Co-operation and Co-operative Development for the Province of Saskatchewan,
to Co-operative News (Manchester), 2 Dec. 1944.
2
I.L.O.: Record of Proceedings, 4th (1922) Session of the International L a b o u r
Conference, Vol. I, p. 600.

206

CO-OPERATION AND PRESENT-DAY PROBLEMS

rector of the International Labour Office communicated to the Governments of the States Members of the International Labour Organisation a decision of the Governing Body suggesting that Governments "might nominate as one of the advisers whom they are
entitled to attach to their delegates a representative of the cooperative societies". Certain delegations to the International
Labour Conference have in fact included co-operators, either as
delegates or as technical advisers, and co-operative organisations
have been consulted on various questions on the Conference agenda,
including that of night work in bakeries and the use of leisure.
Co-operators have also sat on certain committees of the International Labour Organisation: the Advisory Committee on Management, the Recreation Committee, the Correspondence Committee
on Women's Work, the Committee of Experts on Workers' Nutrition, and the Permanent Agricultural Committee.
Co-operators also participated in the Preparatory Committee
for the World Economic Conference in 1927, in the Conference
itself, and in the Economic Advisory Committee set up afterwards
with the responsibility of seeing that the Conference resolutions
were implemented.
Mention should also be made here of the International Committee for Inter-Co-operative Relations 1 , of which it has been said
that "its creation is certainly the most important result of the
1927 Conference, and possibly even its sole positive result". 2
Co-operators also were represented on the Mixed Committee
on the Problem of Nutrition, set up by the League of Nations.
Finally, some co-operators participated in the comparatively
recent United Nations Conference on Food and Agriculture (Hot
Springs, Virginia, May 1943); among them were the President of
the Cooperative League of the U.S.A. and Secretary of the Ohio
F"arm Bureau Federation (one of the five members of the American
delegation), and one of the members of the Superior Council of
Co-operation of the Province of Quebec (in the Canadian delegation).
All these occasions have incontestably served to bring out the
particular value of the co-operative contribution to international
action. 3 Co-operative organisations, sometimes with the support
of the trade unions, also claim representation in the bodies which
will be responsible for planning the economic life of the different
countries and of the world.
1
See pp. 99-100, and Co-operative Organisations and Post-War Relief, op. cit.,
pp. 18-19.
2
Edgard M I L H A U D : Le rôle et les tâches de la coopération dans l'économie de
demain (Union suisse des coopératives de consommation, Basle, 1943).
* Idem, p. 47.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

207

Certain particular recommendations made by two recent international conferences should be noted in this connection. Though
co-operative organisations are not expressly mentioned in them,
it is reasonable to think that the following texts apply to them, at
least in part, or can apply to them. In its XXVth resolution, dealing
with international commodity arrangements, the United Nations
Conference on Food and Agriculture recommends that "such
arrangements will include effective representation of consumers as
well as producers". 1 Similarly, the 26th Session of the International
Labour Conference (Philadelphia, 1944), in a resolution concerning
economic policies for the attainment of social objectives, considered
that international arrangements for the international exchange of
goods and services "should provide for adequate representation of
consumers as well as producers, representing both importing and
exporting countries, in all authorities responsible for the determination and application of policy". 2
Finally, although the Constitutions of the United Nations
Relief and Rehabilitation Administration, and of the proposed
Food and Agriculture Organisation exclude non-Government
representation, it is to be noted that both these bodies have given
prompt and clear recognition to the co-operative movement as a
valuable aid in the achievement of the tasks entrusted to them.

Assignment of Public Utility Functions
In the national sphere, collaboration between co-operative
organisations and public authorities has often been of a far more
active nature than the, mere consultation exemplified above.11 It
remains to review these more active forms of collaboration where
co-operative organisations have found themselves entrusted, either
within or in extension of their normal activities, with functions
involving a public responsibility.
These forms of collaboration between the "co-operative sector"
and the "public sector" have been studied over a period of years in
the Annales delà régie directe, and, later, in the Annales de l'économie collective.* The editor of these reviews, Professor Edgard Milhaud, has enumerated some of them in a brochure recently published
1

U N I T E D N A T I O N S C O N F E R E N C E ON F O O D AND A G R I C U L T U R E :

Final

Act

and Section Reports (Washington, D.C., U.S. Government Printing Office, 1943).
» I.L.O.: Oficial Bulletin, Vol. X X V I , No. 1, 1 June 194'4, p. 94.
3
Some of the examples given, it should be added, involve responsibilities
more extensive and direct than mere consultation.
* Published in Geneva (8 rue Saint-Victor) in four languages (French, English,
German, Spanish).
,.
4 0

208

CO-OPERATION AND PRESENT-DAY PROBLEMS

for the use of Swiss co-operative study circles.1 Its use by these
circles stresses the interest felt in this question by co-operators
today. The International Committee for Inter-Co-operative Relations surveyed these forms of collaboration in a considerable number
of countries in one of the last enquiries it made before the war.
The following instances are taken from these sources, supplemented by information communicated directly to the International
Labour Office. These examples are fairly varied. In some cases
it is a matter of improvised, unsystematic measures, taken without
previous study to meet an urgent necessity, though such measures
may establish habits. Other examples show actions of a more
permanent kind, but which remain isolated and limited in their
scope and bearing. Finally, co-operative organisations are sometimes associated with carefully planned interventions so related to
one another in time and space that they lead to concerted action
destined to replace the automatic adaptations of the laissez-faire
economy.
However, for the purposes of this study, it seems better to
classify the examples according to their form, along the lines of
the classification proposed by Professor Edgard Milhaud. He distinguishes four cases: (1) the simple mandate conferred by public
authorities on a co-operative or a group of co-operatives; (2) delegation, which establishes a real mutual collaboration when the public
authority (State, provincial, municipal, etc.), "desirous of attaining certain ends of general interest, has recourse to existing cooperatives or fosters the creation of new co-operatives and entrusts
them with certain functions which it enables or assists them to
perform by giving help of various kinds—financial, technical,
administrative, propagandist, educational, etc." 2 ; (3) association
of public bodies (Government departments and public corporations) and co-operatives in semi-public, semi-co-operative joint
service undertakings, in which case the public bodies have a role
"of the same order as that of the co-operatives, collaborate on a
footing of equality, are simply associated; they co-operate" 3 ;
(4) integration of co-operatives in public administrations or joint
service undertakings, which may be regarded as a particular instance of the preceding case, with the difference that the co-operative activity, while remaining independent, is included in a wider
system of economic activities.
Like any classification, this necessarily leaves out intermediate
and border-line cases which can almost equally well be placed in
1

Edgard MILHAUD, op. cit.

»3 Idem, p. 41.
Idem, p. 43.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

209

one category as in another. In particular, certain instances are
such by nature, or the information available upon them is such
that it is not always possible to measure the degree of collaboration on the part of the public authority and therefore to distinguish
between simple mandate and delegation. Similarly, as regards the
participation of co-operatives in joint service undertakings, there
may be transitional forms between association and integration.
Accordingly, the facts collected will be given under two headings
only: mandates and delegations under the first, and associations
and integrations under the second, with occasional further details
on certain forms when possible.
MANDATES AND DELEGATION OF FUNCTIONS

These are the least complicated forms and also the forms providing the most numerous examples. To get an idea of their variety,
it may be of interest briefly to glance at some of them.
First, a very simple case of mandate may be cited. Recently,
when the Government of the United States wished to liquidate its
stock of wool purchased abroad during the early years of the war,
it selected the Co-operative National Wool Marketing Corporation to handle the sale by auction of the wool.
.When the public authorities have no means of their own for
carrying out a group of actions or a particular act, they sometimes
delegate the execution of such actions or act to co-operative organisations. Mention has already been made of this intermediary
role played by the credit co-operatives in the distribution of Government credits made to agriculture 1 , by housing co-operatives in a
considerable number of countries, and by the reconstruction cooperatives in France. 2 It is also the role of certain rural co-operative
insurance societies in France, which have been entrusted with the
administration of the legislation on accident compensation as regards their members. Similarly, under the Beveridge plan, the
local administrative functions of social insurance may be vested in
co-operative organisations carrying on voluntary insurance in one
or other of the fields of social insurance covered by the plan.
As already noted, a similar formula of delegation governs, with
the necessary modifications, the relations of the Rural Electrification Administration in the United States, and of theSwedish Government with rural electricity co-operatives', and the relations of some
of the provincial Governments in Canada with telephone co-opera' It will be recalled that the loan negotiated by the Bulgarian Government
with the League of Nations was partly distributed through the medium of the
Agricultural and Co-operative Bank of Bulgaria.
« Cf. pp. 74-77.
» Cf. pp. 64-65.
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210

CO-OPERATION AND PRESENT-DAY PROBLEMS

tives. In Ireland, there is a comparable situation as regards the
cutting of peat, which is organised by a public department and
carried out by local co-operative societies in liaison with this department. In the field of hygiene and health, the grants and privileges given by the State to the Yugoslav health co-operatives were
simply a return for the delegated functions exercised by the cooperatives in vaccination, preventive medicine and sanitation
matters. To these instances may be added that of the Government of Ecuador, which turned to co-operative organisation for
the reconstruction of the provinces devastated by the war with
Peru and to this end provided newly organised co-operative societies
with two years' working capital, by way of compensation for losses
sustained by the population. 1
At a time of scarcity, the public authorities may decide to
entrust the distribution of certain commodities to co-operative
organisations. In France, during the First World War, the State,
wishing to popularise the use of frozen meat as a means of reducing
prices on the meat market, made arrangements with the National
Union of Distributive Co-operative Societies and the Co-operative
Wholesale Society, whereby meat from Argentina was delivered
directly to the latter and distributed by it to its affiliated societies.2
In 1916, the Austrian Government authorised the consumers'
co-operatives and their wholesale society to supply the workers
employed in munition plants, whether or not they were members
of co-operatives, and to do this at their place of work.
The present wartime period provides some instances of the
same nature. First, mention may be made of the various commissions given the Hungarian co-operatives in the course of a
single year, between the end of 1941 and the autumn of 1942:
distribution of sugar and soap for the Green Cross organisation;
the feeding of villages cut off by floods from ordinary commercial
relations: distribution of Government clothing to certain categories
of the population (more than 300 wagon loads and nearly 10,000
parcels) ; commission given to the co-operative organisation Hangya
by the Ministry of Trade and Communications to feed 12,000
workers engaged on railway construction; a similar commission
given by the Ministry of Agriculture for the feeding of 23,000
workers in-* the Carpathian forests and, later, for the feeding, at
the border, of 8,500 agricultural workers returning from Germany;
and commission by the Ministry of Finance involving the feeding
of 12,000 workers in salt mines.
1

Decree of 18 March 1942; Registro Oficial (Quito), 11 Apr. 1942.
' Quoted by Edgard M I L H A U D , op. cit., from Ernest POISSON: "La collaboration coopérative et municipale pour la vente de viande frigorifiée à Paris et dans
le Département de la Seine", in Annales de la régie directe, 1915-16, pp. 1-32.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

211

In Turkey, the Government has established "people's distributive unions" whose duty it is to acquaint people with the food
regulations and rationing provisions and to assist in making a fair
distribution of available supplies, particularly of State-provided
articles. Membership in these unions is voluntary. A regulation
published on 22 June 1942 laid down that existing co-operatives
should be recognised as "people's distributive unions" and that
any union could decide, by a majority vote, to turn itself into a
co-operative society.
In Cyprus, the Co-operative Central Bank has become the
principal agency in wartime for the supply of such various articles
as fertilisers, sulphur, soap and sugar, which it has distributed
through the medium of the co-operative societies. At the request
of the Government it has also undertaken the distribution of certain
commodities imported or bought locally by the Government, such
as tires, cloth, margarine and condensed milk. The co-operatives
have also been given thé task of storing wheat reserves.
In India, there is the successful experiment made first in the
City and, later, in the Province of Madras. In April 1942, when the
City of Madras was threatened with air raids and most of its retail
shops and all its wholesale depots were closed, the consumers' cooperative was asked by the Government to open 30 new shops and
to supply all citizens with goods. The Government gave it assistance in the form of payment of rent for the new shops, wages for
new employees, and interest-free advances for the purchase of
stocks, and provision of transportation. A year later, the extension
of this experiment to the whole province and the institution of a
Government plan for distributing foodstuffs to a part of the population led to the opening of 14 co-operative wholesale and 65 cooperative retail stores in 34 towns. The Government, on its part,
provided stocks and guaranteed loans contracted by the co-operatives for carrying out the plan.
In 1942, in Ceylon, there was a similar solution to a similar
problem: scarcity of food and clothing, a rapid rise in prices, exorbitant profits made by traders and failure of price control, which
made goods leave the legitimate market for the black market. The
Government therefore decided to open a vigorous campaign for
the establishment of consumers' co-operatives, and the co-operatives set up as a result reported a trade of more than 45 million
rupees in their first year. 1
In India, again, in the United Provinces, the Government
turned to the co-operatives for the distribution of certain essential
commodities about which there were difficulties, despite rationing
1

1 rupee = approximately U.S. $0.30.
5

212

CO-OPERATION AND PRESENT-DAY PROBLEMS

and price-control measures. But, although the consumers' cooperatives naturally take part in this action (their number increasing from 31 to 132 in the course of the year), the Government has
also used co-operatives with a marketing function and most of the
work has been done by them.
It is perhaps in the marketing of agricultural products that
the co-operative organisations have most commonly received direct
responsibilities, which often involve the job of co-ordinating production, sale on the national market, imports and exports, and
sometimes even go as far as the award of a monopoly or quasimonopoly to co-operatives.
First, some examples may be given of simple regulatory action,
relating to the pre-war period. In Belgium, in order to overcome
certain abuses in the import of foreign butter, the Government
gave the co-operatives for the marketing of domestic butter, for
nearly a year in 1934-35, a third of the import licences, which had
the effect of regulating domestic prices. In Czechoslovakia, the
co-operative dairies played an important role in the managing
committee of the Dairies Equalisation Fund; in addition, the
operation of the Fund for the purchase of eggs was left to the cooperative marketing organisations. In Japan, the Act to control
rice production authorises and even encourages co-operative societies to act in place of the rice-control companies which are responsible for storing rice in times of surplus production; in addition, the National Federation of Agricultural Co-operative Marketing Societies and the regional federations receive compensation
for expenses incurred in consequence of measures for the orderly
marketing of wheat. In Luxembourg, the Central Association of
Raiffeisen Funds made advances on stored wirie. In New Zealand,
the co-operative federations supplement the national boards established in 1922 to regulate the marketing of meat, dairy produce,
fruit, honey, wheat, and poultry and take care of actual commercial
transactions; the boards do not accept commercial risks or fix
prices. In Sweden, the Union of Co-operative Dairies was entrusted
by the State with the execution of the milk regulations. Asimilar
part was played, in Switzerland, by the Central Union of Milk
Producers, through which the State directed the regulation and
organisation of the milk and dairy produce market.
During the war, the authorities naturally turned to the cooperative organisations in taking general measures for the collection and marketing of agricultural products. The Australian
Wheat Board, set up by the Government to organise the marketing of wheat, appointed the Wheat Pool of Western Australia and
the Co-operative Bulk Handling Ltd. its agents for certain purposes

FORMS OF THE CO-OPERATIVE CONTRIBUTION

213

in Western Australia; the Australian Government also sought the
collaboration of the Overseas Farmers' Co-operative Federations
Ltd. 1 in marketing Australian wheat in Europe. In Cyprus, the
Controller of Cereals has made considerable use of the co-operatives,
which collected, on behalf of the Government, three quarters of the
wheat and barley crops and also helped with the collection of silk
cocoons and olive oil.
Sometimes it is a case of encouraging new production, of setting
up a complete marketing system, or of meeting a scarcity. In the
Philippine Islands, towards the end of the First World War, the
rural credit co-operatives were invoked; at this period, scarcity of
cereals and the rise in prices threatened the economy and social
peace of certain countries of the Far East. The Government of the
Philippine Islands decided to encourage rice and corn cultivation
and for this purpose put a million pesos at the disposal of agriculturists. The credit co-operatives were designated as the exclusive
agents for the application of the grant ; they received and examined
requests for loans and made the advances. The "rice and corn"
funds and the privileges of the credit co-operatives remained in
being beyond the war period. To introduce order into the production, assembling and marketing of maté, and to fix prices and production and export quotas, the State of Parana in Brazil set up a
special administration 2 , within which place is made for a body
(Commission for the Co-operative Organisation of the Production
of Maté) responsible for helping to establish co-operatives among
the producers. Co-operative organisation is meant to form the basis
of the whole system as soon as possible and gradually to replace
the lower stories of the structure set up by the State. Difficulty
may arise with products other than agricultural products: mention
has already been made of the combined effort of co-operative and
Government action to avert a serious crisis in the fishing industry
in the Gaspé region of Canada.*
Finally, organisation of the marketing of agricultural produce
has, as already stated, often led to the establishment of monopolies.
This was the case, particularly, during the long crisis in the agricultural market preceding the war. In a large number of instances
the monopolies so established were exercised either directly by cooperative organisations or by ad hoc institutions in which co-operatives participated.
1
Its membership comprises an agricultural co-operative organisation from
each of the following countries: Australia, Kenya, New Zealand, Rhodesia, and
Union of South Africa.
* Decree of 4 November 1942, issued by the Co-ordinator of Economic Mobilisation.
' Cf. pp. 54-55.

214

CO-OPERATION AND PRESENT-DAY PROBLEMS

The following examples first of all concern cases where the
delegation entrusted to co-operative organisations has taken the
form of the direct exercise of a monopoly. This may be no more
than the confirmation of a situation existing in fact or may sometimes involve the introduction of some measure of "compulsory cooperation" of one kind or another. In Austria, the Federation of
Agricultural Co-operative Societies of Lower Austria, as the
marketer of the major part of the rye produced in the country, had
the sole right to import rye from abroad, under the supervision of a
sworn commissioner appointed by the Federal Ministry of Trade.
In Estonia, the exportation of butter, eggs, pigs, pork and sausages
has been monopolised by the State and the monopoly rights were
vested in the three central co-operative organisations respectively
concerned with the export of butter, eggs and meat. In Greece,
it was through the agricultural co-operative unions of the wheatproducing districts that the Central Committee for the Protection
of Home-Grown Wheat bought from associated or individual producers; it was likewise agricultural co-operative unions which,
under a system of "compulsory co-operation", were entrusted with
the collection and exportation of fruit and wines. In Hungary, the
co-operative organisations, and notably Futura (which directly
and indirectly derives a large part of its capital from the State),
were entrusted with the purchase and exportation of cereals as
agents of the Department of Foreign Trade, while in the dairy
produce export trade a prominent part was played by the Hungarian Central Association of Co-operative Dairies; the co-operative
organisations were also entrusted with the exportation of horses,
potatoes, onions, etc., and were used by the public authorities as
an intermediary for the distribution of loans granted to tobacco
growers. In Latvia, the co-operative movement was really a part
of the economic machinery of the State, which used it most extensively for the collection and exportation of dairy produce, eggs
and meat products. In Lithuania, the Central Union of Co-operative Dairies embraced almost the whole dairy production of the
country and served as an agency for regulating the dairy market
under State control. In Norway, the Central Export Agency of
the Co-operative Dairies had a monopoly of butter and cheese
exports and the sole right to supply butter to the margarine factories; the Norwegian Central Union for the Marketing of Meat
had the monopoly of the export of bacon and mutton, and was
entrusted with the execution of all the measures taken by the
State as regards this industry. In Switzerland, the Central Union
of Milk Producers, which included practically all the producers,
held what amounted to a monopoly and was the body through

FORMS OF THE CO-OPERATIVE CONTRIBUTION

215

which the State directed the regulation of the milk and dairy produce market; the Union received subsidies and had at its disposal
special resources derived from the proceeds of certain taxes and
deductions. In the egg and poultry trade, the Union of Swiss Egg
Marketing Societies organised the production, marketing, importation and general trade. In the Union of South Africa, the co-operative organisations were granted the sole right to market tobacco
and to distil wine.
Some instances may next be given of co-operative participation
in institutions set up by the public authorities for the exercise of
monopolies. Two refer to the pre-war period and the third to the
period of the war. In Czechoslovakia, the monopoly of import licences issued by the Government for dairy produce, eggs, cattle, meat,
lard, animal fat, bacon and ham was given to the Syndicate for the
Marketing of Cattle and Animal Products in the Czechoslovak
Republic, of which the Federation of Unions of Agricultural Cooperative Societies ("Centro-co-operative") and the Joint Committee of Consumers' Co-operative Federations were members
(together with and on the same footing as the Central Confederation of Czechoslovak Manufacturers). The Czechoslovak Grain
Company, founded in 1934, was given the triple monopoly of
buying home-grown wheat (at a price fixed by the company) and
of importing and exporting wheat, rye, barley, oats, maize and
practically all kinds of fodder. The company's capital was provided
and its business was managed by groups interested in its operations:
co-operative organisations, 60 per cent. (Centro-co-operative, 40
per cent., and the Joint Committee, 20 per cent.) ; flour-mill unions,
20 per cent.; and private trade, 20 per cent. Its President, however,
was appointed by the Government, and State supervision was
exercised by a commissioner appointed by the Minister of Finance;
under certain circumstances the company could receive a State
subsidy. It should be added that the federations of agricultural
co-operative societies, with all their constituent units, were at the
disposal of the cattle marketing syndicate and of the grain company for their operations. Moreover, the inspectors of the federations saw that the orders of the State were observed, and the cooperative warehousing societies and the federations acted as the
principal agents of the grain company. During the war, the authorities in Croatia established an organisation, known as the "Milk
Co-operative", which functioned under their control; under its
monopoly this organisation was responsible for the production and
marketing of milk and dairy products; the co-operative dairies as
well as the private dairies were obliged to belong to it.
The foregoing examples chiefly concern functions delegated to
5

216

CO-OPERATION AND PRESENT-DAY PROBLEMS

co-operative organisations with a view to introducing order into
the agricultural produce market and to regulating prices in it. In
some of them co-operative organisations are seen as the agents of
the public authorities for the carrying out of partial programmes
of agricultural policy, and it has already been noted that this is a
role that they are often called on to fulfil. Governments may even
rely wholly on co-operative organisations for the execution of their
entire agricultural policy. This is so, for instance, in Bulgaria,
where the Government has endeavoured in recent years to shift
the agriculture of the country away from purely food-crop production in. almost closed peasant economies towards the production
of crops useful to industry, with an eye to the international market.
It has made use of co-operative organisations for distributing credits,
seeds, selected animals, implements and machinery, as well as the
technical knowledge required for carrying out this policy. It has
also exerted influence on them through the medium of the Agricultural and Co-operative Bank, a mixed body in which the State
predominates and to which it has given not only certain monopolies
but also extensive powers over the co-operatives themselves. Although these powers have been wielded with moderation, they give
the Bank and therefore the State a sway over the co-operative
movement which has met with some resentment. Subject to any
changes that may have been brought about by the war period,
however, the Bulgarian co-operatives are reported to have kept
a large measure of vitality and local initiative.
CO-OPERATIVE ORGANISATIONS AND P U B L I C BODIES
L I N K E D IN J O I N T SERVICE UNDERTAKINGS

The cases reported in which co-operative organisations are
associated or integrated with public bodies in joint service undertakings are less numerous than those in which co-operatives have
had functions directly delegated to them.
Among simple cases of integration is that of labour co-operatives
operating in municipal or national printing works 1 or performing
other works or services (transport, public works, mining works,
etc.) within State enterprises. 2
A considerable number and variety of instances exist of forms
of association between co-operatives and municipalities.
The
"Bavarian Dairy Society", established in 1928 to organise a regional
1
Cf., for example, Charles MARAUX: "The Commandite: Co-operative
Work in the French Printing Industry", in International Labour Review, Vol.
XII, No. 5, 1925, pp. 650-667 (reprinted in Annals of Collective Economy, MayJuly 1940).
*
1
Cf. Anthony E. C. HARE: "Co-operative Contracting in New Zealand",.
in International Labour Review, Vol. LI, No. 2, Feb. 1945, pp. 167-190.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

217

milk market, consisted of the three municipalities of Nuremberg,
Fürth and Regensburg and of four producers' and two other cooperatives. 1 The electricity works of Provdiv in Bulgaria are the
joint property of the municipalities concerned, of the local cooperative societies and of some individual shareholders. Slightly
different in form are the electricity co-operatives in Argentina, and
the consumers' co-operatives in Germany, which had among their
members municipalities purchasing supplies for hospitals, schools
and similar institutions. Sometimes it is the State which appears
as a partner of the co-operative organisation. 2 For instance, certain
"collective economy undertakings" (gemeinwirtschqftliche Anstalten) set up in Austria after the First World War took the form
of societies composed of public bodies and co-operatives. Among
such enterprises were the United Leather and Footwear Factories,
formed jointly by the State and the Co-operative Wholesale
Society. 3
Among the more complex cases of integration, mention has
already been made of the Czechoslovak electricity co-operative
societies which participate, together with the State, the provinces
and the municipalities, in the public service electricity undertakings
set up by the Act of 27 July 1919.4 The numerous national credit
institutions where State intervention is more or less closely bound
up with the activity of co-operatives of various kinds, mostly credit
co-operatives, may equally be regarded as semi-public, semi-cooperative joint service undertakings. 5 As already stated, the
Futura company in Hungary, which acts as the State's organ of
intervention on the market, was established (1919) and financed
by the joint action of the State, of the Central Institute of Credit
Co-operative Societies (itself semi-public and semi-co-operative),
and of the large Co-operative Wholesale and Productive Society
Hangya.
In France, the National Inter-Occupational Wheat Office, which
held a monopoly of the import and export of wheat, though it
carried on no buying and selling operations itself, provides a typical
1
Cf. Josef E H R L E R : " T h e Bavarian Milk Supply Company", in Annals of
Collective Economy, Vol. VII, No. 3, 1931, p p . 367-374, and Maximilian M E Y E R :
" T h e Economic Undertakings of the Municipality of Nuremberg", in idem,
Vol. VIII, No. 2, 1932, pp. 184-192.
2
The Finance Bill passed on 13 December 1944, by the New Zealand House
of Representatives, authorised (Sec. 8) the Minister of Finance to acquire shares
in co-operative dairies.
3
Cf. Käthe P I C K : "Les entreprises communautaires autrichiennes", in
Annales de la régie directe, 1922 ; and Emmy F R E U N D L I C H : "Collaboration between
Co-operative Societies and Municipalities in the Development of Collective
Undertakings in Austria", in Annals of Collective Economy, Vol. I l l , 1927,
pp. 167, et seq.
* Cf. pp. 65-66.
s Cf. pp. 20-27.
5

218

CO-OPERATION AND PRESENT-DAY PROBLEMS

example of the participation of co-operativës in joint service undertakings. An important place is given to co-operatives on its Council,
in which are represented all the bodies interested in and connected
with the production of wheat, its industrial processing, and the
distribution and consumption of wheat products. Out of 51 members, 4 represent the State (the Ministries of Agriculture, Finance,
National Economy and the Interior), 18 represent the agricultural
co-operatives and 3 the consumers' co-operatives. In addition, as
in the case of the Czechoslovak Grain Company, and the Syndicate
for the Marketing of Cattle and Animal Products, the whole cooperative network (credit co-operatives, wheat-marketing co-operatives, etc.) forms the basis of the system for carrying out the operations of finance and crop collection. In French Morocco, the Moroccan Inter-Occupational Wheat Office has similar functions,
though they are restricted to an import monopoly; its Council of
33 members includes 4 representatives of agricultural co-operatives
engaged in the storage of wheat.
Futura and the French and Moroccan Wheat Offices are not
the only instances that can be given of joint service undertakings
in which the State and co-operative organisations participate in
the field of the marketing and import or export of agricultural
produce. In Yugoslavia, Prizad, which was established in 1930 to
organise the marketing of wheat, maize, fruit and opium, to fix
prices and allocate export quotas, was a company in which the State
held the majority of shares; the remainder were divided among cooperative organisations and private businesses. The export of cattle
and meat was organised along similar lines. The case of Rumania
merits special attention. The National Co-operative Institute
covers the whole co-operative movement, with the exception of the
organisations of minority groups. It became one of the chief instruments of the Government's agricultural policy and for this
purpose possessed a vast apparatus for distributing the requisites of
agricultural production (including machinery) as well as for collecting and marketing farm products. Despite its name, it was mainly
a State organisation. From the time of its creation under a special
Act (23 June 1938), it was under strict State control and this has
probably not been relaxed since. The State holds shares in it to a
value of 249,810,000 lei; the co-operatives subscribed a slightly
larger amount (256,130,000 lei) and paid up a smaller amount
(216,404,544 lei). The State is naturally represented on the governing body and it also exercises control through a commissioner. It
seems that in this instance the State has completely absorbed and
"officialised" the co-operative societies, which do not seem to have
enjoyed their full managerial freedom in recent years or, in cotise-

FORMS OF THE CO-OPERATIVE CONTRIBUTION

219

quence, to have been as effective as they otherwise might. This
example illustrates the danger which may be encountered in collaboration between public authorities and co-operative organisations
when this collaboration places on a co-operative movement that is
still too weak excessively heavy public responsibilities far removed
from its own functions and a t the same time imposes on it a too
rapid rhythm of growth.
Finally, something should be said of the original and complex
structure of two joint service undertakings in the international
field: the Russo-British Grain Company and Ratao. The former
was established in 1923 to purchase wheat in bond in Russian ports
or in cargo and to market it in Great Britain, France and South
European countries. On the Russian side it consisted of State
organisations (Commissariat for Foreign Trade, its London agency
Arcos, and the State Bank) together with Centrosoyus, the central
organisation of the consumers' co-operatives, Selskosoyus, the
central organisation of the agricultural co-operatives, and Vsekobank, the Russian co-operative bank. Great Britain was represented
by the English Co-operative Wholesale Society (one half share),
and two shipping and brokerage firms (one half share). Ratao
(Russisch-Osterreichische Handels A.G.), which was also set up
shortly after the First World War, comprised the consumers' coope'rative wholesale society and a private firm on the Austrian
side and Centrosoyus and the State on the side of the U.S.S.R.
This long and varied enumeration yields some useful findings.
Its size is itself enlightening. It shows, first, t h a t the instances of
collaboration between the "public sector" and the "co-operative
sector" are far from exceptional, but, on the contrary, may be
found wherever the co-operative movement has developed far
enough in some fields. This list, incomplete as it is, contains examples drawn from some 40 countries. Secondly, it stresses the
important place the co-operative movement has gained for itself
during the last 25 years in a large number of national economies,
and, consequently, suggests the potential role of the movement in
the task of post-war reconstruction.
The examples given are not all of equal significance or of equal
informative value. Some deal with structures and working methods,
which for practical purposes should be analysed in detail but have
only been touched upon. Others raise the question of "compulsory
co-operation" on which co-operators are not yet entirely agreed
and which can perhaps only be solved by a consideration of specific
cases. Finally, co-operative collaboration in an action of a public
nature is seen to involve limitations and to presuppose certain conditions. But, subject to these reservations, the general finding
* 1

220

CO-OPERATION AND PRESENT-DAY PROBLEMS

must be that the combination of co-operative action with that of
the public authorities has been achieved in pursuance of convergent
aims and without prejudice to the free development and, working
of the co-operative institutions.
That is naturally so as regards modes of consultation and representation. In the committees and offices in which they are represented, as with the departments of State consulting them, cooperative organisations are invited to exert their influence in regard
to an action of a public nature which directly or indirectly concerns
them by virtue of their functions, but is generally an extension of
their own sphere of activity. On the one hand, they have the opportunity of putting forward their own rights and interests, but
within the framework of the interest of the community as a whole;
and, on the other, they also freely give the advice which their experience and special knowledge suggest to them, and the usefulness
of this advice lies precisely in the fact that it is independent.
When co-operative organisations are called upon to exercise
functions of public interest, whether by mandate or delegation, or
in association with other private or administrative bodies, these
functions are, and should be, within the field of their competence
and experience or, at most, an extension of their normal activities.
Though they thereby cease, to some extent, to be at the exclusive
service of their members, they nevertheless remain under the
members' control; in addition, they continue to exercise, in accordance with co-operative methods, the functions delegated to them
by their members. As Edgard Milhaud puts it: "They keep their
whole character and all their prerogatives as co-operative societies.
They work and act in full co-operative freedom—and therefore
with full co-operative responsibility—but have their place in a
system of economic activity within which they exercise their cooperative function—implying precisely their total co-operative
independence." 1
What finally emerges from this enumeration is the great diversity
of the examples presented. Diversity of the geographical, economic,
social and political circumstances in which the formulae of collaboration originate and develop; diversity of the fields in which collaboration has been achieved: production and domestic and foreign
marketing, distribution, credit, supply of electric power, insurance,
housing, health, etc.; diversity in the formulae adopted in the
course of this collaboration—a diversity apparent despite the effort
made to group them under a few headings. Some of the formulae
are simple, others complex, embodying, as the case may be, limited
1

Edgard

MILHAUD,

op. cit., p. 44.

FORMS OF THE CO-OPERATIVE CONTRIBUTION

221

or extensive powers and very different forms of articulating public
intervention with co-operative action.
This manifold and almost universal development can hardly
have failed to impress itself on thosewho have had occasion to observe
it. It is perhaps not without interest to consider it in connection
with plans being made for the immediate and more distant future,
where there is a general tendency towards increased intervention
by the public authorities in economic organisation. If it takes place
in a democratic framework, such intervention will meet with its
own particular problems and will have to seek its appropriate forms
and means. It is probable that, either from the beginning or as the
result of experience, it will be seen that its effectiveness gradually
decreases as the impetus given or the restraint imposed at the
centre makes its way down to the sphere of individual needs and
wills. In this event the vast wealth of formulae provided by recent
or current experiments can be drawn upon to help the inventive
and constructive effort made to find in the co-operative organisations and other people's institutions "a series of relays between
the directive centres of the economy and the depths of social life".

CONCLUSION
In examining some of the problems of rehabilitation and reconstruction, this Itudy has reviewed a large number of the various
forms of co-operative. This survey, reinforced by a knowledge of the
principles and methods of co-operation, provides an answer to the
question how far and by what means co-operative organisations can
contribute to the post-war rehabilitation and reconstruction effort.
Several features stand out clearly from the survey. First, there
are the great diversity and elasticity of co-operative institutions as
regards form, functions and problems dealt with, while observing
the same principles,ethics and methods. Second, there is the fact that
they have penetrated,in some cases far,in others little,and,recently,
into numerous branches of economic and social life. Equally outstanding are the large and ever growing number of people whom
they embrace and the service that they render to workers of all
categories in every country and climate. Lastly, there are their
almost unlimited possibilities of growth, in function no less than in
membership.
Their service to the low-income social groups in the rehabilitation period is the same that they render them in normal times, for
the people in these groups are habitually engaged in a permanent
effort of liberation and rehabilitation, an effort simply made greater
and more necessary by the post-war situation.
Using the concrete information available, the foregoing pages
have sought to give an idea of the nature and worth of the cooperative contribution. They have also tried to reflect the idea
which the thinkers and leaders of the co-operative movement themselves have of the action in which they share, since ideas, if based
on facts, illuminate them. But in these final remarks it may be
pointed out that it is not only the fully authorised representatives
of the co-operative movement who have appraised the value of the
co-operative contribution t o the rehabilitation effort. It would be
difficult to improve on the following concise definition of this contribution by one not directly connected with the co-operative movement, though a close observer of it 1 : "Reduction of prices to the
consumer, increase of prices to the producer, democratic management of industry, education in self-help, in the capacity for com1
Rev. John A. RYAN, quoted in Annals of Collective Economy (Geneva),
May-Aug. 1939, p. 337.

CONCLUSION

223

munity action, and in the ability to manage business, are all within
the reach oi the masses, both in the country and in the city, if they
are willing to use the methods that have been tested and approved
in the co-operative movement."
Co-operative institutions, besides providing the community
with new methods of distributing goods and incomes and a system
of channelling credit and means of production down to the humblest
producer, also provide means of spreading technical progress, formulae for organising work and production, elements of order and
equilibrium, and foundations for economic and social democracy.
That their principles and activities are in accord with and even in
advance of present-day demands is attested by another figure
active in public life, but outside the co-operative movement 1 : "Cooperatives are definitely anti-authoritarian. They help in the redistribution of income. They are not afraid of better wages, not
afraid of social security, not afraid of democracy. They are a
people's movement. They have a great opportunity in the exciting
and exhilarating days to come." 2
That the co-operative movement is fairly generally regarded as
an instrument standing ready-made and well adapted for immediate
use in the work of rehabilitation is confirmed by the declarations
and programmes coming from quarters which have been in a position to acquire an acute sense of the necessities and conditions of
rehabilitation and post-war restoration: resistance groups, and
former and new Governments of countries which have been overrun, as, for instance, in Czechoslovakia, France, Poland, and
Yugoslavia. In Italy, too, there have been spontaneous efforts,
encouraged by the authorities, in Sicily and at Rome, Leghorn and
other places, to establish consumers' co-operativcs, as well as plans
for the restoration of thé agricultural co-operative movement.
But though there is now fairly full agreement on the nature and
potential value of the co-operative contribution, only the future can
show its possible extent. This future depends on men: it depends
on those who build and can build the co-operative movement;
outside co-operative institutions, it depends on the structures, and
on the legislative and institutional environment of such institutions,
which can help or impede their development and action.
The building of the co-operative movement is primarily the
responsibility of co-operators, and depends on the zeal with which
they exercise their rights and fulfil their obligations. But as it is a
voluntary movement, whose action is not the subjept of decree, its
1
Mr. Leon HENDERSON, formerly head of the Office of Price Administration
in the United States, speaking a t the 1944 Congress of t h e Cooperative League
of the U.S.A. in Chicago.
8
As reported in The Cooperative Builder, 26 Oct. 1944.
5
4 1 *

224

CO-OPERATION AND PRESENT-DAY PROBLEMS

development and influence also concern those who will decide to
give or not to give it new strength. Because it is continuously growing, it can be a permanent and vigorous constructive force. But
such growth is not predetermined and automatic. To quote Father
John A. Ryan once again, its advantages "cannot be achieved in a
day nor in a year, nor by governmental subsidies, nor through any
easy formula or recipe. They must necessarily come about gradually
and through the action of men and women who are willing to
exercise patience and make the sacrifices which are indispensable
to any important or lasting reform of industrial conditions." 1
Though co-operative action is not a matter of enactment, its
spread is none the less partly dependent on external circumstances
and, in particular, on the attitude of the legislator and those in
charge of public affairs. In an economy still hedged around by restrictions, rationing and priorities, regulations and controls, and one from
which the power of large concentrations of capital will not have
disappeared, the contribution of co-operative institutions to the
task of relief, rehabilitation and reconstruction will depend not only
on their immediate possibilities or on the potentialities contained
in them. It will also depend on the extent to which these possibilities and potentialities and the original character of such institutions in the economic and social world are grasped by public opinion,
by the representatives of t h a t opinion, and by those with the direct
responsibility for establishing, adjusting and executing reconstruction plans. In the countries where the co-operative movement has
lost part of its means of action, a priority will be given to the appropriate measures for restoring it, if the conviction is strong that
its restoration will forward rehabilitation at large. Similarly, in all
countries the development and activity of the co-operative movement will be regarded with public favour, disfavour or indifference
according as it is or is not clearly recognised that such development
and activity harmonise with the general direction, possibilities and
necessities of the reconstruction effort. Only where it is recognised
that they do, will the legislative and other legal obstacles that still
sometimes stand in the way of co-operative activities be removed
and the teaching of co-operation be enlarged and encouraged. It
is only in such cases that co-operative institutions, the industrial
organisations of labour and management, the technicians and other
qualified bodies will be directly and variously associated with the
work of restoration in such a way as not to be distorted or emasculated by such association, but able fully to deploy their action
for the common good.

Loc. cit., p. 337.

ÍNDEX

INDEX

The index which follows is almost exclusively one of countries
and of types of co-operative organisation. It includes no names of
persons, books or individual organisations (with the exception of
international co-operative organisations and institutions and some
other organisations of a special type). Its purpose is to help the
reader to find the main references in the text to the many types of
co-operative organisation and to the numerous countries concerned.
It has been decided to include in this index references to the
earlier study in the series, Co-operative Organisations and Post-War
Relief. References to the first study are preceded by a Roman
numeral I; those to the present work by a Roman numeral II.
Agricultural co-operative societies with
distributive activities, I . 98-99, 111,
112
Agricultural or rural co-operative
organisations, I. 38, 39, 58-82, 90,
95, 98-99, 103, 106-107, 108, 111,
112, 116-135, 138-142; I I . 7-47, 59,
60, 61, 64-67, 78-100, 104, 124-136,
142, 145, !52, 153, 154, 156, 158,
159, 161, 162, 163, 167, 191, 198,
199, 200, 209, 212, 213, 214, 217,
218, 219, 223
Alaska I. 121
Algeria, l". 63, 66, 124, 126, 127, 132;
I I . 24, 49
Allotment societies, I . 72; I I . 124, 125,
127
Antigua, I. 129
Argentina, I. 17, 25, 26, 28, 50, 66, 79,
113, 117, 118, 119, 122, 123, 126,
131, 132, 134, 138, 139, 141, 149,
150; I I . 64, 67, 70, 180, 201, 217
Australia, I. 7, 23, 30, 31, 57, 64, 1 loi n , 118, 119, 122, 124, 125, 126,
127, 129, 132, 133, 134, 136, 138,
139, 140, 141; I I . 58, 134, 198, 199,
200, 201, 212-213
Austria, I. 16, 17, 24, 25, 41, 51, 57,
95, 97, 99, 105, 106, 108, 111, 143,
149, 151, 164; I I . 19, 39, 47, 65. 83,
90, 116, 138, 163, 210, 214, 217,
219
Barbados, I. 129
Belgium, I. 7, 24, 28. 30, 31, 41, 48,
73, 81, 82, 95, 97, 99, 100, 101, 103,

104, 105, 106, 107, 115, 136, 137,
138, 142, 143, 149, 164; I I . 7, 18,
19, 34, 35, 37, 47, 49, 53, 58, 62.
67, 91, 92, 116, 118, 151, 153, 157,
212
Better living societies, I. 80
Brazil, I. 17, 28, 66, 77, 113, 118, 120,
121, 123, 124, 126, 127, 129, 130,
131, 132, 134, 142; I I . 50, 51, 180,
213
British co-operative electric bulb
factory (Luma), I . 7
British Honduras, I . 129
British West Africa, I . 130, 136
Building (or building and loan) societies, I. 53-54; I I . 71, 72, 73
Bulgaria, 1. 7, 17, 23, 24, 25, 28, 30,
42, 48, 53, 55, 62, 63, 69, 74, 76, 77,
82, 97, 98, 99, 100, 101, 104, 107,
112, 142, 143, 149; I I . 18, 19, 20, 21,
24, 28, 29, 33, 35, 40, 41, 43, 44, 45,
47, 57, 58, 60, 65, 83, 114, 115, 116,
134, 153, 178, 217
Bulgarian co-operative rubber factory,
I. 7
Cameroons (British), I. 130
Cameroons (French), I . 28
Canada, I . 11, 13, 24, 28, 30, 31, 55,
58, 63, 67, 68, 75, 77, 79, 81. 82, 112,
117, 119-120, 120-121, 122, 123, 125,
128, 129, 132, 133, 134, 136, 137,
138, 139, 140, 141, 142, 149; I I . 15,
17, 50, 54-55, 59, 60, 61, 127, 135,
147, 151, 153, 159, 163, 181, 190.
191, 192, 199, 202, 205, 209, 213

228

CO-OPERATION AND PRESENT-DAY PROBLEMS

Ceylon, I. 15, 114, 130. 131, 132, 136.
137; II. 205, 211
Chile, I. 113; II. 180
China, 1. 12, 63, 80, 92, 93, 113, 132,
136, 143, 150; II. 105, 113
Colombia, I. 26, 113, 126; II. 62, 180,
198
Consumers' co-operative organisations,
I. 13, 38, 39, 40-49, 89, 95, 97-98,
99, 102, 103, 104-106, 109, 110, H I ,
112, 113, 128, 135, 136, 137, 138144; II. 1, 10, 12, 17, 23, 31, 46. 47,
48, 53, 54, 57-58, 61, 70, 72, 73. 78,
79, 80, 83, 85, 86, 87, 88, 90, 91, 93,
97-98, 99, 108, 116, 136, 137-139
142, 143, 144, 145-147, 149-151, 152,
153, 154, 156, 157, 158, 159, 160,
161, 165-167. 185, 198, 200, 210,
211, 217
economic activities of, I. 42-46;
II. 12, 47, 158
personnel of, I. 103-104; I I . 137,
139, 149-151
social strata served by, I. 41-42
stores, number of, I. 102-103
Consumers' co-operative organisations
(rural), I. 69, 94, 97-99, 108; II.
10, 12, 28, 32, 34, 46, 86
Co-operative banks of the consumers'
movement, I. 46-47
Co-operative dairies, I. 64-65, 115,
122-123, 134, 139-140, 141-142, 167171; II. 32, 36-39, 83, 84, 85, 86, 87,
88, 90-91, 93, 159, 200, 212, 214
Co-operative distilleries, II. 41, 43-44,
215
Co-operative hospitals, I. 101; II. 153
Co-operatives for joint cultivation,
I. 73; II. 125, 127, 129-136
Co-operative lockers, II. 159
Co-operative marketing, I. 59, 60, 62,
63-71, 90, 99, 112, 114, 116-135, 138142; II. 9, 17, 27-47, 78, 79, 80, 83,
S4, 85, 86, 87, 88-92, 93, 97, 128, 145,
156, 159, 212, 213, 214
specialised marketing co-operative
organisations, I. 59, 60, 63-68,
116-134, 137-142, 167-171; IF. 9,
28, 30-47, 83. 84, 85, 86, 87, 88.
89-92,93,97, 159, 200, 201, 212,
213,214
cacao, I. 130
cereals, I. 67, 116-118, 138-139;
II. 30-32, 89, 212, 214, 218
coffee, I. 130-131
copra and palm-oil, I. 128
dairv produce, I. 64-65, 115, 122123, 134, 139, 140, 142, 167-171;
II. 32, 36-39, 83, 84, 85, 86, 87,
88, 90-91, 93, 159, 200, 212,214
eggs and poultry, I. 67-68, 121.
122, 139;II. 30,34-35, 87, 90,200
fibres, I. 132-134; II. 44-45, 209
fish and shellfish, I. 120-121
fruit and vegetables, I. 66, 123128, 140; II. 40-44, 87, 91-92,

201, 214; (apples, I. 124-125; bananas, I. 126-127; citrus fruit, I.
123-124, 140; II. 92; dried fruit,
I. 125, 126, 127, 140; II. 41, 42,
92; grapes, I. 125-126; II. 43;
nuts and almonds, I. 127; II.
41, 43; pears, I. 124-125; vegetables, I. 128)
honey, I. 129; II. 44, 45
livestock, bacon and meat, I. 65,
119-120, 139; II. 30, 32-34, 159,
200, 214
maté, I. 131; II. 213
olive oil, II. 44
sugar, I. 129; II. 44
tea, I. 131
tobacco, I. 131-132, 141; II. 44,
45
wheat, I. 67, 138-139; II. 30-32,
89, 200, 212, 218
wine and grapes, I. 65-66, 125126; II. 43
purchase and sale co-operative societies (non-specialised), I. 68-71,
112, 134; II. 12, 29, 30, 31,
32,34
rural credit co-operative societies,
marketing activities of, I. 62, 130;
II. 28
Co-operative petroleum associations,
I. 79, 137; II. 58-59
Co-operative research, I. 26
Co-operative restaurants, I. 100
Co-operative society:
definition of, I. 4-5
functioning of, II. 165-167
Co-operative societies:
consolidation of credit, for, I. 73
general statistics of, I. 37-40; II.
179
geographical distribution of (tables),
I. 39, 41, 49, 54, 56, 59, 64, 65, 66,
70, 78, 82
land improvement, for, I. 73; II. 127
Co-operative study circles, I. 30-32;
II. 110, 152, 208
Costa Rica, I. 113, 126
Credit co-operative societies (rural),
I. 13, 59, 60, 61-63, 99, 107, 112,
130; II. 9, 18-27, 28, 60, 61, 87, 125,
127, 142, 153, 162, 209, 213, 217, 218
Credit co-operative societies (urban),
I. 13, 54-55; II. 73, 78, 115, 116, 159,
163, 217
Cuba, I. 28, 129; II. 180
Cyprus, I. 66; II. 125. 211, 213
Czechoslovakia, I. 7, 17, 23, 24, 25, 28,
30, 41, 42, 44, 46, 51, 55, 57, 62, 64,
65, 67, 68, 69, 70, 72, 76, 78. 95, 97,
99, 103, 104, 106, 107, 108, 109, 111,
115, 138, 143, 149, 151, 164; II. 12,
14, 18, 19, 21, 31, 32, 33, 36, 39, 40,
41, 43, 44, 45, 47, 57, 64, 65, 70, 84,
91, 105, 109, 116, 125. 138, 152,
153, 179, 199, 212, 215, 217, 218,
223

INDEX
Danish Co-operative Bacon Trading
Company, I. 16; II. 89, 92, 94.
Danzig, II. 19, 33, 40
Definition of co-operative society, I.
4-5
Denmark, I. 7, 11, 12, 16, 22, 24, 28,
31, 42, 45, 47, 48, 63, 64, 65, 68, 71,
81, 92, 95, 97, 98, 99, 100, 101, 103,
104, 106, 107, 108, 109, 111, 115,
137, 138, 139, 142, 143, 149, 172;
II. 7, 8, 9, 11, 12, 15, 17, 19, 33,
34, 35, 36, 37, 38, 39, 47, 49, 56, 58,
64, 72, 84, 89, 90, 91, 109, 147, 153,
157, 200
Dentists' co-operative societies, I. 100
Ecuador, I. 118, 130; II. 180, 210
Egypt, I. 113, 132, 134; II. 204
Eire, see Ireland
Ejidos, I. 74; II. 135
Electricity co-operative societies, I.
77-79; II. 64-67, 152, 209, 217
El Salvador, I. 130
Estonia, I. 7, 12, 42, 64, 68, 69, 71, 99,
107, 137, 142, 143, 149, 164; II. 9,
11, 15, 18, 19, 33, 35, 37, 39, 40, 43,
45, 47, 49, 53, 57, 58, 65, 84, 90, 91,
214
Finland, I. 7, 12, 22, 23, 24, 25, 26, 30,
42, 45, 46, 47, 49, 63, 64, 65, 68,
69, 71, 72, 76, 77, 81, 88, 97, 99,
100, 101, 103, 104, 106, 107, 137,
142, 143, 149, 164; II. 9, 10, 11, 12,
15, 16, 19, 24-25, 31, 33, 35, 36, 39,
47, 57, 60, 61, 64, 84, 90, 91, 125,
150, 152, 153, 157, 162, 179, 200
Fishermen's co-operative societies, I.
58, 120-121; II. 48-55, 213
Forestry co-operative societies, I. 7677; II. 44, 57-58, 87
France, I. 17, 24, 25, 26, 28, '30, 31, 41,
44, 49, 57, 58, 63, 64, 65, 66, 67, 70,
72, 73, 77, 78, 82, 84, 92, 95, 97, 99,
100, 101, 103, 104, 105, 106, 107,
109, 112, 115, 136, 137, 138, 142,
143, 149, 164; II. 7, 9, 14. 15, 19, 22,
24, 25-27, 31, 32, 37, 38, 40, 41, 43,
44, 45, 47, 49, 51, 53, 58, 62, 64, 747 7 , 8 5 , 9 1 , 9 2 , 9 3 , 109, 112, 116, 117,
118, 120, 121, 143, 147, 150, 151, 152,
153, 177, 178, 179, 198, 200, 202,
204, 205, 209, 210, 217-218, 219,
223
French West Africa, I. 28, 137
Geographical distribution of co-operative societies (tables), I. 39, 41, 49,
54, 56, 59, 64, 65, 66, 70, 76, 78, 82
Germany, I. 17, 23, 24, 25, 41, 44, 51,
53, 54, 55, 56, 61, 62, 63, 64, 65, 66,
68, 69, 70, 71, 77, 78, 81, 84, 92, 95,
97, 98, 99, 101, 105. 106, 107, 108,

229

109, 111, 115, 137, 138, 148, 149;
II. 9, 11, 15, 16, 19, 20, 24, 28, 29,
31, 33, 34, 35, 36, 38, 39, 40, 41, 43,
47, 49, 57, 60, 64, 65, 70, 85, 90, 114,
118, 121, 151, 153, 217
Gold Coast, I. 124, 127, 130, 131
Great Britain, I. 6, 7, 13, 14, 15, 16,
17, 23, 24; 25, 26, 27, 28, 29, 30, 31,
33, 40, 41, 43, 46, 48, 51, 53, 57, 88,
90, 91, 95, 96, 97, 98, 100, 101, 102,
104, 105, 107, 108, 110, 111, 114,
115, 119, 135, 136, 137-138, 139,
140, 141, 143, 149, 164, 167, 171;
II. 10, 11, 12, 13, ¡4, 15, 17, 29, 33,
34, 35, 36, 40, 41, 44, 47, 49, 53, 56,
57, 58, 67, 70, 71, 72, 80, 85, 89, 90,
91, 92, 105, 117, 137-139, 143, 144,
147, 149, 150, 151, 152, 153, 157,
158, 161, 190, 192, 199, 202, 205,
219
Greece. I. 25, 63, 65, 67, 85, 99, 107;
II. 7, 14, 19, 24, 28, 32, 37, 40, 41,
43, 44, 49, 91, 114, 125, 127, 179,
214
Guadeloupe, I. 12
Handicraftsmen's and small shopkeepers' co-operative societies, I.
56; II. 23, 78, 115, 116
Health co-operative societies, I. 79-80,
100-101, 107; I I . 153, 210
Horace Plunkett Foundation, I. 18,
23, 26, 27
Housing co-operative societies, I. 13,
38, 49-54; II. 70-74, 78, 143, 145,
152, 209
Hungarv, I. 13, 17, 28, 42, 47, 49, 57,
63, 68, 69, 72, 76, 77, 81, 92, 97, 102,
104, 106, 137, 143, 149, 150; II. 10,
15, 19, 24, 31, 32, 33, 36, 37, 38, 39,
40, 42, 43, 45, 47, 62, 65, 86, 90, 92,
116, 117, 125, 151, 153, 157, 210,
214, 217
Iceland, I. 13, 25, 69, 98, 107, 109, 120,
133. 134, 137, 149; II. 29, 33, 38, 44,
45, 49, 86, 199
India, I. 13, 15, 21, 25, 28, 31, 49, 50,
55, 56, 62, 64, 69, 73, 76, 80, 113,
121, 129, 131, 132, 133, 136, 137,
149, 150; II. 51. 60, 113, 134, 153,
179, 204, 211
Insurance co-operative societies (agricultural and rural), I 80-82; II. 161,
162, 209
Insurance
co-operative
societies
(urban), I. 47-49; II. 73, 78, 153,
161, 162
Insurance Committee of the International Co-operative Alliance, I. 8,
49, 148
Inter-co-operative relations, I. 12-19,
137-144; II. 12, 16, 47, 53, 78-100,
156, 167, 197

230

CO-OPERATION AND PRESENT-DAY PROBLEMS

inter-co-operative action, national
committees for, I . 16-18; I I . 99,
203-204
International Committee (or Interco-operative Relations, I . 18-19,
22, 166; I I . 82, 90, 99, 154, 156,
186, 193, 195, 203, 208
joint undertakings, I. 14, 16, 141142, 167-171; I I . 53, 83, 87, 88,
89, 91, 92, 94, 96-98, 219
Danish Co-operative Bacon Trading Company, I. 16; I I . 89, 92,
94
Dairy Union, Geneva, I I . 88, 94
Dairy Union, Malmö, I I . 87, 94
New Zealand Produce Association,
I. 16, 141-142, 167-171; I I . 91,
94
Ratao, I. 16; I I . 219
Russo-British Grain Export Company, I . 16; I I . 89, 94, 219
Swedish
Co-operative
Fish
Marketing Society, I. 14; I I .
53, 88, 94
International Confederation of Agriculture, I. 18, 23, 26, 166; I I . 92, 99,
186
International
Co-operative
Agr icultural Purchasing Society {Intercoop), I. 7; I I . 18, 59
International Co-operative Alliance,
I . 7-8, 17, 18, 23, 26, 46-47, 89, 96,
147-163, 166; I I . 98, 99, 158, 186
International Co-operative Banking
Committee, I . 8, 46-47, 148
International Co-operative Trading
Agency, I . 8, 143, 148, 164-J65; I I .
59, 92
Internationa! co-operative trading and
manufacturing association, I . 143144; I I . 60, 100
International Co-operative Wholesale
Society, I . 8, 137, 142; I I . 59, 91,
92
International Co-operative Women's
Guild, I . 30, 102; I I . 157
International Institute of Co-operative
Studies, I . 26
Iran, l l . 24
Ireland, I . 29, 76, 97, 98, 99, 104, 107,
142; I I . 17, 19, 20, 36, 39, 57, 58, 89,
9 0 , 9 1 , 201, 210
Italy, I. 13, 51, 57, 58, 64, 65, 66, 67,
70, 73, 77, 82, 97, 99, 101, 105, 107,
115, 137, 138, 148, 149, 151; I I . 19,
37, 40, 42, 43, 44, 45, 49, 62, 64, 90,
92, 109, 110, 116, 117, 118, 121, 130,
153, 223
Jamaica, I. 25, 126, 128
Japan, I. 13, 23, 25, 59, 63, 70, 80, 134,
149; I I . 24, 113, 134, 153, 212
J a v a , I . 129, 142
Joint cultivation, co-operatives for,
I. 73; I I . 125, 127, 129-136

Kenya, I. 7, 131
Kolkhozy, I . 59, 74-75; I I . 125, 131132
Kooperativa Lumaförbundet, I . 7; I I .
59
Kvutzoth, I. 73; I I . 132-134
Labour contracting co-operative societies, I . 57-58; I I . 61, 62, 109-112,
149, 167, 216
Land improvement co-operative societies, I. 73; I I . 127
Land leasing societies, I . 72; I I . 125,
127
Latvia, I. 13, 24, 28, 42, 64, 65, 69, 71,
97, 98, 103, 105, 107, 137, 143, 149;
I I . 9, 11, IS, 16, 19, 33, 35, 36, 38,
39, 40, 43, 45, 47, 49, 53, 57, 65, 86,
9 0 , 9 1 , 116, 178,214
Lithuania, I . 13, 24, 28, 42, 57, 64, 65,
69, 71, 95, 99, 103, 107, 137, 143,
149; I I . 9, 11, 15, 16, 17, 19, 2 4 , 3 1 ,
33, 37, 39, 40, 42 .45, 47, 57, 86, 91,
116,178,214
Luxembourg, I. 71, 73, 99, 107; I I .
9, 16, 19, 33, 37, 38, 39, 40, 42, 43,
86, 178, 200, 212
Madagascar, I. 63; I I . 24
Malay States, Federated, I I . 205
Marketing co-operative organisations,
see Co-operative marketing
Mexico, I . 26, 28, 57, 58, 63, 74, 113,
121; I I . 50, 51, 62, 135, 180, 190,
192
Morocco, I . 63, 75, 77; I I . 49, 92, 218
Netherlands, I. 7, 17, 23, 25, 31, 41,
49, 51, 62, 64, 65, 66, 68, 70, 81, 95,
97, 99, 101, 103, 104, 105, 106, 107.
I l l , 112, 129, 136, 137, 143, 149,
164, 173; I I . 7, 9, 11, 12, 15, 17, 18,
19, 20, 33, 34, 35, 36, 38, 39, 40, 42,
43, 44, 47, 56, 58, 72. 87, 90, 91, 92,
116. 138, 153, 157
Netherlands Indies, I. 13, 58
Newfoundland, I . 31, 58, 112, 121;
I I . 50, 51
New Zealand, I. 7, 15, 16, 30, 57, 64,
119, 122, 125, 129, 134, 136, 138,
139, 140, 141-142, 150, 167-171; II.
91, 105, 110, 212
New Zealand Produce Association, I.
16, 141-142; 167-171; I I . 91
Nigeria, I. 21, 128, 130
Nordisk Andelsforbund, I . 7, 142; II.
59
Norway, I. 7, 22, 25, 30, 42, 45, 49, 70,
76, 88, 95, 97, 98, 103, 104, 106, 107,
I I I , 112, 142, 143, 149; I I . 7, 11,33,
34, 36, 38, 39, 40, 42, 43, 47, 49, 58,
60, 87, 113, 150, 200, 214
Nyasaland, I. 131

INDEX
Occupational (other than agricultural)
co-operative societies, I . 38, 54-58,.
120-121; I I . 23, 48-55, 56-57, 61, 62,
73, 78, 104, 105-108, 109-112, 115,
116-117, 120, 129, 142, 149, 153, 159,
163,213,217
Overseas Farmers' Co-operative Federations Limited, I. 7, 125, 140, 141,
142; I I . 213
Palestine, I. 17, 49, 50, 57, 66, 73, 77,
92, 124, 126, 127, 134, 138, 140, 141,
143, 149, 164; I I . 62, 92, 109, 110,
125, 130, 132-135
Pasture co-operative societies, I I . 12
Peat co-operative societies, I I . 57, 210
Peru, 1.26, 113; I I . 135, 180
Petroleum co-operative associations,
I . 79, 137; I I . 58-59
Pharmaceutical co-operative societies,
I. 100, 101; I I . 153
Philippines, I I . 213
Poland, I. 14, 25, 26, 28, 30, 31, 42, 51,
55, 62, 63, 64, 65, 68, 69, ,70, 72, 80,
92, 95, 97, 99, 100, 103, 105, 107,
115,143, 149, 164; I I . 14,19,21,24,
29, 31, 33, 35, 37, 39, 46, 47, 65, 90,
105, 115,125, 127, 153, 157, 178, 179,
200, 223
Portugal, I. 85, 97, 105, 106,
Public co-operatives, I I . 61-62
Publishing and bookselling co-operative
societies, I. 24
Puerto Rico, I. 28
Ralao, I. 16; I I . 219
Research, co-operative, I. 26
Restaurants, co-operative, I. 100
Rhodesia (North and South), I. 7, 118,
131, 132
Rumania, I. 13, 25, 30, 55, 63, 72, 76,
95, 97, 99, 105, 107, 115, 149; I I . 19,
21, 24, 31, 32, 37, 40, 42, 43, 44, 57,
87, 114, 125,218
Russo- British Grain Export Company,
I . 16; I I . 89, 94, 219
St. Kitts, I . 129
St. Lucia, I . 124
Sakhalin, I. 58
Salvador, El, I . 130
Scandinavian Co-operative Wholesale
Society (Nordisk
Andelsforbund),
I . 7, 142; I I . 59
School co-operative societies, I. 27-28;
I I . 178, 179
Self-help co-operative societies, I I . 105108
Sierra Leone, I. 118
Social services of co-operative societies,
I . 101-102, 109; I I . 150, 152, 161
Spain, I. 17, 25, 28, 57, 58, 85, 95, 97,
105, 143, 149, 151; I I . 44, 50, 54, 64,
153

231

Statistics, general, of co-operative societies, I . 37-40; I I . 179
Study circles, co-operative, I. 30-32;
I I . 110, 152, 208
Supply co-operative societies (rural),
I . 68-72, 103, 111, 112; I I . 7, 8, 9-18,
27, 59, 78, 87, 142, 151, 159, 167
purchase and sale co-operative societies (non specialised), I. 68-71,
112, 134; I I . 9, 11, 12, 28, 29, 30,
31, 40, 198
rural supply co-operative societies
(specialised), I . 71-72; I I . 7, 8, 9,
10-18, 30
farm implement and machinery,
I I . 9, 13-16, 127
feeding stuff, I I . 7, 8, 9, 10-12
fertiliser, I I . 7, 8, 9, 10-12
livestock, I I . 16
seed, I I . 12-13
Sweden, I . 7, 13, 14, 17, 22, 23, 24, 25,
26, 27, 28, 30, 3 1 , 32, 41, 42, 43, 46,
47, 48, 51, 52, 65, 67, 68, 69, 71, 76*
78, 81, 88, 90, 96, 97, 98, 100, 101,
103, 104, 106, 107, 110, 111, 112, 115,
142, 143, 149, 164; I I . 9, 12, 15, 16,
17, 18, 19, 20, 29, 31, 33, 34, 35, 36,
38, 39, 40, 42, 44, 45, 47, 48, 49, 50,
53, 57, 58, 64, 65, 66, 71, 72, 87, 91,
94, 114, 116, 122, 138, 145-147,150,
151, 152, 153, 157, 158, 162, 190, 191,
192, 199,201,202, 209, 212
Switzerland, I . 14, 17, 21, 23, 24,
25, 26, 30, 31, 4 1 , 43, 46, 49, 51, 53,
62, 64, 66, 68, 69, 71, 73, 76, 77, 78,
82, 96, 97, 98, 100, 101, 103, 104, 106,
107, 109, 111, 112, 115, 138, 143, 149,
164; I I . 9, 10, 12, 15, 16, 17, 19, 20,
29, 30, 33, 36, 38, 39, 40, 42, 43, 44,
47, 56, 57, 60, 64, 67, 70, 88, 90, 92,
94, 109, 116, 118, 138, 143, 147, 150,
151, 152, 153, 157, 158, 162, 163, 190,
191, 199, 201, 202, 208, 212, 214
Vanganyika, I . 131, 132
Telephone co-operatives, I . 77; I I . 60,
127, 152, 209
Tenants' co-operative societies, I . 5052- I I . 72
Tobago, I . 124, 128, 130
Transport co-operative societies, I . 77;
I I . 61-63
Trinidad, I . 124, 128, 130
Tunisia, I . 127
Turkey, I . 63, 76, 97, 105, 140; I I . 19,
20, 24, 40, 42, 43, 44, 45, 92, 179,211
Union of South Africa, I . 7, 28, 66, 113,
118, 123, 124, 125, 127, 129, 132, 133,
134, 138, 140, 149, 150; I I . 24, 215.
United States, 1.15, 24, 25, 26, 27, 28,
31, 32, 42, 45, 49, 50, 54, 55, 58, 63,
64, 65, 66, 68, 69, 70, 72, 77, 78, 79,
82, 86, 87, 88, 96, 112-113, 117-118,
5

232

CO-OPERATION AND PRESENT-DAY PROBLEMS

120, 121, 122, 123, 124, 124-125, 126,
127, 128, 129, 131-132, 133, 134, 136,
137, 138, 139, 140, 141, 142, 143, 149,
150; I I . 15, 16, 17, 50, 51, 57, 58, 59,
60, 65, 66, 67, 105-108, 125, 135, 140,
143, 147, 153, 157, 158, 159, 162, 163,
180, 181, 184, 190, 191, 192, 199, 200,
201, 202, 209, 215
U.S.S.R., I. 16, 25, 28, 30, 41, 57, 58,
74, 75, 76, 77, 84, 92, 95, 108, 114,
143, 148, 149, 151; II. 10, 50, 57,
58, 89,90, 105, 114, 117, 118, 120,
125, 130,131-132
Uruguay, 1.26, 113
Venezuela, I. 26, 28, 113; I I . 180
Vine growers' co-operatives, I. 66, 125126; I I . 40, 43, 85
Water-supply co-operatives, I. 77; I I .
60, 127

West Indies, French (Guadeloupe),
I . 149
Women's co-operative guilds, I. 28-30,
102
Workers' productive societies, I. 56-57;
II. 57, 61, 62, 78, 105-108, 109-112,
116-117, 120, 129, 142, 149, 153
Chinese industrial co-operatives, I.
1 4 3 ; I I . 105
self-help co-operative societies, II.
105-108

Yugoslavia, I. 13, 17, 23, 27, 28, 42, 55,
58, 62, 63, 65, 67, 70, 71, 72, 79, 80,
84, 92, 95, 97, 99, 100, 101, 105, 107,
115, 149, 151; II. 9, 14, 15, 19,21,30,
31, 33, 37, 38, 40, 42, 43, 45, 47, 50,
51, 65, 92, 114, 116, 117, 118, 120,
125, 134, 153, 210, 218, 223
Youth education, I. 27-28; II. 171