COOPERATIVE DISTRIBUTION. This is some times called consumers' coOperation, and is an effort to 110 away with the middleman and to have the consumers themselves organize distribu tive stores and reap the profit which would otherwise fall to the storekeeper. There can of course be no doubt that under existing condi tions of production the merchant who serves as an intermediary between the producer and the consumer, or between the wholesale dealer and the retail purchaser, performs an important social service for which he is entitled to a rea sonable remuneration; but, unfortunately, the number of these intermediaries has increased be yond all measure; and, as they all must strive to subsist, there is still, in spite of great im provements in the distributive process. a vast difference between wholesale and retail prices. A French economist, Prof. Charles Gide. esti mates that more than one-tenth of the popula tion of France depends on commerce for its sub sistence. In other words, every ten persons sup port one intermediary. The economic waste of commercial competition indicated by these facts aroused, many years ago, the condemnation of such social reformers as Francois Fourier (q.v.) and Robert Owen (q.v.) ; but the first lasting, successful attempt to dispense with the middle man was made in 1844, by twenty-eight poor weavers of Rochdale, near Manchester. They or ganized. under the name of 'Equitable Pioneers of Rochdale.' to supply themselves with provi sions, beginning with flour. butter, sugar. and oatmeal. Business was transacted at first in a small room in Toad Lane, with a capital of £2S, each member having subscribed an equal share. They overcame all difficulties. and out lived not only internal divisions and jealousies, hut also external prejudices and opposition. The success of the store led to many imitations, a considerable number of which, however. had only a very short existence, owing in many eases to want of harmony among the members, bad management, insufficient capital, or dishonest officials. Notwithstanding all difficulties, co operation continued to increase, aml in 1864 no less than 395 societies in Great. Britain made re turns to the registrar. possessing a share and loan capital of £774,000, doing an annual trade of nearly f3,000,000. and making an annual profit of £225.000. It was then proposed to form a federation of societies for the purpose of un dertaking the wholesale trade of the movement., thereby protecting the societies from the impo sition of the wholesale traders, and securing the profits of wholesale dealing. The 'North of Eng land 'Wholesale Society' began business in Man chester in 1863, and in 1871 became the 'English Wholesale Society.' This organization has pur chasing and forwarding depots not only in Eng land and Ireland, hut in New- York, Hamburg. Copenhagen, Calais, and Rouen. It owns six steamships, which ply between England and the Continent. Following the same lines, the 'Scot tish Wholesale Society' was formed in 1868. and commenced business in Glasgow. Both of these organizations have prospered and grown, and now supply a large portion of the goods sold by the retail societies. They not only purchase di rect from the producers. but produce on their
own account, or in connection with other asso ciations. The latter activity falls under the head of productive cooperation, which will be discussed later. In 1895 the membership of the societies was nearly 1.500,000. and their share capital amounted to over 880.000,000; the net profit of the concerns was nearly $27,000,000, after paying 5 per cent. interest on capital and accumulating a surplus. About one-sixth of the population of Great Britain have their wants in whole or in part supplied through cooperative stores.
In the United States isolated experiments of a similar nature were made as early as the eigh teenth century. In 1845 the 'Workmen's Pro tective Union' of Boston organized a successful store, which was afterwards carried on under the name of the `New England Protective Union.' The 'Patrons of Husbandry.' founded in 1867, for a time developed a variety of coOperation by encouraging the local 'granges' to form pur chasing clubs and to employ agents to buy sup plies. The 'Sovereigns of Industry,' a secret or der with ritual, founded in 1874 to do for the artisan classes what the 'Patrons of Husbandry' were doing for the farmers, fotuaded numerous cooperative stores on lines resembling the 'Roch dale Pioneers.' In 1877 the organization was doing a business of $1.0S9.372, but by 1880 the order had collapsed, although not a few stores in various parts of the United States still re main as a result of the movement.
The foundation of a cooperative store on a small scale is a simple matter in itself. A group of consumers meet to discuss rules and regulations for the enterprise, and agree to fur nish the necessary capital by subscribing, say. five dollars each. As cooperative stores almost always do business on a cash basis, the original capital need not be very great. Each share of capital receives a fixed rate of interest, say 5 per cent. The dividends may be credited as pay ments on additional shares up to the maximum number of shares allowed any one shareholder. In this wise the store serves also as a savings bank for the members. Usually the money sub scribed as share capital need not all be paid at once; weekly payments of ten cents are custom ary. Whatever profit The store makes after deduction of the interest on loans, the charge for depreciation in the value of the stock and plant, 5 per cent. dividend on the capital, a re serve fund, and perhaps a bonus to employees, is divided among the purchasers according to the respective amounts of their purchases. Goods are sold at the usual prices of private stores. Outsiders may buy at the store, but only mem bers receive shares in the gains. These shares are also usually credited as payments on the stock shares until they the paid in full. The amount of each member's purchase is recorded by means of checks distributed with every sale. The management of the business is in the hands of an executive committee, which appoints the storekeepers, and oversees the purchase of goods and the finances. It is evident that the success of the society will depend largely on this com mittee, must be honest and efficient.