A Global History of Co-Operative Business

A GLOBAL HISTORY OF CO-OPERATIVE BUSINESS

Co-operatives provide a different approach to organizing business through their ideals of member ownership and democratic practice. Every co-operative member has an equal vote regardless of his or her own personal capital investment. The contemporary significance of co-operatives was highlighted by the United Nations declaration of 2012 as the International Year of Co-operatives. This book provides an international perspective on the development of co- operatives since the mid-nineteenth century, exploring the economic, political, and social factors that explain their varying fortunes and transformation into different forms. By looking at what co-operatives are; how they have changed; the developments as well as the persecutions of the co-operative movement; and how it is an important force in promoting development and self-sufficiency in non-industrialized areas, this book provides valuable insight not only to academics, but also to practitioners and policy makers.

Greg Patmore is Emeritus Professor of Business and Labour History and the Chair of the Co-operatives Research Group at the University of Sydney, Australia. He is a member of the International Co-operative Alliance (Geneva) Global 300 Project.

Nikola Balnave is Senior Lecturer in the Department of Marketing and Management and a member of the Centre for Workforce Futures at Macquarie University, Australia. Nikki has been the President of the Australian Society for the Study of Labour History since 2009. She has also been an executive member of the Academic Association of Historians in Australian and New Zealand Business Schools in many capacities since its inception in 2009. Taylor & Francis Q Taylor & Francis Group � http://taylorandfrancis.com A GLOBAL HISTORY OF CO-OPERATIVE BUSINESS

Greg Patmore and Nikola Balnave First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business  2018 Greg Patmore and Nikola Balnave The right of Greg Patmore and Nikola Balnave to be identified as authors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Names: Patmore, Greg, author. | Balnave, Nikola, author. Title: A global history of co-operative business / Greg Patmore and Nikola Balnave. Description: First Edition. | New York : Routledge, 2018. | Includes bibliographical references and index. Identifiers: LCCN 2017054323| ISBN 9781138191488 (hardback) | ISBN 9781138191495 (pbk.) | ISBN 9781315638164 (ebook) Subjects: LCSH: Consumer cooperatives—History. | Business enterprises—History. Classification: LCC HD3271 .P38 2018 | DDC 334.09—dc23 LC record available at https://lccn.loc.gov/2017054323

ISBN: 978-1-138-19148-8 (hbk) ISBN: 978-1-138-19149-5 (pbk) ISBN: 978-1-315-63816-4 (ebk)

Typeset in Bembo Std by Swales & Willis Ltd, Exeter, Devon, UK CONTENTS

List of illustrations vi Acknowledgements vii List of abbreviations viii

1 What are co-operatives? 1

2 The origins of the idea and the Rochdale pioneers, before 1844 26

3 The early years of Rochdale, the rise of co-operative wholesaling, and financial co-operatives, 1844–1864 47

4 Diversification, internationalization, and the formation of the International Co-operative Alliance, 1864–1914 70

5 The challenges of war, depression, and totalitarianism, 1914–1945 114

6 Postwar prosperity, the Cold War, and decolonialization, 1945–1975 155

7 Contrasts: neo-liberalism and the UN International Year of Co-operatives from 1975 to the present 187

8 Conclusion 222

Index 228 ILLUSTRATIONS

Figures 4.1 Holyoake House in Manchester, named in honor of co-operative pioneer, G.J. Holyoake (1817–1906), was the headquarters of the CU, opened in 1911 75 6.1 Products and publications of the Berkeley Co-operative 170 7.1 Barossa Co-operative Supermarket, South Australia 208 7.2 Alfalfa House Community Food Co-op, Sydney 209

Tables 3.1 The Rochdale pioneers’ store, 1844–1864 49 4.1 The growth of retail consumers’ co-operation in Britain, 1873–1914 73 4.2 The CWS, 1864–1914 76 4.3 The SCWS, 1868–1914 80 4.4 Consumer co-operation in Europe, 1914 90 6.1 Members of ICA-affiliated organizations, 1946–1975 179 7.1 Credit unions in the former Soviet Bloc, 2015 193 ACKNOWLEDGEMENTS

We wish to acknowledge the support of many people and institutions that made the completion of this book possible. We would like to thank Ed Mayo, Melina Morrison, Charles (Chuck) Gould, and Dolly Goh for agreeing to participate in interviews, and the staff of the Department of Labor Library in Washington DC and National Co-operative Archive in Manchester, particularly Sophie Stewart, for their assistance with documentary research. We thank Wendy Paterson for proofreading the draft chapters and constructing the reference lists for each chapter and Samantha Phua, from Routledge, for her support and encouragement. The research was funded by a variety of sources, including the University of Sydney School of Business and the Department of Marketing and Management at Macquarie University. The book also includes early findings from a Discovery Grant from the Australian Research Council (DP170100573). We would also like to thank Derick, Maureen, Michael, and Helen for their continuing support and encouragement. ABBREVIATIONS

AAC Australian Association of Co-operatives AC Associated Co-operatives (US) AFL American Federation of Labor ASE Amalgamated Society of Engineers AUCE Amalgamated Union of Co-operative Employees (UK) AV Allgemeiner Verband der auf Selbsthilfe beruhenden deutschen Erwerbs- und Wirtschaftsgenossenschaften (Germany) CBH Co-operative Bulk Handling (Australia) CCF Co-operative Commonwealth Federation (Canada) CFA Co-operative Federation of Australia CFNSW Co-operative Federation on NSW CFWA Co-operative Federation of Western Australia CIC Chinese Industrial Co-operatives CIFRC China International Famine Relief Commission CIS Co-operative Insurance Society (UK) CLUSA Co-operative League of the United States of America CO Cooperativa Obrera Limitada (Argentina) CPBS Co-operative Permanent Building Society (UK) CPF Co-operative Productive Federation (UK) CRS Co-operative Retail Service CU Co-operative Union (UK) CUC Co-operative Union of Canada CUCSJ Central Union of Co-operative Societies in Japan CUNA Credit Union National Association (US) CUSO Credit Union Service Organization (US) CUWS Co-operative Union and Wholesale Society (NZ) CWS Co-operative Wholesale Society (UK) Abbreviations ix

DGPC Dakota Grain Pasta Company (US) EACB European Association of Co-operative Banks EC European Commission EHO El Hogar Obrero (Argentina) ESOP Employee Stock Ownership Plan Euricse European Research Institute on Cooperative and Social Enterprises (Italy) FAO Food and Agriculture Organization (UN) FCL Federated Co-operatives Limited (Canada) FDB Fœllesforeningen for Danmarks Brugsforeninger (Denmark) FNCC Fédération nationale des coopératives de consummation (France) GCA Ghana Co-operative Alliance GDP Gross Domestic Product GFC Global Financial Crisis GHC Group Health Co-operative (Seattle, US) GNCTU Grand National Consolidated Trades Union (UK) IAOS Irish Agricultural Organisation Society IAPSA Industrial and Provident Societies Act ICA International Co-operative Alliance ICAA Irish Co-operative Aid Association ICTA International Co-operative Trading Agency ICWG International Co-operative Women’s Guild ICWS International Co-operative Wholesale Society IDATE Irish Department of Agriculture and Technical Education IFFCO Indian Farmers Fertilizer Co-operative Limited ILO International Labour Organisation IOB Investor-owned Business IYC International Year of Co-operatives KF Kooperativa förbundet (Sweden) KNCU Kilimanjaro Native Co-operative Union (Tanzania) KNPA Kilimanjaro Native Planters’ Association (Tanzania) KOL Knights of Labor KVZ Konsumverien Zürich (Switzerland) LBFC Letaba Bantu Farmers’ Co-operative (South Africa) MLR Monthly Labor Review (US) MOB Member-owned Business NACF National Agricultural Co-operative Federation NAF Nordisk Andelsförbund (Scandinavian Co-operative Wholesaler) NCB National Co-operative Bank (US) NCBA National Co-operative Business Association (US) NCGA National Co-operative Grocers’ Association (US) NDA National Dairy Association of New Zealand NGC New Generation Co-operatives NLU National Labor Union (US) NORCO North Coast Co-operative Company (Australia) x Abbreviations

NSW New South Wales (Australia) NSWCWS New South Wales Co-operative Wholesale Society (Australia) NTUC National Trade Union Congress NZ New Zealand NZCA New Zealand Co-operative Alliance NZCWS New Zealand Co-operative Wholesale Society NZFC New Zealand Federation of Co-operatives OFWCF Overseas Farmers’ Wholesale Co-operative Federation OTK Suomen Osuustukkukauppa (Finland) PNG Papua New Guinea PO Parti Ouvrier (Belgium, France) PRC People’s Republic of China RCMS Rochdale Co-operative Manufacturing Society (UK) RRL Right Relationship League (US) SA South Australia SACCO Savings and Credit Co-operative Organization SCEC Saskatchewan Co-operative Elevator Company (Canada) SCWCCS South Coast and West Camden Co-operative Company (Australia) SCWS Scottish Co-operative Wholesale Society SIP Societé Indigène de Prévoyance (French colonies) SOK Suomen Osuuskauppojen Keskuskunta (Finland, wholesaler) SPWMA Society for Promoting Working Men’s Associations (UK) TUC Trade Union Congress (UK) UCA Union Co-operative Association of Philadelphia (USA) UFC United Fruit Company (USA) UFCC United Farmers’ Co-operative Company (Canada) UHF United Housing Foundation (New York City, USA) UK United Kingdom UN United Nations USA United States of America USDA United States Department of Agriculture USSR Union of Soviet Socialist Republics WA Western Australia WCG Women’s Co-operative Guild (UK) WED World Extension Division (CUSA) WFL Westralian Farmers’ Limited (Australia) WOCCU World Council of Credit Unions 1 WHAT ARE CO-OPERATIVES?

The rise of neo-liberal economics since the 1980s had a negative impact on the recognition of co-operatives as a legitimate form of economic participation (Kalmi, 2007). Previously they had attracted considerable attention in regions such as Mondragon in the Basque region of Spain and the Plywood co-operatives of the Pacific Northwest of the United States (Markey, Balnave, and Patmore, 2010, p. 248). As Battilani and Schröter (2012a) have noted, however, “co-ops did not simply dwindle away and vanish from mature economies, as predicted by many scholars” (p. 263). The reverses of neo-liberal capitalism in the Global Financial Crisis (GFC) of 2007–2009 and the designation by the United Nations (UN) of 2012 as the International Year of the Co-operatives highlighted the benefits of co-operatives for developing economies and local communities in sustaining participatory democracy and economic activity, and boosted co-operatives in some countries such as Australia (O’Leary, Patmore, and Zevi, 2015, pp. 53–54). This chapter explores the meaning of the term co-operative as a member- owned business (MOB), particularly drawing upon the early principles of the Rochdale consumer co-operative movement and the more recent International Co-operative Alliance (ICA), which is the international body of the co-operative movement founded in 1895 (ICA, 1895). While these principles have guided co-operatives, they might not be strictly followed in practice and there can be cultural and geographical variations. The chapter also looks at the variety of different types of co-operatives. While consumer co-operatives were the major focus of co-operation during the mid- nineteenth century, there are now multiple forms including agricultural, worker, financial, and social co-operatives. The lines between different types of co-operatives can blur and co-operatives may transform themselves from one type to another across time. The chapter then compares co-operatives to other forms of business organizations, including mutuals and investor-owned businesses (IOBs), and explores the 2 What are co-operatives? relationship of co-operatives to ideas such as the shared economy. The chapter concludes by exploring historical factors that account for the fluctuating fortunes of the co-operative movement at both local and societal levels.

Defining a co-operative The co-operative is an MOB as opposed to an IOB. Members either work for the co-operative (as in the case of a worker co-operative), or consume goods and services (such as groceries in the case of a consumer co-operative, or grain storage facilities as in the case of an agricultural co-operative). Johnston Birchall has defined an MOB as a “business organization that is owned and controlled by members who are drawn from one (or more) of three types of stakeholder—consumers, producers and employees—and whose benefits go mainly to these members” (2011b, p. 4). MOBs are not charities in that they provide goods and services to members and while they are sometimes considered to be ‘non-profit’ they must make a surplus to cover costs and provide for future capital investments. MOBs are contrasted to IOBs, with the focus of the former being on people and the latter money. Investors can appropriate profits and increases in share value, whereas members can take the surpluses and give priority to other objectives such as quality of service, community assistance, and better conditions for employees. More generally the existence of a member-owned sector provides more choice for members who may value the benefits of membership over the goods and services (Birchall, 2011b, pp. 8–9). Co-operatives as MOBs have been defined by a set of principles. The origins of these principles lie in the formation of the Rochdale consumer co-operative model in 1844, in the wake of an unsuccessful weavers’ strike over wages and distress for the participants. A group of ‘pioneers,’ dominated by skilled and supervisory trades, in Rochdale, England, started the movement to combat low wages, high prices, and poor quality food (Balnave and Patmore, 2012, p. 986; Cole, 1944, p. 62; Walton, 2015, p. 233). As Wilson, Webster, and Vorberg-Rugh note the “principles of this model both spread across the world and survived to the present as the ‘ideal’” (2013, p. 37). Birchall (1994, pp. 54–64) notes that there were nine fundamental principles set out in the early rules and publications of the Rochdale co-operative. The first principle related to democracy and the Rochdale consumer co-ops differ from other businesses in that management is based on democratic principles with ‘one member one vote’ rather than ‘one vote one share.’ This meant that someone holding a hundred shares had the same number of votes as someone holding one share. These rights also extended to women before women had the right to vote in the political sphere. The second principle was open membership whereby individuals had an opportunity to join of their own free will (Birchall, 2011a, p. 7). The third principle was fixed and limited interest on capital. This principle recognized the need to attract capital through members’ shares by rewarding shareholders with interest on their shares and limiting the interest payment on shares so that it did not What are co-operatives? 3 undermine the need to reinvest capital in the co-operative to ensure maintaining and upgrading facilities. This principle was also linked with limitations on size of shareholdings to ensure that wealthy individuals did not use their economic influence to distort the democratic process (Wilson, Webster, and Vorberg-Rugh, 2013, pp. 38–39). The fourth principle was the distribution of the surplus as a dividend on purchases. This is the ‘divi’ associated traditionally with consumer co-operatives, and the dividend encouraged forced saving by members and gave the co-operative a short-term capital boost as dividends tended to be paid quarterly. In worker co-operatives, the dividend could be distributed from the surplus based on members’ wages (Holyoake, 1893, p. 156; Webb and Webb, 1930, pp. 12–15). The fifth principle was cash trading. There was strong hostility to giving credit to poorer people because of the growth of debt and many earlier co-operatives had failed due to the provision of unsecured excessive credit. There was a hope that this principle would encourage thrift among members, who would not live beyond their means (Cole, 1944, pp. 69–70; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 40–42). The sixth was to sell only pure and unadulterated food. This reflected a widespread mid-nineteenth-century practice of substituting cheaper and even dangerous ingredients such as water in milk and sawdust in bread to reduce the costs of production (Cole, 1944, pp. 70–71). The seventh principle was education. Education related to learning co-operative principles but also to technical education and the ‘intellectual improvement’ of members, highlighting a belief that education could improve moral character. There would be a levy on funds to finance educational programs (Birchall, 1994, pp. 61–62; Cole, 1944, pp. 71–72). The eighth principle was political and religious neutrality. This was to avoid conflict among the various groups in the early co-operative movement and there is no evidence that early members were denied membership on political and religious grounds. The final principle was the disposal of net assets without profit to members. If the co-operative was wound up, then members would receive what they held in their share accounts and any remaining assets would be distributed to other co-operatives and charities. This would stop individuals from trying to take over the co-operative to gain control over its assets (Birchall, 1994, pp. 62–63). Despite the significance of Rochdale principles, they were not necessarily strictly followed by co-operatives. For example, there were consumer co-operatives that breached the principle of cash-only transactions in favor of credit for reasons such as the provision of credit facilities by competitors, seasonal variations of rural income, and the impact of unfavorable economic and industrial events such as strikes on household income (Balnave and Patmore, 2015, p. 1134). Co-operatives have taken loans from non-members, even other storekeepers, and allowed outside investors to purchase shares to raise capital, which can undermine democratic control by members (Atherton, Birchall, Mayo, and Simon, 2012, p. 13; Carr-Saunders, Sargent Florence, and Peers, 1940, p. 131). The principle of political neutrality has been difficult to observe with Rochdale consumer co-operatives in the UK forming the Co-operative Party in 1917 and entering an electoral alliance with the Labour Party in 1927 (Birchall, 1994, pp. 114–116; Hilson, 2002, pp. 11–18). 4 What are co-operatives?

The ICA from 1930 became a forum to redefine the Rochdale principles con- sidering the wide variation of practice by co-operatives (Hilson, 2011, pp. 211–213; ICA, 1930, pp. 155–161, 1934, pp. 131–177, 1937, pp. 145–173). Two principles that fell out of favor over time were cash trading and political and religious neutrality. The former was viewed as a business practice rather than a key principle, while later clashed with the co-operative movements in countries such as Belgium, France, and Italy which had organized on political or religious lines. The ICA after an extensive survey of its members in 1995 came up with the following seven fundamental principles to define the co-operative identity: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; co-operation among co-operatives; and concern for community (Birchall, 2011b, p. 196, 1997, pp. 57–65). The ICA (2016) broadly defines a co-operative as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise.” It further notes that “co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity.”

Types of co-operatives While there are a variety of different co-operatives, there are historically four main types: consumer, worker, agricultural, and financial. The retail consumer co-operative was the focus of the early co-operative movement. The traditional way through which consumer co-operatives are formed is by individuals voluntarily getting together. They generally must raise their own capital and initially provide their own labor on a voluntary basis to get the co-operative started. They can start on a small scale with a buyers’ club, whereby members contribute collectively to the purchase of items and then distribute according to their contribution to the club. There may be no store under this arrangement, but there may be some money set aside to provide the capital for the purchase of an existing store or the building of a new store (Neptune, 1977, pp. 9–11). A less common way in which consumer co-operatives have been formed is where an existing owner of a retail business offers to mutualize. One example of this is the Nuriootpa Co-operative in the Barossa Valley of South Australia (SA) where a local retailer decided, following the death of his male heir during the Second World War, to allow the community to take over his store. The town had a long history of community projects, including a community hotel run by a trust. A small group of individuals had a sufficiently large amount of capital to make the project viable and co-operative membership was open to all members of the community. The existing goodwill, inventories, store staff, and management were transferred to the store, which removed many of the issues involved with starting up a new retailing business (Balnave and Patmore, 2015, p. 1148). A larger-scale example occurred with Migros in Switzerland in 1940, when the founder Gottlieb Duttweiler converted a large retail chain into 12 regional co-ops grouped into a federation (Birchall, 2011b, p. 57). What are co-operatives? 5

Once established co-operative stores may expand through the recruitment of new members in new locations or through the purchase of existing stores. The Berkeley Co-operative in the USA initially adopted a policy of expansion in the 1950s. It was willing to open a store in any community that had a growth potential of 5,000 families, had 500 families willing to invest $50,000 in shares, that was willing to recruit a further 500 families with $50,000 in the first year, and that was within 25 miles of the Co-operative’s oldest shopping center. Unfortunately, this co-operative also expanded by taking over non- co-operative stores, such as five Sid chain stores in 1962 and three Mayfair chain stores in Oakland in 1974. These purchases included their debts and customers, who were not members and not necessarily loyal to the co-operative ideal. These decisions were viewed as contributing to the Co-op’s ultimate demise (Curl, 2012, pp. 192–203; Voorhis, 1961, p. 164). While there may be sufficient members to form a consumer co-op, they may not provide sufficient capital through membership fees to expand the co-operative, and there may not be sufficient members to keep down costs through a high level of sales turnover. Consumer co-operatives must recruit members through a broad range of strategies, including word of mouth and advertising the benefits of co-operative membership through a variety of media. One issue that arises in historical literature is whether the best message for recruiting is based on the quality and value of the products or on the broader ideological appeal of co-operatives (Balnave and Patmore, 2010). Jerry Voorhis, a leading US co-operator, noted in the early 1960s that the appeal of the co-operatives was “often a conventional one—straight product advertising—and not often an exposition of how and why co-operatives are a different kind of business, one thathas to listen to consumers’ needs and wishes because those same consumers own it” (1961, p. 176, original emphasis). The dividend was initially viewed as a major attraction for members of consumer co-ops. ‘Dividend days’ were looked forward to by members because they provided additional cash for a range of goods and services, including the payment of medical bills, school fees for children, the purchase of backyard poultry, and even seaside holidays. There were problems for co-operatives in managing dividends, as they had to develop a system to record them. As co-operatives grew these could be difficult to manage. There were a variety of systems used to record purchases for the distribution of dividends. Some systems allowed a member to receive a metal token or voucher at each purchase. They were retained by the member and presented to the co-operative on a regular basis. Under this system those members who did not keep accurate records would find themselves missing out on the full extent of their dividend. Employees had to calculate dividends based on member-provided receipts in a very short period prior to issuing the dividend. More recent methods require the member to do little as the co-operative keeps records of the member’s purchases and calculates the dividend automatically. This has been an area where consumer co-operatives have benefited from computer technology, with members being able to swipe a membership card, which records their transactions and calculates their dividends. An unexplained and considerable 6 What are co-operatives? drop in dividends also causes issues for co-operatives, as this could be viewed by members as the first sign of financial difficulties and lead to a withdrawal of capital. Historically, management have tried to maintain dividends at a constant level to preserve confidence and to provide clear explanations for any dramatic shifts in dividend policy (Carr-Saunders, Sargent Florence, and Peers, 1940, pp. 112–114; Waddell, 1993; Webb and Webb, 1930, pp. 12–13). There are two important variations of the retail consumer co-operative: the wholesale consumer co-operative and the retailers’ co-operative. While many retail consumer co-operatives had to develop relationships with non-co-operative wholesalers to survive, there were early examples of opposition from traditional wholesalers and manufacturers to supplying co-ops. There were also concerns about consumer co-operatives bidding against each other in a competitive market. In the early years of the movement in Great Britain the purchasing of stock was a major concern to co-operative management committees and managers were subject to greater scrutiny than in non-co-operative retailers (Purvis, 1998, pp. 57–61). As Gurney notes “wholesaling was vital to co-operative success as it reduced costs and helped solve the problem of boycotting; with a strong wholesale organization, co-operators could buy their supplies directly from the manufacturer, thereby cutting out the capitalistic middleman” (1996, p. 94). To meet these issues in Great Britain the Co-operative Wholesale Society (CWS) and the Scottish Co-operative Wholesale Society (SCWS) began trading in 1864 and 1868 respectively (Birchall, 1994, pp. 81–87). The survival of consumer co-ops since the Second World War has rested partially on their ability to develop integrated systems of wholesaling to match the economies of the larger non-co-operative retail chains (Ekberg, 2012, pp. 1007, 1115). Retailer co-operatives arise when retailers, who are not necessarily co-operatives, form a co-operative to gain economies of scale in areas such as wholesale purchasing and marketing. Two contemporary examples of this are Foodstuffs in New Zealand and Ace Hardware in the United States (Foodstuffs NZ, 2016; Dubb, 2016, p. 144). Worker co-operatives provide a direct way for workers to control their production and shape the economy. Workers who are employees of a consumer co-operative can also be members but have their rights within the consumer co-operative limited in terms of representation on the board of directors, due to a perceived conflict of interest and a view that consumers’ interests are paramount over workers’ interests (Balnave and Patmore, 2006, p. 61; Wetzel and Gallagher, 1987, pp. 519–521). The idea of a worker co-operative is also linked with the demand for ‘workers’ control,’ which has been defined as “the replacement of the capitalist industrial system by a new industrial order in which the industries of the country will be controlled (partly or completely) by associations of workers employed in those industries” (Pribićević, 1959, p. 1). These ideas were popular among workers in the UK during and after the First World War against a background of industrial unrest and the growth of shop steward movements. Unions, in particular the National Union of Railwaymen, called for the nationalization of key industries, such as railways and coalmining, with workers’ control. Workers’ control through worker co-operatives What are co-operatives? 7 challenges the traditional notion of the firm and is distinct from other forms of industrial democracy, such as works councils and joint consultation, that retain ownership of the firm by entrepreneurs, external shareholders, and the state (Patmore, 2016, pp. 2, 69). In the UK the term ‘producer co-operative’ is also used when discussing worker co-operatives. Wilson, Webster, and Vorberg-Rugh define producer co-operatives as “a producer/industrial organization owned at least partly by the workforce, which shared the profits of the organization after meeting essential commitments like interest on loans, wages and other costs” (2013, p. 44). While there is no generally accepted definition of a worker co-operative, there are a number of characteristics on which most commentators would agree. The enterprise is autonomous, and workers can become members of the enterprise usually through nominal holdings of share capital. There are formal provisions that exist for direct and indirect participation by worker members at all management levels of the enterprise. Workers should receive a share of the income after the payment of material costs, and the co-operative principle of one vote for each member applies. There are variations in the model. Membership of traditional French worker co-operatives is not confined to current workers. The link between ownership and employment can break down if the co-operative hires non-member staff to meet increased demand for its output. The Mondragon Co-operative system expanded internationally but did not offer membership rights to workers in other countries so that the number of member workers fell from 90 percent in 1990 to 38 percent in 2009 (Birchall, 2011b, p. 175; Markey, Balnave, and Patmore, 2010, p. 249). As Birchall has noted: “It seems that Mondragon may after all be deforming into a kind of worker capitalism” (2011b, p. 175). One of the concerns about worker co-operatives is that many do not survive or they degenerate into capitalist firms. The Webbs (1914, p. 21), who were more sympathetic to consumer co-operatives, argued that worker co-operatives tended to degenerate into non-participatory organizations due to the inability of workers to exercise self-discipline regarding production quality and output. Workers did not understand the product market and were resistant to adjusting work practices to meet changing markets. If worker co-operatives are successful, then worker- owners may be reluctant to dilute their equity by hiring new workers as labor rather than recruiting new members. There is a danger that members with large amounts of capital and entrepreneurial ability will demutualize the co-operative and convert it into a capitalist enterprise to maximize their financial returns. Allowing workers to own the company rather than specific shares or requiring large majorities in any decision to demutualize the co-operative could minimize any tendency towards demutualization. Sometimes workers may convert an existing capitalist firm in a financial crisis into a worker co-operative to continue production but are unable to reverse the problems that led to the crisis in the first place (Markey, Balnave, and Patmore, 2010, p. 251). One of the other important issues for worker co-operatives is raising capital. Workers may put all their own limited wealth into the co-operative and prefer immediate rewards to placing any surplus into investment or reserves to offset 8 What are co-operatives? fluctuations in demand. Vanek (1975, pp. 446–450) argued that this “under- investment effect” was a major reason for the comparative failure of the worker co-operative compared to the capitalist firm. Traditional financial lenders such as banks may also be reluctant to invest in worker co-operatives due to a lack of familiarity or sympathy with worker co-operatives. This is particularly the case where workers have turned an ailing capitalist firm into a worker co-operative to ensure continued employment (Markey, Balnave, and Patmore, 2010, pp. 251–252). The supporters of worker co-operatives (Logue and Yates, 2006, p. 687) argue that worker co-operatives perform better than their private sector counterparts regarding worker morale, loyalty to the organization, output, and productivity. Workers have a financial stake and voice in worker co-operatives. While the evidence generally remains inconclusive on the superiority of worker co-operatives over capitalist firms in terms of productivity, worker co-operatives do provide more stable employment in periods of economic uncertainty as workers have a greater voice in the management of the enterprise. The differentials among workers, including those exercising managerial responsibilities, in a worker co-operative tend to be more compressed than those in a capitalist enterprise (Markey, Balnave, and Patmore, 2010, pp. 252–253). Farmers have protected their interests through forming agricultural co-operatives. Two agricultural co-operative federations led world co-operatives in 2014 based on turnover in relation to gross domestic product per capita: NH Nonghyup in South Korea and the Indian Farmers Fertilizer Co-operative Limited (IFFCO) in India (ICA and Euricse, 2016, p. 8). The growth in population and shift to towns and cities that accompanied the industrial revolution in the UK and later in other industrializing countries encouraged the growth of national and international markets for food, which became a commodity with a market value. The development of national railway systems and more reliable forms of water transportation facilitated the movement of agricultural produce. Farming became more capital intensive with a greater use of machinery, fertilizers, and genetically engineered varieties of seed and livestock. Canning and refrigeration, particularly of dairy products and meat, encouraged international trade. Land reform and settlement in countries such as Denmark, Ireland, Australia, New Zealand, Canada, and the USA, encouraged the rise of smaller family farms and the need for co-operation to increase market power (Birchall, 1997, p. 14; Fay, 1936, p. 206). Agricultural co-operatives can provide crucial supplies for farmers, such as seeds and fertilizers, through bulk purchases that reduce costs. These agricultural co-operatives may overlap with consumer co-operatives by providing their members with groceries and a variety of consumer goods. They may also allow farmers to vertically integrate by marketing and distributing their goods. Early examples of this type of agricultural co-operative can be seen in the USA, where farmers had to sell stock in distant markets, with co-operative pig marketing beginning in Granville, New York, in 1820. Farmers can also vertically integrate through co-operatives by establishing facilities to allow the processing of their products so that they are fit for human consumption; early examples of which can be found in cheese factories and What are co-operatives? 9 creameries in countries such as Canada, Denmark, Ireland, and the USA (Barton, 1989, p. 12; Birchall, 1997, pp. 14–16; MacPherson, 1979, pp. 10–11). There are a variety of reasons why farmers would form a co-operative. They wish to obtain a fair price for their produce and to reduce production costs through economies of scale, greater co-ordination, and avoiding intermediaries who may charge large fees for their services. Anger with the charges imposed by bank- ers, grain merchants, implement manufacturers, and storekeepers—and a desire to create new markets for their produce and protect existing markets—fueled the enthusiasm for co-operatives among Prairie grain growers in Canada in the early part of the twentieth century. Agricultural co-operatives also allow farmers to pool risk in what can be a volatile industry in terms of market demand, weather, and pests, and to capture profits from others involved in the food supply chain. Greater stability in income allows farmers to exercise more quality control and achieve higher productivity through crop variety and herd improvements. Overall, as noted previously, by combining together farmers increase their market power (Barton, 1989, p. 12; Lewis, 2006, p. xviii; MacPherson, 1979, pp. 11–12). As with all co-operatives, members control the agricultural co-operative, with which they engage by either selling their produce or purchasing goods and services. Not all individuals that use the co-operative’s services will necessarily be members, as agricultural co-operatives generally require that members must be farmers or other co-operatives. Individuals can live near an agricultural co-operative and purchase fuel, fertilizers, and a range of products but not be farmers (Barton, 1989, 12–14). An example of this can be seen with the Mt. Barker Co-operative in Western Australia (WA), which was initially established in 1918 to serve the interests of fruit growers with the provision of a fruit-packing shed. The services of the co-operative expanded to include a power station from 1929 to 1934 and a retail store from 1934. It breached the Rochdale principle of one vote for each shareholder by establishing two classes of member. While farmer members had full voting rights, town members who used services such as the retail store were allowed a share of the co-operative’s financial surplus but were denied a voice in management (Balnave and Patmore, 2008b, p. 11). Individuals formed financial co-operatives to obtain access to credit where it was not provided by existing financial institutions, or to avoid moneylenders who may charge high fees and interest rates. The origins of financial co-operatives are especially linked to Germany, where German peasants required credit to rebuild their holdings following a major famine in 1846–1847 and the political revolution of 1848. There were similar issues for townspeople requiring capital as joint-stock banks provided capital for heavy industry rather than for workers and traders. Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen promoted the idea of financial co-operatives to resolve credit issues. The Schulze-Delitzsch co-operatives were run by a 12-person committee elected by members at an annual meeting and were not encouraged to devote resources to social issues. Membership required the purchase of one share sufficient to provide working capital for the co-operative and could be paid in installments. While Raiffeisen co-operatives 10 What are co-operatives? initially had broader objectives, including the education of neglected young people, they became a distinctly credit co-operative and provided the foundation of the modern credit union. Each member had a vote and only members could deposit and borrow. Unlike the Schulze-Delitzsch co-operatives, the Raiffeisen co-operatives did not require share capital, and members could use their farms, agricultural implements, or stock, and rely on their personal reputation as their ultimate guarantee of commitment. As no fee was required the Raiffeisen co-operative had more appeal to the poor. In contrast to the Schulze-Delitzsch co-operatives, the Raiffeisen co-operatives provided no dividends on shares and all surpluses went into reserves. If the Raiffeisen co-operative dissolved, then funds were given to a good cause rather than dispersed among members. While the Schulze-Delitzsch co-operatives provided short-term loans with high interest rates, which were of benefit to traders and artisans, the Raiffeisen co-operatives could provide long-term loans with low interest rates, which were of benefit to farmers. While both had unlimited liability and were focused on the town or parish, the Schulze-Delitzsch co-operatives had the potential for unlimited growth. The success of these financial co-operatives encouraged their diffusion throughout the world, with legislation being introduced by the British in 1904 in India to promote Raiffeisen co-operatives as a means of challenging village moneylenders who could charge excessive fees for services and force villagers into debt, particularly during periods of drought and flood, and exac- erbate rural poverty (Birchall, 1997, pp. 12–13, 2011b, pp. 136–140; MacPherson, 1999, pp. 4–7; Woolf, 1919, pp. 1–40). There were also financial co-operatives that assisted with housing finance where established lenders were reluctant to provide it. These included building societies, US saving and loan associations, and Starr-Bowkett societies. They date back to 1781 in the UK and 1831 in the USA. These societies could be terminating, with the co-operative being dissolved once sufficient funding was raised to meet housing needs. In Starr-Bowkett societies members generally would pool their savings through the payment of monthly subscriptions at a level related to the number of their shares. Once the requisite number of members had registered, these pooled funds would be used to make interest-free loans based on a ballot in which all members had an equal chance of winning and the winner was unable to participate in any further ballots. Once all members had repaid their loans the society was terminated. These building finance co-operatives could be permanent, with rules not specifying a fixed time or event after which it would cease to operate. A permanent society had two types of members: those who deposited sums of money for interest payments; and those who borrowed at a slightly higher rate of interest to build or purchase a house. Permanent building societies, for example, accepted deposits in the same manner as a bank and survived by having more deposits than loans and holding mortgages over the land and buildings for which money was lent. Terminating societies generally developed before the establishment of permanent societies (Bab, 1938, p. 56; Birchall, 2011b, pp. 127–128; Darnell, 2006, pp. 15–16; Lyons, 1988, pp. 388–389). What are co-operatives? 11

One approach has been for co-operatives to establish their own banks to help them obtain financial support. The CWS in England had a banking department, known as the Loan and Deposit Department in 1872 and then the CWS Bank in 1876, which received deposits from co-operative societies with surplus funds, and made advances to co-operative societies who needed short-term capital for expansion. The CWS Bank also made possible the financing of the rapid expansion of the CWS’s international trade and production facilities. The CWS Bank grew, gaining accounts from local authorities and trade unions, and was renamed the Co-operative Bank in 1968 (Cole, 1944, pp. 163–164; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 67, 241, 266). In the USA, following lobbying from the Co-operative League of the USA (CLUSA), the US Congress in 1978, with the support of President Carter, established the federally funded National Co-operative Bank (NCB) to provide cheap finance to co-operatives. The subsequent Reagan administration moved to close the NCB as part of budget cuts, but agreed to privatize the Bank in 1981 after the US co-operatives raised sufficient capital for the Bank (Berkeley Historical Society, 1996, pp. 22–23). New types of co-operatives keep emerging, with two recent examples being social co-operatives and platform co-operatives. Social co-operatives have developed since the 1960s, particularly in Italy, to meet deficiencies by both the state and the private sector in delivering social services. The decision-making process is democratically driven with the simultaneous participation of a variety of members, including users of the services, workers, volunteers, financing members, and various legal entities. Revenue derives from supplying services to both the state and private firms. Examples of activities include home-based and residential services for the disabled and preschool educational services (Borzaga, Depredi, and Galera, 2015; Zamagni, 2012, p. 75). Platform co-operatives are a response to the rise of the shared economy and web-based businesses, such as Uber and Airbnb, with an earlier co-operative interest in Internet-based platforms, such as the Community Memory Project in the Bay Area of California in the mid-1980s.1 Critics of Uber and Airbnb argue that while they are incredibly convenient for consumers they are owned by a small number of individuals, are not accountable to the communities they operate in, and disregard established regulations—including labor law. If they were organized as platform co-operatives the workers in Uber, for example, would own the service and have a say through the participatory democratic practices of a co-operative (Sullivan, 2015). There are a variety of other types of co-operatives, including community food, housing, energy, insurance, and professional ones that provide medical and veterinary services (Mayo, 2015, p. 19). There are peak co-operatives, or co-operatives of co-operatives, such as the CWS and the ICA and “outsider co-operatives,” which operate outside any co-operative network (Balnave and Patmore, 2015). There are also parastatal co-operatives. As co-operatives are voluntary organizations established by members, the role of the state generally is to provide legislation that facilitates the establishment and governance of co-operatives. However, governments have established or incorporated co-operatives as part of a broader 12 What are co-operatives? public policy. These parastatal co-operatives can be found in fascist, communist, and developing countries, such as Ghana, Kenya, and Tanzania, where the colonial state established marketing boards to process and market export crops. While these colonial co-operatives provided inputs such as fertilizer and farm credits to farmers, there was little encouragement of farmer participation and farmers saw the co-operatives as an extension of the state (Birchall, 2011b, p. 185). Finally, there developed the ideal of the Co-operative Commonwealth, particularly associated with the socialist Laurence Gronlund (1886), where the market economy would be transformed so that all forms of economic activity would be organized along co-operative lines. The various types of co-operatives can blur. Agricultural co-ops run supermarkets and even banks. Village co-operatives in India, while providing agricultural services such as farming inputs, storage facilities, produce marketing, and crop processing, also provide irrigation, electricity, transport services, health services, and retail outlets (Zamagni, 2012, p. 67). The Eroski retail co-operative in Spain has consumer and worker members (Birchall, 2011b, p.4). There are transformational co-operatives, where the form of the co-operative shifts over time to match changes in local economic conditions. The Macleay Co-operative on the mid- north coast of New South Wales (NSW) in Australia, founded in 1905, began as a dairy co-operative with a butter factory and transformed into a retail co-operative as the dairy industry went into decline (Patmore, 2012, p. 10).

Co-operatives and other business models The co-operative is one of many possible business models with four major alternatives being proprietorships, partnerships, IOBs, and mutuals. A proprietor is the sole owner of the proprietorship and they, or someone selected by the proprietor, manage the business. All income is distributed to the sole owner as a return on their equity investment. In a partnership the partners own the business and they can vote on matters relating to the firm usually in proportion to each partner’s equity proportion. To join a partnership you must be able to provide sufficient equity capital and be acceptable to the other partners. All net income belongs to the partners and is distributed as a return on their equity investment (Barton, 1989, pp. 9–11). IOBs are distinct from MOBs such as co-operatives with the focus of the former being on a good money return to investors and the latter being on services to members and their communities. IOBs are generally listed on stock exchanges and their shares traded in an open market. Voting is not based on one vote per member but in proportion to the number of shares that you own, which means larger shareholders have a greater influence than smaller shareholders in an investor- owned business. For co-operatives and IOBs, authority flows from owners to an elected committee of management of board of directors and down a management hierarchy to employees. Directors in IOBs are generally comprised of people who are external to the organization and recommended by management because of their business expertise and ability to influence governments. Co-operative board What are co-operatives? 13 members are less likely to be drawn from the business community and they tend to be lay members whose views reflect that of the membership. Co-operative members have a greater interest than the return on their shares as they are usually the consumers of the co-operative’s goods and services. Management in IOBs and co-operatives are responsible for operating the organization efficiently and for achieving the goals set by the board (Wetzel and Gallagher, 1987, pp. 521–523). Mutuals, like co-operatives, are MOBs. While there has been a tendency to place mutuals and co-operatives together, describing them as Co-operative and Mutual Enterprises (Mazzarol et al., 2014, p. 5; Yeo, 2002, pp. 12–14), there are differences. As Birchall has noted, compared to co-operatives, mutuals “do not have such a strong social identity; their history is much more mixed and less obviously heroic, and they cannot be said to constitute one movement” (2011b, p. 6). The term ‘mutual’ is usually applied to a member-owned financial business, whose object is to raise funds to provide services such as savings, loans, life assurance, and medical insurance. Like co-operatives they do not require outside investors as the mutual recycles sufficient funds to meet its needs. Mutuals insist that customers become members, while co-operatives in principle can have deal- ings with customers who are not members. This principle can be overridden, as in Japan where consumer co-operatives could only trade with their members. While the International Association of Mutual Benefit Societies (2016)—the international umbrella organization of health mutuals—emphasizes the principle of ‘one member, one vote,’ health insurance mutuals in Australia can differ from the traditional Rochdale model in that a relatively small number of governing members, who have a recognized expertise regarding running a health insurance fund and/ or community interest, vote for the board of directors as opposed to general members. Unlike Rochdale co-operatives, mutuals do not generally issue dividends, but they can provide discounts for members in terms of reduced premiums (Birchall, 2011b, pp. 86–87; Knowles, Patmore, and Westcott, 2016, pp. 4–5). While co-operatives are distinct from other business models, they can own and even incorporate features of other types of businesses. Some co-operatives have used other types of business models to reduce risk when experimenting with product or service innovation. The Nuriootpa Co-operative in SA decided in 1952 to introduce self-service shopping but not to trade directly under its name. It reactivated the Sheard’s Service Store Company, the former company that was demutualized to form the Co-operative, and trade through that entity. The Co-operative held a controlling interest in the Sheard’s Service Store Company and believed that this approach would minimize any risk of the move to self-service. After self-service proved to be a success the separate company ceased trading in November 1965 and self-service became an integral part of the Co-operative’s operations (Balnave and Patmore, 2015, pp. 1140–1142). At an international level increased competition and globalization led some co-operatives to set up overseas subsidiaries that were not co-operatives. The Rabobank, a Dutch co-operative bank whose origins lie in the Raiffeisen movement, had 603 offices in over 46 countries by 2011 through strategic acquisitions and new business start-ups. 14 What are co-operatives?

Virtually all the new foreign banks were not turned into co-operatives and overseas customers were not offered membership (Birchall, 2011b, p.149). Co-operatives have also found it necessary to develop hybrid business models to survive. For the few remaining Australian Rochdale co-operatives there is no national wholesale co-operative network, as in a number of Western European countries. To sustain themselves and grow they became franchisees of a major independent supermarket chain, which reduced their autonomy but gained them the economies of scale in marketing and supply chain management necessary to compete with the large Australian IOB supermarket chains of Coles and Woolworths (Balnave and Patmore, 2015, p. 1137).

Theories of co-operative growth and decline While the focus of co-operative historians has been on consumer co-operatives, historians have suggested a number of economic, political, and social factors that assist the formation and growth of co-operatives. Market failures are an important explanation for the rise of co-operatives. Price inflation and its impact on real wages and purchasing power is one key factor for consumer co-operatives. As prices rise, consumers look for ways to reduce their grocery bills. By cutting out the ‘middleman’ and redistributing the surplus back to consumers, co-operatives can have a downward effect on prices. There can be similar issues regarding financial co-operatives when individuals desire credit to rebuild following an economic or climatic upheaval, or build a house and are unable to obtain it from the existing financial system, or face excessive charges in terms of transaction costs and interest rates. If primary producers are unable to gain access to important markets for their produce, they will organize co-operatives to transport, market, and process their crops and livestock. Co-operatives engage in collective bargaining to negotiate better prices for quality goods and services, and capital formation to build the necessary infrastructure to overcome market failure, whether it be a fruit-packing shed, milk-processing factory, retail store, professional office, or Internet platform (Birchall, 2011b, pp. 27–28). Periods of unrest, when disenchantment with the prevailing economic and social order leads to an interest in alternative ways of controlling both consumption and production, are another important factor in explaining the development of co-operatives. Such periods include the industrial revolution in the UK, the Great Depression of the 1930s, the counterculture movements of the 1960s and 1970s, and the recent GFC when co-operatives were praised as a way to achieve a fairer and more stable economy and society (Jones, 1984, p. 38; Knupfer, 2013, p. 176; Stiglitz, 2009). One notable response to these periods of unrest in the earliest days was to build utopian communities based on co-operative ideals. Two nineteenth-century examples are: Robert Owen’s New Harmony in the USA during the 1820s2 and the ‘New Australia’ settlement in Paraguay during the 1890s (Kellet, 1997). Another response can be seen in the USA during the 1930s Depression when the federal government enacted legislation to encourage What are co-operatives? 15 credit unions, given their potential to stimulate consumer purchasing power, and their better performance than banks during the downturn, and established electricity co-operatives. President Roosevelt also dispatched a delegation to Europe to look at co-operatives as a “third way” between capitalism and socialism (Curl, 2012, p. 173; Hilson, 2013; Moody and Fite, 1971, pp. 149–168). More recently, against the background of the most extreme state neo-liberal reforms and consequent rising unemployment in Argentina during the 1990s and 2000s, worker unrest underpinned the development of a movement of worker- owned factories (Rossi, 2015, pp. 98–99). Once a favorable political and legal environment is established for co-operatives this may further enhance their growth and development. A good example of the state encouraging co-operatives can be seen in Italy (Sarina and Fici, 2015). After the Second World War the Italian co-operative movement developed in a context of general recognition for the role it could play in the economic and social development of the country. Article 45 of the 1946 Italian Constitution claimed that the social role of co-operatives was based on mutuality and non-profit goals, and involved the government in promoting their development. Favorable laws followed that assisted the growth of co-operatives, such as 1977 legislation that allowed undistributed profits to be set aside in indivisible reserves and not be lia- ble for corporate tax, a measure that considerably increased self-finance (Battilani, Balnave, and Patmore, 2015, pp. 65–67). Immigration, religion, and colonial governments played an important role in spreading co-operative ideas internationally. British immigrants in Australia and New Zealand, particularly in coalmining areas, and Finnish immigrants, notably in Michigan, Minnesota, and Wisconsin in the USA, established consumer co-operatives (Balnave and Patmore, 2008a, p. 100; Curl, 2012, p. 161). There were political differences within the American Finnish community, who were more radical than most other immigrant communities and strongly influenced by socialist ideals. They arrived too late to obtain the best homestead land and were further radicalized through having to find work in mines and lumber camps. They played an active role in strikes, such as the Mesabi Iron Range strike in 1907, which led to many of them being blacklisted and forced to farm marginal land to survive. An example of a Finnish co-operative was the Farmers’ Co-operative Company, which was founded at Hancock Michigan in 1914, following their participation in a copper mining strike. Finns formed the Co-operative Central Exchange, a Wisconsin based wholesaler, in 1917 (Patmore, 2017, p. 512). Jewish emigration to Palestine encouraged co-operation there in the interwar period and by the end of 1937 over 1,000 Arab and Jewish co-operatives had been established, including credit unions, agricultural marketing societies, irrigation co-operatives, consumer co-operatives, and housing co-operatives (Registrar of Co-operative Societies in Palestine, 1938, pp. 3–4). A variety of religious groups through their beliefs and clergy have promoted co-operatives. Catholic interest in co-operatives grew in Italy with Giuseppe Toniolo’s foundation of the Catholic Union for Social Studies in 1889 and Pope 16 What are co-operatives?

Leo XIII’s Rerum Novarum in 1891, which highlighted the Church’s need to address the concerns of the poor and labor. In Italy, the focus was on financial, agricultural, and consumer co-operatives (Zamagni and Zamagni, 2010, p. 48). The Catholic clergy in Belgium played a crucial role in the formation of agricultural and financial co-operatives in the 1890s in response to a socialist interest in co-operatives, particularly in rural areas (Fay, 1936, pp. 69, 115, 129–130). An important Catholic movement in promoting co-operatives can be seen in the example of the Antigonish movement, which started at St. Francis Xavier University in Nova Scotia, Canada in 1930. It approached co-operative development with study circles that identified local problems and proposed co-operative solutions, particularly credit unions. The Antigonish movement had a wide impact and influenced the establishment of credit unions in the Caribbean in the 1950s, South Korea in the 1960s, and Zimbabwe in the 1960s (Birchall, 1997, pp. 197, 211–212, 153–154; Jung and Rösner, 2012, p. 93; MacPherson, 1979, pp. 130–135). While the Catholic Church played an important role in the international spread of co-operatives, Protestant clergy also played their part. Toyohiko Kagawa, a Japanese Christian evangelist, promoted co-operatives in Japan and overseas and published an influential book,Brotherhood Economics (1934), that emphasized financial co-operation as a means of achieving international peace (Lewis, 1996, pp. 4–5; Neptune, 1977, p. 9). Alf Clint, an Australian Anglican minister, who promoted co-operatives in Australian indigenous communities and Papua New Guinea, is a further notable example of Protestant activism (Loos and Keast, 1992). Colonial expansion, as well as resistance against it, encouraged the spread of co-operatives. Colonial authorities saw co-operatives as aiding the economic development and welfare of their colonies and as consistent with the mutual aid practices of the indigenous populations. As previously noted, the British introduced Raiffeisen financial co-operatives into India to circumvent moneylenders and promote economic development; a system that was copied elsewhere in British colonies. European settlers brought with them agricultural co-operatives to assist in the marketing of cash crops such as coffee and cocoa. The British introduced co-operative legislation on their behalf in Tanzania (1925), Zimbabwe (1926), and Kenya (1931). The British approach to colonial co-operatives throughout its domain was to develop a single co-operative movement with a unified co-operative law and a Co-operative Registrar or Director with greater powers to intervene than in the British equivalent (Birchall, 2011b, pp. 181–183; Hailey, 1938, pp. 1466–1467; Rhodes, 2012). In Malaya and the Straits Settlements, for example, there was a Director of Co-operatives based at Kuala Lumpur, whose duties in 1938 included overseeing the regulation of 585 co-operative societies and a rural lecture caravan, which provided a venue for showing co-operative films in rural locations (Boyd, 1939). The French by contrast initially tolerated a variety of MOBs and did not focus on one co-operative registry. Other colonial authorities that encouraged co-operatives included Belgium, the Netherlands, Portugal, and Japan (Birchall, 2011b, pp. 184–185; Jung and Rösner, 2012, pp. 85–86). Efforts by indigenous peoples to form their own co-operatives were met with What are co-operatives? 17 suspicion and either incorporated into the colonial system, as with the ‘native’ credit societies in India, or suppressed, as in the case of the Kilimanjaro Native Planters’ Association (KNPA) in Tanganyika in 1929 (Birchall, 2011b, p. 182). Some nationalist leaders saw them as a means to achieve political independence through economic independence, as occurred in interwar Korea during the period of Japanese occupation (Jung and Rösner, 2012, pp. 87–88). Technological change also played a role in the development of co-operatives. In the dairy industry the cream separator, which was invented in 1878, had major implications for the development of co-operatives. In Denmark, freehold farmers with small landholdings and a few cows were unable to produce quality cheese and butter. Through establishing co-operative dairies and pooling resources to purchase cream separators, first used by large landowners, they were able to gain economies of scale that allowed them to produce quality butter for the same high prices that had previously been attained by the large landowners. A hauler picked up daily the small quantities of milk from each co-operative farmer and took them to the co-operative dairy for processing. The first Danish co-operative dairy was established in 1882 (Birchall, 2011b, p. 156; Fay, 1939, pp. 465–468). Another example of a technological advance that encouraged agricultural co-operation was the grain elevator or wheat silo in Prairie Canada (MacPherson, 1979, pp. 14–15). One factor that several scholars have recently explored is the link between the formation and survival of co-operatives and their local community and region, particularly in rural areas. The social and economic networks built in a particular locality or region—whether it be the Mondragon region of Spain, or a village in India, or rural communities in Australia—promote a sense of “localism” and encourage a “propensity to co-operate” (Balnave and Patmore, 2006, pp. 51–52, Birchall, 2011b, pp. 24–25). As Nicole Robertson has noted in regard to consumer co-operatives: “for some of its members, the role of a co-operative society within a community extended beyond the realms of grocery shopping” (2010, p. 2013). They become enmeshed in the cultural and social environment of the community by sponsoring local sporting groups, for example through financial sponsorship and forms of assistance. Co-operatives become a core institution in the local community, promoting employment and retaining profits within the community. Consumer co-operatives promote ‘buy local’ campaigns to ensure that residents of particular communities purchase from local businesses and do not spend money elsewhere. These campaigns are designed to preserve local job opportunities and maintain viable communities. There are examples of consumer co-operatives that ensure the maintenance of the retail profile of the community and stop residents shopping elsewhere by stocking goods formerly sold by businesses that have closed, and even purchasing failed businesses to ensure that the goods and services continue to be provided to the community (Balnave and Patmore, 2006, pp. 63–65; Robertson, 2012, p. 935). Localism could also have a downside for the broader co-operative movement with local co-operative societies preferring their local autonomy in buying and being reluctant to purchase from centralized co-operative wholesalers (Webster, 2012, pp. 886–890). 18 What are co-operatives?

Co-operatives have also faced challenges that have led to their decline and disappearance. There are a number of reasons for the decline, including economic prosperity in the case of consumer co-operatives, demographic changes, and competition from the non-co-operative sector. The decline of working-class communities in mining areas and waning populations in rural areas due to mechanization in agriculture and economies of scale brought about by the consolidation of rural properties have had a negative impact on consumer and agricultural co-operatives. Increasing car ownership in rural areas in developed economies created further difficulties for consumer co-operatives reliant on their remoteness for success. Some co-operatives cease to exist because their industry ceases to exist—as in the case of the cotton industry in India and Tanzania (Birchall, 2011a, p. 21; Curl, 2012, p. 347; United States Department of Labor, 1957, pp. 7–8). There can also be ideological challenges to the principles underlying co-operatives that weakens them. Anti-democratic movements and ideas that promote individual over collective behavior do not favor co-operatives. Communist and fascist states have attacked co-operatives and incorporated them into the state. After gaining government in Germany in 1933 the Nazis dissolved the German Central Union, which was the German organization affiliated to the ICA, and forced the amalgamation of the four main co-operative organizations into a state-controlled body, with directors appointed by the government, which the ICA refused to recognize as it breached co-operative principles (ICA, 1934, pp. 82–86). In the Union of Soviet Socialist Republics (USSR) in 1935, Stalin abolished all urban consumer co-operatives and replaced them with state agencies. All assets were seized and there was no compensation for members (Birchall, 2011b, p. 37). The recent rise of the Chicago School of Economics and the push towards privatization and deregulation during the 1980s and the following two decades created a climate that favored IOBs and co-operative demutualization, particularly for financial co-operatives. The push towards demutualization was abruptly stopped by the GFC in 2008, with the recognition that co-operatives are safer than other business models as they are generally more risk adverse (Battilani and Schröter, 2012b).

Conclusion This introductory chapter has highlighted a number of points about co-operatives. They are MOBs and not charities that deliver benefits and services to members. They are defined by an evolving set of principles that flow from the development of the Rochdale consumer co-operatives, through the ICA, to the present day. Despite these principles, there are variations in practice and between differing legal jurisdictions. There are a variety of types of co-operative, with major ones being consumer, worker, agricultural, and financial co-operatives. Co-operatives can engage in a wide range of activities, as with agricultural purchasing co-operatives that sell retail products, and they can transform over time. They are distinguished from other types of businesses for their principle that one member has one vote, irrespective of their number of shares, and their focus on members and communities What are co-operatives? 19 rather than external investors, as in the case of an IOB. There are a number of factors that have favored their development, including market failures, periods of political and social unrest, immigration, favorable clergy, favorable colonial powers, technological change, and community. A number of factors can weaken them, including competition from the non-co-operative sector, anti-democratic governments, and unfavorable ideologies such as neo-classical economics. However, individual co-operatives can fail, like all other businesses, if they are poorly managed. Against the background of this introduction, the remainder of the book is organized along chronological lines. Chapter 2 explores the early ideas relating to co-operation, including Robert King and Robert Owen, and early efforts to set up co-operatives. The chapter concludes with the specific case of the successful Rochdale model, which provided the basic principles for consumer co-operatives and the modern co-operative movement. Chapter 3 explores the early problems that consumer co-operatives faced in the UK, up to the formation of the CWS in 1864. These include the questions of capitalization and supply chain management, which highlighted the need to look at co-operative financing and wholesaling. This period also saw the spread of co-operatives beyond the UK to Europe, North America, and Australasia. Chapter 4 explores the expansion of co-operatives in form and geographically from 1864 to the outbreak of the First World War in 1914. This period saw the development of a variety of different co-operatives, ranging from agricultural co-operatives to building societies, which spread throughout the world and became organized internationally through the ICA. Chapter 5 examines the two World Wars, the interwar period, and the impact on co-operatives. During the First World War co-operatives played an important role in distributing scarce resources, while the Second World War saw the destruction of some co-operative networks. The Depression brought financial difficulties for the co-operative movement, but it benefited from disillusionment with capitalism and was hailed as the third way by Franklin D. Roosevelt in the USA. Fascist and communist governments of this period moved to incorporate co-operatives into the apparatus of the state and sought to stifle their independence. Chapter 6 explores postwar prosperity from 1945–1975. Generally, consumer co-operatives faced major challenges during the prosperous period after the Second World War as competitors began to take advantage of the development of supermarkets and supply chain management. There were important exceptions to this, such as the co-operative movements of Italy and Japan, which reorganized and grew out of the ashes of the Second World War. By contrast the quest for finance to fund personal loans and housing led to a growth of financial co-operatives and building societies in a number of countries. Co-operatives became an instrument of the state in the People’s Republic of China and decolonized countries in Africa as part of shaping economic development. Chapter 7 examines the development of co-operatives from 1975 as the movement continues to face challenges. The end of postwar prosperity saw the collapse of consumer co-operative movements in Europe, Australasia, and the USA. There has been a trend towards the demutualization of agricultural co-operatives, and 20 What are co-operatives? the rise of neo-liberalism challenged the mutuality on which co-operatives were based. Financial co-operatives such as credit unions continued to grow and food co-operatives built around the organic and local food movements developed in North America and Europe. An interest in social co-operatives has also developed. The Mondragon model of worker co-operatives has attracted considerable interest in the USA, where it has been seen as the basis for reviving ‘rust-belt’ economies. The UN highlighted co-operatives as a model for economic development by declaring 2012 the International Year of Co-operatives, giving a boost to this business model in the wake of the GFC, when co-operatives generally fared better than IOBs. Chapter 8 concludes the book with a re-examination of the various ideas that explain the fluctuating fortunes of co-operatives and the development a more comprehensive theoretical framework. There are several limitations to the book. There is an uneven geographical spread of literature relating to co-operative history. There is a bias towards the history of co-operatives in Europe as less is known about co-operatives in other parts of the world, particularly in English language sources, with information on co-operative movements in countries such as Iran and Turkey being difficult to obtain. There are also relatively few transnational histories of the co-operative movement. There is a danger that looking at co-operatives through a European perspective distorts our perspective on co-operatives elsewhere (Hilson, Neunsinger, and Patmore, 2017, p. 4). As Ian MacPherson noted “too often, co-operatives are understood and described in terms of reflections of the European experience . . . an unthinking, lingering, imperial perspective” (2006, p. 17). There is also a bias in the available literature towards consumer co-operatives compared to other types of co-operatives. Finally, given that this is a global history covering over two centuries, not all co-operative experiences can be covered within the limited length of the book.

Notes 1 See ‘Community Memory Project 1984–1985,’ Consumers Co-operative of Berkeley papers, UC Berkeley Bancroft Library, BANC MSS 90/140 c, Folder 16:37. Courtesy of The Bancroft Library, University of California, Berkeley. 2 The Co-operative Magazine and Monthly Herald, January 1826, pp. 11–17.

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Yeo, S., 2002, Co-operative and Mutual Enterprises in Britain: Ideas From a Useable Past For a Modern Future, London, Centre for a Civil Society, London School of Economics and Political Society. Zamagni, S. and Zamagni, V., 2010, Cooperative Enterprise: Facing the Challenge of Globalization, Cheltenham, UK, Edward Elgar. Zamagni, V., 2012, “A World of Variations: Sectors and Forms,” In Battilani, P. and Schröter, H., eds., The Cooperative Business Movement, 1950 to the Present, Cambridge, UK, Cambridge University Press, pp. 63–82. 2 THE ORIGINS OF THE IDEA AND THE ROCHDALE PIONEERS, BEFORE 1844

While the Rochdale pioneers are hailed as the founders of co-operative businesses, the idea of co-operatives predate them. There are claims that co-operation even predates industrialization. This chapter explores the early origins of co-operation and focuses on the impact of the industrial revolution on the early co-operative movement. It examines the influence of early pioneers, particularly Robert Owen and Dr. William King. The chapter concludes with a discussion of the events leading up to the establishment of the Rochdale consumer co-operative in 1844.

Pre-industrialization A number of co-operative scholars and activists have claimed that co-operation predates the industrial revolution. They note that in Europe the medieval guilds had features of MOBs and that in Germany there were ‘precinct co-operatives’ for land management. There are claims of a co-operative society in the form of a merchants’ federation in Scotland in 1179 and in coalmining in Britain as early as 1297. Friendly societies predate the industrial revolution and a form developed in Britain whereby members deposited a small amount of money into a box at an alehouse. The society paid the proceeds to members in the event of unexpected costs, such as medical expenses associated with an illness or a benefit on the death of a family member. There were monthly meetings of members and officers appointed on rotation to oversee the fund. An early known example in Scotland was the United General Sea Box of Borrowstounness Friendly Society established in 1634 (Aschhoff and Henningsen, 1986, pp. 16–17; Birchall, 2011, pp. 41, 66; Hibberd, 1968, p. 532). Early European settlers in North America worked mutually to establish their communities and to survive by co-operatively building houses and barns, ploughing fields, and constructing fences (Curl, 2012, p.17). Origins of the idea 27

There have also been claims concerning co-operation existing outside European society in pre-industrial times. According to Curl indigenous people in North America practiced “collectivity, co-operation, and communalism” (2012, pp. 15–17). Shoshone families west of the Wyoming Rockies would occasionally combine with other families for co-operative rabbit hunts, with families without nets receiving a slightly smaller share of the hunt. The Rio Grande Pueblos had co-operative irrigation, while North-west coast tribes had collective fishing, with the entire catch handled by an elder who had to ensure its equitable distribution. The idea of co- operation extended to the Inca Empire in Peru, where there was an organization of labor, the allyu, built on solidarity and collaboration that provided all essential needs (Herr, 1943, p. 52). In India co-operation and interdependence were a feature of the Hindu family and there were ancient craft guilds that had a banking role (Hough, 1932, pp. 50–51). Indian village communities collectively created permanent assets, such as water tanks, and regularly collected small quantities of cash for chit funds, as they were known in the Madras Presidency, to lend to members (Sami, 2011, p. 1). There were work groups in Africa, known as naam groups in Burkina Faso and nnoboa groups in Ghana, where members worked on the others’ farms in rotation. These traditional ways of sharing resources in indigenous communities were used by colonial authorities as a justification for the introduction of co-operatives (Birchall, 2011, p. 181), and for scholars to explain, for example, the ease with which credit unions later took hold in Africa and Asia (MacPherson, 1999, pp. 1–2). There are some who have questioned the co-operativeness of some of these pre-industrial societies. George Holyoake, the great nineteenth-century publi- cist of the Rochdale model, argued that co-operation has been around since the beginning of human society in the sense “of two or more persons uniting to attain an end which each was unable to effect singly” (Holyoake, 1875, p. 2). However, he also noted that the benefits of this co-operation, rather than being appropriated by the stronger capitalist, as with the industrial revolution, was in early times gained through coercion by a king or chief, particularly as a society grew (Holyoake, 1875, p. 2).

Industrialization and the early co-operative movement, 1759–1820 While there may have been earlier forms of mutualism and co-operation, the rise of the co-operative movement is associated with the onset of industrial revolution and the beginnings of modern capitalism in the 1760s in England. The development of new steam technology and the breakdown of agricultural life due to the enclosure of land to increase farm production brought larger numbers of workers to the growing, overcrowded, and insanitary industrial towns. While initially these workers were employed in their homes doing outwork, they eventually found themselves in factories as large-scale production was needed to match growing demand. Workers faced long hours and received meagre wages. Factory work 28 Origins of the idea involved speed, regularity, and supervision, which was at odds with pre-industrial life. In industrial communities, the rhythms of life were determined by bells and whistles that determined the beginning and end of shifts. Some occupations, such as handloom weavers, silk workers, and nail makers were hard hit by industrialization and were unable to compete with the factories, which employed children and institutionalized labor, such as prisoners and paupers. These workers faced declining wages and status as they were forced to become outworkers for capitalists (Birchall, 1994, pp. 1–6; Patmore, 2006, p. 27; Wilson, 1995, p. 33). Workers also had to deal with the ‘truck system,’ where unscrupulous employers forced workers to obtain low-quality and high-price goods at stores owned and operated by them by paying them with script that was only redeemable at those stores. While the practice was outlawed in 1831 it persisted in some industries such as mining, iron working, and railway building until 1871. Even in the absence of the truck system, workers could be tied by debt to a shopkeeper due to fluctuating incomes as they could no longer grow their food in the fast-growing urban areas. These issues underlaid early worker interest in retail co-operatives (Birchall, 1994, pp. 10–13). Accompanying these changes were shifts in the prevailing ideology and business models. The early industrial entrepreneurs needed recognition in a relatively hostile environment where they faced opposition from “merchants, craftsmen, manufacturers and others, whose outlook and personal security were identified with the old methods of production” (Bendix, 1956, p. 23). They found support through the promotion of individualism by philosophers and political economists such as Thomas Malthus, John Stuart Mill, and Samuel Smiles who promoted the notion of self-dependency. Individuals such as Richard Arkwright, who rose from being the son of a barber to owning large industrial estates by his death in 1791, were praised as examples of this self-dependency. Political economists such as Adam Smith and David Ricardo highlighted the dominance and efficiency of the market economy and the need for labor to conform to the changing world. While the partnership was the basic business model up to the mid-nineteenth century in British manufacturing industry, the IOB in the form of the joint-stock company gained popularity as able to raise the capital necessary to invest in larger and more complicated machinery and infrastructure, such as railways and canals. Unlike the partnership, the joint-stock company had the advantage of limited liability, which limits the owners’ liability for any losses to their actual investments in the business. Reforms to company law between 1825 and 1856, and the creation of stock exchanges in both London and provincial cities such as Manchester and Edinburgh, made this model even more attractive (Wilson, 1995, pp. 42–50; Wilson, Webster, and Vorberg-Rugh, 2013, p. 28). Despite these changes, industrialists continued to face opposition, particularly from workers. Against the background of the Napoleonic Wars, in England there were outbreaks of unrest in the form of food riots over prices and the scarcity of food in April 1812, and uprisings by Luddites in the textile industries of Yorkshire and Nottinghamshire in 1811–1812. Luddites are associated with Origins of the idea 29 machine breaking; a tactic to try and force employers to improve wages and industrial conditions. These protests were also found in rural areas, in the Swing Riots of the late 1820s the poor undertook widespread attacks against landowners across the south of England (Thomis, 1972, pp. 21–22, 132–133; Wilson, Webster, and Vorberg-Rugh, 2013, p. 25). More organized forms of opposition were trade unions and the Chartist movement. The latter, before its demise in 1860, called for parliamentary reform and the enfranchisement of the working class (Jones, 1975). The state provided support for industrialists in their conflicts with workers, as in the case of the Newport Rising of November 1838 in Wales, where troops killed and wounded a number of marching Chartists—the Chartist leaders were subsequently transported to Australia after their death sentences were commuted (Cole and Postgate, 1981, pp. 286–287). Another response was the formation of early co-operatives. From 1759 until 1820 at least 46 flour and bread societies were established in parts of England and Scotland to retail bread and flour at below the prevailing local market price. They challenged the high prices for bread and its poor quality arising from adul- terating flour through mixing in substances such as china clay. These societies were directly owned by consumers or operated indirectly through a local friendly society. They represented vertical integration into retail distribution, and beyond that into bakeries and flour milling, and highlighted a market failure in terms of the rapid increase in the price of grain. The earliest known of these societies were formed in 1759, associated with government dockyard workers at Chatham (Middlesex) and Woolwich (Kent). They spread across England and Scotland, and the Hull Anti-Mill recruited 1,435 members in 1795 and opened a mill in June 1797. There was a relationship with the outbreak of food riots with 82.6 percent of them being established during years noted for food riots. Local bakers and millers resisted them. They faced prosecution as monopolists by local millers and bakers and in one case it was alleged that local bakers were involved in burning down the mill at Woolwich in March 1760. The Devonport Union Mill, which was formed by dockworkers near Plymouth in 1817 as a wholesale bread supply company, bought its own mill and bakery in response to a boycott by local bakers. The average life of these companies was 48.05 years, with the Hull Anti-Mill and Subscription societies surviving for 100 and 91 years respectively. A small number of these societies, including the Hull ones, were to link themselves later with the growing Rochdale consumer co-operative movement (Bamfield, 1998, pp. 16–21, 31). The idea had an impact beyond England with an unsuccessful attempt in the Australian colony of NSW in 1839 to form a Union Flour and Bread Company to combat high flour prices.1 While there were variations among these flour and bread societies, they tried to avoid creating a market for their shares by insisting that all shares be offered to the committee of the society, who would then redistribute them. They did not issue share certificates but rather required members to subscribe, with their shares being registered in transfer books. There were limits on the maximum number of shares an individual could hold, which allowed no small group of large shareholders 30 Origins of the idea to dominate the society and ensured that many households would benefit from these societies. Despite claims that the societies were established to help the poor, the cost of a share was beyond the means of the poor. As they were unincorporated, trustees held the societies’ property, as a society could not legally hold any. The societies sold all bread for cash and discouraged members from receiving credit; all shareholders were given a ticket to show their entitlement to bread and flour. The societies usually forbade sales to non-members and in the early years members were required to buy the same amount every week, which helped the societies in planning and procuring flour. Some members had bread delivered to their homes, while most societies used flour agents to distribute bread and flour from their homes rather than from retail premises. The societies ensured that these agents did not defraud their members with agents being discharged, for instance, if they adulterated the flour or altered the weighing scales. The societies were governed by large committees, which were chosen by a general members’ meeting, with limits being placed on the rights of small shareholders to sit on the committee. The governing committees were expected to be deeply involved in the oversight of the management of the society to prevent fraud and poor business decisions, with the committees in most societies decid- ing the quantity of the flour to be purchased. As with later retail co-operatives, members expected a return on their capital and that this be paid as a dividend in terms of bags of flour for every share (Bamfield, 1998, pp. 22–29). There are early examples of broader retail co-operatives, which did not specifically focus on milling and baking, of building societies, and even of worker co-operatives. In Scotland a weavers’ society in Fenwick began as early as 1769 to purchase necessities. This was followed by the Govan Victualling Society in 1777, the Bridgeton Society in 1800, the Lennoxtown Co-operative Society of 1812, which had a dividend on purchases, and the Larkhall Victualling Society of 1821. While friendly societies, such as the Blue Ball Club in Blidworth in 1771, did buy goods such as cheese for resale to members, the earliest known English retailing co-operative was the Oldham Co-operative Supply Company, established in 1795 (Cole, 1944, p. 14; Richardson, 2013, pp. 162–163). At least one English baking society, the Sheerness Economical Society, extended into co-operative retailing in 1816 (Birchall, 1994, p. 5). Cole notes (1944, p. 15) that an early English example of a worker co-operative was formed by Birmingham tailors in 1777. An example of an early building society, which was terminating, was at Deritend, near Birmingham, formed in 1781 by workers interested in building their own houses and meeting the property ownership requirements of voting in elections—the workers wound it up when their housing needs were met (Bab, 1938, pp. 56–57; Fay, 1939, pp. 204–205). There were also early examples of worker co-operatives in the USA in major cities, both before and after the Revolutionary War. These worker co-operatives arose from unsuccessful strike action and a reluctance to return to the traditional employment relationship. They predate major industrialization in the USA but highlight the tensions that arose between sizeable groups of skilled workers and Origins of the idea 31 employers in the growing American cities (Rayback, 1966, pp. 17–18, 49–52). Twenty tailors in New York went on strike in 1768 because of a reduction in wages. Without a union, they formed a co-operative ‘house of call’ to obtain work. Similar actions were taken by carpenters in Philadelphia in 1791, shoemakers in Baltimore in 1794, and shoemakers in Philadelphia in 1806. These co-operatives were generally short-lived as the intention was to disband them once the strike was over (Curl, 2012, pp. 32–34). However, the Philadelphia shoemakers decided to open a “boot and shoe warehouse” on a permanent basis following their convic- tion for conspiracy. Unfortunately, it is not known how long this warehouse lasted or whether it was a success (Commons et al., 1966, pp. 128–130).

Robert Owen, Dr. William King, and early co-operatives, 1820–1844 Two significant individuals in the UK had a major impact on the development of co-operatives—Robert Owen and Dr. William King. Robert Owen, born in Wales, began work as a draper’s shop assistant at the age of nine. He eventually became a manager of a spinning mill. He married the daughter of David Dale, one of the largest cotton-mill owners in Britain, and took over the management of the New Lanark mills in Scotland from his father-in-law after he and several associates purchased it for £60,000. In 1799 the village of New Lanark had approximately 2,500 mill hands and their families, with 500 of the employees being children recruited from charitable institutions in Edinburgh. Owen believed that the environment formed individual characters and that a better environment would result in better individuals. He established a reputation for creating humane conditions at New Lanark, where workers received high wages in good working conditions. Owen remodeled the village and removed all the storekeepers who had been charging excessive prices for inferior goods and replaced them with stores where goods were sold at cost. All establishments that sold alcohol were moved to the outskirts of the village. He stopped employing the children from the charitable institutions and provided model schools for the education of the workers’ children. Fearing opposition from his partners, Owen borrowed sufficient funds to buy them out (Cole, 1944, pp. 15–16; Curl, 2012, p. 285; Hillquit, 1971, pp. 49–52; Thompson, 2012, p. 11). However, as Cole notes, “Owen’s shop at New Lanark was not a Co-operative Store but a part of the firm’s business; and New Lanark as a whole was an example not of industrial democracy but of benevolent autocracy” (1944, p. 17). Owen, however, was not satisfied with his achievements at New Lanark, despite popular acclaim. He first popularized his ideas in A New View of Society, published in 1813, and coined the term ‘co-operative and economical society’ in January 1821 in the first issue of his magazine, The Economist, which was published from 1821 to 1822. Owen was concerned with the impact of industrialization upon the living standards of workers. He called for the creation of villages of mutual co-operation, which would have a population of between 500 32 Origins of the idea to 1,500 people and would transform capitalism, as workers would produce for themselves and exchange surplus goods with other co-operative villages. These co-operatives would spread and federate the whole of society, with this socialism replacing the “old immoral world” with a “new moral world,” where all would be free and equal, and there would be “true democracy.” He presented his plan to the House of Commons in 1817 with a request for government aid to set up the co-operative villages, but failed to obtain the support of industrialists. He sought the assistance of the workers, but they had no capital, and relied on wealthy subscribers, who would either form joint-stock companies or become trustees, with the common property as security (Birchall, 1997, p. 4; Curl, 2012, p. 285; Hillquit, 1971, pp. 52–53; Holyoake, 1875, p. 66; Pollard, 1960, pp. 78–79; Thompson, 2012, p. 11). Owen continued to promote his ideas from 1832 to 1834 through the publication The Crisis, which included the rejection of Christianity, arguing that its beliefs were “totally unfit to relieve the world from its present evils, or to prevent their continuance or their accumulation through all future ages.”2 He also called for gender equality and community care of all children after they were born, with their parents having unrestricted access to them. Owen promoted the idea of Equitable Banks of Exchange, or Equitable Labour Exchanges, where individuals and co-operatives could exchange goods valued per the amount of time involved in their production. Financial notes based on the production time for the various items would be circulated by the banks. Owen argued that the banks would eliminate crime, poverty, and ignorance by providing employment for the job- less.3 He encouraged the formation of unions of both employers and employees to improve working conditions through “friendly communication.”4 He also served as President of the Grand National Consolidated Trades Union (GNCTU), which was formed in 1834 to co-ordinate the emerging trade union movement and promoted “co-operative production” for the unemployed (Pelling, 1972, pp. 30–34). Dr. William King was a medical practitioner born in Ipswich, England, in 1786, who moved to the small coastal town of Brighton in 1821, which had about 25,000 inhabitants. He was a founding member of the Brighton District Society in 1821, which aimed to encourage “frugality among the poor” and relieve the “real distress” of the poor. He was also active in the formation of the Provident Institution, which encouraged industry among the working classes and required workers to deposit their savings during the summer and receive a treble return during the winter in clothing, food, and fuel. He helped form a Mechanics Institute in Brighton in 1825 to promote education, through lectures and a library, particularly for local workers (Mercer, 1947, pp. 1–10). Like Owen, King was concerned about the declining living standards of workers. King believed that by 1828 industrialization had led to the decline of wages to one-third of what they were one hundred years previously, and believed that workers were on the verge of starvation.5 He was influenced by Owen and received sponsorship from Lady Byron, the divorced wife of Lord Byron, the poet. Unlike Owen, King was religious and his ideas were to inspire the later Christian Origins of the idea 33 socialist movement. King advocated through his magazine The Co-operator, which began publication on May 1, 1828, that Owen’s supporters should open stores and use the surpluses to emancipate themselves. He, like Owen, believed that workers would establish self-sufficient communities that would buy land for the unemployed to work and provide sickness benefits. Unlike Owen he believed that these co-operative communities could operate in the current society without any need for a radical transformation (Birchall, 1997, pp. 4–5; Mercer, 1947, p. 14; Thompson, 2012, pp. 13–14; Wilson, Webster, and Vorberg-Rugh, 2013, p. 32). King differed from the later Rochdale co-operative movement in proposing the “careful” choosing of members rather than open membership. They should for example be of “good health” and not be older than 35 because if they were too old “they may become superannuated, before the Society can receive the fruits of their labour.”6 Members paid a subscription but capital was the common property of the whole co-operative rather than of individual shareholders. There was therefore no need to pay members’ interest on the capital (Mercer, 1947, pp. 40, 169). A movement developed that combined elements of both King’s and Owen’s ideas. While London provided an initial base for the discussion of Owenite ideas, the broader movement began in 1826 in Brighton, which was a fast-growing town where the older skilled trades faced rising unemployment as industrialization hit. While some co-operators saw themselves as saving to set up communities, as in Orbiston in Scotland and Exeter in England, others established ‘union shops’ to sell their own products, similar to worker co-operatives, and to build up capital to form a co-operative community.7 King used the Brighton Co-operative Trading Association, later the Brighton Co-operative Society, which was formed in 1827, as a model for his propaganda. There were about 70 contributing members who bought £5 shares in small payments. They sold goods to subscribers and their families, such as candles, mutton, bread, and tea, and by February 1828 the co-operative had appointed their first full-time employee, trade unionist William Bryan, as agent or storekeeper. A surplus from the sale of these groceries was invested in a lease of 28 acres, and members were paid to cultivate the land as a garden and nursery at higher than the prevailing rate of wages. There is a strong link between the emerging trade union movement and these early co-operatives, with many arising out of strikes or created by local trade unionists to challenge low wages or promote employment. Except for Wales, stores could be found in every industrial area of Great Britain and Ireland, with societies as far apart as Dublin, Belfast, and Aberdeen. The largest number of these co-operatives was in London (where there was over 50), Lancashire, Yorkshire, the East Midlands, and around Birmingham. The movement grew to involve somewhere between 300 and 500 shops. Sympathizers formed the British Association for the Promotion of Co-operative Knowledge in 1829 to further promote the idea (Birchall, 1994, pp. 9, 14, 1997, p. 5; Cole, 1944, pp. 22, 24–26; Durr, 1988, pp. 18–20; Mercer, 1947, p. 168). The strength of the movement is highlighted by eight Co-operative Congresses, the first of which was held in Manchester in May 1831 and the last in Halifax in 34 Origins of the idea

April 1835 (Cole, 1944, p. 27; Holyoake, 1875, pp. 190–191; Mercer, 1947, p. 170), with trade union participation and delegates from Great Britain and Ireland.8 The first Manchester conference had delegates from 56 co-operative societies with a maximum estimated membership of 300,000 and accumulated capital of £6,000. Early issues discussed at these Congresses included the establishment of co-operative wholesaling and the employment of co-operative “missionaries” to promote the idea (Holyoake, 1875, pp. 150–151; Powell and Powell, 1831, pp. 4–10). The April 1832 Congress in London adopted a report rejecting credit being given for any transactions because the “deviation from this important principle, has been the sole cause of the destruction of so many previous societies, and thus banefully operated to retard the general progress of co-operation” (Carpenter, 1832, p. 103). Indeed, the Richmond Co-operative Society reported in September 1832 that members had lost their confidence in the Society and had stopped paying their subscriptions after they had suspended their storekeeper for placing their society into debt with various suppliers and for providing credit to unemployed members of the Society who had left and had never paid their bills (Pare, 1832, p. 41). There was also an attempt to establish a national co-operative wholesale system in 1831 with the formation in Liverpool of the North West of England United Co-operative Company (Wilson, Webster, and Vorberg-Rugh, 2013, p. 33). The movement faced some opposition, had difficulties such as finding meeting places, and received condemna- tion from members of the clergy (Holyoake, 1875, pp. 322–344).9 The main Equitable Labour Exchange opened for business initially at Gray’s Inn Road, King’s Cross, London, on September 3, 1832, and Robert Owen traveled around England and Ireland promoting the Exchanges, with one meeting in Birmingham attracting an estimated 10,000 people in December 1832.10 Shareholders of the Birmingham Equitable Labour Exchange, which opened in August 1833, were members who purchased shares to the value of one pound each, which could be sold and transferred only within the Exchange. Members received a fixed rate of interest on their shares and were only allowed one vote in the election of officers and general meetings, irrespective of their number of shares.11 There was also an early example of an agricultural co-operative associated with this movement. At Ralahine in Ireland, John Vandaleur, the owner of 620 acres, who was facing unrest from his tenants, including the shooting of his steward, turned his estate into an Owenite co-operative community for his tenants in November 1831 (Cole, 1944, p. 34). While Vandaleur did not require rent for the land, the co-operative was expected to provide him with a certain amount of output, such as wheat, barley, fat cattle, and pigs, calculated on the average production that Vandaleur had received over the previous seven years. Vandaleur also accepted the co-operative’s labor notes, which could be exchanged at a co-operative store for available goods. Any surplus above that was retained by the co-operative. Local businesses, such as the tailor, shoemaker, and hatter were willing to accept the co-operative’s labor notes. The co-operative was managed by a committee of nine, with three being drawn from the agricultural workers and three from the skilled Origins of the idea 35 trades, with Vandaleur as president. The committee allocated the work among the members; unmarried members slept in dormitories, while married men had their own cottages. There was training for young people, a contributory sick fund, and a savings bank. There was no alcohol allowed on the co-operative and one member was expelled after becoming drunk at a village wake. By April 1833 there were 57 adult members, of which 36 were men and 21 were women.12 However, the co-operative movement had virtually collapsed by 1834. The tenants at Ralahine were evicted in 1833 after Vandaleur lost the land through gambling and fled to the USA. At Orbiston the community failed in 1828 due to financial difficulties and conflict over the equal distribution of the community’s output irrespective of effort (Donnachie, 2006; Holyoake, 1875, p. 283; Jones, 1894, pp. 69–70; Smith, 1961, p. 31). Brighton Co-operative Trading disappeared in 1832, with a few of its members taking out their capital and buying a fishing boat (Cole, 1944, p. 22). There was an economic depression that reduced the earnings of co-operators, a collapse of the rising trade union movement due to employer lockouts, such as in the London building trades, and government repression. A notable example of the latter was the trial and transportation to Australia in 1834 of the ‘Tolpuddle martyrs’—six agricultural laborers from Dorset—for administering an unlawful secret oath at an initiation ceremony for the formation of a trade union to protect themselves from employer victimization.13 The GNCTU began to break up as it was unable to support striking union members and eventually collapsed when a treasurer absconded with the remaining funds. The Labour Exchanges collapsed as the trade unions and co-operatives, on which they depended for their customers and supply of goods, began to decline. There was a problem of balanc- ing credit and debt as members brought in products to be sold but took away goods of equivalent value before their products were sold. There was a lack of co-operative education and incentives for members to stay, as the emerging capitalist industrial society was able to offer better wages and conditions when the economy was booming. The legal status of co-operatives was uncertain, which made them vulnerable to mismanagement and fraud, and there were management issues in the co-ops as they did not know how to distribute profits unless they dissolved their co-operatives to make a payout (Birchall, 1997, p. 4; Cole, 1944, pp. 31, 70; Patmore, 1991, p. 29; Pelling, 1972, pp. 32–33; Wilson, Webster, and Vorberg-Rugh, 2013, p. 33). As Birchall notes, the success of the later Rochdale movement “is largely attributable to their use of the dividend on purchases to reward members not as workers but as consumers” (1997, p. 5). A small number of co-operatives survived and new ones were established after 1834. While the Owenite movement was in decline, Chartists saw co-operative stores as supplementing their drive for political reform, as a form of economic power, and a way of raising funds for their cause. There were amendments in July 1834 to the friendly societies legislation that extended the scope of the legislation to include all societies established for any legal purpose. This allowed co-operatives to register and gain some legal recognition and financial security. The Huddersfield Co-operative Trading Association in Yorkshire, which was 36 Origins of the idea established in 1829, registered under the legislation on July 4, 1838, and had nearly 500 members in 1840. There were a further 30 Yorkshire societies that registered over the following three years. These societies generally divided profits per their share capital, with most societies dividing the profits equally as each member held only one share. An exception to this rule was a small number of societies that paid dividends per the amount purchased by individual members at the society’s store. In West Yorkshire at least four societies followed this practice before it was adopted by the Rochdale co-operative in 1844. The co-operative society at Paddock in West Yorkshire went even further towards the Rochdale model with its 1839 rules providing for the first payment from profits of 5 percent interest on all loans, subscriptions, and donations, and for any remaining profits to be distributed individually per the amount of money paid for goods. While there may have been a continued interest in using the surplus from these stores to found Owenite communities, they seemed primarily concerned with supplying unadulterated food at reasonable prices. The Huddersfield co-operative did not consider the idea of community until 1831, when it was rejected as impractical and the store remained focused on trading food. The trading activities of these co-operatives were significant. The Ripponden Co-operative, established in 1832 in West Yorkshire, spent £2,000 in 1832 on purchases and stocked 160 items by 1842, including groceries, drapery, and hardware. It is estimated that between 1835 and 1844 there were at least 120 retail societies and 25 more specialized trading societies in England, selling everything from bread to shoes manufactured by their members, in operation at various times. One ambitious co-operative project, the North of England Joint Stock Co-operative Society of Newcastle, supplied several local stores and was taking in over £1,035 a week in December 1839 (Hibberd, 1968, pp. 536–539; Priestley, 1932, p. 19; Purvis, 1986; Thornes, 1988, pp. 39–42). Of the societies formed by 1844, 23 in Scotland and 14 in England were still in operation in 1890 (Jones, 1894, p. 9). This early co-operative movement was not just a phenomenon in the UK, it was a transatlantic movement, with co-operatives appearing in the USA. Against the background of an economic depression and a general economic collapse that followed the panic in 1819, Cornelius Blatchley, a Quaker pharmacist, in 1822 advocated the idea of co-operation to transform society and achieve social justice. Blatchley was strongly influenced by the experiences of religious communes such as the Shakers, Harmony, and the Moravian Brotherhood, and founded the Society for Promoting Communities in New York in 1820. He drew upon Owen’s ideas and invited him to the USA. Owen saw the USA in the wake of the American Revolution as being a more favorable location for the values of liberty and equality that underpinned his beliefs and he gained a favorable reaction when he gave speeches at the House of Representatives in Washington DC (Curl, 2012, pp. 37, 284, 286; Hillquit, 1971, p. 54; Oved, 1987, p. 109). Owen founded New Harmony in Indiana in 1825 as an example of a co-operative community. Over 900 people, mainly urban workers, settled on the 20,000 acres, which included farming land, a co-operative silk factory, woolen Origins of the idea 37 mill, brickyard, distillery, oil mill, and dye works. Members of the co-operative had to balance debits from the community store with work credits on an annual basis (Curl, 2012, pp. 36–37, 287). Individuals could only join if they had the majority support of an assembly of members. Members elected the community executive either directly through the assembly, as in the case of the Secretary, Treasurer, and Commissary, or indirectly through ‘intendents,’ as in the case of four superintendents, who each represented a department, such as agriculture. The community’s land was held in perpetuity and could not be sold to outsiders, and anyone who left the community received compensation for any real estate they had purchased at a value to be determined by the community. There were efforts to influence behavior through, for example, a ban on the sale of alcohol in the community, and members could be “dismissed” from the community for “misconduct” and “idleness.”14 Owen’s ideas and New Harmony received nationwide publicity as Owen embarked on US national speaking tours. There were at least nine other similar communities in the USA, formed along similar lines, such as Valley Forge in Pennsylvania and Franklin in New York. One notable co-operative community was Nashoba in Tennessee, a slave state, founded in 1825 on 2,000 acres of land. Frances Wright, a Scottish-born early suffragist (Hillquit, 1971, p. 66), was critical of the then US ideal that all men were “born free and equal,” particularly in relation to its “citizens of colour.”15 Wright applied Owen’s ideas to the liberation of black slaves, viewing the co-operative communities as an alternative to a violent uprising, and freed slaves living in the community. These mixed communities of black and white would produce for their common needs and use surpluses to found new colonies and liberate more slaves (Curl, 2012, pp. 37, 286–287, 295). Owen tried to make New Harmony into a more democratic community, with each member receiving benefits as per need rather than receiving benefits per the work performed. This sparked conflict among the diverse range of members, which included urban workers and middle-class intellectuals, and New Harmony split into at least five groups, and the experiment had failed by 1827. Capital was an issue, with banks generally owning the land and the members having to pay a large mortgage. A further economic downturn in 1828–1829 depressed wages and restricted credit, making it difficult for workers to establish more co-operatives. With the demise of New Harmony, the movement dissipated and all the co-operative communities eventually collapsed. Nashoba, which succeeded for three years and resisted hostility from local racists, was unable to meet its land payments to the bank as the economy worsened (Curl, 2012, pp. 287–289, 295). While Owen left for England and returned briefly to the USA on three further occasions after the failure of New Harmony, his son, Robert Dale Owen stayed in the USA and continued to promote his father’s ideas through publications such as the Free Inquirer, which he published with Frances Wright. Robert Dale Owen went on to serve two terms in the US Congress and drafted legislation under which the Smithsonian Institution in Washington was established (Hillquit, 1971, pp. 54–56). 38 Origins of the idea

There was some interest in consumer co-operatives in the USA. Robert Owen’s store at New Harmony was an early example of a co-operative store with time credits for work performed in the form of labor notes being exchanged for goods at the store. In 1827 Joseph Warren, who lived at New Harmony, organized a similar store in Cincinnati, Ohio, known as the Time Store. However, despite some success it closed three years later. Stores were also established in Philadelphia and New York in 1829, one of the latter’s organizers being Bryan, a former storekeeper of the Brighton Co-operative in England and a disciple of King. Bryan continued to correspond with his compatriots in Brighton and encouraged their children to come to the USA. The New York co-operative never had more than 40 members and had collapsed by 1830 (Curl, 2012, pp. 37–38; Parker, 1956, p. 3; Thompson, 2012, p. 14). During this period, early financial co-operatives appeared in the United States. The first building and loan association was opened in Philadelphia in 1831. Urban workers generally founded these independent associations to assist home building. Members made monthly payments into the fund, which financed the construction of houses one at a time. The association held each mortgage until it was paid off, and the association would dissolve when all the houses were built. They were to become widespread in the 1850s in response to rising rents but they were wiped out during the economic and social upheaval of the US Civil War in the early 1860s (Curl, 2012, pp. 52–53). Beyond the UK and the USA, there was a push towards worker co-operatives in France. Industrialization here had a different pattern to that in Britain, with production remaining small scale and focused on local markets, and an emphasis on skilled labor rather than mass production. There were also severer restrictions on popular associations such as co-operatives in France compared to the UK, with the 1834 French law on associations reflecting the views of the social political elite that such organizations were a challenge to the prevailing order. Unlike laissez faire capitalism in the UK, the French state intervened in industry to overcome sluggish industrial development. There were French promoters of co-operatives. Comte Henri de Saint-Simon, who participated at the Battle of Yorktown in the American Revolution and was the president of a Paris commune during the French Revolution, called for the public ownership of industry per ‘scientific’ principles, where individuals would work according to their ability and everyone was rewarded according to services rendered. A workers’ newspaper, L’Artisan, first promoted the idea of worker co-operatives in 1830. Charles Fourier, the French equivalent of Owen, advocated co-operative communities as a solution to the problems of industrialization; and Philippe Buchez, the equivalent of King and a doctor, provided the movement with a set of principles that would give it direction and purpose. Buchez, inspired by Saint-Simon, advocated democratic governance, return of surpluses in proportion to the work done, the indissolu- ble nature of co-operative, with assets being transferred to another co-operative if the co-operative dissolved, and all workers gaining full membership to the co-operative after one year. Buchez set up an association of cabinetmakers in 1831 Origins of the idea 39 and inspired four workers to set up a jewelry workers’ co-operative in Paris in 1834. The socialist Louis Blanc, in his book L’Organisation du Travail (1839) advocated the idea of the social workshop; a worker co-operative with equal benefits shared among the members and receiving state aid (Battilani and Schröter, 2012, p. 5; Birchall, 1997, pp. 21–22, 2011, pp. 171–172; Forman, 1972, p. 30; Purvis, 1998, p. 159). Beyond worker co-operatives, there were experiments with consumer co-operatives, le Commerce Véradique et Social, which operated at Lyon from 1835 to 1837 (Watkins, 1970, p. 5), and in French Algeria in 1835, at Boufarik, near Algiers (Maunier, 1949, p. 640). Despite the collapse of the first co-operative movement, Owen showed an interest in organizing co-operatives on an international basis. In 1835 he announced a plan for an “Association of All Classes and All Nations,” later the Rational Society, that would promote and apply his ideas globally to create the “New Moral World.” The Association involved an annual congress of its membership, an administrative central board, and a network of local associations that numbered over 50 in 1839. The Association aimed to establish a central co-operative society with branches all over the world, eliminate competition, bring about the peaceful transformation of society, and build a society on a basis of common humanity without distinction of race, class, or color. There was a Home Department, based in Manchester, and a Foreign Department, based in London, but there is no evidence of any activity at the London office. There was a weekly paper entitled the New Moral World but the membership remained entirely British. Owen took a long European tour in 1837 but was unable to gain any foreign support for the Association (Cole, 1944, p. 57; Watkins, 1970, pp. 3–4). As Watkins notes, the Association was a “precursor of the International Co-operative Alliance” (1970, p. 4). Owen also shifted his interests away from trade unions and co-operatives back to the creation of co-operative communities, and there was hostility within Owenism to storekeeping as a way of fundraising to establish the communities. There was division between the Owenite socialists who called for a new social system and a group led by Owen who regarded Owenism as a new ‘rational religion.’ The idea of co-operative missionaries was revived in 1837 and a number were appointed. One notable missionary appointed in 1841 was George Jacob Holyoake, who had a background working at the Eagle Foundry in Birmingham, where he became a skilled whitesmith and shop supervisor, and was influenced by teachers who were staunch Owenites at the Mechanics Institute classes he attended from 1834 to 1840. A significant example of a co-operative community was Queenwood, or Harmony Hall, in East Tytherly, New Hampshire, established in 1839 on land purchased from the banker, Sir Isaac Goldsmith. Goldsmith was a friend of Owen and retained a mortgage over the property. There were several problems as the settlers lacked experience in farming and many of those who settled on the land had to leave to reduce costs as laborers had to be hired to cultivate the land. Financial difficulties increased, despite donations from wealthy sympathizers. There was instability in the management of Queenwood, with Owen serving as ‘governor’ on three occasions. The end came in June 1846 when the last governor was evicted 40 Origins of the idea and New Harmony was sold. Generally, workers had lost interest in Owenism and turned to Chartism to bring about social reform. At an individual level, Owenites such as Holyoake were highly critical of Queenwood. Holyoake called for communities for workers only, since they were the most in need, questioned Owen’s reliance on wealthy benefactors and control from above rather than grass roots democracy, lost faith in co-operative communities, and began to support the new movement of consumer co-operation associated with Rochdale (Cole, 1944, pp. 32–36, 57; Gurney, 1988, pp. 55–59; Purvis, 1986, p. 208).

The establishment of the Rochdale co-operative, 1844 Rochdale, an East Lancashire mill town 16 kilometers north-east of Manchester, by 1844 had a population of 20,000 inhabitants, with another 40,000 living in nearby villages. In 1804 a canal linked Rochdale to the major industrial centers of Liverpool and Manchester, and by 1840 Rochdale had regular train services. Its major industries were woolen manufacture, especially flannel, and the spinning and weaving of cotton goods. Flannel weaving had been practiced in Rochdale as early as the fourteenth century, but the first cotton mills were relatively recent and dated from about 1790. There was steam mechanization, with the first power looms being set up for cotton in about 1820 and for woolen milling in 1831. The handloom was still in wide use for woolen goods, including flannels, but the handloom weavers were facing increasing competition from steam-powered machinery. Wages were in decline for the handloom weavers and work was irregular. Both the cotton and woolen industries faced wild fluctuations in demand, with the flannel trade being hit hard by US tariff developments in 1828 and 1841, which led to a sudden and severe fall in exports. There were many handloom weavers in Rochdale and the surrounding districts, and the mechanization of the industry forced the urbanization of the trades, who lost contact with the land from which they could supplement their income with agricultural pursuits when times were bad. By the early 1840s economic depression had led to large-scale unemployment and hunger (Cole, 1944, pp. 39–42, 54; Thompson, 2012, pp. 3–4; Wilson, Webster, and Vorberg-Rugh, 2013, p. 34). The living conditions of the weavers were deteriorating as their status declined. There were reports of weavers clothed in rags and selling all their furniture to survive. Weavers could work 16 hours a day and ate oatmeal, potatoes, onion porridge, and treacle. There were insanitary conditions with smoke and squalor in Rochdale and half the streets having no sewers or drains. Many of the poor did not have access to a public water supply and remained dependent on wells. By 1848 the life expectancy in Rochdale was 21 years, compared to 27 for the whole of England. The apprenticeship system collapsed as new arrivals, such as agricultural workers, demobilized soldiers, and Irish immigrants, were prepared to undercut the journeymen weavers (Birchall, 1994, pp. 34–38; Cole, 1944, p. 51). The Rochdale workers tried to address these issues in a variety of ways. There was a strong involvement in religion, with an array of non-conformist religious sects, Origins of the idea 41 such as Wesleyan, Methodist Unitarians, and Baptists, and ideas such as teetotalism offering economic benefits because it saved money otherwise spent on alcohol. There were also Owenite socialists with their ‘rational religion,’ which rejected all theological beliefs. The Rochdale weavers unsuccessfully lobbied Parliament for a minimum wage and shorter hours. This led Rochdale weavers to join the Chartist movement, which eventually collapsed. There was trade union activity, with several strikes and riots, in 1808, 1827, 1829, 1830, and 1842. A major strike in 1844, despite the Weavers’ Union negotiating an agreement with more liberal employers, led to a major defeat and to the weavers looking for alternative solutions to their grievances, including emigration (Birchall, 1994, pp. 39–41). The Rochdale co-operative pioneers were influenced by the emerging co-operative movement. James Smithies, for example, had a bound copy of King’s The Co-operator, which he circulated among other pioneers, such as Samuel Ashworth (Birchall, 1994, pp. 40–41; Thompson, 2012, p. 14). During the earlier wave of co-operatives, a Rochdale Friendly Co-operative Society had been formed in 1830 following a strike by flannel weavers. The Rochdale co-operators called upon the Co-operative Congress in London in April 1832 to establish “a national co-operative manufactory,” which would include a co-operative woolen manufactory to gain economies of scale and reduce costs in the purchase of machinery, and the establishment of a missionary system (Carpenter, 1832, p. 121). By April 1832 the Society had 52 members and employed ten members and their families in the production of flannel (Carpenter, 1832; Cole, 1944, p.24). By 1833 there was a store at Toad Lane, which folded in 1835 due to the provision of excessive credit. Charles Howarth, a later Rochdale pioneer, was involved in this store. There was an interest in co-operative communities with some Owenites setting up a Social Institute in Rochdale and five of the Rochdale pioneers putting money into the Queenswood Owenite community (Birchall, 1994, pp. 39–41; Walton, 2015, p. 242). In the wake of the unsuccessful 1844 strike the weavers and others turned to co-operation, and at a meeting on August 15, 1844, a decision was made to form a co-operative in Rochdale. The Rochdale Society of Equitable Pioneers was registered under the Friendly Societies legislation on October 24, 1844, with 40 subscribers paying three pence a week to raise capital to open a store, which commenced business on the evening of Saturday, December 21, 1844, on the ground floor of a warehouse at 31 Toad Lane, Rochdale, with opening hours from 8pm to 10pm. There were some immediate issues, such as the small amount of capital to purchase stock, which affected the price and quality of the early goods for sale, which were sugar, butter, flour, oatmeal, and tallow candles. The Society appointed William Cooper as ‘cashier’ and Samuel Ashworth as ‘salesman,’ with an agreement that neither would be paid unless the store showed a surplus in the first three months. Shares were one pound each and the Society’s rules provided for a range of activities beyond running the store, including the construction of houses for members, the manufacture of goods, the purchase or rent of land for cultivation to allow the employment of the unemployed, and the opening of a 42 Origins of the idea

Temperance Hotel. Owenism was still an influence, with one objective being to establish a “self-supporting home colony” (Birchall, 1994, pp. 42–43; Holyoake, 1893, pp. 10–13; Thompson, 2012, pp. 37–39). Who were the original 28 subscribers or Rochdale pioneers? They were all male and largely came from skilled and supervisory occupations. Of the 17 men associated with the textile industry, probably only eight were weavers. The rest virtually all came from the skilled occupations found in most early Victorian towns in England, including carpenters, shoemakers, a tailor, and a pattern- maker. There was also a coalminer and a hawker or itinerant dealer. Most of the pioneers grew up in Rochdale and the surrounding communities and there was a strong representation of non-conformist religions such as Methodism, with an absence of Roman Catholics. It has been estimated that about half of them were Owenites and there were nine Chartists. While the original 28 subscribers were all male, the first woman to join the Society in her own right was Eliza Brierley in 1846. Some of the pioneers, such as Samuel Tweedale, had good connec- tions with businessmen who could assist with advice, patronage, and contacts (Birchall, 1994, pp. 42–43; Walton, 2015, pp. 2026–2046). While the formation of the Rochdale co-operative and its principles has influenced the development of the international co-operative movement, it brought together ideas from other co-operatives and organizations that predated it. They based their first rules on the Rational Sick and Burial Society, which had been formed in Manchester in February 1842. The Society arose from an Owenite critique of friendly societies, which were viewed as having too high surpluses and as wasting money on processions and feasts (Holyoake, 1893, p. 11; Garnett, 1972, p. 193). The democratic principles of one member and one vote also underlaid Chartism, trade unions, friendly societies, non-conformist chapels, and other co-operatives. The rules of the flourishing Ripponden Co-operative, which was approximately 16 kilometers from Rochdale, provided for democratic government and admitted women as members as early as 1833, with 19 female members by 1842. The idea of fixed and limited interest on invested capital was one of Owen’s principles, while the concept of a dividend on purchases was found in earlier co-operatives from the mid-1820s, such as Lennoxtown in Scotland and Meltham Mills in Yorkshire. Alexander Campbell, the Scottish socialist and co-operator, had advocated a dividend on purchases since 1822 and had lectured in Rochdale in 1840. He claims also to have been consulted by the Rochdale pioneers in 1843 and 1844. Owenites, however, were critical of surpluses being returned to members rather than being directed towards the building of co-operative communities. There was a long- standing concern about the provision of credit to workers and a preference for cash payment dating back to the flour mill and baking co-operatives. As noted previously, the April 1832 Co-operative Congress in London adopted a report rejecting credit and an earlier Rochdale co-operative had failed for providing excessive credit for members. Further, Owenite labor exchanges faced growing debt issues by allowing members credit before their goods were sold (Birchall, Origins of the idea 43

1994, pp. 54–59; Carpenter, 1832, p. 103; Cole, 1944, pp. 63–70; Hibberd, 1968, pp. 545–546, 548–549; Potter, 1891, pp. 62–67; Priestley, 1932, pp. 32–33, 160–161; Thompson, 2012, pp. 96–97). Overall, as Wilson, Webster, and Vorberg-Rugh argue:

whether or not it was the first modern consumer co-operative, and whether or not it represented a decisive new direction compared to earlier experiments, it is clear that Rochdale did seem to capture the imagination of the movement, and certainly inspired many imitators. (2013, p. 36)

Conclusion While there is recognition that the notion of human co-operation dates to antiquity, the modern co-operative movement is linked to industrial revolution, particularly in the UK, where there was a major upheaval of traditional life and growing inequality for the rising army of industrial workers and their families. The early period highlights two approaches to the development of the co-operative movement. One approach involved creating a ‘New Moral Order’ through co-operative communities such as Orbiston in Scotland and New Harmony in the USA, which eventually failed, and changing capitalist society. Another approach was to work within capitalism to improve the conditions of working life through establishing consumer-owned stores or worker co-operatives. These two approaches remained themes in co-operative thinking well beyond this period. While the formation of the Rochdale consumer co-operative is a landmark in the international history of co-operatives, it drew upon a rich earlier history of co-operatives that includes flour and bread co-operatives in England and a wave of co-operatives in Great Britain and Ireland inspired by Owen and King in 1826–1834. While this wave collapsed, there was continuity, with some societies surviving and new societies forming between 1834 and 1844. These co-operatives followed many of the practices and principles that the Rochdale consumer co-operative pioneers viewed as the cornerstone of their co-operative business model. The chapter also highlights that the UK was not the only source of the development of the co-operative idea, noting French thinkers such as Philippe Buchez. The next chapter explores the expansion of the Rochdale model, both within the UK and beyond, and its movement into co-operative wholesaling. It also examines the development of worker co-operatives and explores the rise of new models of financial co-operatives, particularly in the German states.

Notes 1 Australasian Chronicle, August 30, 1839, p. 2; Sydney Gazette and New South Wales Advertiser, November 17, 1840, p. 2. 2 The Crisis, September 7, 1833, p. 3. 44 Origins of the idea

3 The Crisis, May 26, 1832, p. 39; June 30, 1832, pp. 59–63; September 29, 1832, pp. 118–119. 4 The Crisis, January 11, 1834, p. 156; March 29, 1834, pp. 249–250. 5 The Co-operator, May 1, 1828, p. 1. 6 The Co-operator, October 1, 1828, p. 4. 7 The Co-operative Magazine and Monthly Herald, June 1826, pp. 194–199; July 1826, pp. 226–227. 8 The Crisis, October 19, 1833, p. 58. 9 The Crisis, June 9, 1832, p. 46. 10 The Crisis, September 8, 1832, p. 108; December 8, 1832, pp. 157–159. 11 The Crisis, June 15, 1833, pp. 182–184; August 24, 1833, pp. 268–269. 12 The Crisis, May 12, 1832, p. 27; July 13, 1833, pp. 214–215. 13 The Crisis, March 29, 1834, pp. 252–255; April 5, 1834, p. 260. 14 The Co-operative Magazine and Monthly Herald, January 1826, pp. 15–16; October 1826, pp. 301–306. 15 The Co-operative Magazine and Monthly Herald, April 1828, p. 74.

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This chapter explores the early problems that consumer co-operatives faced in the UK and the continued expansion of co-operative ideas and institutions. The early UK consumer co-operatives faced issues of capitalization and supply chain management, which highlighted the need to look at co-operative financing and wholesaling. The Rochdale consumer co-operative movement spread into Europe and worker co-operatives developed in France and the Italian states. There were also significant developments in the German states with Hermann Schulze- Delitzsch and Friedrich Wilhelm Raiffeisen promoting their ideas of financial co-operatives to resolve problems for workers and farmers trying to obtain credit following famine and the Revolution of 1848. This period also saw the spread of co-operatives beyond the UK to North America and Australasia. The ideas of the Rochdale movement received coverage in the local press and emigrants from the UK carried these ideas with them.

Rochdale and beyond During the 20 years that followed the foundation of the Rochdale co-operative in 1844 there was economic growth and improvements in the wages and conditions of skilled workers. While the 14 percent growth in money wages between 1850 and 1860 had to some degree been undermined by an increase in the cost of living of approximately 11 percent, there was less unemployment, more regular work, and an increase in real earnings. In the woolen trades the male powerloom weavers earned about ten shillings and nine pence by 1849 and about 18 shillings by about 1860. Employers, particularly in the cotton trade, were more willing to recognize and negotiate with trade unions. While there remained many workers who could not afford to save and were reliant on the credit provided by small private shopkeepers, the increasing number and proportion of the relatively prosperous skilled 48 The early years trades could afford to provide the working capital for the growing co-operative movement. There were setbacks with a trade depression in 1857–1858 and the US Civil War leading to a ‘Cotton Famine,’ initially through a Confederate boycott and later a Union blockade, in the early 1860s, with 8,359 unemployed and 27 percent of the population receiving relief in Rochdale in 1863 (Cole, 1944, pp. 82, 92; Holyoake, 1893, pp. 98–99; Thompson, 2012, pp. 66–67). As Table 3.1 highlights, the Rochdale store underwent dramatic growth during its first 20 years, with membership growing from 28 in 1844 to 4,747 in 1864. There was a growth of membership in 1850 following the collapse of the Rochdale Savings Bank in the previous year when workers lost their savings as the bank’s owner used their savings to offset losses in his other businesses. The store attracted investors as it offered a high rate of interest on investments, had security in its assets, and through its democratic procedures provided investors with some degree of control. There was a dip in membership and economic performance in 1862 due to the Cotton Famine, with the Rochdale store and associated organizations providing £1,500 towards unemployment relief. The Rochdale co-operative’s capital had grown to £62,000, which provided them with sufficient capital for expansion. In early 1845 the store began to open every evening and in 1851 decided to keep the store open all day and every day. New items were added to the store’s inventory and as demand grew separate departments were established under specialist managers. It extended its range of goods to include butcher’s meats, drapery, tailoring, bootmaking, and shoemaking. In 1849 the co-operative acquired the whole lease of the Toad Lane building and opened a newsroom and book department on the upper floors. In 1853 a separate subscription for member access to the newsroom and book department was abolished and 2.5 percent of the trading surplus available before distribution was allocated to the cost of the newsroom and book department. This was the beginning of an education fund and the Pioneers’ Newsroom Committee was a forerunner of the co-operative’s education committees (Birchall, 1994, p. 47; Cole, 1944, p. 84–85, 92–93; Holyoake, 1893, pp. 30–31, 104; Thompson, 2012, p. 48). The Rochdale co-operative also expanded by opening branches from 1856. The first branch in Oldham Road was a result of members wanting to have a store in their Rochdale neighborhood. There were concerns that the opening of branches could lead to competition with other nearby co-operatives, but in the case of the Castleton co-operative this was overcome by an agreement to absorb the co-operative and become another branch in 1857. Further pressure by local members in 1859 led to the opening of a co-operative at Bamford in direct competition with the Hooley Bridge Co-operative, despite its protests. After this the number of branches multiplied and independent co-operatives were absorbed; there were nine branches by 1863 (Cole, 1944, p. 91; Holyoake, 1893, pp. 36, 129, 143–145). According to Holyoake the branch stores were “cheerful, whole- some, and not unpleasing buildings” (1893, p. 102). The Rochdale co-operative also began using its accumulated capital to move beyond storekeeping and towards vertical integration. A Rochdale co-operative The early years 49

TABLE 3.1 The Rochdale pioneers’ store, 1844–1864 (Holyoake, 1893, p. 142)

Year Membership Funds £ Business turnover £ Profits, including interest £

1844 28 28 – – 1845 74 181 710 22 1846 80 252 1,146 80 1847 110 286 1,924 72 1848 149 397 2,276 117 1849 390 1,193 6,611 561 1850 600 2,289 13,179 880 1851 630 2,785 17,633 990 1852 680 3,471 16,352 1,206 1853 720 5,848 22,700 1,674 1854 900 7,172 33,374 1,763 1855 1,400 11,032 44,902 3,109 1856 1,600 12,920 63,197 3,921 1857 1,850 15,142 79,789 5,470 1858 1,950 18,160 74,680 6,284 1859 2,703 27,060 104,012 10,739 1860 3,450 37,710 152,063 15,906 1861 3,900 42,925 176,206 18,020 1862 3,501 38,465 141,074 17,564 1863 4,013 49,961 158,632 19,671 1864 4,747, 62,105 174,937 22,717

corn mill began operations in 1850 to supply corn to the Rochdale co-operative and other co-operative societies in Lancashire, with the mill supplying 52 co-operatives by 1852. One motivation was the need to provide the store with its own cheaper, high quality, and unadulterated flour. It initially operated an old mill that it rented and repaired and in 1856 built its own mill. Despite some initial problems with the quality of the output and the miller’s neglect or lack of skill, the mill continued to flourish until it was taken over by the CWS in 1906. The co-operative next established the Rochdale Co-operative Manufacturing Society (RCMS) in 1854 and began renting mills, initially focusing on running power- looms, but branching out into spinning and weaving, and building their own mill in 1854. By 1864 the corn mill had capital of nearly £47,000 and the RCMS of nearly £83,000 (Cole, 1944, pp. 84–85, 89, 93; Holyoake, 1893, pp. 115–118; Jones, 1894, p. 199). Both the corn mill and the mills were independent ventures separate from the Rochdale co-operative, with the Rochdale co-operative investing the capital and having a number of its leaders active on the committee of management. They were producer co-operatives not worker co-operatives, as most shareholders were not workers. The Rochdale Society saw itself as a consumer co-operative and there was a view that the workers in these productive concerns would become shareholders and receive interest on their capital and a share of profits as a bonus 50 The early years on their wages. The RCMS had the Rochdale Society as a shareholder, with most of the capital being invested in small amounts by individual members of the consumer co-operative. These non-worker investors, however, opposed the workers’ bonus in the RCMS at the expense of interest on share capital, particularly during periods of poor demand, and in 1862 succeeded in abolishing the bonus against the background of the Cotton Famine. By 1862 only 50 of the 500 RCMS employees were shareholders and, as Cole notes, the RCMS “was thus converted into an ordinary profit-making concern . . . [and] ended the great Rochdale experiment in Producers’ Co-operation” (Cole, 1944, pp. 89–90). The Rochdale co-operative also ventured into other activities. They set up the separate Rochdale Co-operative Land and Building Company in 1861 to build housing for workers, with Company shares being owned by the workers and outside investors. The Company had built 25 houses by 1864 and remained in operation until at least 1888. In 1860–1861 the Rochdale co-operative also launched the Rochdale Equitable Provident Sick and Benefit Society as a friendly society to benefit members (Cole, 1944, p. 92). While the Rochdale co-operative may have not continued with producer co-operatives, there was interest elsewhere. Trade unions were involved in promoting the idea of producer co-operatives with the failure of the Owenite community at Queenwood. John Drury, the leader of Sheffield trade unionists, formed the National Association of United Trades for the Protection of Labour in 1845. While its major role was resistance to wage reductions, its leaders saw producer co-operatives as a way of raising money for a fund, administered by the National United Trades Association for the Employment of Labour, to support workers in industrial disputes. By 1847 the fund employed 123 workers in trades that required very little capital, such as bootmaking, and in 1848 the two Associations merged. The movement faded after it became involved in a strike in 1849, when employers prosecuted both the strikers and the leaders of the Association for incitement for breach of contract and offenses. The Association gave up its focus on producer co-operatives and remained in existence until 1860–1861, focusing on amendments to labor law (Cole, 1944, pp. 99–100). Another group that promoted producer co-operatives both on the land and as self-governing workshops was the Leeds Redemption Society, formed in 1846 in Leeds by a group largely of Owenites. Workers would subscribe a penny a week into a fund to be used for the ‘Redemption of Labour.’ They took a leading part in the establishment of the Leeds Co-operative Corn Mill in 1847 and of the Leeds Co-operative Store in 1852. The Society was also presented with an estate of 220 acres at Garnlwyd in South Wales in 1847, on the condition that it was organized along co-operative lines, and the Redemptionists worked the land and erected workshops, supplying products to the co-operative societies in Leeds and elsewhere. The Redemptionists opened a co-operative store in Leeds, with part of the profits being sent to the Welsh co-operative community. The Leeds Society established branches at a variety of locations, including London, Bury, Brighton, Huddersfield, and Liverpool, to gain support for the co-operative community. The early years 51

The community continued to operate until 1854, when the estate was abandoned and handed back to the owner. The Bury Redemptionists started a co-operative store in 1850, which operated for four years, and helped local bootmakers win a strike by forming a co-operative. In Liverpool a project in 1851 involved the Amalgamated Society of Engineers (ASE), which was recently formed as a craft union covering skilled metal trades, in buying the Windsor Foundry, which had recently failed, and started it as co-operative workshop. The Windsor project was unsuccessful as the ASE’s available funds were diverted to fighting a major employer lockout in 1852. The Leeds Redemption Society ended its operations in 1855, with surplus funds being distributed to public institutions in Leeds (Cole, 1944, pp. 100–101; Jones, 1894, pp. 96–109). While there were no apparent links to the Redemption movement in the north of England, the emerging Christian Socialists in the south of England were interested in co-operation, particularly co-operative production. John Ludlow, Frederick Maurice, and Charles Kingsley, who were three Christian intellectuals concerned with the impact of industrialization on the very poor, believed that the social evils and selfishness around them seemed inconsistent with the goodness of God and formed the movement in 1848. They subsequently recruited Edward Neale, a wealthy barrister, who funded some of their initiatives. While attracted to the socialist ideas of Owen, they rejected the more atheist tendencies of Owenism, particularly the idea that the character of humans is shaped merely by their circumstances and that improved circumstances alone would remove selfishness. They were influenced by ideas from France, particularly about co-operative workshops, from promoters such as Buchez and Blanc in the wake of the French Revolution of 1848, which ended the monarchy and established the Second Republic. The group was further inspired in 1849 by the author Henry Mayhew’s study of slum conditions and the sweating system in London. They also supported trade unionism, industrial conciliation and arbitration, factory legislation, and political reform. The rise of Christian Socialist activism coincided with a growing disillusionment about Chartism; and there was a desire among Christian Socialists to provide workers with an alternative in the wake of the defeat of Chartism. (Cole, 1944, pp. 97–98; Jones, 1894, p. 111; Watkins, 1970, p. 10; Webb, 1919, pp. 71–75; Wilson, Webster, and Vorberg-Rugh, 2013, p. 44). The Christian Socialists launched the Association of Working Tailors in London in February 1850 to combat sweating in the clothing industry, and developed the Society for Promoting Working Men’s Associations (SPWMA) in June 1850 to oversee the growing movement. They further established Working Associations for Bakers, Printers, Builders and Tailors, and to challenge the exploitation of women workers in sweatshops they also established a London Needlewomen’s Association. Except for the latter, it was expected that all the Associations would turn into self- governing co-operative organizations with the capital advanced by a Council of Promoters, which consisted of leading Christian Socialists, being repaid gradually out of profits. The members or ‘associates,’ who chose their own manager, would receive wages based on a “fair day’s remuneration for a fair day’s work” and a share 52 The early years of the net surplus. One third of the net surplus was set aside to increase capital, with workers receiving interest on the capital equally but unable to receive any payment on the principle. Hired workers would receive the same wages as associates and an additional sum in lieu of any share of profits. There were problems in the early Associations regarding the careful recruitment of associates in terms of skills and commitment, internal disputes (particularly if the demand for their output declined), and conflicts with managers. There were expulsions of members and several of the Associations had to be reconstituted. Co-operative stores were established in London—the London Co-operative Stores, formed by Neale in October 1850—and Liverpool, to sell co-operative products (Cole, 1944, pp. 97–99, 102–103; Jones, 1894, pp. 112–122; Webb, 1919, p. 73). The Christian Socialists were also interested in obtaining support from the trade unions for their ideas, with discussions with the ASE over the possibility of establishing co-operative workshops in London. After their defeat in a lockout the Executive Council of the ASE in April 1852 passed a resolution to support a system of self-employment in “associative workshops” as way of regulating workers’ wages as the “hostile” resistance of labor to capital did not improve workers’ conditions. While the ASE was unable to provide funding, Neale and his cousin put up money to finance schemes of co-operative production in the London engineering trades. There were four co-operative associations established in London by June 1852, which acquired factories. The Atlas Ironworks Company in Southwark, for example, was formed in March 1852, and by August 1853 had ten members and employed an average of 60 workers. While it had capital of £3,500 and had earned £4,500 since its formation, it faced major issues with obtaining orders. Other associations had problems with insufficient capital. Despite ASE support for associative workshops, insufficient funds due to the lockout, and internal divisions over the strategy led to the demise of the experiment with co-operative production in engineering (Cole, 1944, pp. 108–109; Jones, 1894, pp. 132–136; Lumley and Shorter, 1853, p. 33). The Christian Socialists meanwhile faced their own difficulties. The movement they had started was passing out of their control to the co-operative societies. There were concerns, particularly by Ludlow, Maurice, and Kingston, that the need for individual and moral conversion as part of co-operative production was not occurring and that participants in the Working Associations were not being carefully selected on moral and Christian principles. There were tensions with Owenites, who were not traditional Christians and were even atheists, and who had a strong influence on trade union and co-operative leaders. Neale, though a Christian, was willing to work with the Owenites and other secular groups to form a national consumer and producer co-operative movement. The clergy attacked the Christian Socialists for being revolutionaries through their association with Owenites and for stirring up workers, with the expulsion of Maurice in 1853 from his professorship at King’s College, London, on a charge of unorthodoxy. The more religious Christian Socialists began to withdraw from co-operative activities and transfer their focus to education with the establishment The early years 53 of the Working Men’s College in London in 1853–1854. The SPWMA, mirror- ing new legislation, became the Society for Promoting Industrial and Provident Societies, but wound up in 1854. While some Working Associations continued after 1854, such as a Working Shoemakers’ Association that was still operating in 1863, the formal movement had ended (Cole, 1944, pp. 110–112; Jones, 1894, p. 117; Webb, 1919, p. 74). The early co-operative movement found it necessary to engage in political lobbying to improve its economic and social environment through favorable legislation. There were limitations on what workers could do in terms of electoral politics, as it was not until the Reform Act of 1867, which extended the franchise to all adult male property owners and dwelling occupants who had been resident for at least 12 months, that the more affluent sections of the urban working class could vote. While the early co-operatives registered under Friendly Society legislation to obtain legal status, the revised Act of 1846 remained problematic from the viewpoint of the co-operatives. Co-operatives could only trade with their members and there was no provision for them to federate. The Christian Socialists, who included skilled legal draftsmen such as Ludlow and Neale, believed that previous failures highlighted the need for specific legislation for co-operatives to grow and flourish. They had influential parliamentary allies and secured the passage of the Industrial and Provident Societies Act (IAPSA) of 1852, which gave the co-operatives recognized legal status. While the legislation retained all the privileges of the Friendly Society legislation, they were no longer required to register as joint-stock companies to obtain legal protection if they had more than 25 members and had their own status parallel to that of companies. Unlike companies, the legislation restricted the transferability of shares by requiring shareholders to either sell them back to the co-operative or to secure the consent of the board of management to transfer them to another individual. This prevented outside investors from taking control, as in the case of the RCMS. Further, unlike companies, the legislation allowed individuals a maximum shareholding of £100, usually in shares of one pound each. To encourage capital investment by members and reduce reliance on outside investors, members could invest up to a further £400 in loan capital—creating the distinction in co-operatives between share and loan capital. The Christian Socialist SPWMA in September 1852 published a set of model rules for co-operative societies, which were approved by the government’s Chief Registrar (Cole, 1944, pp. 97, 110, 118–119; Kirk, 1994, p. 170; Watkins, 1970, p. 10). The 1852 legislation did extract a ‘price’ for co-operatives, as they had to be registered and annually present their accounts to the Registrar. It also fragmented the co-operative movement by making implicitly illegal certain activities that would have led to a recasting of capitalist society, and by encouraging workers to be members of separate entities, such as trade unions, friendly societies, or co-operatives (Purvis, 1998a, p. 158). There were still issues for the co-operatives, despite the passage of the IAPSA. The legislation did not give the co-operatives limited liability, exposing members to responsibility for the whole of the co-operative’s debts, still contained no provision that allowed co-operatives to federate and invest in other co-operatives, 54 The early years and did not include education as a permitted objective. Another area of concern was income tax. The Friendly Society legislation of 1842 had exempted friendly societies from tax on any income derived from government securities, which was the form in which friendly societies generally held their funds. There was a further exemption for friendly societies on income tax arising from the profits of trade in 1853, but this was not extended to co-operatives. In protest the Rochdale co-operative refused to pay income tax on their trade profits from 1856, with the authorities not enforcing payments despite their initial protests. These limited liability, federal organization, income tax, and education problems were overcome by amendments to the IAPSA in 1862, which also raised the sum that an individual could hold in share capital to £200 and removed the limit on the total funds that could be obtained through loans (Cole, 1944, pp. 86, 110, 119–121, 123, 129; Webb, 1919, p. 18). As Purvis noted, despite these amendments co-operatives remained in a legal framework “that emphasised the commercial rather than the social or political nature of co-operation” (1998b, p. 158). The Rochdale co-operative, in addition to its own success, played an important role in the spread of consumer co-operation throughout Britain. There are several factors that aided this expansion, in addition to an increasingly favorable legal environment and the promotion of co-operation by a range of groups, including Christian Socialists and Redemptionists. Beyond Rochdale there were rising living standards for workers, particularly for workers in skilled occupations. This led to workers having rising consumer expectations in a retailing environment dominated by family-run general stores, where goods were packaged in the store without guarantees regarding weight and quality, with high prices, and the possibility of credit and indebtedness to the store. Further, the expansion of the railways created a national market for food and provided regular delivery of food even to remote areas, allowing a regular supply of fresh fruit and vegetables, milk, and fish for the first time to workers and their families. The consumer co-operatives did not have any major rivals as chain stores did not begin to emerge until the 1870s and department stores did not take off until the end of the century. The co-operatives provided workers with dividends and a safe place to put their additional savings in shares or the provision of loans to the co-operative. They were also democratically run and committed to unadulterated food at fair prices (Birchall, 1994, pp. 66–72, 77; Jones, 1894, p. 99; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 42–43). The Rochdale co-operative did not keep its success to itself and promoted its business model to others. Using the cheap and quick penny postage system, invented in 1840, William Cooper, the auditor and later secretary of the Rochdale co-operative, wrote many letters to others highlighting the development of the Rochdale co-operative, with one estimate being that he wrote 1,600 letters in two years just on the issue of co-operative law reform. The general press, such as Reynolds’s Newspaper and Lloyd’s Weekly, and the regional press, such as the Newcastle Chronicle, provided publicity for co-operative activities. There were specific co-operative journals, such as The Co-operator founded by the Manchester and Salford Co-operative Society in 1860, and The Scottish Co-operator, which became The early years 55 focal points for discussion about co-operative development. Holyoake, the former Owenite missionary, wrote a history of the Rochdale pioneers, which was published in 1857 and had a wider effect not only in Britain but internationally with translations into many languages including French, Spanish, and Italian. It was reprinted 13 times between 1858 and 1907. Holyoake went on lecture tours explaining the Rochdale system, for example visiting Scotland on several occasions. Readings from his book during lectures at the Blaydon Institute in north-eastern England were a prelude to the establishment of the Blaydon consumer co-operative in December 1858. Holyoake’s tireless efforts on behalf of the co-operative movement before his death in 1906 were built on his belief that Rochdale co-operatives addressed a crucial problem for the working class—the need for workers to accumulate their own capital. John Stuart Mill, the great philosopher and economist, wrote in great length and detail about co-operatives, quoting from Holyoake’s history in his Principles of Political Economy (Birchall, 1994, pp. 72, 76–77; Flanagan, 1920, p. 37; Gurney, 1988, pp. 60–61; Hugman, 1996, p. 69; Klinoch and Butt, 1981, p. 19; Purvis, 1990, p. 326). As Birchall notes, modern editions of Mill’s book unfortunately cut out Mill’s discussions of co-operatives, and “so not many people appreciate just how keen Mill was on Co-operation” (1994, p. 76). The Rochdale movement encouraged the growth and geographical disper- sion of consumer co-operatives throughout Britain. In 1847–1848 several stores based on the Rochdale model developed in nearby locations to Rochdale, such as Bacup, Middleton, and Salford, with the Bacup store being formed after a strike in which local retailers sided with the employers and refused credit. There were 192 co-operatives in England and Wales by 1851, many of which had fewer than 50 members. Of these, 150 were in the north-west of England and in Yorkshire. There were 13 London societies and the remaining co-operatives were scattered in centers where there were relatively large numbers of skilled workers. From 1852–1857 the number of societies remained around 200, with 99 new retail co-operatives offset by the failures. One new co-operative was in Bury, which started business in 1856 and was largely promoted by the Redemptionists in the wake of their failure to establish their own store in the town. There was a geographical retreat of co-operatives, with northern English dominance increasing and the failure rate of northern co-operatives being marginally lower. There was another wave of consumer co-operatives in England and Wales between 1858 and 1863, with the numbers more than trebling before the impact of the Cotton Famine on northern England. Co-operation provided a buffer against fears of rising food prices due to European political upheavals and a possible war with France. While it is estimated that 6 percent of the population of England and Wales were members of consumer co-operatives by 1861–1862, the co-operative movement tended to be concentrated in Yorkshire and the north-west, with 20 percent and 15 percent respectively of the population being a member of a consumer co-operative. London remained the main co-operative center in England outside the north with 2.7 percent, and Wales with only 1.5 percent (Jones, 1894, p. 99; Potter, 1891, pp. 77–78; Purvis, 1990, pp. 314–326). 56 The early years

There was also growth occurring in Scotland, with an upsurge from 1860 to 1864, with the 142 societies, which were generally consumer co-operatives, registering under the IAPSA. In 1862 a survey found that 16 of the Scottish co-operatives had 4,687 members, with the largest being the Glasgow Co-operative Society with 1,810 members and nine branches, which expanded beyond its financial resources and failed in 1864. In Scotland consumer co-operatives were found more in the industrial midlands than in rural areas (Cole, 1944, p. 151; Klinoch and Butt, 1981, pp. 2–18). Why did regional variations occur in the early consumer co-operative movement? Many successful consumer co-operatives were established in growing communities where there were insufficient retail outlets to meet the demands of a growing population. Co-operatives tended to flourish in close communities, such as Durham coalmining villages, which were discrete both occupationally and geographically, and had a colliery that was the center of economic life for decades. Railway workers also carried the idea of co-operatives with them as railways expanded in England with the Gateshead Industrial Co-operative Society, which was begun by workers of the North-East Railway Company, using an arch under a railway bridge as their first store. In larger commercial centers, however, there was more competition and more heterogeneous communities with a range of occupations and interests. There were also larger numbers of service workers, particularly domestic workers, in these larger centers, who did not identify with other workers. Co-operatives failed to take off in rural areas because they were more sparsely settled and there was less familiarity with co-operative shopping. Co-operative stores established in geographical isolation were also particularly vulnerable as they could not gain assistance from more established co-operatives in terms of practical knowledge. One anomaly is South Wales, where co-operation did not catch on despite the presence of coalmining communities; religious rivalries undermined the sense of a wider identity, retarding co-operative growth, and there was the persistence of company stores using the truck system, and indebtedness through the credit provided by grocers. The survival and spread of consumer co-operatives is also explained by the level of opposition from employers, and particularly from private retailers who could undercut prices, induce wholesalers not to supply the co-operative, and spread rumors about poor co-operative service and mismanagement. (Birchall, 1994, p. 76; Hugman, 1996, p. 69; Purvis, 1990, pp. 325–329).

The rise of co-operative wholesaling While many co-operatives had to develop relationships with private sector wholesalers to survive, as there were no viable co-operative alternatives, there were early examples of opposition from some wholesalers and manufacturers to supplying co-operatives. Some private retailers saw co-operatives as unwelcome competition and threatened boycotts of wholesalers who supplied co-operative stores. In 1864 at Cramlington, near Newcastle, the co-operative store could not obtain flour The early years 57 despite obtaining quotes, with supplies eventually being obtained from a Newcastle merchant on condition that his identity was kept secret. There were also concerns about consumer co-operatives bidding against each other in a competitive market. In the early years of the movement in Great Britain the purchasing of goods to sell was a major concern for co-operative management committees, with the newer co-operatives having little knowledge about where and when to buy. The Jarrow and Hebburn Society obtained assistance in 1861 from a local private grocer who was willing to buy goods on the London market for them for a small commission. The co-operatives hired managers and buyers to assist with wholesale purchases not only from their own ranks but also by advertising through the regional press, with applicants having retail experience generally from the private sector. The co-operative buyers and managers were generally subject to greater scrutiny than in other retailers (Purvis, 1998b, pp. 57–61; Redfern, 1913, p. 41). The Rochdale Society in 1850 tried to form a wholesale co-operative agency with other co-operatives, but instead by 1851 set up its own wholesaling arrangements to supply co-operatives in the surrounding area. The Society altered its rules in October 1853 to provide for retail and wholesaling departments, and appointed its own special wholesale trade committee to act as wholesale dealers for co-operatives. Co-operative Congresses in the 1850s debated the need for a national co-operative wholesale society and the Rochdale Society appeared to be able to fulfill this function. The wholesaling, however, placed a strain on the Rochdale Society’s finances and became a source of major disagreement within the society. While financial losses led to the closure of the wholesale department in 1858, the Rochdale Society continued to do a small amount of wholesale trading, particularly in yeast. In 1862, while north-eastern English co-operative societies also attempted unsuccessfully to establish a co-operative wholesaler, a Midlands Counties Wholesale Society was established in Northampton, which grew to 14 local co-operatives as members before its demise in 1870 (Cole, 1944, pp. 86–87; Holyoake, 1893, p. 124; Lumley and Shorter, 1853, pp. 12–14; Purvis, 1998b, p. 66; Redfern, 1913, pp. 15–16; Wilson, Webster, and Vorberg-Rugh, 2013, p. 48). The Christian Socialists also showed an interest in co-operative wholesaling. In May 1851 Neale converted his London Co-operative Society into the Central Co-operative Agency (CCA), which aimed to become the co-operative wholesaler for the whole movement and a place where Working Associations could sell their output—despite it being based in London, while the main strength of consumers’ co-operatives was in the north with a demand for a limited range of commodities, such as tea. Disagreements over the registration of the co-operative wholesaler as a joint-stock company, resulted in the formation of a rival wholesaler, the Universal Provider, which received some co-operative support, with the Rochdale Society purchasing from both wholesalers. After some success, both failed, and the CCA was wound up in 1857. Among the problems were the continued reliance on wealthy idealists such as Neale, with organizations such as the CCA being created from above rather than below, and the middle-class promoters expecting repayment on 58 The early years their loans. Unlike the later CWS, the CCA was not a federation of co-operatives and the co-operatives had no direct involvement (Cole, 1944, p. 103, 110–113; Redfern, 1913, p. 13; Wilson, Webster, and Vorberg-Rugh, 2013, p. 48). The push for a wholesale society came at a meeting of co-operative activists at the co-operative Jumbo Farm near Middleton, Lancashire, in August 1860. This farm was founded in 1851 and was influenced by Feargus O’Connor, a Chartist, who called for the establishment of “land colonies” or co-operative communities, where shareholders were offered a chance to win a cottage and a few acres of land in a lottery (Birchall, 1994, p. 39; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 49–50). It was a popular meeting place for co-operators given its location near co-operative centers such as Manchester and Rochdale (Thompson, 2012, p. 76). The question of a co-operative wholesaler was linked to the need to reform the IAPSA to allow federal co-operatives, with subsequent meetings moving to set up a co-operative wholesaler once the law was amended. In December 1861 a Rochdale conference of co-operators also decided to establish a co-operative wholesaler after the passage of the revised legislation, with co-operatives paying a levy of one halfpenny per member to cover the initial costs (Cole, 1944, p. 142; Redfern, 1913, pp. 21, 26). The final push to enter co-operative wholesaling came in 1863 with the formation of the CWS. The 1862 amendments to the IAPSA provided the legal basis for the CWS by authorizing co-operatives to hold shares in another co-operative and allowing them to advance capital. A special conference of 200 co-operative delegates from all over England, Dublin in Ireland, Glasgow in Scotland, and Landore in South Wales gathered in Manchester in April 1863 to establish the CWS under the initial title of the North of England Co-operative Wholesale Agency and Depot Society Limited. Abraham Greenwood, son of a small blanket manufacturer in Rochdale and member of the Rochdale Society since 1846, put forward the proposal for co-operative wholesaling. The Rochdale Store with its central store and branches provided a model for the CWS to provide goods to co-operatives on a cost-price basis, with a commission to cover its costs, and to minimize stock to reduce the risk of price fluctuations undermining capital. Although the CWS, as a federation of retail co-operatives or a ‘co-operative of co-operatives,’ was legally limited to a subscription of £200 each. There was also an initial provision for 12 individual ‘original members’ to subscribe to the CWS and supplement capital by providing up to a further £200 each, although they only took up one five-shilling share each. Individual membership disappeared in 1868 after amending legislation removed the limitation on investment by societies. The retail societies elected the General Committee and considered resolutions by the Committee at half-yearly or quarterly meetings of society representatives. The new wholesaler was registered under the IAPSA in August 1863 and by October 1863 48 retail co-operatives had joined. It appointed a temporary buyer in December 1863, and commenced trading in a small warehouse in Cooper Street, Manchester, on March 14, 1864, with butter, coffee, tea, sugar, and soap being among its first goods (Birchall, 1994, p. 76; Cole, 1944, pp. 123, 142–144; Holyoake, 1893, p. 129; Redfern, 1913, The early years 59 pp. 30–31; Webb, 1919, p. 106; Webster, 2012, pp. 886, 890; Wilson, Webster, and Vorberg-Rugh, 2013, p. 1). While the CWS sold only to co-operative stores, the co-operatives were free to buy from elsewhere, which undermined the CWS and strengthened private competitors (Purvis, 1998b, p. 57).

Co-operatives in Europe and the rise of financial co-operatives There were local influences underlying the development of mainland European consumer co-operatives in the mid-nineteenth century as well as the Rochdale example in Britain. Co-operative bakeries that distributed bread and other pas- tries developed in several cantons in Switzerland in the first half of the nineteenth century. They were initiated by laborers, who wanted to keep living costs down, with the support of philanthropists and industrialists. There was also political and economic turmoil in Switzerland with a brief civil war in 1847. A major development was the foundation of the Konsumverien Zürich (KVZ) in 1851 by members of the Grütlivervein; a manual workers’ association that later merged with the Social Democratic Party. The KVZ began as a bakery and expanded into general groceries in 1853. As there was no specific co-operative law it registered as a corporation, as did other early Swiss consumer co-operatives that followed. Due to internal conflict the KVZ had a closed membership and thereby breached an important Rochdale principle of open membership. Many of the early Swiss consumer co-operatives failed because of insufficient finance or resistance from private retailers. A co-operative was established in Bern in 1853 and grew to three stores, but dissolved in 1855. Jean Jenny-Ryffel, a textile industrialist who had learned about co-operatives while visiting England, drew up articles of association for a co-operative in Schwanden, which was converted from a workers’ club in 1863 and became a center for promoting Rochdale principles in Switzerland (Degen, 2003, p. 245; Fay, 1936, pp. 290–292). The Rochdale model of consumer co-operatives also had an influence in Italy. Consumers’ co-operatives appeared for the first time in 1854, before Italy completed unification as a nation state in 1870. Giuseppe Mazzini, who was a significant figure in Italian unification and an acquaintance of Holyoake, believed in the co-existence of capital and labor, and not in class war. He saw co-operatives as a valuable way of bringing Italians together in the struggle for Italian independence and unification. These early consumer co-operatives arose from the transformation of pre-existing self-help societies and mutual aid societies, such as friendly societies, which had been encouraged in Piedmont after 1848 when citizens had been given freedom of association. The self-help societies were also the early breeding ground for Italian trade unions. The very first consumer co-operative was the Società Magazzino di Previdenza, in Turin (in Piedmont) organized by the local workers’ self-help society. The aim was to combat rising food prices during a period of agricultural shortages. These first co-operative stores differed from the Rochdale model in that they only sold goods to co-operative members, at cost 60 The early years price, and were thus not able to accumulate wealth or pay out refunds (Battilani, Balnave, and Patmore, 2015, p. 58; Earle, 1986, p. 11; Holyoake, 1893, p. 152). There were also examples of worker co-operatives. In 1856 cholera broke out in the village of Altare, in the Ligurian hills beyond Savona in northern Italy. The local economy, dependent on glassmaking, was in decline, with workers having low earnings and long hours. Guiseppe Cesio, a local doctor, persuaded 84 glass blowers in 1856 to pool their work and form a co-operative, the Associazione Artistica Vetraria. Despite initial concerns by government authorities that the co-operative may be a subversive organization, Dr. Cesio’s support led to it being tolerated. Workers paid a levy on their earnings during the first nine years to accumulate capital, and their work was of such quality that they won a silver medal at the Turin Industrial Exhibition of 1858. The worker co-operative shared profits unevenly per the number of shares held by each worker and was a closed co-operative in that membership was restricted to families in the village; principles that continued generally in Italy. There were at least five other worker co-operatives formed in Italy before 1862, including Genoese tailors in 1856 and Turinese printers in 1859 (Earle, 1986, pp. 12–13). Worker co-operatives remained more important in France than consumer co-operatives. There was a second wave of worker co-operatives formed after the 1848 Revolution, supported by the provisional government with the provision of loans for capital and by giving them preference for public works contracts. Louis Blanc, the socialist promoter of worker co-operatives, was directly involved in organizing a number of these co-operatives, particularly for tailors. It was estimated that this short-lived burst involved more than 200 societies, with only a dozen left by 1855. The dependence of these co-operatives on the state undermined the will- ingness of their members to seek work and the law required them to be registered as private partnerships with unlimited liability. There was also a poor selection of co-operative members in terms of commitment and productivity, as well as inexperienced directors. Alongside this surge of worker co-operatives there was a smaller growth of consumer co-operatives, with 40–50 in total found in centers such as Paris, Lille, and Lyon. The political climate changed with increasingly conservative Republican governments and the imperial coup d’état in December 1851 that led to the establishment of the Second French Empire. Against the background of liberalization by Napoleon III there was another revival and in 1863 Jean-Pierre Beluze—who had become disillusioned with the idea of separate co-operative communities and had been imprisoned for alleged membership of a secret society—formed the Société du Crédit au Travail, which provided credit for new co-operatives and had 172 individual members. As early as 1862 Rochdale consumer co-operatives had an influence as Holyoake’s history of the Rochdale pioneers was serialized in the Lyon journal Le Progrès and provided inspiration for the foundation of many later French consumer co-operatives (Birchall, 1997, p. 22; Fay, 1936, p. 236; Gide, 1899, pp. 32–33; Hilson, 2009, p. 70; Purvis, 1998a, pp. 157, 159; Toucas-Truyen, 2003, p. 130; Watkins, 1970, pp. 13–14; Zamagni and Zamagni, 2010, p. 15). The early years 61

Germany, before unification in 1867, became the “cradle for co-operative credit unions,” “which had the aim of defending the economic independence of the self-employed middle class by means of collective self-help” (Prinz, 2003, p. 19). The background to the rise of financial co-operatives was the abolition of the common cultivation of agricultural land and the dissolution of craft and merchant guilds at the beginning of the nineteenth century. Farmers gained free ownership rights with the abolition of landed property, and industrialization placed pressure on the traditional crafts as they faced competition from emerging factories. There was a greater reliance on market cash transactions, a need to obtain capital for basic supplies, and to remain competitive, but the joint-stock banks prioritized their loans for heavy industry. There were also agricultural setbacks during the 1840s with failed potato crops and poor grain harvests between 1845 and 1847, and peasants had little to eat other than small potatoes, chicory broth, and sauerkraut. There was political upheaval with the Revolution of 1848, which highlighted significant ideological divisions such as democracy versus authoritarianism. While these changes undermined the traditional foundations of German society, urban dwellers retained a strong sense of identity from the guilds and there remained a rural communal life in small German villages, with German farmers living in the villages and not scattered across the countryside (Aschhoff and Henningsen, 1986, pp. 15–18; Birchall, 1997, pp. 11–12; MacPherson, 1999a, pp. 3–4; Tucker, 1922, pp. 18, 51). From this environment arose two forms of financial co-operative—the Schulze-Delitzsch and the Raiffeisen. The idea of co-operative banking was first promoted in a series of pamphlets by Victor Aimé Huber, a doctor, who traveled extensively through Europe from the 1820s to the 1860s. Huber became an enthusiast of the ideas of Robert Owen and Saint-Simon, the Rochdale model of consumer co-operatives and the French worker co-operatives. He was initially interested in co-operative stores, which he viewed as a means of ending the truck system of payment to workers. Huber advocated all forms of co- operation in Germany and believed that co-operative banking would improve living conditions for all. He was a devout Lutheran who believed that co-operative banking should have ethical foundations and encourage the ethical and religious improvement of its members. Credit would allow the ownership of property and encourage self-support and self-respect (MacPherson, 1999a, p. 4; Tucker, 1922, pp. 21–28). Hermann Schulze-Delitzsch was a lawyer in Saxony who became aware of the problems of small-scale industry through his role as a judge and member of the Prussian National Assembly of 1848. He was influenced by Huber and British friendly societies, which gave him the idea of thrift. He tried to help those facing distress by obtaining funds from the wealthy members of society but this was not a permanent solution. He turned to the principles of self-help and personal self-responsibility as a means whereby individuals could overcome their problems. In 1849 he founded a friendly society and a co-operative for cabinetmakers and shoemakers so that they could purchase the raw materials for their trades. In 1850 he formed a mutual loan society, or Volksbanken or People’s Bank, which relied 62 The early years upon rich philanthropists for capital but was a co-operative in that it required borrowers to become members. Following the example of a co-operative bank at Eilenberg, which was established in October 1852 by a colleague, Dr. Bernhardt, and a tailor named Bauerman, Schulze-Delitzsch modified his own bank in 1852 so that it became self-supporting, with members supplying share capital. To encourage new co-operatives and sustain existing ones he founded a body to co-ordinate the financial co-operatives in 1859, a central bank to manage the liquidity of financial co-operatives in 1864, and also in 1864 a general association for German co-operatives, the Allgemeiner Verband der auf Selbsthilfe beruhenden deutschen Erwerbs- und Wirtschaftsgenossenschaften (AV) (Aschhoff and Henningsen, 1986, pp. 18–19, 22; Birchall, 2011, p. 136; Tucker, 1922, pp. 43, 46). Friedrich Wilhelm Raiffeisen was a mayor of several rural communities in the present German state of Rhineland-Palatinate who had strong conservative Christian beliefs, with loving thy neighbor being an important principle. He helped distressed local farmers in the famine of 1846–1847 by distributing bread and potatoes to the poor. He established a co-operative bakery that halved the price of bread and established a cattle-purchasing association. Like Schulze-Delitzsch he initially relied on charity but also realized this was not a permanent solution and that those in need would have to organize their own co-operatives to solve their problems. His first financial co-operatives, or loan societies, had farmers as members and were formed at Anhausen in 1862 and Heddesdorf in 1864. Like Schulze-Delitzsch he also published a book to promote his ideas (Aschhoff and Henningsen, 1986, pp. 19–20; Birchall, 1997, p. 13, 2011, p. 137). Schulze-Delitzsch’s influence extended to Italy, with Luigi Luzzatti, a Venetian economist and politician, establishing a People’s Bank at Lodi near Milan in 1864, adapted from the Schulze- Delitzsch model and which spread rapidly (Earle, 1986, pp. 14–15). While financial co-operatives were the early major focus in Germany, there was some interest in consumer co-operatives and housing co-operatives. Although German consumer co-operatives were to develop later than in Britain, due to slower urbanization, commercial restrictions, and a more hostile environment for trade unions and progressive political parties, there was an early influence of the Rochdale model on consumer co-operatives through Huber. The German consumer co-operatives aimed to supply private households with good quality food at low prices, with the first being founded in Saxony, northern Germany, and in Berlin. The German Revolution of 1848 created a temporary political space for workers’ consumer co-operatives, with several formed in Berlin. Only 15 of the 392 co-operatives that joined the AV in 1864 were consumer co-operatives. Huber was also active in promoting housing co-operatives, with a non-profit housing society in Berlin as early as 1848 and later a few specialized housing co-operatives, the first in Hamburg in 1862. These co-operatives also developed slowly with a high investment cost and concerns about the unlimited liability of members (Aschhoff and Henningsen, 1986, pp. 22–23; Birchall, 1997, p. 36; Prinz, 2003, p. 18; Purvis, 1998a, p. 159). The early years 63

Co-operatives in North America and Australasia There continued to be an interest in the idea of co-operative communities in the USA as land opened for European settlement. There was the Brook Farm Community, located 16 kilometers south-west of Boston, Massachusetts, where there was an attempt to create a co-operative commonwealth built around the ideas of Charles Fourier from 1842 to 1846. There were equal rights for all shareholders irrespective of the amount of stock, and the distribution of all benefits among community members after the payment of a stipulated interest on invested capital. Several of its members, such as Albert Brisbane, who had already authored books on Fourier’s ideas, and John Orvis, were promoters of co-operation in the USA over the following decades. John Orvis, for instance, was active in the Sovereigns of Industry and the Knights of Labor (KOL), organizations that promoted co-operatives (Bemis, 1888, pp. 17–18; Curl, 2012, pp. 80, 87). There were early examples of agricultural co-operatives in the USA as farmers pooled their resources to create dairy products. While Smith (1961, p. 4) notes reports of a co-operative cheese factory at South Trenton, New York, as early as 1810, a more documented example was the Jesse Williams Cheese Factory, established in May 1851. Williams faced financial difficulties when a merchant sold his cheese but kept the proceeds. He pooled milk from other dairy farmers to produce high quality cheese and, after deducting expenses, he paid the farmers a return in proportion to the amount of milk they had contributed. There was also a co-operative creamery established in Orange County, New York, in 1856 and by 1867 there were 400 co-operative creameries in the USA (Rahmer, 1971; Smith, 1961, p. 4). During the 1840s and 1850s skilled workers in the USA continued to establish worker co-operatives against continuing industrialization, as the shoe industry was mechanized and textile mills were constructed in the north-east. New England factories and mills, powered initially by water and later steam, processed slave-produced cotton from the Southern states with wage labor. There was a growth in unions after legal constraints were removed in 1842, but the depression of 1847 brought dismissals and wage reductions. Workers struck unsuccessfully against these changing conditions, and unions advocated worker co-operatives as an alternative with workers pooling their resources to buy machinery. Albert Brisbane and Horace Greeley, the founder and editor of the New York Tribune, saw co-operatives as a vehicle for social change and encouraged workers to form them. Greeley advocated an “Associationist” formula, whereby some co-operatives would gather together resources to eventually form “phalanxes,” or co-operative communities. Anyone could join the worker co-operative, or phalanx, but each shareholder would have only one vote and be entitled to a low rate of interest on their capital and interest. After a living wage was paid to worker members they were entitled to a share of the remainder of any surplus income. Some European immigrants, particularly Germans, brought with them 64 The early years ideas relating to worker co-operatives, with an unsuccessful attempt, involving Wilhelm Weitling, the German revolutionary, to establish an Owenite labor exchange in New York. Worker co-operatives included tailors in Boston, glass- blowers in Philadelphia, and seamstresses in Buffalo. The worker co-operatives had limited resources and faced opposition from business associations, some state governments, who refused to legally recognize them, and the clergy, who saw them as the first step towards socialism. A depression in the mid-1850s and the onset of the US Civil War ended this movement (Curl, 2012, pp. 48–52). There was also an interest in consumer co-operatives in the USA. John Kaulback, a Boston tailor and member of the New England Association of Mechanics, promoted the idea of a buying club to procure basic goods in 1844 to promote attendance at association meetings. This led to a store being opened in 1845 and ultimately the formation in January 1847 of the Workingmen’s Protective Store, which had 12 stores. While the founders knew little about the contemporary Rochdale Society, there was adherence to the principles of equal voting and cash sales. They had influence beyond the USA with a co-operative store in Eilenberg, Germany, being started in 1849 after correspondence with the Protective Store. By October 1852 the movement had become the New England Protective Union, covering both farmers and workers, with 403 stores. There was even a protective store wholesaler, called the Central Agency. These protective stores declined in the face of internal discord, competition from non-co-operative retailers, and the disruption arising from the Civil War. However, three of these stores were still in operation in 1888 (Patmore, 2017, p. 508; Warbasse, 1942, pp. 34–35). The ideas of the Rochdale movement began to attract interest in the USA from the 1850s. One significant influence was Holyoake’s Self-Help by the People, which was first produced in a summary form in the New York Tribune in 1859 by Horace Greeley. Thomas Phillips, a shoemaker, and some friends organized the Union Co-operative Association of Philadelphia (UCA) in 1862 and opened their first store with 24 members in 1864. The founders of the UCA took the concept for their store directly from Holyoake’s book. US co-operators saw advantages in the Rochdale approach. While the Protective Union approach relied on membership fees, the Rochdale consumer co-operatives accumulated capital through the sale of shares to members. There were an estimated 100 stores opened for business during the Civil War, with many of them drawing on Rochdale principles (Curl, 2012, pp. 57–58; Leiken, 2005, pp. 5–6). The ideas of the Rochdale movement also began to attract interest in Australia in the 1850s. Holyoake’s Self-help by the People, was reviewed in The Empire newspaper in Sydney in August 1858.1 The earliest known Australian Rochdale consumer co-operative was formed in Brisbane barely 15 years after the establishment of the Rochdale movement in England. It was registered in Brisbane in August 1859 under the NSW Friendly Societies Act, before the separation of Queensland from NSW. One of the major reasons for its formation was the desire to avoid the practice by Brisbane shopkeepers of providing credit. Instead the co-operative encouraged members to pay with cash and thus avoid bad debts The early years 65

(Balnave and Patmore, 2012, p. 987). There were also at least two consumer co-operatives formed in 1860 in the lower Hunter Valley, a center for coalmining in NSW, with British miners bringing with them their co-operative experience; an Adelaide co-operative was formed in 1863; and a Sydney General Co-operative was formed in 1864. The establishment of the Hunter co-operatives occurred alongside the successful formation of a district-wide miners’ union. The Sydney General Co-operative consisted of skilled workers and salaried professionals, and had the aim of supplying groceries, with a dividend to its members, and no radical Owenite agenda of forming further co-operative enterprises (Eklund, 2007, p. 137; Hampson, 1986, pp. 13, 15; Lewis, 1992, pp. 9–11, 178). Coalminers in the Borehole consumer co-operative in the Lower Hunter Valley extended the idea of the co-operative to coalmining with the formation of the Co-operative Coal Company in 1861.2 The company arose out of an industrial dispute, when miners refused to accept a 20 percent cut in hewing rates, and was a union enterprise. There was also a belief that the co-operative could be a long- term solution to labor conflict. A syndicate of 15 miners, including James Fletcher President of the local Miner’s Union, was formed and secured 1,500 acres of land, with 6,000 shares at £5 each to capitalize the project, with the venture being financed by retail surpluses and profits from the mine.3 Workers set their own hewing rates, with production targets being determined democratically at meetings between managers and miners. There was the continual problem of obtaining sufficient capital to run the mine, with miners reluctant to invest their earnings in the mine, and other businesses ‘sabotaging’ the project by interrupting supplies and transport. The mine eventually became insolvent with debts of £12,000, and was wound up in May 1869 and sold to a private company (Gollan, 1963, p. 39; Lewis, 1992, pp. 10–11). As late as 1891 unionists in NSW referred to the failure of the mine “as evidence of co-operation’s inadequacies” (Lewis, 1992, p. 10) There were also examples of consumer and agricultural co-operatives in New Zealand (NZ) and Canada. Settlers employed by the New Zealand Company on road construction established the first consumer co-operative at Riwaka in the Nelson area in the 1844. William Fox, the Company’s local agent and a later Premier of NZ, suggested the idea and offered to provide two months’ wages in advance to provide capital for the store if it was run on co-operative principles (Balnave and Patmore, 2008, pp. 99–100). There was a short-lived dairy co-operative established by former soldier settlers in 1848 at Howick near Auckland (McLauchlan, 1996, p. 14). There was also an interest in consumer co-operatives in Canada from the 1830s as industrialization occurred, with three New England Protective Union stores in Canada in 1850. British immigrant coalminers established a Rochdale consumer co-operative in the coalmining town of Stellarton, Nova Scotia, in 1861, which grew from a population of only 170 in 1827 to 2,000 by 1864 as coalmining expanded and had a company store based on the disliked truck system (Bemis, 1888b, p.22; Earle, 2001, p. 58; MacPherson, 1999b, pp. 332–333; Neal, 1998, pp. 57–58, 78; Parker, 1956, p. 5; Petrou, 2013, p. 290). 66 The early years

Conclusion The period from the foundation of the Rochdale consumer co-operative to the formation of the CWS highlighted several features of the emerging international co-operative movement. In the UK the emphasis on establishing co-operative communities shifted to the formation of consumer co-operatives, which serve members needs regarding unadulterated consumables and with the benefits of a dividend on purchases, interest on capital, and democratic participation in the organization. The consumer co-operatives do well where there is a strong sense of occupational community and locality. They developed at a time of a rising standard of living, particularly for the skilled working class, and broadening domestic markets, particularly with the rise of the railways. The Rochdale pioneers were strong promoters of their co-operative model, assisted by the introduction of the penny post, sympathetic newspapers, and the seminal work of Holyoake. They expanded through diversifying their products, establishing branches, vertical integration into manufacturing, and the establishment of the CWS on a federal model after several unsuccessful attempts. They also shaped their own environment through political lobbying to ensure favorable legislation. While there was a form of production co-operatives, these did not develop into worker co-operatives, as investor members are necessary for capital and workers were denied the bonuses necessary for a participation in co-operatives. Beyond the UK the developments highlighted that co-operative models can appeal beyond workers to a broader range of people, including farmers and the operators of small businesses, and take a variety of forms. In France worker co-operatives were more significant, particularly during the Revolution of 1848. In the wake of major changes in German society, which saw the breakdown of the craft guilds and land ownership, and the turmoil of poor harvests in 1846–1847 and the 1848 Revolution, financial co-operatives arose to meet the credit needs of farmers and artisans trying to deal with increased competition and the pressures of industrialization. Dairy farmers in the USA turned to co-operatives to pool their resources and avoid agents. There were also variations from the Rochdale model, with Italian workers in the Associazione Artistica Vetraria operating as a closed co-operative with membership only open to families in their village. Immigrant workers from Germany and the UK brought their ideas about co-operatives to North America and Australasia. The next chapter explores the development of an international co-operative movement from 1864 to the outbreak of the First World War through the growth of global trade, immigration, colonialization, colonialism, and the transfer of ideas that saw the CWS become a global enterprise, and the formation of the ICA as an international forum for the co-operative movement.

Notes 1 Empire, August 26, 1858, p. 3. 2 Newcastle Chronicle and Hunter District News, August 21, 1861, p. 3. 3 Sydney Mail, October 12, 1861, pp. 2–3. The early years 67

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Redfern, P., 1913, The Story of the CWS: The Jubilee History of the Co-operative Wholesale Society Limited. 1863–1913, Manchester, CWS. Smith, L., 1961, The Evolution of Agricultural Co-operation, Oxford, Basil Blackwell. Thompson, D.J., 2012, Weavers of Dreams: Founders of the Modern Co-operative Movement, 2nd ed., Davis, CA, Twin Pines Press. Toucas-Truyen, P., 2003, “The Emergence of the Identity of French Consumers’ Co-operatives (1880–1914): Between Labour Movement and Social Economy,” In Amsab-Institute of Social History, ed., Consumerism versus Capitalism? Co-operatives Seen from an International Comparative Perspective, Ghent, Amsab-Institute of Social History, pp. 129–137. Tucker, D., 1922, The Evolution of People’s Banks, New York, Columbia University. Warbasse, J.P., 1942, Cooperative Democracy. Through Voluntary Association of the People as Consumers, 4th ed. New York, Harper & Bros. Watkins, W.P., 1970, The International Co-operative Alliance, London, ICA. Webb, C., 1919, Industrial Co-operation: The Story of a Peaceful Revolution, 8th ed., Manchester, CU. Webster, A., 2012, “Building the Wholesale: The Development of the English CWS and British Co-operative Business 1863–90,” Business History, 54 (6), pp. 883–904. Wilson J., Webster A., and Vorberg-Rugh R., 2013, Building Co-operation: A Business History of the Co-operative Group, 1863–2013, Oxford, Oxford University Press. Zamagni, S. and Zamagni, V., 2010, Cooperative Enterprise: Facing the Challenge of Globalization, Cheltenham, UK, Edward Elgar. 4 DIVERSIFICATION, INTERNATIONALIZATION, AND THE FORMATION OF THE INTERNATIONAL CO-OPERATIVE ALLIANCE, 1864–1914

This chapter explores the international growth of the co-operative movement from the formation of the CWS in 1864 to the outbreak of the First World War. The British co-operative movement grew and diversified into a range of activities that included banking, insurance, and agriculture. The CWS, alongside the SCWS, developed trading networks internationally that brought everything from butter in Denmark and tea in India and Ceylon to British consumers. Co-operatives spread beyond Europe, North America, and Australasia to Africa, Asia, and South America. Consumer, financial, and agricultural co-operatives spread, and new forms, such as housing co-operatives, appeared. The internationalization of the movement took organizational form with the establishment of the ICA in 1895. Three major developments underpinned this growth. The growth of international trade, immigration, and colonialization. The growing capacity and speed of ships, particularly with the development of steam, encouraged economic development and opened new markets for agriculture, mining, and manufacturing. The introduction of refrigerated holds on ships during the 1880s allowed previously perishable goods, such as butter, beef, and lamb, to be transported long distances from countries in the Southern Hemisphere to the North. The opening of the Suez Canal in 1869 and the Panama Canal in 1914 provided quicker times for travel between Europe and Asia, and the Atlantic and Pacific Oceans. Railway construction occurred rapidly both within countries and across borders, with the USA being crossed by railway in 1869, Canada in 1885, and Russia in 1905. The development of railways and steamships allowed cheaper foreign foods into Europe, with American, and later Canadian and Indian, wheat arriving in Britain at half the local price. In the last quarter of the nineteenth century in Britain the price of wheat, sugar, and tea fell by more than 50 percent, while that of butter and bacon fell by 25 percent (Birchall, 1994, p. 70). Communication also became faster with the expansion of the telegraph, alongside railways and underneath oceans, and Diversification 71 the invention of the telephone, with the first transcontinental telephone connec- tion in the USA occurring in 1914. For consumer co-operatives, the growth of international trade encouraged vertical integration offshore and gave an incentive to the formation of agricultural co-operatives to combat the growing power of intermediaries and agents as shipping distances grew both nationally and internationally (Birchall, 2011, p. 158). Immigration reached unprecedented levels in the second half of the nineteenth century, with millions coming from across Europe, initially from north-western Europe and spreading to southern and eastern Europe. There were 3.4 million Europeans who emigrated between 1821 and 1850, 8.1 million from 1851 to 1880, and 32.1 million from 1881 to 1915. The proportion of British emigrants fell from 91.3 percent in 1851–1880 to 42.7 percent in 1881–1915, while the percentage of Italian emigrants grew from 2.5 percent to 24.3 percent in the same period. The bulk of these emigrants went to the USA, 68.1 percent in 1851–1880 and 59.4 percent in 1881–1915, but 11.6 percent and 7.6 percent went to Argentina and Australia respectively in the later period (Graff, Kenwood, and Loughheed, 2013, pp. 54–55). Some immigrants, for instance from Britain, Germany, Italy, and Finland, brought with them ideas about co-operation. Colonization by European powers, the USA, and the newly industrializing power of Japan spread to all corners of the globe, with a ‘scramble’ to secure territories in Africa and Asia. European settlers in these colonies drew from Rochdale and Raiffeisen traditions to establish their own co-operatives, while the British in India and the Japanese in Korea looked to variations of financial co-operatives as a way of fighting poverty and aiding economic development (Birchall, 1997, p. 133; Jung and Rösner, 2012, pp. 85–86; Sami, 2011, pp. 11–17). As Eklund argues, there should be cau- tion in assuming the European models of co-operation were simply transported to other countries through immigration and colonialization, as in the case of Australia where “English practices and traditions” were “sacrificed at the altar of colonial realities” and being “far from simple copies, colonial societies were characterised by a bewildering heterogeneity” (2007, pp. 129–130).

Britain: the growth of retail consumer co-operatives and co-operative wholesaling From 1864 to 1914 there was a major growth of consumer co-operatives in the UK, with the expansion of the CWS into agriculture, manufacturing, and financial services, and the creation of the SCWS in 1868. As Table 4.1 (Cole, 1944, p. 371) highlights, co-operative membership grew steadily in Britain from 1873, when accurate data begins, until 1914, with an average annual growth of 5.3 percent. While the number of retail consumer co-operatives peaked in 1903 at 1,455, the average number of members of a society grew from 564 in 1881 to 2,205 in 1914. There were also very small societies, with membership of White Coppice, a small hamlet with a cotton mill on the edge of Rivington Pike Moors in Lancashire, fluctuating between 26 and 32 between 1870 and 1909 (Walton, 1996, p. 24). 72 Diversification

By 1914 retail co-operatives supplied 7–9 percent of Britain’s total retail trade and 17–19 percent of Britain’s total trade in groceries and provisions (Wilson, Webster, and Vorberg-Rugh, 2013, p. 99). The growth of retail consumer co-operatives led to more sophisticated management practices and competition among co-operatives. There was the development of a group of professional co-operative managers, with training courses, and the formation of the National Association of Co-operative Secretaries in 1909 and the National Association of Co-operative Managers in 1912. Overlapping co-operatives could develop in one location. The industrial village of Ainsworth, near Manchester, had an average census population of 1,793 between 1881 and 1911, but two consumer co-operatives developed there, and it was midway between the co-operative centers of Bury and Rochdale. Sometimes these rival co-operatives developed because of political differences, such as Tory versus Liberal, but they could also arise because of personality clashes, faction fighting, and even geographical location within the community. The competition among co-operatives led to higher dividends to attract members, duplication of resources, and the offer of credit to members in violation of the original Rochdale principles (GB Historical GIS, 2017; Walton, 1996, pp. 23–24; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 137–144). There are several explanations for the growth of consumer retail co-operatives in the UK. While there were fluctuating economic conditions, with a slide into depression in 1875 for instance, this did not reverse growth but generally slowed it during periods of economic downturn. The only exception to this is 1881, which may be explained by a poor economic climate but also could be accounted for by changes in the statistical definition of co-operatives. While economic conditions fluctuated, this did not undermine a long-term growth in working-class living standards, which gave workers greater disposable income to purchase from and invest in retail co- operatives. The growth of consumer co-operatives was linked to the spread of trade unionism to unskilled workers and the rise of the Women’s Co-operative Guild (WCG), particularly from 1885 to 1890. Trade unionism grew to four million by 1914 and socialist and labor organizations became a significant force. Compared to consumer co-operatives, trade unions were more favorably affected by booms and more unfavorably affected by slumps. While consumer co-operatives lost sales in downturns, their membership remained relatively stable compared to trade unions, as workers still depended on them for the necessities of life (Cole, 1944, pp. 179–188, 370–372; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 56, 100). While co-operatives spread throughout Britain, co-operative membership remained concentrated. In England over 10 percent of the population of the North and Yorkshire were members of co-operative retail societies by 1901. Other notable regions by 1901 included the North-West (8.3 percent), the West Midlands (6.7 percent) and the North Midlands (6.3 percent). The level of membership in Wales remained low, with 1.7 percent in 1901, and the London TABLE 4.1 The growth of retail consumers’ co-operation in Britain, 1873–1914

Year Number of retail Total membership Annual increase Average number societies (,000) of membership of members per (%) society 1873 n.a. 350 n.a. n.a. 1874 n.a. 375 7.2 n.a. 1875 n.a. 440 17.4 n.a. 1876 n.a. 468 6.8 n.a. 1877 n.a. 483 3.2 n.a. 1878 n.a. 510 5.6 n.a. 1879 n.a. 525 3.0 n.a. 1880 n.a. 554 5.5 n.a. 1881 971 547 -1.3 564 1882 1,043 599 9.6. 574 1883 1,051 628 4.9 597 1884 1,128 696 10.8 617 1885 1,148 747 3.6 650 1886 1,148 774 3.6 675 1887 1,153 828 7.0 718 1888 1,204 867 4.7 720 1889 1,297 932 7.5 719 1890 1,240 962 3.2 775 1891 1,307 1,045 8.6 799 1892 1,420 1,127 7.9 794 1893 1,421 1,169 3.7 823 1894 1,421 1,213 3.8 854 1895 1,417 1,275 5.1 899 1896 1,428 1,356 6.8 950 1897 1,442 1,466 8.1 1,060 1898 1,436 1,536 4.8 1,069 1899 1,446 1,613 5.0 1,116 1900 1,439 1,707 5.9 1,186 1901 1,438 1,793 5.0 1,247 1902 1,454 1,893 5.6 1,302 1903 1,455 1,987 5.0 1,366 1904 1,454 2,078 4.6 1,429 1905 1,452 2,153 3.6 1,483 1906 1,441 2,222 3.2 1,542 1907 1,432 2,323 4.6 1,622 1908 1,418 2,414 4.0 1,696 1909 1,430 2,469 2.2 1,727 1910 1,421 2,542 3.0 1,789 1911 1,403 2,640 3.9 1,882 1912 1,392 2,751 4.3 1,976 1913 1,382 2,878 4.6 2,083 1914 1,385 3,054 6.1 2,205 74 Diversification metropolitan area had less than 1 percent membership in 1901, with the most notable society being the Royal Arsenal Society, formed by munitions workers at Woolwich in 1868. The CWS launched in London in 1894 the People’s Co-operative Society, which was based on local branches. By 1895 there were five working branches and the CWS guaranteed competent management and the protection of members’ shares in the Society. Yet, while it grew to 12 branches in 1897, it only grew to 3,385 members, compared to 20,000 or more members in the larger provincial consumer co-operative societies. Due to internal dissension, the People’s Society passed into liquidation in 1899. While London remained dis- appointing, the movement had established itself in large centers such as Glasgow, Sheffield, Newcastle upon Tyne, Manchester, and Derby. Despite this the movement remained concentrated in traditional textile and coalmining towns, with the level of membership in 1901 in Newcastle only being half of that found in the nearby coalfields, and Manchester being only a quarter of the peak level of the Rochdale district. In the Scottish Lowlands county of Clackmannanshire, which had collieries and textile mills, 26 percent of the population in 1911 were members of co-operatives, while Edinburgh had 13 percent. There were issues in the larger cities with a competitive retail trade, high operational costs such as rents and council rates, a weaker sense of neighborhood community, and a lack of concentration of workers from similar occupational communities. By 1911 the percentage of the population that were members of retail co-operatives was 2.7 percent in Wales, 6.4 percent in England, and 8.5 percent in Scotland (Birchall, 1994, pp. 77–80; Flanagan, 1920, p. 443; Purvis, 1990, pp. 318–329, 1999, pp. 232, 237; Wilson, Webster, and Vorberg-Rugh, 2013, p. 101). The development of co-operative wholesaling underlaid the growth of the co-operative movement in Britain. As Table 4.2 (Redfern, 1913, pp. 418–419, 1938, p. 532) indicates the CWS grew dramatically from its humble beginnings in 1864 to a global enterprise by 1914, with capital of almost £10 million, and net sales of almost £35 million. The headquarters of the CWS remained in Manchester, where several blocks of imposing offices and warehouses developed with the opening of Holyoake House in 1911, named in honor of Jacob Holyoake. The CWS established branches in Newcastle upon Tyne in 1871, and London in 1874, with depots, warehouses, and salerooms throughout England to serve regional needs. At the branches the CWS built conference halls for business meetings and co-operative gatherings. There was also stability in CWS management with John Mitchell from Rochdale serving as chair from 1874 until his death in 1895. He was succeeded through election by vice-president John Shillito, who remained chair until he died in 1915. The CWS was highly centralized, with the General Committee or Board of Directors following a set of consistent policies and strategies. By 1905 the CWS was the 16th largest company in Britain, with £4.4 million in capital, surpassing companies such as Lever Brothers, the soap manufacturer, and Brunner Mond, the chemical manufacturer, in terms of capitalization (Cole, 1944, p. 210; Gurney, 1996, p. 20; Redfern, 1913, pp. 206, 424–430; Webb, 1919, pp. 110–112; Wilson, Webster, and Vorberg-Rugh, 2013, p. 96). Diversification 75

FIGURE 4.1 Holyoake House in Manchester, named in honor of co-operative pioneer, G.J. Holyoake (1817-1906), was the headquarters of the CU, opened in 1911 (Courtesy of Greg Patmore)

One source of CWS growth was that it became a direct importer of cheap foods from abroad, which were either processed in Britain, such as corn or flour, or in the country of origin, such as bacon. For the year ending December 1909 the CWS imported £7,077,968 from outside the UK, with Denmark being the largest supplier, with £3,530,904 for butter, bacon, and eggs, followed by the USA, with £1,311,355 for cheese, bacon, lard, flour, and canned goods. Other significant suppliers were, in order, Sweden, Austria, Canada, and Germany. 76 Diversification

TABLE 4.2 The CWS, 1864–1914

Year ended Members of federated Total capital (£) Net sales (£) co-operatives

1864 Oct. 18,337 2,455 51,857 (30 weeks) 1874 Jan. 168,985 200,004 1,636,950 1884 Dec. 459,734 761,358 4,675,371 (53 weeks) 1894 Dec. 910,104 1,891,102 9,443,938 1904 Dec. 1,594,145 3,929,176 19,809,196 1914 Dec. 2,336,460 9,902,447 34,910,813

The CWS established depots outside Britain, the first being for butter in Tipperary in Ireland in 1868, and locations such as New York in 1876, Hamburg in 1874, and Sydney, Australia, in 1897. The depots had resident buyers who purchased local supplies and shipped them back to England. The CWS purchased a bacon factory in Denmark in 1900, a tea estate in Ceylon (now Sri Lanka) in 1902, and three further tea estates in Ceylon in 1913, while constructing a new bacon factory at Tralee in Ireland in 1901. The CWS, concerned about shipping rates, furthered vertical integration by entering the steamship business through purchasing its first steamship, the SS Plover, in May 1876 and launching the SS Pioneer in 1879. It sent buyers overseas, to Greece in autumn for example, to visit large growers who provided supplies for dried fruit and to pay cash on delivery (Birchall, 1994, pp. 83–85; Redfern, 1913, pp. 127, 424–430; Webb, 1919, pp. 111–112). The CWS’s interest in expanding its operations into the British Empire were linked to British imperialism and the desire to ‘civilize’ natives who were viewed as ‘child-like,’ as in the case of Sierra Leone in British West Africa, where the CWS obtained a concession in 1913 of 314 square miles for the production and export of palm oil for soap production, to win a protracted a trade war against capitalist soap manufacturers such as W.H. Lever, who had secured similar concessions in Nigeria and Sierra Leone. William Lander, a CWS director who visited Sierra Leone, believed that while capitalists had failed to reform Sierra Leone, co-operators could bring more long-term benefits to the colony (Gurney, 1996, pp. 108–109; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 130–133). The CWS, to ensure supplies for its stores, also moved into production of basic products, such as shoes, soap, clothing, furniture, biscuits, pickles, and jams. The expansion into production was because of growing demand from co-operative retailers, concerns about quality and reliability, and manufacturers’ boycotts of the co-operative sector. There was also a need to enter into competition with private manufacturers who the retail co-operatives preferred to buy from. While CWS had to trade with the co-operative societies, there was no requirement for the Diversification 77 societies to purchase wholesale from the CWS if they believed that CWS goods did not match the price and quality from private wholesalers. There was an estimate in 1885 that 176 co-operative societies in southern England only purchased 25 percent of their goods from the CWS. CWS production diverted the profits made otherwise by private manufacturers and retailers back into the co-operative movement through dividends, which amounted to £652,818 in 1914. The CWS set up new factories that used the latest mass production techniques and ensured competitiveness, with one manager visiting the USA in 1889 to inspect the latest shoemaking machinery. The first CWS factories were started in 1873, when the CWS opened a confectionery and biscuit factory at Crumpsall near Manchester and a boot factory in Leicester. Other factories included chocolate and cocoa production in Luton, which opened in 1887, and the taking over of the Rochdale and Oldham flour mills in 1906 (Birchall, 1994, pp. 84–85; Gurney, 1996, p. 249; Jones, 1894, p. 227; Webb, 1919, p. 130; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 63–64, 80–81, 96). The CWS also expanded into agriculture in England and tourism. It purchased a 742-acre farm at the Roden Estate, near Shrewsbury, in 1896 and Burmash Farm, near Hereford, in 1904 to produce berries and fruit for jam. By 1914 its agricultural activities included vegetables, grain, and cattle breeding (Redfern, 1913, pp. 209–214). In 1905 the CWS entered the travel business with the setting up of an Excursion Department, recognizing that rising income and falling transport costs were allowing workers to undertake travel for pleasure, with its first activities being trips to the Isle of Man (Wilson, Webster, and Vorberg-Rugh, 2013, p. 134). There was controversy about the CWS moving to set up factories with Christian Socialists, with arguments that production should be done by producer co-operatives, where workers would share both management and profits. There was skepticism about these ventures, which included co-operative coal mines, as a number had failed in the 1860s and 1870s. The co-operative coal mines had started during a period of very high profits and soon ran into difficulties during the first economic slump. Other major flagship producer co-operatives, such as the Ouseburn Engineering Works on Tyneside, failed spectacularly. These producer co-operatives had to receive assistance from the CWS and consumer retail societies, and the CWS lost large amounts on defaulted loans, £32,000 in June 1881, and it lost further money when it took some over as they were unable to meet their CWS debts (Birchall, 1994, pp. 102–103; Cole, 1944, pp. 158–163; Wilson, Webster, and Vorberg-Rugh, 2013, p. 80). The CWS agreed in November 1872 to pay a bonus on any surplus made to its own workers. This was not popular with workers engaged in distribution of the goods who did not receive it, and opponents who argued that it was the duty of co-operatives to pay workers certain and fair wages rather than a fluctuating wage based on the co-operative’s financial performance. There were also concerns that CWS employees were already gaining a benefit through being allowed to purchase goods from the CWS at wholesale prices, and there were allegations that some were making a profit by reselling them at retail prices. 78 Diversification

Despite some management proposals for modifications, which included the idea that the bonus be paid on the profits of each factory rather than total trade, the CWS abolished the bonus in June 1875 because the system was “unworkable” and “unsatisfactory.” There was further experimentation with a bonus system in several departments in Manchester and London between 1882 and 1886, but it was again discontinued. Mitchell, as CWS chair, was a strong supporter of the “federalist principle” that consumer, rather than producer, control underpinned the co-operative movement. Mitchell had seen the failure of the bonus scheme at the RCMS in 1862 and was determined not to repeat it. His personal support for the federal principle helped embed it as the main doctrine of the English co-operative movement (Cole, 1944, pp. 168–169, 210; Jones, 1894, pp. 224–225; Melmoth, 1996, p. 85; Redfern, 1913, pp. 421–422, 425). The supporters of producer co-operatives formed the Co-operative Productive Federation (CPF) in 1882 to promote enterprises part-owned by workers and formed a Labour Association for Promoting Co-operative Production in 1884 to again promote co-partnership and the labor bonus, which the CWS again rejected in 1886 and 1891. The supporters of co-operative production argued that a focus on consumption did not assist the present status of the worker under capitalism. The CPF went on to increase the number of producer co-operatives in England and Scotland to a peak of 126 by 1903, many of which were small, relied on skilled craft labor, and sold to retail co-operatives, making a variety of products including printing, silk weaving, metalworking, and photography. There were also a number producing boots and shoes, with some being formed following strikes, where skilled workers making men’s boots resisted the movement to factories with power-driven machinery. The English producer co-operatives tended to form clusters by concentrating around particular towns, such as Leicester and Kettering, with the presence of one successful producer co-operative and a sympathetic consumer retail co-operative encouraging others to form (Birchall, 1994, pp. 103–104; Cole, 1944, pp. 207–208; Jones, 1894, p. 225; Redfern, 1913, p. 187; Webb, 1919, pp. 133–135). The Leicester Equity, which produced foot- wear and was formed following a strike in 1886 at the CWS Wheatsheaf factory, survived until 2009 (Akers, 2016, p. 534). The hostility of the CWS to producer co-operatives won the support of the influential Beatrice Potter (1891, pp. 117–169), later Webb, who was critical of the “individualist” producer co-operatives, after a critical analysis of 54 producer societies, of which only eight were “self-governing” worker co-operatives. She took a “federalist” view and argued that workers’ interests in consumer retail co-operatives would be best looked after by their membership of unions, and that ownership was best held by retail co-operatives as federal agencies representing the democratic will of their members (Akers, 2016, p. 529). The Labour Association became the Labour Co-partnership Association in 1903 and drifted away from the co-operative movement as it was now primarily supported by non-co-operative firms that were operating schemes of profit sharing or co-partnership in their factories. The terms co-partnership and profit Diversification 79 sharing blurred, with some being initiated by employers as a means of undermining working-class independence and solidarity. Middle-class supporters of profit sharing, while advocating that workers should be given a share of the profits, argued that they were to have no say in management. William Lever, a strong critic of the co-operative movement, had supported co-partnership since the late 1880s and introduced a profit-sharing scheme into his soap factory at Port Sunlight in 1909 (Cole, 1944, p. 205; Gurney, 1996, pp. 148–156). As the factories grew the CWS became a major employer of workers. By 1905 there were 100,000 co-operative employees, of whom approximately 40 percent were employed in the factories. The CWS observed union conditions where a trade union existed and paid “fair rates of wages” to unorganized workers, who were predominantly women and girls. In 1911 only 23 percent of the 7,072 CWS female workers were covered by union rates. It took a welfarist approach to its employees, and established a Thrift Fund in 1907 for all employees with six months’ service that provided for retirement, and encouraged employee thrift and a greater bond between management and labor. Despite its sympathetic approach to labor there were strikes at the Leicester boot factory in 1886 and 1892, over lower rates being paid at another CWS boot factory and the behavior of a supervisor respectively. The Amalgamated Union Co-operative Employees Union (AUCEU), which was founded in 1895, sought to organize workers across all co-operative industries. The AUCEU was involved in stoppages in 1911 and 1914 in CWS factories such as the Bristol flour mill and Leicester boot factory to protest wages and conditions (Redfern, 1913, pp. 171–172, 359; Webb, 1919, pp. 113–115; Vorberg-Rugh, 2009, pp. 122–123). The CWS also had employees outside the UK, such as on the tea plantations in Ceylon where laborers cultivated, picked, and prepared tea, and Webb noted that “an endeav- our is made to steadily improve the conditions of work and life of the native employés” (1919, p. 112). While the CWS developed in England and Wales, there were parallel developments in Scotland. There was some hope that the CWS would expand into Scotland through opening a branch in Glasgow but the CWS was cautious about rapid expansion. Some Scottish societies did join the CWS and there were 27 Scottish societies that traded over £10,000 worth of goods with the CWS from April 1867 to April 1868. Thirty-three Scottish societies formed their own co-operative wholesale, the SCWS, in Glasgow in August 1868 to trade only with registered consumer retail societies, with the CWS allowing their Scottish members to transfer their shares to the SCWS (Flanagan, 1920, pp. 69–70; Klinoch and Butt, 1981, pp. 32–38). As Table 4.3 (Flanagan, 1920, p. 450) indicates, the SCWS grew dramatically between 1868 and 1914. The number of affiliated societies increased from 51 in 1869 to 266 in 1914, with a peak of 290 in 1899 (Klinoch and Butt, 1981, p. 377). The SCWS expanded both within Scotland and overseas. It established branches at Leith in 1877 and Kilmarnock in 1878. Like the CWS it expanded overseas with depots at Enniskillen in Northern Ireland in 1885 to collect and 80 Diversification

TABLE 4.3 The SCWS, 1868–1914

Year ended Society shares Employee shares Total capital (£) Net sales (£)

1868 7 Dec. n.a. n.a. 1,795 9,697 (13 weeks) 1878 2 Nov. 34,830 n.a. 83,174 600,590 1888 29 Dec. 96,521 n.a. 409,669 1,963,853 1898 31 Dec. 223,669 5,054 1,333,078 4,692,330 1908 26 Dec. 393,549 14,206 3,292,046 7,603,460 1914 26 Dec. 461,645 18,699 4,954,915 9,425,384 distribute Irish produce, and Winnipeg, Canada, in 1906, with ten grain elevators in Canada erected by 1913, to obtain wheat for flour mills. It also moved into manufacturing in 1881 with a small shirt factory, and in 1887 purchased land at Shieldhall, on the banks of the Clyde River near Glasgow, where factories were built to produce goods that included boots, clothing, tobacco, pickles, and confectionery. Other factories included the Chancelot Flour Mills near Leith in 1894 and an aerated water factory in Dunfermline, opened in 1906. The SCWS was interested in remaining competitive against private manufacturers and introduced the latest machinery in areas such as cabinetmaking and brushmaking, which promoted disputes over new machinery and the introduction of female labor to operate them. Like the CWS it also expanded into agriculture, with the purchase of the Calderwood estate in 1904 to grow fruit and raise cattle. There was movement into retailing by the SCWS, with the establishment in 1910 of a store in Elgin, north-eastern Scotland, in the hope that locals would eventually take over the store, and as a prelude to its expansion into the more sparsely populated Highland regions, where there were areas with no co-operative members by 1901. The CWS assisted the SCWS to frame its original rules, provided advice, and co-operated with it on matters such as the supply of tea, through forming a joint tea committee in 1900 and the joint purchase of tea estates in Ceylon in 1902 (Cole, 1944, pp. 259–260; Flanagan, 1920, pp. 172–175, 421, 184; Jones, 1894, pp. 245–246; Potter, 1891, pp. 105–106; Watts, 2017, p. 152; Webb, 1919, pp. 29, 36–37, 108, 116–117; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 5–6). There were differences between the SCWS and the CWS. The SCWS, which employed 7,669 workers in June 1910, adopted co-partnership in October 1870 with the guidelines covering the bonus being amended on several occasions. The SCWS supported the bonus because it encouraged worker loyalty and increased productivity. In 1884 employees engaged in distribution received the same rate of bonus as the rate for members’ dividends, while the net aggregate rate of profit in their manufacturing departments determined the rate of bonus for production workers. From 1892 all workers were required to put half their bonus into a Bonus Loan Fund, which was released three months after they left the SCWS, with interest. Adult workers were also allowed to be members of the SCWS by purchasing a limited number of shares through a Co-operative Diversification 81

Investment Society, with a delegates meeting of the SCWS in November 1892 allowing one employee representative at quarterly meetings of the SCWS and a further representative for each additional 150 worker shareholders. The bonus continued in SCWS until December 1914, when it was abolished because workers received a fair wage through their unions, and all the surplus flowed to members in terms of dividends or reduced prices, with bonuses for pre-1914 employees continuing until 1922. There were also doubts about whether the bonus increased productivity and the SCWS fell in line with the position of the CWS. While voting power in the CWS-affiliated consumer co-operatives was based on the number of members, voting power in the SCWS was based on the volume of trade and the SCWS, influenced by the temperance movement, refused to allow consumer retail co-operatives to join if they sold alcohol (Cole, 1944, p. 205; Flanagan, 1920, pp. 80, 265–66; Jones, 1894, pp. 249–251; Potter, 1891, p. 114; Webb, 1919, pp. 29, 108–109, 118–119, 125–126). The SCWS, like the CWS, had problems with producers’ co-operatives, but came nearer a final disaster than the CWS. The three main producers’ co-operatives in Scotland were the Glasgow Co-operative Cooperage Society, formed in 1868 following a coopers’ strike, the Oak Mill Society of Tillicoultry launched in 1871, and the Scottish Co-operative Ironworks started in 1872, also formed in the wake of an industrial dispute over hours when employers dismissed prominent labor activists in the strike. All these societies eventually folded and the SCWS and other retail co-operative societies lost money with the collapse of the Oak Mill Society in 1879 and the Ironworks in 1875. The Ironworks management paid their receipts into the SCWS and drew upon the SCWS for funds when they were needed, but unlike other societies was to remain in debt to the SCWS. James Barrowman, the SCWS secretary, did not inform the CWS Committee that the Ironworks had drawn beyond the agreed overdraft of £1,000 to the extent of £10,000. The total capital of the SCWS was only £48,981 at the end of 1874, which meant that one penny in the pound had to be deducted from dividends until 1879 to pay off the debt. The member societies also provided £8,000 in additional loans and shares within a year to keep the SCWS afloat. Although Barrowman resigned with the encouragement of the SCWS directors, there was a growth in distrust and threats to withdraw business by member societies, with the Bannockburn Co-operative leaving the SCWS. Some suppliers also withdrew their business from the SCWS. Like the CWS, the SCWS became wary of large schemes of co-operative production, preferring consumer control over co-operative production, but retained the idea of a bonus for its workers (Cole, 1944, pp. 171–172; Flanagan, 1920, pp. 87–99; Klinoch and Butt, 1981, p. 73).

Britain: movement, diversification, and the relationship with Ireland The British co-operatives moved beyond retailing and wholesaling and developed into a national movement. The Co-operative News, which was founded in 1871, became recognized as the official publication of the co-operative movement 82 Diversification and by 1898 had a circulation approaching 50,000 copies per week (Cole, 1944, pp. 202–203). There was a revival of co-operative conferences with the first being held in London in 1869, which attracted 63 delegates and visitors. Out of this Congress developed an Executive or Central Board, which became known as the Co-operative Union (CU) from 1873, with Christian Socialist Edward Neale as its General Secretary, who remained in the position until his retirement in 1891. The CU obtained registration under the IAPSA in 1889. It was a democratic organization, open to all genders, with representation based on the size of the co-operative’s membership, and was open to co-operatives of all kinds, including producer co-operatives and building societies in Britain and Ireland. The Central Board of the CU worked through committees, such as education, a joint parliamentary committee with the CWS and the SCWS, a joint propaganda committee with the CWS and production, and geographically based autonomous sectional boards, for example in the Midlands and Scotland, with the CU Annual Congresses setting the policy. The CU became a debating forum co-operative, sharing ideas through its running of the Annual Congresses and engaging in political lobbying on behalf of the movement. It also provided business services, such as accounting, and co-operative education services. As early as 1874 it published a two-volume handbook providing general information about the co-operative movement and an article defining a “true co-operative.” There was a trade union link in the CU with the first Trade Union Congress (TUC) in 1868 declaring an interest in co-operation and the ASE and the Carpenters and Joiners attend- ing the 1869 Co-operative Congress, with a Joint Committee of Trade Unionists and Co-operators established in 1882. By 1913 the CU membership represented 1,272 co-operative societies with a membership of 2,874,574, which represented 84 percent of all co-operative societies and 95 percent of all co-operative members in the UK. The Co-operative Congress in 1909 attracted 1,556 delegates, and the number of students enrolled in CU educational classes grew from 3,400 in 1900 to almost 21,000 in 1914 (Cole, 1944, pp. 199–201; Flanagan, 1969, pp. 3–5, 22, 38; Webb, 1919, pp. 32, 194–204). The growing consumer co-operatives faced the issue of where to invest their mounting surpluses. At the 1869 Co-operative Congress there had been a call for the setting up of a co-operative bank and the 1875 Congress rejected the Schulze- Delitzsch system of financial co-operatives for Britain. The CWS in 1871 had opened a banking department, later known as the Loan and Deposit Department, which received deposits from co-operative societies with surplus funds, and made advances to co-operative societies who needed short-term capital for expansion. While the 1871 IAPSA allowed for co-operatives to make loans to members on the security of real or personal property, it was not until further amendments in 1876 legalized co-operative banking that the CWS Department was renamed the Banking Department or the ‘CWS Bank.’ Abraham Greenwood, the first president of the CWS, was the first manager of the CWS Bank from 1874 until his retirement in 1898 (Cole, 1944, pp. 124, 163–165; Flanagan, 1969, p. 24; Wilson, Webster, and Vorberg-Rugh, 2013, p. 70). Diversification 83

The CWS Bank strengthened the loyalty of local co-operative societies to the CWS by the provision of loans and overdrafts, which amounted to £438,000 to 158 different societies between June 1878 and 12 September 1890. This financial support helped consumer co-operatives expand their activities through the purchase of land. The societies were shielded from speculative rises in interest rates through the CWS Bank keeping its loan rates steady. The CWS Bank also assisted the expansion of the co-operative movement by providing loans and credit to producer societies, which exposed the CWS to risk with unsuccessful ventures in the 1870s and 1880s, and in 1887 the Bank provided support for the establishment of new consumer co-operatives as part of a CU and CWS organizing campaign. The CWS Bank encouraged trade unions and other working-class organizations to bank with it and in 1910 began accepting individual deposits. The trade unions could receive assistance from the CWS in industrial disputes and during the 1912 coal strike the CWS Bank lent £70,000 to the Northumberland Miners’ Association. Members of the co-operative movement could also obtain advances for house building from the Bank at below the prevailing interest rates in 1897 to 1901 and from 1907 onwards. By 1912 the CWS Bank’s annual turnover was £158 million (Cole, 1944, p. 259; Redfern, 1913, pp. 326–327; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 80, 94, 137). The SCWS moved into financial services with the establishment of a Loan Fund in 1885 as Scottish banks were reluctant to lend to co-operative societies and only provided loans at high interest rates. The SCWS loans were for building purposes with existing property as collateral. In Scotland the Scottish banks held a monopoly and the SCWS would have to gain special Parliamentary permission to operate as a Bank like the CWS (Kinloch and Butt, 1981, pp. 220, 243). The British co-operative movement also expanded its activities into insurance. Some co-operatives were uninsured, while others were paying premiums to insurance companies, funds that could be retained by the co-operative movement. The CWS in 1867 called a conference, which established the Co-operative Insurance Company, primarily for fire risks. The new company had to be registered as a joint-stock company, as the IAPSA did not allow co-operative societies to provide insurance. Insurance operations shifted from Rochdale to Manchester in 1867. When the Act was amended in 1899 to allow co-operative insurance, the company was registered as the Co-operative Insurance Society (CIS), which was a federation with shares of one pound and each society shareholder being allowed one vote for every 50 shares or part thereof. The policies expanded beyond fire to cover fidelity guarantees of co-operative society employees, life insurance, and collective assurance, whereby a co-operative could provide life insurance for all its members individually (Cole, 1944, pp. 146, 270; Garnett, 1968, pp. 20–28; Webb, 1919, pp. 177–78, 259). The CIS had to face growing competition from the CWS. The CWS established a Trade Insurance Fund in 1873 following the loss of SS St Columbia in the Irish Sea while carrying some CWS Irish butter. The CIS would not provide trade insurance as it considered it too risky until 1899. The CWS further expanded its 84 Diversification insurance interests by amending its rules in 1898 to cover all insurance except life. Despite calls for a merger of the two into an insurance department of the CWS, the CWS formed its own Insurance Department in 1909. The CWS criticized the CIS for not being progressive and lacking the resources to insure the whole co-operative. The CWS also insisted in 1909 that all properties with money lent by the CWS Bank be covered by CWS insurance and extended this requirement in 1910 to all properties that were used as security by co-operatives for CWS bank overdrafts. The CWS moved into the area of health insurance following the passage of the 1911 National Insurance Act, which attracted more than 100,000 members by the summer of 1912, and used local co-operative societies as agents. The growth of the CWS insurance activities dwarfed those of the CIS and by 1911 the CIS had reserves of £355,000 while the CWS fund had £848,000. The 1908 CU Congress supported the absorption of the CIS into the CWS and the SCWS. The CIS voted, with the support of 80 percent of its affiliated societies, to join in 1913 the Joint Insurance Department of the CWS and the SCWS, which owned shares in the CIS but had also had its own insurance fund since 1879 (Flanagan, 1920, p. 111; Garnett, 1968, p. 38; Klinoch and Butt, 1981, pp. 67, 100; Redfern, 2013, pp. 97, 334, 340–341; Wilson, Webster, and Vorberg-Rugh, 2013, pp. 135–136). The WCG was formed in 1883 and arose from Samuel Bamford, editor of the Co-operative News, agreeing to start a “Women’s Corner” in the paper (Cole, 1944, p. 216). It highlighted a problem for the British co-operative movement that, while it was built on democracy, women did most of the shopping but were excluded from its governance. Many retail co-operative societies limited membership to one person per family, which was usually the husband, and where joint membership was allowed the man usually attended the business meetings. Some societies would not accept wives as members or pay dividends to them without their husband’s consent. The WCG encouraged women through education to actively participate in their own autonomous guilds that paralleled the CU organization, and sponsored women as candidates in co-operative elections. The branches grew from three in 1883 to 51 in 1889 with a membership of 1,800. A significant WCG officer was Margaret Llewellyn Davies, daughter of a Christian Socialist minister of religion, who was the WCG secretary from 1889 to 1921 (Birchall, 1994, pp. 97–100; Gaffin and Thoms, 1983, p. 270). The CU from 1886 and the CWS from 1908 gave financial support to the WCG (Webb, 1927, p. 197). There was also a Scottish Women’s Guild formed in 1892 and a Men’s Guild in 1911, which never achieved the impact of the WCG since men were not under-represented in co-operative governance (Cole, 1944, p. 263; Davies, 1904, p. 114). While there was some hostility by some co-operatives to the WCG, with married women and their husbands being ostracized, Davies and other activists traveled, lectured, and wrote pamphlets to change these attitudes among co-operatives (Jeffs, 1996, pp. 76–77). The WCG promoted its movement internationally, with guilds being established at Amsterdam in the Netherlands by 1900 and the French Women’s Co-operative League in 1903 (Davies, 1904, pp. 114–119; Furlough, 1991, pp. 208–209). Diversification 85

According to Birchall, Davies transformed the WCG “into a campaigning organization whose influence extended far beyond the Co-op into the life of the nation” (1994, p. 100). While WCG gave support to co-operatives through encouraging the purchase of co-operative brands such as Luton Cocoa, it became involved in several issues that led to conflict with other sections of the co-operative movement. It campaigned for “open membership,” whereby wives as well as husbands would join the co-operatives, the introduction of co-operatives to poor neighborhoods, cash trading rather than credit, and for a minimum wage for co-operative female employees with the AUCE (Amalgamated Union of Co-operative Employees). While the 1908 Co-operative Congress approved a minimum wage scale for males and females, progress was delayed as each local co-operative society had to approve the scale, with the CWS and 240 local societies approving the wage scales by 1914. Its campaign for radical divorce reform, which brought it into conflict with Catholics, particularly the Manchester and Salford Catholic Federation, which objected to the WCG pursuing a religious issue, led to the CU cutting off its funding to the WCG in 1914 fearing that Catholics might leave their local co-operatives. The WCG also campaigned unsuccessfully against a court decision in 1907 that a wife’s investment in a co-operative society was the legal property of her husband (Cole, 1944, pp. 218–221; Gaffin and Thoms, 1983, pp. 48–49; Jeffs, 1996, pp. 79–80; Vorberg-Rugh, 2009, pp. 125–130; Webb, 1927, p. 81). While the growth of the co-operative movement provided a means of consumption and economic reward through the dividend, the consumption practices of the co-operative were highly specific, as they were not privately owned stores run for profit, and “the practice, ritual and symbolism of co-operative trading constituted co-operative culture in a fundamental sense” (Gurney, 1996, p. 61). Despite the Rochdale principles, co-operative societies provided credit during times of stress such as unemployment and industrial strife. They were centers of community life, owned by working people, where members and their families shopped and interacted. The co-operative culture included tours of CWS factories and recreational activities such as reading rooms, marches, tea parties, festivals, plays, and choirs. The Ripponden Society began an annual dinner or “tea” and entertainment in November 1906 and organized a “children’s demonstration” in July 1908 that was led by a brass band, with each child being given a mug, sports after tea, and a talk on co-operation. From the 1870s there were local exhibitions of co-operative goods, which culminated in the annual exhibitions held under the auspices of the National Co-operative Festival at the Crystal Palace in London between 1888 and 1910. Their demise was linked to the rising cost of railway fares, particularly from the north of England. Local co-operatives also supported local causes and invested in local infrastructure besides retail facilities. The Ripponden Society participated in local demonstrations to support the life- boat service, while the Ripponden, Wallsend, and Blaydon Societies built houses for purchase by members. Between 1870 and 1900, 224 societies had erected 24,000 houses (Gurney, 1996, pp. 60–74; Flanagan, 1969, p. 43; Hugman, 1996, p. 73; Magnanie, 1988, pp. 174–186; Priestley, 1932, pp. 115, 119–120). All these 86 Diversification various activities “strengthened understanding of and support for co-operative ideology, and strongly embedded societies within their localities” (Wilson, Webster, and Vorberg-Rugh, 2013, p. 40). While the co-operative movement made major advances in Britain, there were three issues that presented challenges to the British movement: the expansion into Ireland; the development of agricultural societies and other forms of co-operation; and the rise of opposition, particularly among private shopkeepers. The extension of co-operatives from Britain to Ireland was in the context of a strong Irish nationalist movement that promoted Home Rule—and even independence from Britain—and land purchase legislation from 1881, particularly the Wyndham Act of 1903, that allowed small-scale tenant farmers to purchase their land with government loans. Irish farmers faced increased competition in the British market as faster rail and sea transport brought in cheaper meat, grain, and butter from other countries, such as Denmark with its co-operative creameries. There was an interest in co-operative retailing from the 1850s, with a retail store established in the railway center of Inchicore near Dublin in 1859, and by 1888 there were ten societies with 1,127 members. The CU, to encourage the development of Irish co-operatives, organized a conference in July 1888 that established an Irish Co-operative Aid Association (ICAA) in 1888 (Cole, 1944, pp. 242–244, 248; Digby and Gorst, 1957, p. 22; Rhodes, 2012, p. 59; Smith-Gordon and O’Brien, 1921, p. 73; Webb, 1919, pp. 147, 151). Sir Horace Plunkett played a crucial role in the expansion of the Irish movement. Plunkett was an Irish baronet, a member of the ICAA, and from 1899 until 1907 Vice-president or administrative head of the Irish Department of Agriculture and Technical Education (IDATE), which encouraged rural co-operatives.1 Plunkett had initially supported the idea of establishing co-operative stores in Ireland and set one up in 1878 on his estate, but realized the model of the English consumer co-operatives was not the best for Irish farmers. He organized co-operative creameries, drawing on developments in Germany, Sweden, and Denmark, which allowed farmers with small landholdings to pool their resources. Plunkett also encouraged farmers to form agricultural societies to sell farming supplies and founded the Irish Agricultural Organisation Society (IAOS) in 1894, by which time there were 33 dairy societies, 13 retail stores, and one co-operative agency. The IAOS received government subsidies, while Plunkett ran the IDATE and formed the Irish Women’s Co-operative Guild in 1906. The CWS, against the advice of the CU and concerns about the independence of the growing Irish co-operative movement and English exploitation, tried unsuccessfully to set up its own co-operative creameries in Ireland, with milk suppliers being paid on a fortnightly basis. It agreed, after a conference with the IAOS brokered by the CU and with losses from its creameries, to hand over its creameries to independent societies formed under the control of the IAOS. However, the CWS obtained positive publicity in Ireland for its role in providing and shipping food to Ireland for the TUC to address shortages arising from a transport strike in 1913 (Cole, 1944, pp. 242, 245, 250–251, 263; Digby, 1970, p. 14; Digby and Gorst, 1957, Diversification 87 p. 25; Flanagan, 1969, pp. 31–32; Redfern, 1913, pp. 301–304, 1938, pp. 72–82; Rhodes, 2012, pp. 60–61; Smith-Gordon and O’Brien, 1921, pp. 23–24, 28–29; Webb, 1919, pp. 113, 222; Wilson, Webster, and Vorberg-Rugh, 2013, p. 129). Dairy co-operatives dominated the Irish co-operative movement by 1907, con- stituting 45 percent of the 603 co-operatives in Ireland and 47 percent of the membership. Agricultural societies constituted 23 percent of co-operatives and 15 percent of members. Other rural-based co-operatives included egg and poultry producers, beekeepers, and the Irish Agricultural Wholesale Society. Counted separately in Ireland were a range of financial co-operatives, including, in 1907, 216 agricultural or village banks based on the German Raiffeisen system with 16,855 members, which allowed farmers to avoid the high costs of dealing with moneylenders and joint-stock banks. The Irish village banks, unlike the German societies, received government loans after 1898. By contrast, retail co-operatives were relatively weak in Ireland, with only 20 societies and 7,375 members by 1907 (Rhodes, 2012, p. 101; Webb, 1919, pp. 150–174). Despite the developments in Ireland, agricultural co-operatives remained underdeveloped in Britain. Flanagan, however, argues that for Britain “there was no export pressure to organize farming as in other countries” and “food was largely for the home market” (1969, p. 31). British farms were larger and more efficient than Irish farms and were less interested in co-operative marketing or credit. While there was a continued interest in agricultural co-operatives at the Annual Congresses, the Congress was more interested in co-operatives in urban and industrial areas. There was also skepticism about agricultural co-operatives being profit-making bodies that were untrue to Rochdale principles, and the conflict between the CWS and IOAS over the Irish creameries dampened enthusiasm for the idea (Birchall, 1994, p. 177, 1997, p. 82; Cole, 1944, p. 246, 1951, pp. 110–111; Flanagan, 1969, p. 31; Rhodes, 2012, p. 178). Despite these limitations, there was some interest in agricultural co-operatives. Edward Greening, an advocate of co-operative co-partnership, founded the Agricultural and Horticultural Association in 1867, which centered its activities on propaganda and the sale of farm supplies. A surviving English agricultural co-operative, the Aspatria Agriculture Co-operative Society in Cumberland, was founded in 1870 to source farming supplies. By 1900 there were only seven agricultural co-operative distributive societies, and four agricultural production societies in England, with none in Scotland or Wales. Following the Irish example agricultural societies were formed in England in 1901 and Scotland in 1905. With the support of the CU and the encouragement given to the creation of smaller farms by the Liberal government through the Small Holdings and Allotments Acts of 1908, there was a growth in agricultural co-operatives in Britain, although not to the relative extent of Ireland. The English Agricultural Society in 1909 changed its governance to have half its governors elected by co-operative societies, one-third by the Minister of Agriculture (reflecting its reliance on government funding from 1909), and the rest by “interested parties.” There was conflict between the CWS and the English agricultural societies, with the agricultural societies wanting the CWS to 88 Diversification trade exclusively with them rather than through agents, but the CWS preferred to trade on the open market to ensure the best price, quantity, and quality. By 1909 there were 145 small agricultural co-operatives in England and Wales and 31 in Scotland (Cole, 1944, pp. 252, 263; Digby and Gorst, 1957, pp. 24–25; Fay, 1939, p. 244; Flanagan, 1969, pp. 31–32; Redfern, 1938, p. 87). There was also limited development of financial co-operatives. Workers had alternatives as they could invest in consumer co-operatives through shares and obtain financial services from the CWS. Many co-operatives also built houses and provided financing for members. Compared to Ireland the number of co-operative credit banks was small, with only 32 in England and one in Scotland, of which 18 were in agricultural districts providing finance to agricultural laborers and small farmers. Outside the mainstream of the co-operative movement lay the Starr-Bowkett Societies and building societies, including the Co-operative Permanent Building Society (CPBS) founded in 1884. Concerns about gambling and promoters benefiting at the expense of members led to the banning of the formation of new Starr-Bowkett societies in England in 1894. While there were failures of building societies—such as the Liberator in 1892 and the Birkbeck Building Society in 1911—due to speculation and mismanagement, which undermined confidence in the sector, there were 1,506 societies in Britain by 1914 and total assets of £65.3 million by 1913. There was legislation governing building societies that dated back to 1836, but the failure of the Liberator society prompted legislation in 1894 that gave a Registrar stricter controls over the building societies (Bab, 1938, pp. 60–63; Darnell, 2006, p. 16; Samy, 2012, pp. 173–174; Webb, 1919, pp. 170–172). Despite claims that building societies benefited the middle class, Samy (2012, p. 177) argues that the overwhelming proportion of CPBS’s borrowers were from the working class. The growing co-operative movement also faced opposition from private capitalist traders. They produced anti-co-operative literature, through publications such as the Grocer, from the mid-1860s to the early 1870s, and encouraged employers to dismiss co-operators, as occurred in Scotland in 1896. The Traders’ Defence Association launched a national campaign in 1905 for the end of income tax concessions, granted by the IAPSA since 1893, in the cases of co-operatives where there was no limitation on the entry of new members and non-members did not receive dividends. Co-operators defended themselves though public meetings, debates, demonstrations, and donations to victimized co-operators. A major setback for the attack on co-operatives occurred in 1905 when the Plymouth Co-operative Society won a libel case in the High Court against a printer, which made printers unwilling to produce anti-co-operative literature and ended the boycotts. The co-operative movement also won a major legal victory in 1910 against William Lever, who had taken 38 actions against co-operative societies that only stocked CWS soap, claiming that they were committing fraud by passing off their soaps for Lever’s brands (Gurney, 1996, pp. 199–207). Diversification 89

European developments While consumer co-operation became dominant in the UK, as Table 4.4 (Gide, 1922, p. 49) highlights, it also developed in other European countries. While the UK had the largest number of members and highest turnover among countries with available data or estimates, some countries, such as Russia, had more co-operatives, and others, such as Denmark and Switzerland, had a greater proportion of co-operative members relative to the total population. There were also wholesale societies in a number of countries, including Germany, Russia, Denmark, and France (Gide, 1922, p. 165). The Rochdale model had an influence on the development of these consumer co-operatives as it provided a concrete example of success, but this does not imply a simple translation of the model. There were delays as the Rochdale model had its greatest impact, for example, on France during the final quarter of the nineteenth century, where it was a major source of ideas such as the dividend. Many of those promoting the Rochdale model in Europe had a middle-class background and supported it as a way of ensuring social harmony, which clashed with working-class interest in consumer co-operatives as part of a socialist movement. Nicolas Ballin, an assistant librarian at the University of Kharkov and pioneer of Russian consumer co-operation in the late 1860s and 1870s, visited Britain, France, and Germany for ideas (Kayden and Antsiferov, 1929, p. 5; Purvis, 1998, pp. 157–158), while Hans Christian Sonne, a local pastor, who founded a Danish consumer co-operative at Thisted in 1866 that set the pattern for the Danish movement, was inspired by both the Rochdale pioneers and the German Schulze-Delitzsch (Birchall, 1994, p. 172; Christiansen, 2012, p. 24). The British influence persisted, with both Holyoake and Neale being guests at a conference of Italian co-operatives in October 1886, which decided to set up an Italian federation of co-operatives, renamed the Lega Nazionale in 1893 (Earle, 1986, pp. 16–17). Within each country there were geographical concentrations. As in the UK, the level of industrialization was important, with the industrial north-east of France and Saxony and neighboring districts in Germany being the focus of consumer co-operatives. The rise of the Belgian co-operative movement was linked to the failure of private retailers to meet the needs of workers in growing industrial centers. Consumer co-operation by contrast was weaker in agricultural areas. For example, in the 1880s and 1890s consumers’ co-operatives developed more in industrial western Belgium than in the largely agricultural province of Namur. Throughout Europe, as in the UK, factory trades, particularly textile and railway workers, played a key role in organizing consumer co-operatives. Railway workers formed some of the largest and most successful consumer co-operatives in Italy, France, and Russia. As in the UK, large cities, with their diversity of trades, social anonymity, and retail competition made it difficult to organize consumer co-operatives. Many of the largest French consumer co-operatives were found in medium-sized industrial towns, such as Lille and Amiens, while the 90 Diversification

TABLE 4.4 Consumer co-operation in Europe, 1914

Country Number of members Number of societies Proportion of members Turnover (,000) per 1,000 population (£,000)

UK 3054 1,385 264 88,000 Germany 2000 2,375 121 28,000 Russia 1,500 13,000 34 32,000 France 881 3,261 90 12,840 Austria 423 1,471 70 7,200 Italy 400 2,481 43 7,200 Switzerland 276 396 290 5,420 Denmark 250 1,560 350 6,000 Hungary 200 1,300 40 3,000 Belgium 170 205 90 1,920 Sweden 153 608 108 2,440 Poland 120 1,500 33 1,680 Netherlands 99 135 72 1,040 Finland 97 512 120 2,520 Spain 40 200 30 800 Norway 39 172 42 550 larger Lyon, despite a co-operative tradition, produced many smaller and weaker societies (Kayden and Antsiferov, 1929, pp. 25–36; Purvis, 1998, pp. 150–155; Strikwerda, 1999, pp. 70–71). While there was a relationship between the spread of consumer co-operatives, urbanization, and industrialization, there were exceptions. In Denmark, consumer co-operatives grew most strongly outside urban areas, with rural areas accounting for 92 percent of the membership and 93 percent of the sales in 1910. These co-operatives supplied farmers with both everyday consumer goods and agricultural production. Agriculture was significant in the Danish economy and there were close links between agriculture co-operatives and consumer co-operatives. There was little illiteracy in Denmark by the mid-nineteenth century, and from the 1860s there were rural folk high schools that provided practical education and ‘education for life,’ with the co-operatives providing literature to promote co-operation. Farmers, assisted by pastors and teachers, adopted self-help ideas. Leaders of the co-operative movement in 1896 established a central wholesale operation, Fœllesforeningen for Danmarks Brugsforeninger (FDB), which about 90 percent of local co-operatives had joined by 1915. Several factors encouraged the spread of consumer co-operatives in rural areas. There was opposition by urban Social Democrats and restrictions on the operation of private traders in rural areas that were not rescinded until 1920. By 1900 there were only 15 consumer co-operatives in Danish urban areas (Christiansen, 2012, pp. 28–30; Purvis, 1998, p. 160). European co-operative movements differed in their practices and politics. While the British and the Swiss consumer co-operatives were politically neutral Diversification 91 concerning party politics, those in Belgium and northern France were overtly associated with socialist politics. The Parti Ouvrier (PO) in France and Belgium received financial support from consumer co-operatives, and co-operative premises provided accommodation for trade unions and the socialist party. The Belgian PO Congress in 1910 called for the international extension of the link between co-operatives and socialism to fight capitalism. From the 1880s consumer co-operatives expanded into Italy’s smaller towns, not only because of the encouragement of socialist organizations but also because of the growing commitment and involvement of the Catholic Church, including parochial church councils. In Germany, the relationship between the Social Democrats and consumer co-operatives in the 1860s and 1870s was characterized by mutual suspicion, with socialist leader Ferdinand Lavelle claiming that consumer co-operatives benefited capitalists since they reduced wages by bringing down the cost of living. The gradual erosion of Social Democratic opposition assisted the upsurge of the German consumer co-operative movement in the 1880s, with workers rejecting middle-class patronage, which was linked to maintaining social order (Battilani, Balnave, and Patmore, 2015, p. 58; Degen, 2003, pp. 248–249; Purvis, 1998, pp. 156–157, 161–162). Prinz has estimated that by 1914 workers constituted 70 to 80 percent of all consumer co-operative members and that “in many cases the call for the foundation of a new co-op originated during a party or union meeting” (2003, p. 21). Independent working-class consumer co-operatives developed in Russia, Russian-ruled Finland, and Ukraine during the early decades of the twentieth century (Purvis, 1998, p. 157). Danish Social Democrats were also initially influenced by Lavelle, seeing small private retailers as potential allies, and co-operation as liberalistic self-help, believing they could achieve their objectives through trade unions and parliament. There was, however, grass roots opposition to their hostility to consumer co-operatives, with a small group of worker co-operators founding almost 70 consumer co-operatives between 1900 and 1914 in urban areas. At international forums such as the Socialist International, other social democratic parties pressured the Danes into recognizing that co-operatives could be valuable in the fight against capitalism, and in 1913 a joint committee of the Danish Social Democrats and trade unions recommended that their members actively engage themselves in urban consumer co-operatives (Christiansen, 2012, pp. 28–29, 34–35). While British co-operatives only gave a limited amount of their funds to education and social activities, there was greater funding of these activities by the socialist consumer co-operatives of Belgium and northern France. Belgian co-operatives paid dividends in coupons or dockets, exchangeable for goods in the store rather than cash, to stop money being diverted away from co-operation and instead being directed towards pensions, sick funds, and maternity and unemployment benefits, with payments being made in terms of free bread, groceries, or medicines. Maisons du Peuple were not simply stores but were also a focus for educational, welfare, and social activities, with co-operatives providing daycare for children, loans, and medical or legal advice. Belgian socialist co-operatives were heavily dependent on 92 Diversification the sale of bread by the early 1900s, with cheap, quality bread as their focus since their origins in the 1870s (Purvis, 1998, p. 161; Strikwerda, 1999, pp. 71–73, 77). The strong identification of some European co-operative movements with socialist parties splintered the co-operative movement with anti-socialists, such as the Catholic Church, forming their own conservative co-operatives. While they were slow to develop in Belgium due to the opposition of Catholic shopkeepers, by 1914 there were almost 30,000 Catholic consumer co-operatives. There were also those who saw the co-operative movement as the third way between capitalism and socialism. The French economist, Charles Gide, a major theorist of the Nimes School of co-operative economics, advocated the complete transformation of society through consumer co-operation extending ownership back through all stages of production, including the extraction of raw materials, to a new economic system, the Co-operative Republic. Gide was concerned that workers would turn to Marxism and wanted to win them back to co-operation. Gide became a committee member and later president of the Union Co-opérative, a non-aligned co-operative movement that ran a co-operative wholesaler alongside a French socialist co-operative wholesaler after 1906; and that entered an uneasy alliance with the socialists in 1912, to form the Fédération Nationale des Coopératives de Consommation (FNCC), in the face of growing competition from capitalist chain stores (Birchall, 1994, pp. 106–107; Fay, 1939, p. 127; Furlough,1991, pp. 83–94, 1999, p. 183; Strikwerda, 1999, p. 74). There were deeper splits in other countries and a strong support for local autonomy within the movements that weakened them. In Germany the growing influence of Social Democracy split the co-operative movement when the AV, concerned at the growing influence of the social democrats and trade unions in the consumer co-operative movement, expelled 98 consumer societies and their wholesaler in 1902. The expelled societies formed their own Zentralverband deutscher Konsumvereine and quickly became the most dynamic part of the German co-operative movement; with the socialist influenced co-operative wholesale society in Hamburg becoming the largest co-operative wholesaler in continental Europe prior to the outbreak of the First World War. Within these co-operative federations there was not complete coverage. By 1910 the Fédération des Sociétés Coopératives Belges covered only half of the eligible societies, with some socialist Belgian consumer co-operatives refusing to affiliate to preserve their autonomy. These divisions undermined the extension of co-operatives into wholesaling and manufacturing and the idea of a Co-operative Commonwealth or Co-operative Republic bringing together all co-operators and transforming society (Purvis, 1998, pp. 162–163). A more favorable political climate assisted the spread of co-operatives in Europe. French governments, to gain the support of the growing working class and avoid social unrest, took a more liberal approach to co-operatives by granting them limited liability in 1867, but rejected a specific co-operative law, with co-operatives being covered by the Code Commercial. This approach was also adopted in Italy and Belgium, where co-operatives were primarily viewed as trading organizations. Diversification 93

The German authorities were much less tolerant of popular associations, and co-operatives were denied limited liability until 1889; while the limitations on working-class activity imposed by the Anti-Socialist Law of 1878–1890 weakened co-operative growth. German co-operatives were modeled on joint-stock companies. Russian co-operatives were undermined by an imperial decree in 1867 that restricted public meetings in the interests of “public safety,” with a brief liberalization following the 1905 Russian Revolution that fueled a massive expansion of all types of co-operatives in Russia by 1914 (Kayden and Antsiferov, 1929, pp. 9, 14; Prinz, 2003, p. 20; Purvis, 1998, p. 159). As in Britain, small private traders protested from the 1880s in many European countries against state concessions to consumer co-operatives, particularly taxation. French shopkeepers also urged employers not to employ co-operators and wholesalers to boycott co-operatives. Governments responded to their concerns: the German government tried to prohibit the involvement of public servants, including railway workers, with co-operatives closely linked with socialism; while the French government in 1905 imposed a patente or commercial license on all French co-operatives. Consumer co-operatives were also granted exemptions from commercial taxation on the condition that they only traded with their own members and did not compete with private traders for general trade, with these measures reinforced in Germany by legislation in 1889 and 1896 with significant financial penalties (Furlough, 1991, pp. 115–116; Prinz, 2003, p. 20; Purvis, 1998, pp. 159–160). Overall Purvis argues that “political establishments, aimed not so much at its elimination, but negating its potential as agency of socio-economic transformation” (1998, p. 160). There was also expansion of financial co-operatives. While consumer co-operatives were significant in Germany after 1880, financial co-operatives remained dominant, with 19,000 of the 34,568 co-operatives at the outbreak of the First World War being financial co-operatives. Both Schulze-Delitzsch and Raiffeisen traveled throughout Germany encouraging the formation of various types of financial co-operatives, with Schulze-Delitzsch organizing 1,900 societies with 466,000 members by his death in 1883, and Raiffeisen organizing 4,323 banks by his death in 1888. Unlike for German consumer co-operatives, and despite opposition from the German banks, Schulze- Delitzsch successfully introduced legislation for co-operative banking with unlimited liability in Prussia in 1867, which provided the basis for German legislation in 1871, following German unification. Schulze-Delitzsch played a critical role in the passage of the new German 1889 co-operative legislation, which granted limited liability and required compulsory financial audits. These provisions underpinned the formation by the Prussian government in 1895 of the Preussische Central-Genossenschafts-Kasse (Preussenkasse), as an independent legal entity, capitalized by the Prussian government, as a central bank for co-operatives. This would meet the fluctuating needs of small farmers and artisans for credit and protect them from downward social mobility. There were, however, large numbers of co-operatives who refused to deal with it as it would compromise their autonomy from the state (Aschhoff and Henningsen, 1986, pp. 24–26; Deeg, 1999, p. 36; Kayden and Antsiferov, 1929, pp. 14–15; MacPherson, 1999a, pp. 5–6; Purvis, 1998, p. 149). 94 Diversification

The German financial co-operatives were directly imitated in other European countries, including Belgium, the Netherlands, France, and Austria, where financial co-operatives grew to be a dominant part of the co-operative movement. In Russia, financial co-operatives also dominated with a membership in 1914 of 8,261,000, compared to 1,400,000 for consumer societies, with rural societies of peasants dominating both. The indebtedness of Italian peasants also encouraged the development of modified Raiffeisen rural banks from 1883. While Leone Wollemborg, a social reformer and politician, initiated the rural banks, Catholic priests played a crucial role in disseminating them throughout Italy, influenced by the 1892 Encyclical Rerum Novarum of Pope Leo XIII. By the end of the nineteenth century there were almost 900 rural banks, of which 775 were of Catholic inspiration. Most of them were established in the north-east of Italy and in Rome, while in the south only Sicily had any significant number of rural banks (Catturani and Cutcher, 2015, pp. 78–79; Earle, 1986, pp. 13–14; MacPherson, 1999a, p. 6; Purvis, 1998, p. 149). There were building societies in Denmark, the most important of which was founded in 1865 (Christiansen, 2012, p. 38), but they did not take off in Belgium, due to low rents and a government policy of encouraging workers to commute from the countryside and small towns to the cities (Strikwerda, 1999, p. 76). There were also major developments in agricultural co-operatives, with Denmark providing an important example for Europe and beyond, particularly regarding dairy and bacon manufacturing. By the 1880s Danish agriculture, which was focused on grain production and export, was in crisis as imports from Russia undercut its economic viability. Expanding milk production and the invention of the cream separator allowed small-scale Danish farmers to combine to form dairy co-operatives to process their milk. In 1882 pioneer farmers in West Jutland wrote the model dairy co-operative rules, and by the outbreak of the First World War 90 percent of Danish farms and smallholdings had joined the co-operatives, high quality Danish cheese and butter had entered the international market, and Britain had become a major export destination. Co-operative bacon manufacturing commenced in 1887, but its development was slower than that of the dairies due to: strong competition from private firms run by dynamic capitalists with international experience; the need to bring together a large number of pig producers to ensure economic viability; and a requirement for more substantial transport facilities to achieve economies of scale. Despite this, by 1914 co-operative bacon factories covered about 85 percent of products manufactured from pigs, with Danish bacon, like Danish butter, becoming a household name on international markets (Christiansen, 2012, pp. 29–31). One consequence of the success of these agricultural co-operatives was that Danish rural financial co-operatives did not take off because banks were willing to lend to Danish farmers (Birchall, 1994, p. 174). Agricultural co-operatives developed across Europe. Their success in Denmark underpinned the rapid growth of agricultural co-operatives throughout Scandinavia. The spread of rural co-operative banks encouraged farmers to form agricultural co-operatives. In Germany, the first agricultural supply co-operative Diversification 95 was established in 1860 and the first agricultural producers’ co-operative was formed in 1871 (Birchall, 1994, p. 174). Catholics in Belgium, who opposed socialists, organized a large network of agricultural co-operatives, which did not co-operate with the socialist consumer co-operatives (Strikwerda, 1999, p. 75). In France, traditions of rural mutualism and favorable legislation from the 1880s encouraged agricultural co-operatives to supply raw materials and market produce, but supply co-operatives were initially constrained from selling foodstuffs and other necessities to their members. By contrast there were no such limitations on Swiss agricultural societies (Purvis, 1998, p. 149). Farmers in Iceland, a small island country dependent on rural exports, formed the first co-operative in 1882, which exported produce, including live sheep, and imported consumer goods, largely through a Danish merchant based at Newcastle upon Tyne in England (Kjartansson, 2012, p. 43). In Russian Finland, the Pellervo Society, established by educated middle-class activists in 1899, promoted co-operatives not only to improve well-being but also to prepare Finland for independence. It initially focused on agricultural co-operatives, which laid the foundations for a rural co-operative bank, consumer co-operatives, and the Suomen Osuuskauppojen Keskuskunta (SOK), a co-operative wholesaler. Professor Hannes Gebhard, the “father of Finnish co-operation” and President of the Society from 1899 to 1917, insisted that a grass roots Danish co-operative model was not suitable for Finland due to lower education levels (Hilson, 2012, pp. 88–92; Pellervo Society, 1924, pp. 4–9; Zamagni and Zamagni, 2010, p. 38). There were other forms of co-operation: mutual insurance societies in France and Belgium; and by 1904 there were 200 worker co-operatives in France, many of which had arisen from strikes or the conversion of capitalist firms into co-operatives. During the final quarter of the nineteenth century Italian workers, particularly in the building trades, formed labor co-operatives to tender for large construction projects, assisted by 1889 legislation that allowed them to tender for public works contracts (Birchall, 1994, p. 178; Earle, 1986, p. 17; Purvis, 1998, p. 149; Strikwerda, 1999, p. 76; Zamagni and Zamagni, 2010, p. 15). Danish trade unionists established a Workers’ Co-operative Housing Society in 1912, which was the first in a wave of Danish co-operative housing societies (Christiansen, 2012, p. 38). The success of rural co-operatives encouraged Danish farmers to form water and electricity co-operatives (Birchall, 1994, p. 174).

The Americas While consumer co-operatives spread in Europe, they were less successful in the USA. Following the US Civil War there were movements among farmers and workers that encouraged consumer co-operatives. In rural areas railway construction assisted the development of agriculture and settlement thereby allowing farmers and their co-operatives access to wholesalers and manufacturers. The Patrons of Husbandry or the Grange Movement, which was founded in Washington in December 1867, aimed to remove middlemen and bring consumers, farmers, 96 Diversification and manufacturers into “direct and friendly relations.” The Grange-sponsored Rochdale co-operative stores spread throughout New England, the Midwest, the south, and across to the Pacific. Problems arose from the insistence on cash transfers, with farmer members withdrawing because of the failure to provide credit. Where credit was given, this created serious financial liabilities for the co-operatives. There were also problems attracting immigrant farmers and objections to the extension of membership beyond farmers who worked their own land. While some stores continued to operate, the Grange movement had lost its momentum by the mid- 1880s (Keillor, 2000, pp. 38–39; Parker, 1956, pp. 10–15). There were also labor organizations that encouraged co-operatives, such as the Knights of St. Crispin and the KOL. While the focus of the KOL shifted from 1884 to a “co-operative industrial system,” its 1878 constitution called for “distributive co-operatives.” By 1883 the KOL organized between 50 and 60 co-operative stores. While they operated generally on Rochdale principles, they were closed organizations that admitted and traded only with KOL members. Stores were organized particularly in towns where the only retailer was a company store. While the KOL collapsed in the 1890s, some of its co-operative stores continued to operate (Parker, 1956, pp. 16–21). Another organization that encouraged consumer co-operatives was the ‘labor exchange’ movement, which began in Missouri in 1889. Members were asked to bring any “product of labor,” such as a handicraft, to the labor exchange where they would receive a check for its estimated wholesale value. The check could be used to buy any article on display, such as food, clothing, and homewares. While the national leadership of the movement opposed conventional co-operation, these exchanges developed into Rochdale consumer co-operatives in California and Washington State. The labor exchange organized in Dos Palos, California, in 1896 became the Dos Palos Rochdale Co. in 1899, which remained in business until 1920 (Parker, 1956, p. 22). There was an attempt to establish a national body for co-operatives in the 1890s, when co-operatives formed the Co-operative Union of America in September 1895 at Cambridge, Massachusetts, to act as an educational and coordinating body for local co-operatives. The Co-operative Union joined the ICA and issued a newspaper. It only had 14 members in the north-eastern USA and faced financial difficulties. Following the dissolution of the Cambridge Co-operative Association, which was its major sponsor, it collapsed in 1899 (Parker, 1956, pp. 23–24). While broader attempts to establish consumer co-operatives failed in the nineteenth century, there were a number of independent consumer co-operatives in various locations that operated for varying periods. The Rochdale UCA in Philadelphia increased its number of stores from one to three, but membership and sales did not match the expansion’s expenditure, and it closed in November 1866. More successful was the Philadelphia Industrial Co-operative Society, which was also based on Rochdale principles and operated from 1874 to 1890. On the Pacific coast the first consumers’ co-operative in California was organized in 1867 and called the Co-operative Union Store, but it only lasted a short time (Bemis, 1888, pp. 141–30; Neptune, 1977, p. 4; Parker, 1956, pp. 25–26). Diversification 97

Despite some local successes, the future of consumer co-operatives in the USA did not look very promising at the end of the nineteenth century. Edward Bemis noted that the “lack of the co-operative spirit, the stimulus to individualism, the migratory character of our people, and the failure thus far to appreciate the importance of small economies, probably account for the weakness of distributive co-operation in America” (1895, p. 377). Limited data from the US Bureau of Labor Statistics indicates that there were only 96 consumer co-operatives in 23 US states in 1900. They were primarily found in Massachusetts (20), Kansas (10), and Minnesota (10). While there was a move to establish a co-operative wholesaler in California, there were no wholesalers or federations elsewhere. Consumer co-operatives tended to run their own small retail business with virtually no contact with other co-operatives (Parker, 1956, pp. 34–35). There were fluctuations of interest in US consumer co-operatives from 1900 to the outbreak of the First World War. There was a gradual expansion of interest in co-operatives between 1900 and 1910 in the context of criticism of the high prices set by monopolies. Socialist and farmer groups promoted them as a means of redressing injustice and eliminating waste. The movement remained uncoordinated however, with 343 co-operatives in 1905, of which 138 were in the Midwest and 98 were in the far west of the USA. One example of enthusiasm for retail co-operatives was the Right Relationship League (RRL), which was formed in Minneapolis in 1905 and organized on a regional basis, it encouraged locals to get together enough members and capital and then buy an existing store to eliminate start-up costs and not increase the level of competition. The owner of the old store generally became the manager. By January 1908 the RRL had 47 stores located in western Wisconsin and in Minnesota. There were financial management problems and the League discontinued operations in 1915 (Keillor, 2000, pp. 221–225; Parker, 1956, pp. 39–54). Canadian consumer co-operatives were linked to developments in the USA through the Grange and the KOL, with approximately 40 co-operatives briefly appearing in communities such as Toronto, Hamilton, and Victoria. They also spread in mining communities in areas such as Nova Scotia, where they continued to compete with company stores. Immigrant Lancashire miners in 1906 founded the British Canadian co-operative at Sydney Mines, Nova Scotia, which became the largest consumer co-operative in North America for several decades. The continued British influence on the development of Canadian consumer co-operatives is highlighted by George Keen, the first General Secretary of the Co-operative Union of Canada (CUC) from its formation in 1909 until 1944. He was an English immigrant and great admirer of Holyoake and the Rochdale model, and he believed in the federalist model of consumer co-operatives and eventual democratic co-operative control of the whole economy (Birchall, 1997; MacPherson, 1999b, pp. 332–339). As in Europe, farmers played an important role in the development of the co-operative movement in Canada and the USA. Railways provided the opportunity for the development of domestic and export markets and farmers saw a need to co-operate to overcome the limitations of family farms in terms of capital 98 Diversification and labor. The Grange movement in both countries in the mid-1870s recognized the advantages of the application of the Rochdale system to the marketing of goods such as tobacco and wool. US farmers’ organizations such as the Farmers Alliance, formed in 1872, and the American Society of Equity, formed in 1902, which were short-lived, and the Farmers’ Educational and Co-operative Union formed in 1902, all continued to promote agricultural co-operatives. From the 1870s cranberry farmers in New Jersey and later Massachusetts formed growers’ associations to market their produce and obtain market information, while from the 1880s Californian fruit farmers developed marketing associations for dried fruits and nuts. As in Europe, US and Canadian dairy farmers formed co-operatives to process dairy products, with over 1,200 co-operative creameries across Canada by 1900. There were differences as, unlike their Danish counterparts, Minnesota’s co-operative creameries did not normally require members to sign a milk delivery contract. On the Canadian Prairies grain growers formed associations—the United Grain Growers in 1906, the Alberta Co-operative Elevator Company in 1913, and the Saskatchewan Co-operative Elevator Company (SCEC) in 1913—to gain a better bargaining position by organizing grain storage elevators locally and at port railway terminals. By 1914 in the USA there were 270 farmers’ grain elevators in Minnesota with a membership of 34,500 farmers; this was 20 percent of Minnesota’s farmers, marketing 30 percent of the state’s grain. In Ontario farmer concerns about rural depopulation, inadequate rural services, and government dis- interest led to the United Farmers of Ontario, which created the United Farmers’ Co-operative Company (UFCC) in 1914, a system of local co-operatives that marketed produce and supplied agricultural provisions to farmers (Birchall, 1997, p. 196; Ingalsbe and Groves, 1989, p. 112; Keillor, 2000, pp. 126, 210; Knapp, 1969, pp. 56–109; MacPherson, 1979, pp. 10–15, 1999b, p. 335). The relationship of US agricultural co-operatives with the US government fluctuated. While before 1890 they were largely ignored, the passage of the Sherman Antitrust Act led to attempts to declare agricultural co-operatives illegal through court action. The situation improved before the First World War after President Theodore Roosevelt established the Country Life Commission in 1908, which recognized the success of rural financial co-operatives in Europe, and President Wilson sent, in 1913, a Commission to study co-operative development in Europe. The Federal Farm Loan Act of 1913 provided the basis for the establishment of a co-operative Farm Credit System, while the US Department of Agriculture (USDA) in 1913 broadened its research and advisory programs to include co-operatives (Curl, 2012, pp. 118–119; Ingalsbe and Groves, 1989, pp. 113–14). Financial co-operatives also expanded in Canada and the USA. Alphonse Desjardins, born in Quebec, had a major influence both in Canada and the USA. Catholic social activism, Luzzatti, and Raiffeisien influenced Desjardins’ desire to alleviate the problems of the poor in Quebec and he formed a peoples’ bank, La Caisse populaire de Lévis, in 1900. With the support of his wife, Dorimene Desjardins, he perfected the operations of people’s banks and expanded them throughout Canada. The movement of Quebec immigrants across the US border Diversification 99 encouraged the spread of the idea to the New England states. There was a need in the USA for financial co-operatives as the existing banking system was not meeting the needs of farmers or the urban poor. Desjardins also assisted in the formation of the first credit union in the USA in 1909, the St Mary’s Co-operative Credit Association in Manchester, New Hampshire, following a request for assistance from the Monsignor of St. Mary’s Catholic Church. The New Hampshire legislature passed a special act to provide statutory support for the St. Mary’s association and to allow the establishment of similar financial co-operatives. Pierre Jay, the Massachusetts Commissioner for Banks, with assistance from Desjardins and the Boston entrepreneur Edward Filene, who had been acquainted with the financial co-operatives in British India, secured the passage of the Massachusetts Credit Union Enabling Act in 1912, which adopted the term ‘credit union’ rather than ‘co-operative bank,’ as the latter was used indiscriminately by local building and loan associations (MacPherson, 1999a, pp. 8–15; Shaffer, 1999, pp. 211–212; Voorhis, 1961, pp. 115–16). Filene joined with other business leaders to form the Massachusetts Credit Union Association in 1914, which MacPherson claims “was the first attempt at creating an institution that could systematically develop credit unions” (1999a, p. 15). There was also interest in the USA and Canada in worker co-operatives. There was a wave of interest within the National Labor Union (NLU), which was formed by unions in 1866 as a national trade union organization. The NLU was built on the growth of unionism in the North during the Civil War. Its foundation Congress called for co-operative workshops, co-operative stores, and the passage of co-operative legislation in all states. There were worker co-operatives formed by skilled workers in the wake of lockouts and failed defensive strikes, with most of them being producer co-operatives with outside shareholders. There were 36 co-operative foundries and 40 co-operative shoe factories operating between 1866 and 1876. There was also a laundry women’s co-operative in Troy, New York, and the Chesapeake Marine Railway and Drydock Company in Baltimore, which employed black workers. Both the NLU and many of its co-operatives were wiped away by the financial panic of 1873 and a subsequent depression. There was another wave of worker co-operatives associated with the KOL in the 1880s, with 334 worker co-operatives established between 1880 and 1888 (Curl, 2012, pp. 64–73, 86–109). The KOL also inspired worker co-operatives in Canada, such as a co-operative at Stratford, Ontario, which produced Little Knight cigars (Kealey and Palmer, 1987, pp. 365–369). While these worker co-operatives eventually failed, Kealey and Palmer noted such ventures “stood as testimonies to the capacities of the common working people, reminding all of them of the potential of self-management” (1987, p. 368). There was some co-operative activity in other parts of the Americas, such as the British colony of Jamaica, and co-operative legislation was present in several jurisdictions, including the British colony of the Barbados and Brazil (Birchall, 1997, p. 198; Davies, 1904, p. 118; Horace Plunkett Foundation, 1928, pp. 59, 65–66). A significant co-operative movement developed in Argentina, with British, 100 Diversification

German, and French immigrants bringing their co-operative experiences with them. While there are examples of a range of co-operatives, such as a consumer co-operative in 1885 and a worker co-operative in 1898, they were short-lived. Juan B. Justo, a doctor, became a major promoter of co-operatives, writing an influential pamphlet on them, and founding El Hogar Obrero (EHO) in 1905. EHO initially focused on providing economical housing for its members, but expanded to consumer co-operatives. While there was an unsuccessful legislative attempt to assimilate co-operatives with joint-stock companies, the EHO provided the impe- tus for an expansion of co-operatives in Argentina (Delom, 1943, p. 41).

Australia and NZ From the 1860s there were waves of interest in Rochdale consumer co-operatives in both countries. Despite the long economic boom that followed the Australian gold rushes, Rochdale consumer co-operatives peaked in the 1860s against the background of concerns over unemployment and urban poverty. Concerns about living standards and disillusionment with the existing political system led to a second wave of interest in the late 1880s and early 1890s. Over 50 societies were registered in NSW between 1886 and 1900. Many were short-lived, and when the first official statistics were collected in 1895, only 19 societies out of 62 still existed. There was a lull in registrations from 1895 until 1905 as the economy faced depression and drought. In the following decade, against a background of economic prosperity and rising prices, 55 new societies were registered in NSW. However, by the end of 1914 only 45 remained, four of which were in liquidation (Balnave and Patmore, 2008, pp. 99–100). In NZ, David Bonthron, an immigrant from Scotland, brought with him the rules of the Saint Cuthbert’s co-operative in Edinburgh to Invercargill on South Island, where he helped organize a co-operative using the rules of the Scottish society in 1873. Despite opposition from local storekeepers, including the use of ‘spies,’ they purchased their own store, and by December 1874 had three employees.2 A surge of interest in consumer co-operatives occurred in the years 1889–1894. Eight “old British co-operators” at the Addington railway workshops formed the Christchurch Working Men’s Co-operative Society in June 1889, drawing their rules from the Kinning Park and Torquay co-operatives in the UK, to combat high prices for “the necessaries of life.” Many co-operatives established in this period were short-lived. Of the 20 registered at this juncture, only five were still in existence at the turn of the century, and only one at the outbreak of war in 1914 (Balnave and Patmore, 2008, pp. 99–100). Rochdale co-operatives could be found in mining districts and metropolitan areas of Australia and NZ. British immigrant miners played an important role in bringing the Rochdale principles to coalmining districts, in which retail co-operatives became a common feature. Beyond the Australian and NZ mining districts, co-operatives were established in NZ industrial towns such as Petone, and in metropolitan areas. The Wellington Co-operative was established Diversification 101 in 1914. Co-operatives in metropolitan areas of Australia included the Adelaide Co-operative, one of Australia’s longest surviving Rochdale co-operatives. While it was surrounded by coalmining districts, the Newcastle and Suburban Co-operative served the needs of a growing metropolis and its first store was opened in August 1898. As in Britain, co-operatives had difficulties establishing a foothold in the larger cities of Melbourne and Sydney. An exception was Balmain in Sydney, which had coalmining under Sydney harbor, where a co-operative was established in 1902 (Balnave and Patmore, 2008, p. 100, 2012, pp. 989–999). In Australia, the NSW Co-operative Wholesale Society (NSWCWS) was founded in 1912 by four Hunter Valley consumer co-operatives. As in Britain, Australian consumer co-operatives faced serious challenges including price-cutting by competitors, and the refusal of supply by some wholesalers concerned with maintaining relationships with existing businesses. The NSWCWS was established to avoid such issues but was faced with boycotts by flour millers and oil companies in the years prior to the First World War. Manufacturers, importers, and the agents of overseas companies refused to include the NSWCWS on their wholesale list (Balnave and Patmore, 2008, p. 101). Overall, the Australian consumer co-operatives remained relatively small compared to those in European countries, with approximately 51 societies in 1913 (Pulsford, 1913, pp. 44–49). Both in NZ and Australia agricultural co-operatives developed particularly among dairy farmers. When the Liberal Party came into office in NZ in 1891 it carried out a land redistribution program, with estates being divided into small leasehold farms, and it acquired three million acres of Maori land for commercial production. The Liberals also provided credit at a cheap rate of interest to small farmers through the Advances to Settlers Act of 1894. Dairy farmers, with government advice and encouragement, formed co-operatives to process and market their output, with the available credit allowing them to purchase the latest technology, such as cream separators, to ensure high quality butter and cheese, and to employ skilled labor to maintain the equipment (Denoon, 1983, pp. 105–106). Refrigeration, with the first cargo of frozen meat sent from NZ to England in 1882, provided the means for NZ dairy farmers to sell their produce on an international market. Over half of the NZ farmers’ cheese and butter factories were co-operatives by 1903 (Sinclair, 2000, pp. 114, 174). Dairy co-operatives also took off in Australia. There was awareness of the Rochdale co-operative model among dairy farmers and rural press coverage of the success of dairying co-operatives in Denmark.3 The Illawarra district on the NSW south coast, with its closely knit dairy communities, provided the initial interest in co-operation, with farmers increasingly dissatisfied with the network of agents and merchants selling their products in Sydney, and looking at the possibilities of co-operation, with better transport links, and refrigeration. The cream separator was introduced into NSW from Denmark in 1881, encouraging farmers to come together to build factories, with Illawarra farmers sending a representative to study co-operative production in Denmark in 1884. The CWS, through a tour of Australia in 1896 and the establishment of a Sydney depot in 102 Diversification

1898, encouraged the co-operative export of dairy products to the UK. The first co-operative for the distribution of farm and dairy products was the South Coast and West Camden Co-operative Company (SCWCCS) at Kiama in 1880, and the first known co-operative butter factory was at Kiama in 1884.4 Co-operative dairies spread to northern NSW, Queensland, SA, and Victoria, through the immigration of Illawarra dairy farmers and local initiatives. A successful attempt to rationalize the various co-operative creameries occurred in the Richmond River Region of NSW, when the North Coast Fresh Food and Cold Storage Limited (later NORCO, the North Coast Co-operative Company) opened a central creamery at Byron Bay in 1893. There were tensions with bogus co-operatives being formed, the failure of some dairying co-operatives, including the SCWCCS, and localism all undermining attempts to form more regional dairying co-operatives. Differences arose between those farmers who welcomed state support for dairy co- operatives, as in SA and Victoria, and those who wished autonomy from the state, as in NSW (Lewis, 2006, pp. 3–20; Linn, 1988, pp. 19–33; Todd, 1994, p. 24). Beyond consumer and dairying co-operatives, there were other forms of co-operatives in Australia and NZ. While the 1865 NSW version of the British IAPSA barred co-operative banking, there were building societies and Starr- Bowkett societies to provide housing finance, particularly in the growing cities of Sydney and Melbourne. Many building societies collapsed during the 1890s Depression and, particularly in Victoria, they obtained a reputation for massive fraud and property speculation. Some Australian building societies survived, including the Perth Building Society in WA, which was founded in 1862 and whose directors were willing to deposit their own funds to maintain members’ confidence during panic withdrawals of funds in the early 1890s. The Starr-Bowkett societies in NSW, insulated from the vagaries of the financial market through self-financing, grew from 12 societies in 1900 to 108 in 1914, fueled by a loss of confidence in building societies, the workers’ inability to obtain bank housing finance, and the desire to buy their own property as rents skyrocketed in NSW prior to the First World War (Darnell, 2006, pp. 20–22; Jackson, 1984; Lewis, 1992, p. 11; Moore, 1989, pp. 3–13). There were also co-operative money clubs in NZ, the earliest of which was registered in 1885 (Smith, 1969, p. 208). The 1890s’ Depression, the productive reorganization of skilled craft work, and the defeat of the unions during industrial conflict in the early 1890s all fueled an upsurge of union interest in NSW in co-operative enterprises, such as a female co-operative laundry in Sydney and co-operative labor associations that bid on specific construction projects. These co-operatives failed due to insufficient capital and a declining demand for their services as the Depression deepened. Colonial governments also tried unsuccessfully to redress growing unemployment by establishing co-operative agricultural settlements for the unemployed. The economic and industrial climate of the early 1890s prompted some labor activists to leave Australia and establish a short-lived co-operative community in Paraguay (Lewis, 1992, pp. 11–46; Markey, 1985). Diversification 103

Africa and Asia Colonialization and European settlement played a significant role in the expansion of co-operatives in Africa and Asia. In both the French and British territories of Africa and Asia there was interest in co-operatives. French settlers in Algeria were interested in co-operatives. A co-operative in Algiers was founded in 1864 after a visit by Alfred Cobden, the Member for Rochdale in the British House of Commons, which exchanged products in return for manufactured Parisian goods (Furlough, 1991, p. 49). There were reports in May 1869 of financial and consumer co-operatives in Algiers and six other locations in Algeria, but there were concerns that the co-operative movement was bitterly divided (Ludlow, 1869, p. 20). By 1872 one notable financial co-operative in Algiers, Crédit Mutuel D’Alger, was growing and thriving, with numerous meetings and a total capital of approximately 11,000 francs (Holyoake, 1872, p. 95). The French government directly intervened in the creation of colonial co-operatives. As early as 1875 in Algeria cereal banks were encouraged among local communities to prevent food shortages and hunger. The French in 1893 legislated for Societé Indigène de Prévoyance (SIP), native provident societies, which were established in Algeria, Tunisia, and Indochina. These co-operatives were centrally administered by the colonial authority with agricultural co-operatives being under the Minister for Agriculture and credit unions under the Ministry for Finance. The SIPs were extended by decree to French West Africa in 1910, with their initial impact being in the Senegal peanut industry. In French West Africa, the SIP’s role extended to include supplying agricultural equipment, insurance, and the provision of loans. While the original intent was to encourage collectivist traditions on a voluntary basis, such as Muslim Brotherhoods at the local level, the SIPs in French West Africa become compulsory in 1915 and were administered by colonial public servants (Asiwaju, 1981–82, pp. 91–93; Birchall, 1997, p. 134; Develtere, 2008, p. 8; Thompson and Adloff, 1958, pp. 356–357). In South Africa there was early interest in co-operatives, with a proposal from co-operators in Cape Town in 1865 to the CWS that it export goods to them (Klinoch and Butt, 1981, p. 33). White settlers established agricultural co-operatives to develop their farming communities, particularly after the war of 1899–1902, with farming co-operative experts being brought to South Africa from Denmark and Ireland. There were Agricultural Development Acts passed in Natal in 1904 and Cape Colony in 1905 that included provisions for co-operatives. The legislation allowed government loans to be paid to farmers who formed co-operatives, largely in the dairy industry to establish creameries and cheese factories, with a preference for forming joint-stock companies with co-operative principles under company legislation. There were also a small number of co-operative wineries formed in the Western Cape Colony between 1905 and 1909. Many of the agricultural co-operatives, however, subsequently failed due to a lack of supervision and the failure to understand the distinction between co-operatives and joint-stock companies. 104 Diversification

The wine co-operatives failed from over-capitalization, in terms of their subsequent output. It was not until 1908 and 1910 that specific Agricultural Co-operative Acts were passed in Transvaal and Orange Free State that provided for the setting up of co-operatives with unlimited liability, which were also eligible for government loans. Even though there was supervision under this legislation by a Registrar and Co-operative Office in the Department of Agriculture, there were often failures due to excessive credit. When the federal government passed the Agriculture Bank in 1912 it recognized both co-operatives with limited and co-operatives with unlimited liability. Two successful survivors of these agriculture co-operatives were the South African Dried Fruit Company—which was formed in 1906 and graded, picked, stored, and marketed dried fruit after members had dried the fruit—and a co-operative society for the marketing, curing, and grading of tobacco in Transvaal in 1908. Outside of South Africa, European farmers in the British territories of Kenya in 1908, Northern Rhodesia in 1914, and Southern Rhodesia in 1909, formed agricultural co-operatives for marketing and production (Digby, 1970, pp. 167, 185, 188–193, 199; Okbandrias and Okem, 2016, p. 72; Rhodes, 2012, p. 142). There was at least one example of indigenous farmers forming a marketing co-operative to bypass the low prices paid by agents in Uganda in 1913 (Develtere, 2008, p. 6). While the focus in South Africa was on agricultural co-operatives, there was some interest in consumer co-operatives, with a co-operative founded at Pietermaritzburg in Natal in 1892 (Okbandrias and Okem, 2016, p. 72). By 1904 there were at least six operating in South Africa, with two in Cape Town, one in Durban, one in Kimberley, one in Uitenhage, and one in Johannesburg. The Transvaal Civil Service Co-operative was the largest of these with 1,759 members in 1904 and stores in Johannesburg and Pretoria (ICA, 1904, pp. 569–571). While these societies catered for Europeans, the Simon’s Town co-operative, which was a Royal Navy Base, claimed to be the most “cosmopolitan,” with membership consisting of “English, Dutch, Greeks, Malays, and Kroomen,” who were Africans recruited into the Royal Navy (ICA, 1904, p. 570). Four of the six were federated with the English CWS to import supplies, but the Simon’s Town co-operative criticized the CWS for the poor packing of goods and hoped that the CWS would open a depot in South Africa (ICA, 1904, pp. 569–570). The British government encouraged the spread of Raiffeisen financial co- operatives in India. There were examples of Indian initiatives in financial co-operatives, such as in the Hoshiapur district of Punjab in 1892 where a society combined co-operative credit with land reclamation. There was growing national interest in co-operatives with a report by Sir Frederick Nicholson from Madras, which examined European financial co-operatives and was issued in 1895 and 1897, an influential book published in 1900 on financial co-operatives in northern India by H. Dupernex, a member of the Indian Civil Service, and local district initiatives in forming financial co-operatives. The government of India enacted the Co-operative Credit Societies Act of 1904, which it hoped would break the power of the moneylender in Indian villages, who were the focus of serious riots in the Deccan region as early as 1875, and help redress poverty. A second Diversification 105 co-operative act in 1912 allowed for the creation of co-operative unions such as Central Banks, provided for other forms of co-operative enterprise, and prohibited unregistered organizations from using the term ‘co-operative.’ The Indian model was not imposed on the villages, as in French territories, but encouraged locals to form and register co-operatives on their own initiative, but Indian initiatives, such as the one in Hoshiapur, had to meet the requirements of registration to be legally recognized (Birchall, 2011, p. 182; Catanach, 1970, pp. 10–55; Dupernex, 1900; Fay, 1939, pp. 374–375; Sami, 2011, pp. 11–17). By 1915 the Indian co-operative movement was primarily based on rural financial co-operatives, with 17,327 societies and 824,000 members, of which 16,106 were agricultural societies (Mukherji, 1917, p. 396). The British-Indian model of co-operatives was adopted in Ceylon in 1911 (Birchall, 2011, p. 183). While the development of co-operatives in Asia and Africa was associated with colonialism and European settlement, the Japanese movement grew against a background of industrialization and modernization, following the beginning of the Meiji period in 1868, and without European colonization. There were rural financial co-operatives and agricultural co-operatives in the silk and tea industries, which increased production quality for a growing export market. Rochdale co-operative stores were first established in Tokyo and Osaka in 1879. Drawing upon German legislation, the Japanese Parliament passed the Industrial Co-operative Law in 1900 to encourage a range of co-operatives, including agricultural and consumer co-operatives and, as in other countries, to help farmers reduce their reliance on moneylenders through financial co-operatives (Grubel, 1999, p. 306; Kurimoto, 2003, 2010, p. 4). This legislation provided a favorable climate for Japanese co-operatives with the formation of the Central Union of Co-operative Societies of Japan (CUCSJ) in 1905 to promote co-operatives and co-ordinate their activities. By 1914 there were 11,160 co-operatives, 63 co-operative unions or federations, and a membership of 1,350,360, with 9,274 co-operatives either exclusively dealing with credit, or being hybrid co-operatives combining credit and other activities, dominating the movement (CUCSJ, 1937, pp. 10, 30; Ogata, 1923, pp. 108–110). The Japanese government also established financial co-operatives in its Korean colony in 1907, to encourage agricultural development and integrate the Korean economy, under a strict control that undermined the co-operative principles of autonomy and democracy (Jung and Rösner, 2012, p. 85).

The ICA and international co-operation The origins of the ICA can be found in the Co-operative Congresses and the CU in Britain. Both provided links between British co-operators and their overseas counterparts. The 1869 Congress had overseas visitors from France, Norway, Belgium, and the USA, and papers were presented on the state of national co-operative movements including those in Denmark, Algeria, Germany, and Italy (Ludlow, 1869, pp. 9, 17–28). The 1884 Congress set up a Foreign Inquiry Committee, which obtained information on the extent of co-operation internationally and 106 Diversification persuaded the Foreign Office to undertake an international study, which was published in 1886. At the Congress of 1886 Edouard de Boyve, the founder of the French consumer co-operative movement, called for an alliance between French and English co-operators. The movement gathered pace with the meeting of friends of co-operative production at the 1892 Congress at Rochdale forming a committee, the International Alliance of Friends of Co-operative Production, to organize an International Congress in 1893. The death of Neale, who was a prominent backer of the Alliance, delayed the Congress until 1895. In the meantime, Plunkett persuaded organizers in 1894 to broaden the Congress beyond producer co-operatives, with the CU providing support (Flanagan, 1969, pp. 29–31). The first ICA Congress was held in London in August 1895 with participants from a range of countries, including Argentina, Australia, Denmark, Italy, Germany, India, and the USA, with the largest number being from the UK. A Central Committee of 15 was elected, with six from the UK, and all the elected executive officers being from the UK. The British dominance of the ICA executive continued until the 1920s, except for Hans Müller from Switzerland, who briefly served as General Secretary in 1913, reflecting the support of the British co-operative movement for the ICA, and the high travel costs for other representatives outside Britain. There were eight subsequent congresses held throughout Europe before the outbreak of the First World War, with the 1902 Congress at Manchester abolishing individual membership and allowing only co-operative society affiliation. At the 1907 Congress in Cremona, Italy, the British co-operative movement dominated the membership, with 371 of 632 affiliated societies being from Britain and providing over 60 percent of the ICA’s finances. Besides early debates over the constitution and rules of the ICA, there were debates over profit sharing for workers in producer co-operatives, the role of the state in co-operative development, and at the Glasgow Conference in 1913 the role that the co-operative movement could play in preventing the growing possibility of war, with a peace resolution being passed unanimously (Birchall, 1997, p. 45; ICA, 1895, p. 30; Rhodes, 1995, pp. 27–31; Shaffer, 1999, pp. 117–118; Watkins, 1970, p. 75). There was an ICA interest in developing closer links between the European wholesale societies, of which there were 15 in 1908, which the British wholesalers supported and encouraged. The potential trading links between these wholesalers had been highlighted by an international exhibition held at the ICA Congress at Manchester in 1902. There were a wide range of European co-operative products, including Italian potatoes, French lithographs, Russian leatherwork, and Dutch paints. European co-operators admired the success of the CWS and paid visits to CWS production facilities to learn and adapt CWS practices in their countries. There were proposals at the 1907 and 1908 ICA Congresses for a federation of European Wholesale Societies that would co-ordinate the exchange and production of co-operative goods across national borders. International wholesaling would combat boycotts organized by private traders, such as in Sweden where a sugar manufacturers’ syndicate had refused to supply the wholesale co-operative Diversification 107 and had forced it to import more expensive sugar. There was also an interest in matching the organization of capitalism globally. The 1907 ICA Congress established an International Co-operative Trading Committee but it fell into disuse during the First World War (Gurney, 1996, pp. 95–99). While the ICA became the major international voice for the co-operative movement, there were splits reflecting the growing diversity of the international co-operative movement, as major agricultural and financial co-operatives withdrew. The early years of the ICA were dominated by conflicts between the French advocates of co-partnership or profit-sharing co-operative production and the British advocates of consumer co-operatives. Conflicts within the German and Austrian movements, over the issue of political neutrality and consumer co-operatives, underpinned the decision by the AV and its Austrian counterpart, which both primarily covered rural financial co-operatives, to withdraw from the ICA at the 1904 Congress in Budapest after a resolution was adopted that gave priority to the extension of consumer co-operatives in rural areas. Some of the small number of agricultural co-operatives in the ICA withdrew after the Budapest Congress refused to support their argument for state aid to co-operatives. The Austrian and German Imperial Unions of Agricultural Co-operatives refused to join the ICA and by 1912 there was an International League of Agricultural Co-operative Societies, whose members included representatives from Denmark, Germany, Japan, Rumania, Russia, and Serbia. At the outbreak of the First World War the ICA was dominated by consumer societies with working-class sympathies, particularly from Britain, but it insisted on political autonomy from socialist parties and trade unions (Hilson, 2002, p. 207; ICA, 1904, pp. 108–109; Krasheninnikov, 1988, pp. 40–41; Ogata, 1923, p. 111; Rhodes, 1995, pp. 24–27; Watkins, 1970, pp. 74–75).

Conclusion The period from 1864 to 1914 witnessed the development of many of the underlying features of the modern co-operative movement. Industrialization, technological changes, market failures, occupational identity, colonialism, immigration, and social unrest encouraged the formation of co-operatives by workers, farmers, and small business owners. British consumer co-operatives moved into a wide range of activities, including wholesaling, factory production, housing, insurance, and banking. The CWS developed an international trade network that included shipping, overseas depots, and tea plantations in India and Ceylon. They adopted a principle of consumer sovereignty that overrode the interests of their employees in participating in the benefits of co-operation through profit sharing, and retarded the development of agricultural and financial co-operatives. The British consumer co-operative developed a culture built around local co-operatives, with the CU and WCG promoting education and political engagement. British co-operators played a significant role in the formation and early operations of the ICA. 108 Diversification

While the British developed a strong consumer co-operative movement, other countries took different paths. In Denmark, farmers, not workers, in small rural communities took the lead in establishing consumer co-operatives. Financial co-operatives dominated the co-operative landscape in a number of countries including Germany, India, Japan, and Russia. Denmark became an international center for the spread of dairy co-operatives. Agricultural co-operatives played a crucial role in Ireland and in settler economies such as Australia, New Zealand, Canada, the USA, and South Africa. Different approaches led to tensions between the ICA and the financial and agricultural co-operatives at the beginning of a short period in world history that witnessed the rise of communism and fascism, two world wars, and the economic strains of the Great Depression.

Notes 1 The Times (London, UK), November 3, 1899, p. 9. 2 The Co-operative News (UK), March 13, 1875, p. 125. 3 The Richmond River Herald and Northern Districts Advertiser (Coraki, NSW, Australia), April 12, 1889, p. 3. 4 The Kiama Independent (NSW, Australia), June 20, 1884, p. 2.

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The British co-operative movement continued to grow and the co-operative business model spread even further throughout the world from 1914 to 1945, but faced major challenges: two world wars; the economic impact of the Great Depression; and the rise of totalitarianism in the forms of communism and fascism. One estimate indicates that worldwide by 1937 there were at least 810,512 co-operative societies, with 143,260,953 members, covering almost every part of the world, with the major types being 672,184 agricultural co-operatives followed by 50,279 consumer co-operatives (Cole, 1944, p. 353). This chapter starts with a brief general overview of these challenges and their impact on the co-operative business model, and then provides a more detailed examination of developments on a geographical basis. It initially examines the impact on Europe, Asia, and Africa, where the military impact of the two World Wars, in terms of fighting foreign occupation, and totalitarianism were greatest. It then examines developments in the Americas and Australasia and concludes with a discussion of the ICA during this turbulent period. The First and Second World Wars, and their antecedents such as the Sino-Japanese War which commenced in 1937, had major implications for the international co-operative movement, where direct engagement particularly impacted on Europe, Asia, and Northern Africa. There was disruption to trade through submarine warfare, armed conflict, and military occupation. Aerial warfare, which dramatically increased during the Second World War, destroyed co-operative infrastructure and created casualties far beyond the front lines. There was also rationing, which limited both the consumption and production of essential items. As was highlighted by CWS food supplies to Ireland during the 1913 strikes, consumer co-operative movements, where well developed, could provide an important means for governments to distribute scarce rationed goods. In Italy during the First World War the government used consumer co-operatives as distribution centers for rationed food, Challenges 115 underpinning a dramatic growth in consumer co-operatives from 2,200 in 1915 to 6,481 in 1921 (Battilani, Balnave, and Patmore, 2015, pp. 58–59). Similarly, during the Second World War in Ceylon, the British colonial government organized an extensive network of consumer co-operatives to assist with the distribution of essential supplies, with the number of co-operatives growing from 38 in 1942 to over 4,000 in 1945, with a membership of over one million. Birchall noted that these co-operatives “were quite weak as businesses and without much member involvement” (2011b, p. 185). Co-operatives also provided a means whereby production could be organized quickly to manufacture military supplies to fight an enemy, as in China, where the industrial base was destroyed following the full-scale Japanese invasion in July 1937 (Cook and Clegg, 2011). The rise of totalitarianism in the forms of communism and fascism provided another challenge for co-operative movements. The democratic nature of co-operatives and their control of significant economic assets in some countries represented a threat to the centralized authoritarian nature of these philosophies. Italian private retailers found common ground with the fascists in their opposition to “Bolshevik institutions” such as co-operatives (Morris, 1999, p. 155). The Nazis, during their election campaigns in Germany, tried to win the support of private retailers and small businesses by promising to destroy the consumer co-operatives; and Nazi Party activists claimed that consumer co-operatives were financed by Jewish interests to destroy German small business. The small-business interests lobbied the Nazis to destroy the remaining consumer co-operatives after they came to power in 1933 (Fairbairn, 1999, p. 294; Prinz, 2003, pp. 28–30). Even before the fascists seized power in Germany and Italy, the co-operatives there faced a wave of vandalism and violence by uniformed members of the fascist parties to win the support of private traders. German and Italian fascist governments closed national co-operative apex organizations and replaced them with new undemocratic corporatist bodies that denied class conflict and sought collaboration between employers, labor, and the state (Battilani, Balnave, and Patmore, 2015, p. 60; Birchall, 1997, pp. 48–50; Watkins, 1970, pp. 138, 178). While the German conservative rural co-operatives were left relatively untouched by the Nazis, a Nazi decree in February 1941 systematically liquidated the remaining consumer co-operatives and made their assets and facilities part of the German Labor Front (Fairbairn, 1999, pp. 293–295). In the chaos that followed the 1917 Bolshevik Revolution in Russia, the communists allowed consumer co-operatives to continue to assist with the distribution of food and other essentials but they had lost their autonomy by 1919. In 1924 voluntary membership was restored and share capital to consumer co-operatives was reinstated. By 1935 the co-operative movement in the Soviet Union was reduced ultimately to rural co-operatives (Birchall, 1997, pp. 52–53). The Great Depression of the 1930s was a further challenge for co-operatives. While the First World War had led to an economic boom for countries engaged in war production, there was a postwar slump from which the UK did not fully recover. Some countries, such as Australia, the USA, and Canada, benefited from 116 Challenges an economic boom in the 1920s, but all economies were engulfed in the 1930s Depression, which saw unemployment peak at 22 percent in the UK in 1932, 25 percent in the USA in 1933, and 44 percent in Germany in 1932. Workers who retained their jobs faced reduced wages and shorter hours through job rationing. Some countries raised tariff walls to protect their domestic economies, which disrupted international trade, and export-orientated Argentina found it necessary to sign bilateral trade agreements to maintain access to foreign markets. A 1931 agreement allowed Finland to export birch plywood free of duty to Argentina in return for Finland importing Argentinian bran and certain milling by-products without duties (Patmore, 2016, pp. 24–26; Fearns, 1973, pp. 120–123). There were dramatic political shifts with the election of Franklin Delano Roosevelt in 1932 and the subsequent interventionist New Deal in the USA on one hand, and on the other the accession of Adolph Hitler and the Nazis to power in Germany in 1933. While co-operatives suffered from declining demand and the disruption of agricultural markets, discontent with capitalism that arose from the failure of markets fueled an interest in co-operatives as a “third way” between capitalism and socialism, which created an upsurge in consumer co-operatives, for example in Australia, New Zealand, and the USA, and in financial co-operatives in the USA (Balnave and Patmore, 2008, pp. 100–101; Moody and Fite, 1971, pp. 148–169; Parker, 1937, p. 98). The following sections examine the impact of these broader events in a more detailed geographic approach, commencing with Europe.

Europe The First World War generally strengthened European consumer co-operative movements because of government reliance on co-operatives for the distribution of essential commodities and the production of goods for the military. The German consumer co-operative movement expanded its coverage beyond the working class as governments permitted civil servants to join socialist-led co-operatives and as middle-class Germans joined to increase their opportunities to obtain food supplies. German co-operatives benefited from a large increase in members’ savings due to the scarcity of goods and very high wages, while in Belgium, which was largely occupied by the Germans and where some consumer co-operatives were destroyed, co-operative members redeemed shares to increase available cash (Birchall, 1997, pp. 47–48; ICA, n.d., pp. 14, 42; Prinz, 2017, p. 50). By contrast, German agricultural co-operatives faced difficulties as farmers took advantage of rationing and the black market to sell directly to city dwellers and obtain high prices rather than delivering their produce to their co-operative for marketing (Staundinger and Weigand, 1920, p. 128). The growing consumer co-operative movement in France gained the first comprehensive legislation in May 1917, which recognized the Rochdale principle of member equality and, through the Ministry of Labor, provided loans at 2 percent interest to assist Challenges 117 co-operative development. An advisory Supreme Co-operative Council for consumer societies and workers’ producer societies within the Ministry of Labor also gave co-operatives a voice within the French government from February 1918. The French government relied heavily on the assistance of regional co-operatives for transporting and organizing the distribution of essential commodities in areas liberated from the Germans, where banking had practically ceased, communication was inadequate, and there were severe shortages of basic foodstuffs, leading to the establishment of new consumer co-operatives in the liberated areas (Furlough, 1991, pp. 255–257; ICA, n.d., pp. 37–38; ILO, 1920, p. 9). There was also a surge of consumer co-operatives in Ireland, with the number growing from 20 in 1914 to 48 in 1918; 12 had been formed by unions concerned with rising prices and wishing to broaden the role of the labor movement in Irish society (McCabe, 2009, pp. 117–118). Although the membership of British consumer co-operatives grew from 3,054,000 in 1914 to 4,131,000 in 1919, with 10 percent of the total sales of food and household goods by 1918, there were difficulties. The co-operative movement, unlike private traders, did not engage in war profiteering and whenever possible used its market power to restrain the price rises by private traders. The CWS purchased large amounts of agricultural land to contribute to food supplies and became the largest farming enterprise in Britain. It also committed itself to improving the quality of its goods by establishing a central laboratory in 1917 to check and test goods, including foodstuffs, textiles, and leather. As their membership grew, consumer co-operatives were disadvantaged by the government administering the rationing of scarce supplies of sugar, wheat, and other necessities based on prewar orders, forcing the co-operatives to further ration their supplies to a growing number of members (Cole, 1944, pp. 265, 371; Gurney, 1999, p. 158; Robertson, 2010, p. 140; Watkins, 1970, p. 110). There were also complaints that co-operative societies were being unfairly treated by local military service tribunals conscripting their essential staff, while the employees of private traders were being exempted (ICA, n.d., p. 47). Labor shortages and rising prices fueled union militancy, with the AUCE engaged in more than 70 strikes over wages against local co-operative societies (Vorberg-Rugh, 2009, p. 133). Consumer co-operatives faced hostility and the Asquith Liberal government decided to tax the trading surpluses of co-operatives to prevent profiteering, and a new coalition government clumsily implemented food rationing, which was administered by local Food Control Committees where private retailers were overrepresented. The consumer co-operatives decided that they needed a voice in Parliament and rejected political neutrality by formally entering politics in 1917. They formed the Co-operative Party to counter the rise of political opposition to co-operatives from independent shopkeepers and their calls for a boycott of retail co-operatives. There was some resistance among British consumer co-operatives from those supporting political neutrality who were concerned that the movement was aligning itself too closely to the fledgling 118 Challenges

Labour Party (Birchall, 1994, 113–115; Hilson, 2002, pp. 11–18, 2003, pp. 223–229, 2011, pp. 212–213; Mercer, 1924, p. 8). There were concerns expressed by Lloyd George, leader of the coalition government, about the “fusion of forces” between co-operatives, trade unions, and the Labour Party, and the co-operative movement was placed under government surveillance from 1917 (Gurney, 1999, pp. 158–159). Despite this, in the final year of the First World War the CWS and other co-operators were given positions in the Ministry of Food, but “by then the movement had concluded that political action was necessary to defend its interests” (Wilson, Webster, and Vorberg-Rugh, 2013, p. 151). There were also changes in Eastern Europe. In Russia, by 1917, half of all peasant households in Siberia were members of dairy, credit, or consumer co-operatives; and by 1918 there were 26,000 consumer co-operatives with approximately nine million members distributing 6.5 percent of food supplies in Central Russia (Birchall, 1997, p. 52). There was also a shift in the form of the Russian co-operative movement with the number of consumer co-operatives increasing faster than the number of financial co-operatives, with growing concerns about a reliable supply of essential goods. There was a reduction in the need for agricultural credit because of a decline in wartime agriculture and a greater flow of funds into villages because of higher agricultural prices and consumer remittances from the front. By January 1918 consumer co-operatives were the dominant type of co-operative, with a greater membership than that of financial co-operatives. The growing strength of the co-operative movement in Russia yielded it favorable co-operative legislation from the provisional government following the March 1917 Revolution, which had a significant number of co-operators in the Cabinet, and forced the Bolshevik government to drop plans to make co-operative membership compulsory in April 1918 as part of their efforts to incorporate consumer co-operatives into state administration (ICA, n.d., p. 73; ILO, 1925, pp. 16–21; Kayden and Antsiferov, 1929, pp. 17, 274; Rhodes, 1995, p. 97). In Finland, those consumer co-operatives that wished to ally themselves with the Socialists split from the “politically neutral” SOK in 1916, supporting proportional representation for the larger urban co-operatives and forming their own co-operative union and wholesaler Suomen Osuustukkukauppa (OTK) in 1917, a division that would hinder future capital accumulation and the development of manufacturing facilities (Hilson, 2017a, pp. 131–133; ICA, n.d., p. 30). In Croatia and Serbia the wartime disruption of traditional markets saw the transformation of agricultural credit and supply co-operatives into co-operatives distributing food items such as sugar and salt (Purvis, 1998a, p. 149). While there were European countries that remained neutral in the First World War, they were vulnerable to disruptions in international trade and serious shortages of essential foodstuffs had occurred by the winter of 1916–1917 (Hilson, 2003, p. 230). In Scandinavia, the British blockade on shipping intensified negotiations over the formation of a joint buying organization withNordisk Andelsforbund (NAF), a joint Danish, Norwegian, and Swedish wholesaling co-operative being formed in 1918, which was later joined by Finland in 1928, and by Iceland after the Second World War. While Scandinavian co-operatives Challenges 119 were not given a preferential position in the distribution of supplies during the First World War, they did not face the same government opposition as their British counterparts, and did not see the need to politicize (Friberg, 2017, p. 211). In Switzerland Verband Schweizerischer Konsumvereine, the Union of Swiss Consumer Societies, was formed in 1890 and, similarly to the CWS, engaged in agriculture and horticulture on a large scale to increase the country’s food supplies (Watkins, 1970, 110). From the end of the First World War in 1918 until the onset of the Great Depression in 1929 there was a continued expansion in the number of European consumer co-operatives, though with some setbacks. Many Italian consumer co-operatives faced bankruptcy after 1921 because they did not develop the management and technical skills to deal with the postwar challenges of high inflation and unemployment (Battilani, Balnave, and Patmore, 2015, p. 60). German consumer co-operatives also faced difficulties with hyperinflation, with an estimated 50 percent of German consumer co-operatives being close to bankruptcy in 1924, and a strained relationship with the labor movement over questions such as the adoption of the eight-hour day and its implications for operating costs. With the end of hyperinflation, German consumer co-operatives lost support—particularly among the middle class who had joined to ensure continued access to goods during the First World War and because of hyperinflation—and spent scarce resources on modernizing their stores to remain competitive in the brief boom that followed (Prinz, 2003, pp. 25, 27, 2017, p. 251). There was also increasing competition from chain stores and the rise of ‘dime stores,’ associated with the expansion of the US retailer Woolworth, particularly in Germany and the UK, and clones such as the Cinq et Dix in France, with their low prices for mass-produced goods, that were well-lit, decorated with bright colors, and played background music (Furlough, 1991, pp. 266–268). Despite this, by 1929 there were 6,169,000 members in Britain, 4,000,000 members in Germany, and 3,500,000 members in France. Ten percent or more of the population belonged to consumer co-operatives in Hungary, Switzerland, Czechoslovakia, Denmark, and Finland (Cole, 1944, p. 372; Heaton, 1936, p. 729). Consumer co-operatives moved into a wider range of activities. In 1919 Anders Örne and Axel Gjöres, two leading Swedish co-operators, provided the Swedish movement with a set of principles, primarily based on the Rochdale model, which emphasized economic management to meet the most essential needs of families, and that the co-operative movement was not a party or a socialist movement but was politically neutral. From the 1920s the Kooperativa förbundet (KF), the Swedish Co-operative Union and Wholesale Society, reacted to boycotts and refusals by private wholesalers to supply by raising funds from members to acquire and establish factories to manufacture a range of goods, including margarine, light bulbs, and rubber. Co-operative entry into the market in 1926 challenged the Swedish Rubber Cartel and helped push prices down by 53 percent over the following five years (Aléx, 2003, pp. 97–100; Hilson, 2009, pp. 75–77; Smith, 1961, pp. 196–197). The Swedish consumer co-operative movement grew from 1,540 120 Challenges stores and 234,000 members in 1919, to 4,849 stores and 635,000 members in 1930, with the KF becoming the largest wholesaler in Sweden with about 20 percent of the market or 2 percent of GDP (Jonsson, 2017, p. 646). The French consumer co-operative movement had adopted a market culture by the 1920s that addressed consumers as individuals and reversed its position on “capitalist” advertising, seeing advertising as a form of “consumer education” (Furlough, 1999, p. 185). The FNCC established a national education commission to promote co-operatives in 1923 and moved to establish closer links with workers’ co-operatives by forming a joint committee with the Consultative Chamber of Production Workers’ Associations in 1924 (Lambersens, Artis, Demoustier, and Mélo, 2017, p. 107). In the wake of women receiving the franchise in Austria, co-operative women’s committees were formed, led by Emmy Freundlich, a leading Social Democrat Parliamentarian and anti-fascist. They began publishing a monthly magazine in January 1929 with a print run of 120,000 copies (Brazda, Jagschitz, Rom, and Schediwy, 2017, pp. 278–279). The CWS continued to face manufacturers’ boycotts and was forced to move into new areas of production, such as radios and electrical appliances. The British co-operative movement also challenged price-fixing rings, such as the Unilever soap combine; and through the English and Scottish Joint Co-operative Wholesale Society, which became the world’s largest distributor of tea, it stopped a price- fixing ring emerging for tea and forced other traders to exclude the weight of the packet from the cost of the tea. The close association between the British co-operative and labor movements continued with financial support for strikers, particularly coal miners, and by the Co-operative Party, which won a small number of ‘Labour and Co-op’ seats, formally affiliating with the Labour Party in 1927. The CWS in 1919 insisted that its employees become members of unions affiliated to the TUC, which excluded the unaffiliated AUCE. However, there were tensions and disagreements over wages with the TUC-affiliated National Union and Distributive and Allied Workers, which arose from a merger in 1921 that included the AUCE. There were outstanding debts owed to the co-operatives from a miners’ strike in 1921 and co-operators resented the TUC’s failure to grant them exemptions during the 1926 General Strike (Birchall, 1994, pp. 125–128; Cole, 1944, pp. 299–300; Gurney, 1996, pp. 226–228; Redfern, 1938, p. 205). The British co-operative movement broadened its influence. The British consumer co-operative movement, building on the prewar youth circles established by local societies such as Leeds and Royal Arsenal, established the British Confederation of Co-operative Youth in 1924 to promote co-operatives among 14 to 25-year-olds and, later, among younger children. It formed local Comrades Circles, organized summer schools, and published the magazine Co-operative Youth. It worked alongside an independent body, the Woodcraft Folk, which was organized in 1925 as an outdoor and camping body, which merged with the Co-operative Youth Movement in 1944 (Cole, 1944, pp. 307–308). The education wing of the British co-operative movement further developed with the establishment of the Co-operative College in Manchester Challenges 121 in 1919; and it expanded its publications through the National Co-operative Publishing Company in 1929 by purchasing the mass circulation Sunday newspaper, Reynolds’s News, to counter long-established press criticism of the co-operative movement and to advertise co-operatively produced goods. There was an expansion of the co-operative movement into southern England, particularly London, where the London Co-operative had nearly 600,000 members by the mid-1930s (Birchall, 1994, pp. 129–131; Gurney, 2015, pp. 1488, 1492). There was also continued expansion of European agricultural and financial co- operatives. In Germany, there were rationalizations of rural financial co-operatives, particularly with hyperinflation depleting deposits, an increasing reliance on government loans, and the liquidation of the central Raiffeisen Bank and of several small institutions. There was a major recovery in deposits after 1927, with economic recovery and tighter government supervision through the Preussenkasse, and a major merger in 1930 to form the Reichsverband. This was the largest co-operative association in the world, with over 36,000 societies, of which more than half were combined credit and purchasing/marketing agricultural co-operatives, and 4,000,000 members. There were also major land redistributions in some European countries following the First World War, which were estimated to have affected 36 percent of the population and 25 percent of the area of mainland Europe outside Russia. Some governments encouraged the peasants to co-operate, with the idea of modern rural development associated with agrarianism, emphasizing co-operation as a “middle way” between socialism and liberalism on one hand and, more extremely, communism and fascism on the other (Aschhoff and Henningsen, 1986, p. 29; Fay, 1939, pp. 479, 503–504; Heaton, 1936, pp. 496–497; Hilson, Markkola and Östman, 2012, pp. 12–13). There was radical land reform in newly independent Estonia in 1919, which meant that nearly all the land owned by the church and nobles was expropriated, and 55,104 new independent farms were created, fueling a growth in dairy co-operatives from 84 to 324, and in financial co-operatives from 97 to 138 between 1919 and 1926 (Eellend, 2012, pp. 172–175). Rural co-operatives in Iceland during the 1920s expanded to include marketing the catch of local fisheries, with the Samband íslenskra samvinnufélaga, Iceland’s Co-operative Union, becoming a major exporter of salted cod (Kjartansson, 2012, p. 45). Despite the developments elsewhere, there were setbacks in Britain and Ireland. British agricultural co-operatives remained weak and an Agricultural Wholesale Society, formed in 1918, was wound up in 1924 with losses being partly borne by agricultural co-operatives, some of which were saved by a small government grant and by the CWS not demanding immediate repayment of any outstanding debts to its agricultural department. The government also withdrew its general financial support for promoting agricultural co-operatives, and left the promotion of co-operatives to the National Farmers’ Union, which was not inclined to organize them. These setbacks were offset to some degree by Sir Horace Plunkett establishing the Horace Plunkett Foundation in 1919, which promoted agricultural co-operation and first published in 1927 theYear Book of Agricultural Co-operation, which surveyed international developments in agricultural co-operation. By 1928 122 Challenges there were still 230 agricultural societies with 67,000 members (Digby and Gorst, 1957, pp. 26–27, 32, 155–156; Fay, 1939, p. 247). There was also a decline in rural financial co-operatives in Ireland, from 235 co-operatives with a total membership of 20,211 in 1913 to 52 with 3,672 members in 1930, as farmers found it easier to gain credit from alternative sources given the financial success of the dairy and other agricultural co-operatives (Cole, 1944, p. 249; Fay, 1939, pp. 256–257; Rhodes, 2012, p. 101). By 1929 there were 238 creameries in the Irish Free State and 64 in Northern Ireland, which was part of the UK, with an average membership of 200. While many creameries were burned down and markets disrupted in the unrest that preceded and accompanied the establishment of the Irish Free State in 1922, the Irish Free State promoted the dairy industry and established the Dairy Disposal Company in 1927 to rationalize the industry through purchasing inef- ficient farms and encouraging co-operatives (Fay, 1939, p. 255). The period leading up to the Great Depression witnessed several major challenges for co-operatives, including splits on political, ethnic, and religious grounds, the fascist takeover of Italy, and the uneasy relationship between co-operatives and the USSR government. Nationality divisions developed in Eastern Europe after the First World War, as nations were formed and altered by incorporating parts of different countries. Czechoslovakian consumer co-operatives consisted of a German and a Czechoslovakian federation, which remained on harmonious terms until 1939 (Fay, 1939, p. 168). There were divisions within the Italian co- operative movement between Catholics and Socialists, who viewed co-operation as a tool for the collectivization of the means of production and of the consequent wealth. The co-operatives linked with the Catholic movement decided in 1919 to exit from the largely socialist inspired National League of Cooperative and Mutual Companies and to create the Confederazione Nazionale delle Cooperative. The Confederazione, as a parallel body to the League, aimed to include all types of co-operatives linked to the Catholic movement. The National Federation of Rural Banks also joined the new Confederation exiting the League (Battilani, Balnave, and Patmore, 2015, p. 60; Catturani and Cutcher, 2015, p. 79; Earle, 1986, p. 19). Danish urban co-operatives split from the rural and liberal-dominated FDB in 1922 to form their own central co-operative union, which continued as the co- operative wing of the social democratic movement into the post-Second World War era (Theien, 2003, p. 82). The Italian fascists incorporated the co-operatives into the state. The fascist government targeted co-operative officers, who were unsympathetic to the regime, by ‘persuading’ them to resign, or ensuring they were voted off the board of management, and even dismissing them, as occurred in January 1923 with the Associazione Generale degli Operai, a large Turin workers’ co-operative. The fascist government in January 1924 gave power to provincial authorities over all associations, including co-operatives, with the ability to inspect and dissolve them. In November 1925 the Prefect of Milan dissolved the National League of Cooperative and Mutual Companies for undertaking “anti-national activity” (Earle, 1986, pp. 28–29; Rhodes, 1995, p. 131), and the government established Challenges 123 the Ente nazionale fascista per la cooperazione (the Co-operative National Fascist Organization), strictly tied to the Ministry of the Economy. The government appointed managers with fascist sympathies and developed a regimented form of co-operation interwoven into the fabric of the corporate state and economy. The number of financial co-operatives fell, and the fascists also took over the National Institution for Co-operative Credit, and in 1927 turned it into a bank to finance their public works programs. There was, however, an increase in the number of agricultural, manufacturing, and labor co-operatives under fascist control (Battilani, 2017, p. 595; Battilani, Balnave and Patmore, 2015, p. 60; Catturani and Cutcher, 2015, p. 79; Zamagni and Zamagni, 2010, p. 52). In the USSR co-operatives faced harassment after the April 1918 decree and then a further decree in September 1918 forced Centrosoyus—the All Russian Union of Consumer Societies founded in 1904—and co-operatives to have state representatives from the Supreme Economic Council and Food Commissariat with the right of veto on their boards. Despite resistance from the co-operative movement, the Bolshevik government in November merged the Co-operative People’s Bank into the Soviet State Bank as a Co-operative Department of the Bank to distribute state funds to co-operative societies, and dissolved financial co-operatives. The final incorporation occurred in March 1919 when all consumer co-operatives were transformed into consumer communes, which had a compulsory membership and absorbed the functions of credit and agricultural co-operatives. However, under the New Economic Policy in May 1923, with the end of the Russian Civil War and the Bolshevik desire to reduce peasant resistance, co-operatives became voluntary and self-governing again. Between 1921 and 1930 their membership rose to 43,000,000, with Centrosoyus running a range of facilities, including grain elevators, canneries, and soap works, plus educational and welfare work (Heaton, 1936, pp. 497–498, 729–730; Rhodes, 1995, pp. 95–100). While the Great Depression brought challenges for some European co-operatives, by 1937 those in democratic countries had recovered.1 Consumer co-operatives faced a decline in demand, production, and capital. Between 1929 and 1933 the turnover of consumer co-operatives declined by 50 percent in Germany, 38 percent in Poland, 31 percent in Hungary, 20 percent in Finland, and 15 percent in Austria. In Britain, turnover and the value of goods produced by co-operatives fell by 29 and 24 percent respectively in 1931–1932, while share capital fell by 23.8 percent (Krasheninnikov, 1988, pp. 90–91). The Co-operative Bank failed in France in 1933; and the Labor Bank failed in Belgium in 1934, placing further financial pressures on co-operatives, with the Belgian government providing a large loan to keep the Belgian consumer co-operatives solvent, a loan which they did not repay until 1956, and which placed constraints on their investment in new infrastructure. The Co-operatives also faced political challenges from small private retailers who were concerned at the rising competition from department stores, chain stores, and co-operatives. The Swiss federal government responded to these concerns by issuing a decree in 1933 that restricted consumer co-operatives from opening new branches, from expanding existing stores and their product range, and introduced 124 Challenges a tax on consumer co-operative turnover for national defense and unemployment relief. There were similar developments in Belgium (Degen, 2003, pp. 255–256; Fay, 1939, pp. 142–144; Strikwerda, 1999, pp. 82–83). Private traders in the UK persuaded the government to impose further taxation on co-operatives in 1933. While local co-operatives’ sales in the Netherlands did not improve until 1936, wholesalers’ sales continued to rise through the Depression.2 In the UK, while sales per member fell, the membership of the consumer co-operative movement grew during the 1930s from 6.4 million in 1930 to 8.6 million in 1939, with the movement capturing 11 percent of the total retail trade in 1938 and taking a major share of the market in staples such as milk, coal, and bread (Birchall, 1994, p. 134; Cole, 1944, pp. 305, 371–372). The Great Depression also provided an opportunity for European movements to rationalize their structures and establish links between the various forms of co-operation. There was centralization in France in the wake of the collapse of the Co-operative Bank, with a National Committee, elected by regional federations of co-operatives, established in 1935 to supervise the general co-operative movement. There was also a shift towards centralization in Belgium in the wake of the collapse of the Labor Bank there (Fay, 1939, pp. 138–139, 142–144). In the UK, there was a push for the CWS to directly enter into retail trading by establishing a separate CWS Retail Society in 1934, with the struggling Cardiff co-operative in Wales becoming its first branch in July 1936, but this initiative was not pursued generally before the Second World War. The CWS reorganized its agricultural department to develop its offerings of agricultural provisions in 1937 and bring about a closer relationship between consumer and agricultural co-operatives (Cole, 1944, pp. 304–306; Redfern, 1938, p. 477). One important development for the UK co-operative movement was the establishment in 1932 of the National Co-operative Authority, which consisted of the CWS, SCWS, the CU, the Co-operative Party, Co-operative Press, and the CPF, and provided the movement with a unified voice and greater co-ordination on matters of trade and policy (Carr-Saunders, Sargent Florence and Peers, 1940, pp. 210–211; Wilson, Webster, and Vorberg-Rugh, 2013, p. 196). As the depression deepened, rivalries developed between Swedish consumer co-operatives and agricultural co-operatives in overlapping areas such as meat processing, butchers’ shops, and the retailing of milk, leading to an agreement in 1935 that allowed each side to keep what it had in processing, but in general leaving retailing to the consumer co-operatives. The consumer co-operatives also agreed to give priority to agricultural marketing co-operative associations when making purchases. This stabilized the relationship between the two movements (Fay, 1938, pp. 440–441; Smith, 1961, p. 84). The Great Depression provided the context for the establishment of state marketing boards in several democratic European countries to stabilize the sale of agricultural produce. The Norwegian Parliament passed legislation in 1930 to overcome the impact of the depression on dairy co-operatives, where some farmers and creameries decided to opt out of local Milkesentraler, which provided Challenges 125 a milk pool and regulated the supply of all milk products in a local area, to sell their surplus milk at low prices in other areas. The legislation gave the power to the producers to establish a marketing board for each commodity if a sufficient majority of farmers were in favor. This board not only regulated all sales but also collected fees on all produce sold whether the farmer was a member or not. While the co-operative principle of voluntary membership was undermined, ownership remained with the co-operative members and allowed the majority to coerce the minority who refused to sell their milk products with them (Smith, 1961, pp. 127–128). The UK also passed Agricultural Marketing Acts in 1931 and 1933, with varying effects on co-operatives, ranging from the Milk Marketing Board (which covered England and Wales) making some English co- operative dairies go out of business as their role was superseded, to the Scottish co-operative creameries being in a sufficiently dominating position to convert themselves into compulsory boards, similar to their Norwegian counterparts. The Potato Board by contrast focused on regulations governing the quality and quantity of potatoes and did not interfere with existing co-operatives (Digby and Gorst, 1957, pp. 30, 75, 98; Fay, 1939, pp. 253–254). The shift towards totalitarianism in Europe during the 1930s Depression led to greater state control of co-operatives. As in Italy, the Nazis prior to gaining full power harassed consumer co-operatives, with Nazi storm troopers physi- cally attacking consumer co-operatives and encouraging members to withdraw their capital and business. Agricultural co-operatives and co-operatives associated with middle-class supporters, such as retail buying co-operatives, were left unscathed. With the accession of the Nazis to power in Germany, an order was issued on May 15, 1933, that placed all consumer co-operatives under the leadership of the German Labor Front, and legislation capped the dividend in 1934 at 4 percent to limit the appeal of consumer co-operatives (Prinz, 2017, p. 252). The consumer movement lost its democratic and voluntary character as elected co-operative leaders were replaced by Nazis the co-operatives were forced to elect. In May 1935 a decree repressed consumer co-operatives by forbidding the creation of new consumer co-operatives, outlawing the opening of new branches, amalgamating all associations in any one location, and by dissolving consumer co- operatives once their assets could be liquidated. Agricultural marketing and housing co-operatives were also incorporated into the state (Aschhoff and Henningsen, 1986, pp. 31–32). This incorporation led to a decline in German co-operative membership from 3,255,000 in 1935 to 1,954,000 in 1938. These measures were also implemented following the annexation of Austria in 1938 and Czechoslovakia in 1939 into Germany.3 Similar trends followed elsewhere. In Latvia, following the change from a parliamentary to a totalitarian form of government in 1934, the co-operative movement lost its voluntary character and became state controlled. The government dissolved the two co-operative unions and replaced them with a central organization, which had compulsory membership and was a state enterprise. Estonia, which had severely been affected by the Depression, saw a shift to a totalitarian government 126 Challenges and Estonian co-operative dairies being given an export monopoly through a state- controlled agency in 1936 (Eellend, 2012, pp. 178–179). Stalin, in 1935, dissolved the USSR urban co-operatives and their stores became state enterprises.4 There were developments in Europe in the period leading up to the Second World War regarding medical co-operatives, which provided health care to members, particularly where the welfare state was underdeveloped. The medical co-operatives in Serbia, part of the newly formed state of Yugoslavia, arose from concerns about children’s health of the Serbian Child Welfare Association of America, a wartime charity. Out of its activities and government interest-free loans grew health co-operatives, the first of which was formed in Serbia in 1920. These co-operatives, which covered a group of villages and had between 300 and 1,000 families as members, provided shareholders with a dispensary and a resident doctor or doctors at a guaranteed salary for a small fee. Members volunteered to build ‘health houses’ to accommodate the health services, improve sanitation, drain malarial swamps, and install fresh water supplies. They also conducted classes on public hygiene and by 1939 the Yugoslav Union of Health Co-operative Societies had 134 affiliated societies with 65,586 members.5 There were similar co-operatives in Poland from 1936 and in Bulgaria (Birchall, 1997, pp. 28–29; Digby, 1948, pp. 131–133; Fay, 1939, p. 513). By 1937, Europe (including the USSR) dominated the world co-operative movement with 586,918 out of 810,512 co-operatives worldwide and 72 percent of the international membership (Cole, 1944, p. 354). The European movement was dominated by consumer co-operatives, which constituted only 8 percent of the number of co-operatives but had 57 percent of the total membership. The relative strength of consumer co-operatives was greatest in industrialized countries such as Belgium, Switzerland, and the UK, where co-operators formed, respectively, 25 percent (including families), 25 percent (including families) and 18.1 percent of the population. The figure for Denmark and Sweden for families was respectively 33.3 and 34 percent. While agricultural co-operatives remained dominant in rural economies such as Ireland, there were exceptions in Hungary and Finland, where consumer co-operatives, which had many farmers as members, exceeded the number of agricultural co-operatives. Financial co-operatives were dominant in countries such as Bulgaria, Czechoslovakia, Estonia, Greece, Latvia, Lithuania, Rumania, and Yugoslavia. There was relatively even development among consumer, financial, and agricultural co-operatives in the Netherlands. Worker and labor contracting co-operatives, with over 2.25 million members by 1937, had a significant impact in Bulgaria with 124,000 members, but even in countries where they had a fair degree of success, such as France, Italy, and the USSR, their membership never constituted more than 10 percent of total co-operative membership.6 The Second World War disrupted the European co-operative movement. Besides the physical destruction of co-operative facilities and the persecution of co-operative leaders, in countries invaded by Germany and its allies some co-operative facilities were handed over to private traders, such as Germans in Baltic states following the Soviet retreat, or placed under government control. Challenges 127

While the consumer co-operative movement was destroyed by a decree in Germany and Austria in 1941, with all assets being transferred to the state, and with local consumer co-operatives becoming state chain stores, agricultural co- operatives continued to operate as they were useful in organizing the production and distribution of food (Aschhoff and Henningsen, 1986, p. 31). There was recognition by the occupying powers, as in the First World War, that co-operatives could play a useful role in rationing and distributing goods in Belgium, Serbia, Denmark, Czechoslovakia, France, the Netherlands, and Poland (Digby, 1948, pp. 46–47, 53). In the wake of the Spanish Civil War, when co-operatives played a significant role in supporting the Republican forces, the neutral Spanish Franco fascist government enacted legislation in 1942 to incorporate the movement into the state, and existing sectoral and regional federal structures were declared illegal and liquidated (Shaffer, 1999, p. 368). There was an expansion of the co-operative movement in most allied and neutral counties, with the KF in Sweden expanding its production facilities.7 There was a growth in the popularity of co-operatives in neutral Switzerland, as co-operatives played an important role in food distribution and the promotion of agricultural self-sufficiency, and Gottlieb Duttweiler converted Migros, his chain of retail stores, from a joint-stock company into regional co-operatives affiliated with Migros (Degen, 2017, pp. 634–636). The British consumer co-operative movement supplied a quarter of the civil- ian population with their food commodities and, as in the First World War, supported rationing and protested profiteering by private retailers (Robertson, 2009, pp. 225–226). Unlike during the First World War, the UK government could not ignore the co-operative movement, given its size and direct representation in Parliament through the Co-operative Party, and there was co-operative representation on local food committees that controlled rationing and on 36 advisory boards. Albert Alexander, a Co-operative Party parliamentarian, served in the wartime coalition cabinet as the First Lord of the Admiralty. The CWS played a crucial role in procuring overseas food supplies, particularly wheat, for the government through its Canadian networks. There was disruption to the social and educational activities of the movement, and the WCG suffered a decline in membership from 87,000 in 1939 to 57,000 in 1946, due to the evacuation of women, the recruitment of women into military service and war work, and the requi- sitioning of meeting rooms (Birchall, 1994, pp. 136–140; Digby, 1948, p. 27; Wilson, Webster, and Vorberg-Rugh, 2013, p. 212).

Africa and Asia The French and British governments continued to encourage co-operatives for the development of their colonies with the French co-operative movement playing a direct role in promoting co-operatives through education after 1918 in Algeria, Morocco, and Tunisia. British colonies in Africa and Asia followed the British-Indian model with co-operative legislation in colonies such as Cyprus, the Gold Coast (later Ghana), Kenya, Lesotho, Malaya, Nigeria, Singapore, and 128 Challenges

Southern Rhodesia. C.F. Strickland from the Indian Civil Service played a crucial role in this spread of co-operative legislation; for example, the first co-operative law in Kenya in 1931 provided for a registrar of co-operative societies, and a special government department responsible for the registration, audit, supervision, and dissolution of co-operatives, but did not permit indigenous people to form co-operatives (Birchall, 1997, pp. 134; Digby, 1970, p. 118; Gyllström, 1991, p. 31; Shaffer, 1999, p. 372; Warbasse, 1942, p. 34). The Second World War had a significant impact on co-operatives in Singapore and Malaya, where the Japanese occupation resulted in co-operation “coming to a standstill” in most areas. Civil servants who had administered co-operative legislation and activists in local co-operatives were scattered, interned, or died during the occupation, while administrative records were lost and destroyed (Digby, 1970, pp. 92–93). While an emphasis was placed on European settlers in the British African colonies, there were indigenous co-operatives with farmers looking to obtain benefits from cash crops as transportation improved and markets developed. Ugandan farmers formed the Buganda Growers’ Association in 1923 to express their viewpoint and in 1933 converted it into the Uganda Growers’ Co-operative Society. This later became a union of co-operative societies, including agricultural societies, that marketed coffee and cotton, and a co-operative store that was formed with the advice of the CU (Birchall, 2011b, p. 182; Develtere, 2008, pp. 6–7; Digby, 1970, pp. 173–174). The co-operative movement in India continued to expand, particularly financial co-operatives, which accounted for 87 percent of all co-operatives in 1923. Reforms in 1919 led to co-operative administration being transferred to provincial governments under the responsibility of a minister, and the Indian co-operatives formed the All India Co-operatives Institutes Association in 1929 to exchange information and lobby for reform. There were problems during the 1920s with the serious over-financing of some financial co-operatives in India and Burma, which led to a quarter of the then 80,000 societies being liquidated during the early 1930s, when the Great Depression saw dramatic declines in the prices of most agricultural products. Provincial governments provided financial assistance to help the co-operatives and from 1929 provinces established land mortgage banks to ensure that the financial co-operatives did not become dependent once again on local moneylenders. The establishment of the Reserve Bank of India in 1935 helped stabilize the position of the financial co-operatives and it had an Agricultural Credit Department to research issues relating to rural credit. From the 1920s consumer co-operatives began to make some progress, notably in Madras and Bangalore; but while they did improve the quality of products, and fought commercial practices such as dishonest weights and measures, they were weakened by providing members with too much credit. There was also an expansion during the late 1930s and Second World War in the development of hybrid co-operatives and co-operatives with members from more than one state, with legislation enacted in 1942 (Birchall, 1997, pp. 166–167; Catanach, 1970, p. 218; Hough, 1932, p. 120; Sami, 2011, pp. 16–21). By 1945 there were 159,633 co-operative societies in India covering Challenges 129

2.3 percent of the population, primarily in rural areas (Reserve Bank of India, 1947, pp. 21–22). While the British government encouraged the co-operative movement to improve conditions for poor and uneducated famers, Sami argues that the “people’s initiative was hardly forthcoming” and “the movement depended on official guidance and support” (2011, p. 22). The British also extended their influence in Africa and the Middle East following the First World War, with Britain taking control of Tanganyika from Germany and Palestine from the Ottoman Empire under the powers mandated by the League of Nations. In Tanganyika Chagga coffee farmers formed the KNPA in 1925 to challenge the monopoly held over the crop by European settlers with initial British support. Due to problems with conflict between indigenous famers, European settlers, and local chiefs, and a British view that the KNPA was a source of defiance to their rule, colonial authorities converted the KNPA into a marketing board in 1929 that forced all coffee farmers to become members, and from 1934 it forced the compulsory sale of all Chagga coffee through it. The organization was no longer voluntary or democratic and was reorganized as the Kilimanjaro Native Co-operative Union (KNCU), with separate registered affiliated co-operative societies under the control of local chiefs and a European manager (Birchall, 2011b, p. 182; Develtere, 2008, p. 7; Digby, 1970, pp. 173–174; Rogers, 1974). There were riots in 1937 by members over the low prices paid by the Union due to excessive overhead costs (Hailey, 1938, pp. 1472–1473). In Palestine, there was no specific legislation covering co-operatives under Ottoman Rule and the British introduced an ordinance in 1920 and legislation in 1933 to regulate co-operatives, drawing upon Indian legislation with some differences, such as the provision for a wider variety of co-operatives. Separate co-operatives developed for Arabs and Jews, with co-operatives being part of the land settlement strategy of immigrant Jews. By 1939 there were 1,081 Jewish co-operatives, 24 Arab co-operatives, and six others, with a combined membership of 150,000. While the Arab co-operatives were largely agricultural and relatively dependent on the state, the Jewish co-operatives were more spontaneous and diverse, with traditional co-operatives such as financial, agricultural, housing, worker, and consumer co-operatives, as well as less traditional co-operatives such as water supply, transportation, and community, also known as kvutzoth or kibbutzum. There were differences between Jewish co-operatives in Palestine and those in Europe, with the latter being overwhelmingly financial co-operatives. There also developed a close relationship between Jewish co-operatives and the Jewish labor movement through the Histadruth, the General Federation of Jewish Labor in Palestine, with nearly 40 percent of Jewish co-operatives affiliated in 1937 (Registrar of Co-operative Societies in Palestine, 1938, pp. 4–9, 20, 39; Rhodes, 2012, pp. 219–223). The main emphasis in South Africa remained agricultural co-operatives for European settlers, a national Co-operative Act in 1922 provided for tighter supervision of co-operatives and forced members to sell their produce though their co-operative society. The South African government promoted ‘white farming’ 130 Challenges with marketing boards, with 1925 legislation allowing for compulsory sales to a co-operative if requested by 75 percent of the producers of 75 percent of any product that was already organized co-operatively for its sale. After a Commission of Enquiry favored voluntary co-operatives in 1934, however, compulsory co-operation was only retained in the wine and tobacco industries. The Afrikaner nationalist movement also promoted co-operatives as a means of empowering poor Afrikaners, particularly those small farmers who had been displaced by the growth of larger-scale commercial agriculture in the 1930s and 1940s (Develtere, 2008, pp. 10–11). By 1940 there were 242 European co-operatives with 132,000 members in South Africa, of which 84 percent of the co-operatives and 73 percent of the membership were agricultural.8 There was interest in developing co-operatives for the African population in South Africa. In the Transkei, the Catholic monk Father Bernard Huss helped establish a missionary controlled and conservative Catholic African Union in 1926 to counter African radicals who sought to form unions and challenge the influence of missionaries through the promotion of co-operatives to regenerate African rural society. By October 1932 there were only 36 financial co-operatives in the Transkei with total deposits of £25,000. Many African consumer and financial co-operatives failed due to a lack of management skills, organized opposition by European traders who provided Africans with credit, the economic impact of the segregation of Africans on poor farming land, the lack of legal status for African co-operatives, and a decline in political support. One successful example among urban Africans was the unregistered Western Native Township Co-operative Society, formed in Johannesburg in 1932. While African co-operatives were associated with the conservative Huss, radical African journalist and activist Govan Mbeki advocated co-operatives from 1939 as a means for Africans to obtain economic self-sufficiency and assist political mobilization against European dominance (Hailey, 1938, pp. 1470–1471; Rich, 1993). Co-operatives spread outside the European colonies and dominions. The first government-sponsored village, Raiffeisen style, financial co-operatives were created in Thailand in 1916 to help farm families escape from the control of moneylenders (MacPherson, 1999a, p. 31). In Egypt, which gained independence in 1922 and had a small number of co-operatives before the First World War linked to the independence movement, the movement took off with the passing of co-operative legislation in 1923, which created a Co-operative Department in the Ministry of Agriculture, and improved legislation in 1927. Ahmed Hussein, a civil servant who had knowledge of co-operation from his doctoral studies on the German agricultural sector, organized co-operatives as agricultural purchasing societies. By 1930 there were over 500 co-operatives with 50,000 members, which were primarily agricultural with a heavy dependence on government financial support. One example was the co-operative in the village of al-Manayil in the 1930s, which supplied its members with essential non-food goods such as kero- sene, soap, cotton clothing, and household utensils, as well as agricultural supplies (Birchall, 1997, p. 133; Hilson, 2017b, p. 37; Rhodes, 2012, pp. 218–219). Challenges 131

There was continued development of co-operatives in Japan, with a push for the middle and working class to form citizens’ consumer co-operatives to distribute daily necessities at affordable prices. Sukazo Yoshino, a democracy advocate, and Toyohiko Kagawa, a Christian social reformer, separately established new co-operatives, such as the Katei Kobai Co-operative in Tokyo in 1919, the Nada Co-operative in 1921, and the Kobe Co-operative in 1921 (Kurimoto, 2003, pp. 56–57). The government also improved the Industry Co-operative Law in 1921 and established a Central Industry Co-operative Bank in 1923. Co-operative Household Associations were founded at Kobe in 1924 and Nada in 1929, these were voluntary organizations without specific rules that produced many women activists in the Japanese co-operative movement. However, as Japan militarized in the 1930s, government control over co-operatives increased and during the final years of the Second World War agricultural co-operatives were used to organize the rural population and ensure food supplies for the war effort. Consumer co-operatives, particularly those associated with the political left, either went bankrupt or faced destruction, due to staff being conscripted into the military and to Allied bombing. While the Kobe Co-operative faced a shortage of goods and the destruction of its stores, its strong community network and comprehensive education program ensured its survival (Grubel, 1999, pp. 306–307; Takamara, 1995, pp. 262–263). The Japanese, in their colony of Korea, continued to expand the co-operative movement with the transfer of legislation from Japan in 1926 relating to industrial co-operatives, which were voluntarily established by Koreans to produce and market goods and had greater autonomy than did the financial co-operatives. Co-operatives that were independent of the colonial government were established, initially associated with the March 1 Liberation Movement in 1919 that called for Korean independence and economic self-sufficiency, with the first being a credit union, the Kangkye Public Co-operative in April 1919. There were also agricultural and consumer co-operatives, the first of which was established in Mokpo in May 1920. They were also inspired by religious groups, students, socialists, and labor unionists, with ideas coming from Japan and Denmark, but they failed because of internal conflicts, poor management, the economic downturn of the Great Depression, and Japanese harassment, with many leaders imprisoned. State- sponsored co-operatives expanded, with 115 industrial co-operatives with 221,000 members at their peak in 1940, and 613 financial co-operatives with 3.2 million members in 1944. The Japanese authorities preferred the more strictly controlled financial co-operatives and during the final stages of the Second World War allowed them to take over the production and marketing functions of the industrial co-operatives (Hyung-mi, 2017, pp. 355–360; Jung and Rösner, 2012, pp. 85–88). While Chinese intellectuals were interested in co-operative developments in France, Germany, and Japan before the First World War, modern co-operatives began in 1919, when the first consumer co-operative was established at Peking University. There was further interest with the China International Famine Relief Commission (CIFRC), headed by American missionaries to provide relief 132 Challenges during China’s Great Famine of 1920–1921 that killed about half a million people. The CIFRC encouraged the formation of co-operatives—particularly Raiffeisen financial co-operatives, as a means of eliminating rural poverty and ensuring that Chinese peasants had sufficient resources to deal with future famines—and had sponsored 371 co-operatives by the end of 1926. The interest in co-operatives spread to the nationalist government, which enacted a Co-operatives Law in 1934. The Japanese invasion of China in 1937 accelerated the development of co-operatives with the formation in 1938 of Gung Ho, the movement of the Chinese Industrial Co-operatives (CIC), to assist the war effort in areas controlled by communists and nationalists, who both saw them as advancing their political interests. The founding members of the CIC included New Zealander Rewi Alley, a factory inspector for the British concession of Shanghai, and the first co- operative was established in Baoji in Shanxi province in 1938. These co-operatives produced a range of goods including processed food, shoes, blankets, and surgical supplies. There was an International Committee for the promotion of the CIC and the receipt of donations from a range of organizations, including the London Co-operative Society and the WCG in the UK. There were problems with the CIC movement such as a lack of expertise, a reliance on outside funding, and a tendency towards bureaucratic management that limited the ideals of self-help and democratic control. By 1942 there were 167,000 Chinese co-operatives with ten million members, of which 83 percent were financial co-operatives (Birchall, 1997, p. 167; Chen, 2006; Cook and Clegg, 2011, pp. 327–340; Ip and Chan, 2017, pp. 379–386; Warbasse, 1942, p. 54).

The Americas The First World War assisted the growth of US consumer co-operatives, which gained support from both unions and farmers. Unions were particularly concerned about rising prices, profiteering, and a declining standard of living. The November 1916 American Federation of Labor (AFL) Convention appointed a committee to investigate co-operatives, which reaffirmed its support for co- operation at the following year’s convention and called for the appointment of a lecturer for one year to promote consumer co-operatives. While affiliates did not provide sufficient funds for the appointment of the lecturer, the AFL lobbied the federal government to exempt co-operatives from income tax on accumulated savings. Unionists played a key role in organizing co-operatives between 1917 and 1922 (Patmore, 2017, pp. 512–513). There was a successful move to establish a national organization of US co- operatives. James and Agnes Warbasse held a meeting in their Brooklyn home in January 1916 that launched the Co-operative League of the United States of America (CLUSA) to promote co-operative education and bring together the co-operative movement. James Warbasse was President of CLUSA from 1916 until 1941 and Agnes served as Educational Director from 1916 to 1928. CLUSA produced The Co-operative Consumer and organized its first national conference in Challenges 133

September 1918 that attracted 185 delegates from 386 co-operatives. In 1922 the League also adopted the circle (or twin) pines seal, showing two pine trees surrounded by a circle (Patmore, 2017, p. 512). The high point of interest in co-operatives was the Farmer-Labor Conference held in Chicago in November 1919, which brought together representatives from farm organizations, unions, and co-operatives. It adopted a national co- operative manifesto and appointed a joint board for developing co-operatives. A second conference in February 1920 aimed to bring together co-operative consumers and eliminate speculators. The All-American Co-operative Commission arose from these conferences, but failed to gain endorsement from the AFL, and received a lukewarm response from CLUSA. Despite this, it is estimated that there were 2,200 consumer co-operatives in active operation by the end of 1920 (Patmore, 2017, p. 513). Despite the optimism at the end of the First World War, the various types of co-operatives had different fortunes during the 1920s. There was a postwar economic recession and a ‘Red Scare’ following the Russian Revolution, which challenged collective organizations such as co-operatives and trade unions. There were also scandals involving bogus co-operatives, whereby private promoters used co-operatives as a means of obtaining money for their own purposes; and disillusionment among organized workers with the number of co-operative failures. Even when prosperity returned in the mid-1920s, consumers were turning to installment plans or hire purchase to buy goods, and co-operative store members demanded more access to credit, forcing consumer co-operatives to increase their financial liabilities, with a decline in the number of consumer co-operatives, and the general collapse of co-operative wholesaling in the early 1920s (Parker, 1956, pp. 81–89; Patmore, 2017, pp. 513–514). By contrast there was continued growth among agricultural co-operatives and credit unions. The number of farmers’ marketing and supply agricultural co-operatives grew from 5,424 in 1915 to 12,000 in 1929–1930 (Eversull, 2015, p. 5). There was favorable legislation at both federal and state levels, particularly from 1920 to 1932, and many states passed co-operative and federal legislation that favorably clarified the treatment of co-operatives under anti-trust legislation and exemption from federal income tax, that formalized the USDA’s support for farmer co-operatives, and that established a Federal Farm Board to encourage farmers’ co-operatives through loans in 1929. Rural co-operation was promoted as an alternative to socialism and as a remedy for the agricultural depression that followed the First World War, with county agents organizing rural co-operatives and providing expert advice on co-operative management. The Californian lawyer Albert Sapiro, a forceful and dynamic speaker, encouraged large numbers of farmers to form co-operatives as legal monopolies restricted to agricultural producers for the marketing of single commodities such as wheat and tobacco, with contracts, and a guaranteed annual average price for produce during the early 1920s. There were also alternative views that favored a more federal model of co-operatives, rather than a centralized one, which culminated in the formation of the American 134 Challenges

Institute of Co-operation in 1925, and in 1929 what became the National Council of Farmer Co-operatives (Ingalsbe and Groves, 1989, pp. 114–117; Keillor, 2000, pp. 281–282, 300; Knapp, 1973, pp. 17–35, 72–88; Shaffer, 1999). This encouraged the growth of ‘large-scale’ co-operatives that operated over an entire state with almost 200 of the 10,803 marketing and supply co-operatives being large scale in 1925–1926 (Eversull, 2015, p. 1). Credit unions spread against the background of the consumer revolution, and the prosperity of the 1920s helped people consolidate debts and purchase goods such as cars, refrigerators, and radios. Through democratic means members had greater control over their finances than when relying on hire purchase plans provided by retailers. Roy Bergengren, a lawyer, and other activists, financially supported by Filene through the National Credit Union Expansion Bureau from 1921 until 1934, played a crucial role in organizing credit unions and persuading states to pass credit union legislation, with many credit unions being based on employment, notably public servants and teachers, and being supported by trade unions, the Roman Catholic Church, the established co-operative movement, and ethnic groups such as the Jews and the Irish (Bergengren, 1943, p. 17; MacPherson, 1999a, pp. 19–21, 23–25). By 1930, 32 states had credit union legislation, with 1,100 credit unions, and assets of approximately US$40 million (Moody and Fite, 1971, p. 126). The co-operative movement faced both political and economic challenges during the 1930s Depression. The Great Depression generally encouraged criticism of the prevailing business system and the search for alternatives based on service rather than profit. There was a boom in self-help co-operatives, where the unemployed would trade labor for housing, food, and clothes; a survey in December 1934 found that there were 310 self-help co-operatives with over 500,000 members (Curl, 2012, p. 164). Despite wage cuts, work rationing, and unemployment, the collapse of consumer co-operatives was not as great as it was in the early 1920s, with members of some consumer co-operatives voting to leave any surplus funds in the co-operative to ensure financial stability. Between 1929 and 1934 CLUSA estimated that the membership of consumer co-operatives had grown 40 percent. The co-operative movement also consolidated its position during the early 1930s. Six regional associations combined to form National Co-operatives Inc. in February 1933, a joint buying organization, as the first step towards a national organization. There were also new regional wholesalers formed in Texas, Washington, and Illinois. The co-operative movement also found renewed support from the trade unions. The AFL welcomed the resurgence of the consumer co-operative movement, noting the benefits of co-operatives for workers in cutting out the middleman, ensuring the quality of goods, and reducing prices by minimizing waste (Patmore, 2017, pp. 515–516). The AFL (1937) published a pamphlet, An Idea Worth Hundreds of Dollars, promoting the Rochdale principles and encouraging members to contact CLUSA. There were setbacks. Some of the housing co-operatives, which had received support from immigrant groups such as Finns and Jews, and from trade unions, Challenges 135 notably the Amalgamated Clothing Trades Union, since the First World War, had to close because of their inability to pay mortgages (Birchall, 1997, pp. 194–195). There was a decline in the number of marketing and purchasing agricultural co-operatives from 12,000 to 10,500 in 1929–1931, and a fall in business volume by 26.4 percent as prices fell, but membership increased from 3.1 million to 3.7 million as the co-operatives consolidated, and co-operatives played an important role in sustaining farmer communities during difficult times (Ingalsbe and Groves, 1989, p. 118). The Farm Bureau Oil Company, which was founded in 1930 and expanded its activities beyond petrol to include farm tools and equipment, in 1935 became United Co-operative, which was a wholesaler for agricultural purchasing co-operatives and had little interest in consumer co-operatives compared to the rival National Co-operatives (Digby, 1948, p. 92; Knapp, 1973, pp. 443–444) There were also shifts in the consumer co-operative movement. CLUSA’s membership grew from 155 societies with 77,826 members in 1927 to 1,500 local associations and over 750,000 members in 1935. E.R. Bowen, a former sales executive for a farm machinery company, became the CEO of CLUSA in January 1934, and broadened the League to embrace the farmers’ purchasing associations. There were also central associations of local co-operatives and regional federations of co- operatives formed to market bulk items such as petrol. The consumer co-operative movement also supported youth leagues and women’s guilds to encourage young people and women to join the movement (Patmore, 2017, pp. 515–516). In urban areas African Americans formed co-operatives in locations such as Chicago and Harlem, which was also the headquarters for the Young Negroes’ Co-operative Leagues (Nembhard, 2014, pp. 112–115). The co-operative movement also faced a favorable political climate with support from President Roosevelt. Roosevelt set up a Consumers Advisory Board, which included Warbasse, in June 1933 to protect consumer interests under the Codes of Fair Competition provided for under the National Industrial Recovery Act (NIRA). Roosevelt’s New Deal posed an early problem for the consumer co-operatives. Under the NIRA codes there were prohibitions against rebates and discounts as they were an unfair trade practice. Following protests from the co-operative movement, President Roosevelt issued an Executive Order on October 23, 1933, exempting all “bona fide and legitimate cooperative organizations” from the code prohibitions if the patronage refunds were paid out of actual earnings rather than as a discount at the time of purchase (Knapp, 1969, pp. 377–378). Roosevelt sent a mission to Europe in July 1936 to report back on co-operative developments. He was particularly interested in co-operatives as a “middle way” in Sweden, where co-operatives “existed happily and successfully alongside private industry” (Roosevelt, 1938, pp. 226–227). When the report of the mission was released it was an anticlimax. While it recognized the economic and social benefits of co-operation in Europe, it doubted whether consumer co-operatives would be a panacea for the USA. While there were no specific recommendations for government assistance in the report, the mission did recommend a survey of, and the establishment of an agency to assist, consumer co-operatives (Knapp, 1969, p. 391). 136 Challenges

Roosevelt promoted credit unions, electricity co-operatives, and agricultural co-operatives. He supported the 1934 Federal Credit Union Act, which recognized that credit unions had fared well during the 1930s Depression, and that provided an opportunity for all citizens to organize credit unions. There was an expansion of credit union organization with the formation in 1934 of the Credit Union National Association (CUNA), which also created the CUNA Mutual Insurance Society to provide insurance services for credit unions, and CUNA Supply to provide bookkeeping and promotional supplies to credit unions (Curl, 2012, p. 162; MacPherson, 1999a, p. 29; Moody and Fite, 1971, ch. vii.). The Rural Electrification Administration (REA) was created in May 1935 to encourage the electrification of rural areas, in which only 10 percent of homes were connected, and provided loans to local electrification co-operatives, which operated the lines and distributed the energy. There was a precedent, as at least 45 electricity co-operatives had been organized between 1914 and 1930, largely in the Midwest. By the end of 1939 the REA served 40 percent of rural homes and the co-operatives forced private operators to extend services and reduce prices (Curl, 2012, p. 173). The electricity co-operatives formed the National Electric Co-operative Association in 1942 to promote their interests (Ingalsbe and Groves, 1989, p. 116). The Farm Security Administration, which was set up in 1935 to combat rural poverty, helped organize approximately 25,000 co-operatives, covering about 4,000,000 low-income farmers with loans for the supply of purchasing, marketing, farm machinery, breeding stock, veterinary services, insurance, water, and medical care (Curl, 2012, p. 174). There were also external influences and a visit to the USA by the Japanese Christian co-operator Kagawa attracted considerable interest (Patmore, 2017, pp. 515–516). Kagawa’s visit to the Bay Area influenced Christians to look at co-operatives as a Christian alternative to the existing system of distribution. The Berkeley Buyers Group, which was formed in 1937 and was strongly influenced by church and university social networks, established a food store in Berkeley that became the Consumers’ Co-operative of Berkeley in 1939, which eventually became the Consumers’ Co-operative of Berkeley in 1947 (Patmore, 2017, pp. 515–516, 518). One important influence on US co-operative development in the 1930s, particularly among Catholics, was the Antigonish movement in Canada, which arose from the extension department at the Catholic Antigonish University in Nova Scotia, established in 1930 (Coady, 1943, p. 21; Fitzpatrick-Behrens and LeGrand, 2017, pp. 147–148). Catholic priests Jimmy Tompkins and Moses Coady believed that the economic misery associated with the Great Depression would strengthen radicalism at the expense of Judeo-Christian values (MacPherson, 1979, p. 130). Drawing from a range of ideas—including from Desjardins, Bergengren, Danish folk schools, and the Rochdale pioneers—the Antigonish movement founded an approach to co-operative development that began with study circles that identified co-operative solutions to local problems using books and pamphlets obtained from the University. They also won the Challenges 137 support of the Protestant clergy, and the number of study groups organized by the extension department rose from 173 with 1,384 members in 1931 to 1,063 with 10,000 members in 1937. This approach assisted co-operative development in the Maritime Provinces of New Brunswick, Nova Scotia, and Prince Edward Island, with 355 credit unions, 42 consumer co-operatives, and 34 fishing co-operatives in operation by 1940 (Birchall, 1997, p. 197; Cameron, 1996, p. 426; Coady, 1943, p. 22; Fitzpatrick-Behrens and LeGrand, 2017, p. 147; Fay, 1939, p. 331; MacPherson, 1999b, p. 343). The Second World War brought the same opportunities and challenges for US consumer co-operatives as for other businesses, such as labor shortages and difficulties with obtaining goods such as petrol. The consumer co-operatives supported nationwide rationing to ensure an equitable distribution of goods, and assisted in drives for war bonds, and the movement reached unprecedented levels of influence and membership. CLUSA estimated that in 1942 there were 3,100 co-operative stores in the USA with a membership of 485,000 and a total turnover of US$129,650,000. There was also a major change in the leadership of CLUSA. Warbasse came into conflict with Bowen, particularly over Bowen’s extension of the definition of consumer co-operative to include co-operative purchasing by farmers’ organizations. This change broadened CLUSA through the inclusion of farmer wholesale co-operatives and shifted CLUSA membership from industrial workers to mainly farmers. Warbasse ultimately resigned as President of the League in 1941. National Co-operatives, which strengthened its position as a national buying association during the war, entered manufacturing in 1943 with the purchase of a chemical company that manufactured products such as cosmetics and polishes, and a milking machine manufacturer. By 1945 National Co-operatives had taken over much of the promotional work for co-operatives that had been done formerly by CLUSA. CLUSA also gained considerable kudos for its assistance to war-ravaged Europe through a freedom fund and later the Co-operative for American Remittances to Europe (CARE—subsequently the E stood for Everywhere) (Patmore, 2017, pp. 519–520). The co-operatives’ continued growth attracted concern in the established business community with the formation in 1943 of the well-resourced National Tax Equality Association, which attacked co-operatives as “tax dodgers” and suggested they were “unpatriotic.”9 The War had differing impacts on US credit unions and agricultural co- operatives. The US government regulated savings so that they were diverted to the war effort through war bonds. There were stricter controls on the production of consumer goods and the construction of private housing, which reduced the need for credit union financing. The credit union movement lost some of their most youthful and enthusiastic activists to enlistment. The number of credit unions fell from 9,891 to 8,680, and the number of members dropped from 3,316,574 to 2,842,989 between 1941 and 1945 (MacPherson,1999a, p. 37). While there was also a decline in the number of marketing and purchasing agricultural co-operatives between 1940–1941 and 1945–1946 from 10,600 to 10,150, there was consolidation as membership grew from 3,400,000 138 Challenges to 5,010,000, and business volume grew from US$2,280,000 to US$6,070,000 as agricultural co-operatives played a crucial role in supplying foodstuffs, such as dehydrated foods, for the war effort (Eversull, 2015, p. 1; Ingalsbe and Groves, 1989, p. 118). As in the USA, there was a major expansion of farmers’ co-operatives in Canada. During the First World War the UFCC continued its drive to create co-operative stores and agricultural marketing co-operatives, but despite opposition from middlemen, by the 1930s it had become a wholesale society, supplying local co-operatives and disposing of their produce, as well as owning a group of creameries. The co-operative fruit associations in Nova Scotia, through a central marketing organization, exported a quarter of the apple harvest by 1933. On the Prairies, when wheat prices fell following the First World War, farmers turned to contract pooling influenced by the US advocate Sapiro. There were three wheat farmers’ pools, which purchased the entire system of grain elevators from the SCEC, and by 1929 had 1,642 country elevators and the terminal elevators at the Head of the Lakes and on the Pacific Coast, accounting for more than a third of the total Canadian terminal storage, with the largest single grain elevator system in the world. While these pools successfully captured half the market between 1924 and 1928, the collapse of wheat prices during the Great Depression and a series of bad harvests led the government to take over the pools and eventually establish the National Wheat Board. The pools retained ownership of the grain elevator systems, which forced privately operated grain elevators to reduce their prices and provided the basis for the development of a variety of marketing and agri-business co-operatives. In British Columbia the first, though short-lived, a fishing co-operative was established by Finns in 1929 to control the price received for the catch, and other fishing co-operatives followed, including the co-operative established in 1931 at Port Rupert, which would become the largest fishing co- operative in North America for many years. Farmer and consumer co-operatives combined to organize wholesale co-operatives, initially in the Prairies, with the first being organized in Manitoba in 1926. There were other initiatives, such as: the Consumers’ Co-operative Refineries Limited, which opened its first refinery in Regina, Saskatchewan, in 1935; the federation of provincial wholesalers that became the Interprovincial Co-operatives; and Canadian Co-operative Implements Ltd., which was established in 1940 to reduce the price of agricultural machinery and began manufacturing implements at Winnipeg in 1944 with the help of three provincial governments (Birchall, 1997, pp. 196–197; Digby, 1970, pp. 24–35; Emmanuel, 2007, pp. 158–159; Fay, 1939, p. 330; MacPherson, 1999b, pp. 340–342). By 1942 it was estimated that 26 percent of all Canadian farm products sold by half a million farmers was through co-operatives (Coady, 1943, p. 25). Canadian farmers’ co-operatives, particularly in the Prairies, along with socialist and labor organizations, played an important role in the formation of the Co-operative Commonwealth Federation (CCF) in 1933, the predecessor to the social democratic New Democratic Party. Their alliance arose from the Great Challenges 139

Depression and their disillusionment with the existing political and economic systems. The ideal of the CCF was the organization of all economic activity along co-operative lines for the mutual benefit of all. The CCF formed a government in Saskatchewan in 1944 that promoted all kinds of co-operative development and established a special department to encourage co-operative activity. While there was an initial focus on voluntary and community-led initiatives for economic and social development that favored co-operatives, this approach gave way to state- led initiatives supported by the CCF leadership. There also remained within the Saskatchewan co-operative movement a strong current of thinking that favored political neutrality and a desire to remain free of government intervention in their internal affairs. Not all co-operators embraced the CCF and a significant number remained loyal to traditional parties (Balnave and Patmore, 2017, p. 21). There were developments in the Caribbean. Banana farmers established a co-operative in Jamaica in 1927, with support from the British Governor, to negotiate an agreement with the US-owned United Fruit Company (UFC), which held a monopoly on exports. The co-operative faced problems in ensuring the loyalty of its members, as private companies offered them higher prices and it did not receive sufficient supplies to fulfill its contracts. It was eventually able to secure 30 percent of banana exports in 1936 but at the price of abandon- ing the co-operative principle of issuing dividends in proportion to deliveries. Through Catholic priests, influenced by the Canadian Antigonish movement, the St. George’s Extension School Co-operative Department was established in Jamaica in 1940, and credit unions were introduced into British Honduras (now Belize) in 1943 (Digby, 1970, pp. 126–129, 137). The co-operative movement in Latin America, particularly Argentina, further developed in this period. While Argentina did not participate in the First World War, its economy boomed through the export of agricultural produce, which left it without debt for the first time in its history. By 1921 the movement was dominated by rural co-operatives, with consumer co-operatives numbering 43 of 218 co-operatives and approximately one-quarter of the total co-operative membership. The EHO supported the first congress of Argentinian co-operatives in 1919 and in 1923 set up a credit union, where the funds from approximately 20 worker societies were deposited and became a central feature of the growth of the EHO. Following the example of the EHO, workers in the growing center of Bahia Blanca formed the Cooperativa Obrera Limitada (CO) in October 1920. The CO aimed to fight the rising price of bread by establishing a bakery and later moved into pasta manufacturing. It also established a savings scheme in 1928 that, as for the EHO, fueled its growth. At national level, a federation of agricultural co-operatives was formed in 1922 and in 1932 consumer co-operatives established their own federation, Federación Argentina de Cooperativas de Consumo, which moved into wholesaling from 1940 (Vuotto, Verbeke, and Caruana, 2017, pp. 486–492). The first South American women’s co-operative guild was organized in Buenos Aires in 1932 (Parker and Cowan, 1944, p. 41). After several 140 Challenges attempts, Argentinian national co-operative legislation was passed in 1925, based on Rochdale principles. By 1940 there were 646 co-operatives with 365,738 members, which included 164 wheat marketing co-operatives, 96 co-operative dairies, 76 consumer co-operatives, 70 electricity co-operatives, and 63 financial co-operatives (Delom, 1943, p. 42). There were examples of the development of co-operatives in other South American countries, such as Colombia, where urbanization and the election of a progressive Liberal government in 1930 provided the background for the passage of co-operative legislation and there were 196 co-operatives by 1941, with 65 consumer co-operatives and 63 financial co-operatives dominating the movement (Ribas, 1943, p. 45). In Brazil in 1927, the Japanese Consul in Rio De Janeiro helped Japanese immigrants form an agricultural society called the Co-operative Agricola Cotia, which grew to operate facilities for the slaughtering of chickens and the production of feed and fertilizers (Spaull, 1965, p. 110).

Australia, NZ, and the Pacific Islands The fortunes of the consumer co-operative movement in Australia and NZ tended to fluctuate, with peaks following the First World War and the Great Depression. The postwar boom and its aftermath in both countries provided the conditions for a renewed interest in consumer co-operatives, particularly given people’s concerns over rising prices and declining living standards. Rochdale co-operatives also became a feature of Australian rural areas, particularly in fruit-growing or poultry- breeding districts, or in towns at important railway junctions, such as Junee in the Riverina region of NSW. By 1923 there were 152 consumer societies in Australia with a membership of 110,000. The postwar boom in NZ co-operative formation reached its peak in 1921. However, commercial competitors, such as chain stores, undercut the NZ co-operatives through price competition and many co-operatives went into liquidation (Balnave and Patmore, 2008, pp. 99–100, 2012, p. 989). While the Depression of the 1930s initially weakened Rochdale consumer co-operatives in both countries, they grew in the recovery that followed. There were overseas influences, with the Japanese co-operator Kagawa also visiting Australia and NZ in 1935, and Australians promoting the Antigonish movement locally (Lewis, 1992, pp. 160–161; Watson, n.d.). There were some failures, such as the Balmain Co-operative in Sydney, which was hit by closures of local industries, such as a colliery. The membership of Rochdale co-operatives in NSW fell by more than half from 60,000 in 1929 to 24,000 in 1933, but numbers began to grow in NSW from 1935. In 1933 the National Dairy Association of New Zealand (NDA), the NZ agent for the CWS with shares held by co-operative dairies, produced the first issue ofThe Co-operator (later The New Zealand Co-operator), and sponsored a conference attended by potential co-operators, resulting in the establishment of the New Zealand Co-operative Alliance (NZCA). The main objective of the Alliance was to advance the co-operative movement in NZ, and it was initially successful in achieving this objective. In early 1934 there were six consumer Challenges 141 co-operatives in NZ, with an overall membership totaling 1,500. The movement grew to 15 co-operatives and 2,250 members in 1935, and 21 co-operatives and 5,206 members in 1936. By August 1937 the movement had 26 co-operatives and 8,000 members (Balnave and Patmore, 2008, pp. 99–100; Fay, 1939, p. 359; Lewis, 1992, p. 133). Some Rochdales organized women’s guilds. The first women’s co-operative guild in NZ was formed at Ranunga in 1928 after an earlier failed attempt in 1924, and a national organization was established in August 1936. The NZCA provided support and the Guild Secretary was a part-time position. Women played a key role in the formation of the Manawatu Co-operative in 1935, and established a women’s guild with such an extensive and successful educational and social program that the co-operative established the only men’s guild in NZ. Many of the co-operatives in coalmining and metropolitan areas in Australia formed women’s guilds with the aim of educating women in co-operative principles and promoting the co-operative movement. The Australian women’s guilds formed a national organization in 1936, with all guilds affiliating to it by 1945 and members in NSW, SA, and Victoria. There is, however, no evidence of co-operatives in rural areas forming women’s guilds (Balnave and Patmore, 2008, pp. 101–102; Entwistle, 1952, pp. 60–62; ICWG, 1947, p. 31). Both Australian and NZ Rochdale consumer co-operatives engaged in wholesaling activities. The NSWCWS attracted an increasing number of societies as affiliates and launched the Co-operative News, the main journal for the co-operative movement, in 1923. A slump in membership occurred in the decade 1924–1934, but from 1935 the number of affiliates noticeably increased. In 1934, 15 societies were affiliated to the NSWCWS, which grew to 37 by 1945. A conference of consumer co-operatives in Wellington, NZ, in December 1920 led to the formation of the Co-operative Union and Wholesale Society (CUWS). However, the lack of support from affiliated societies undermined the financial viability of the CUWS, which went into liquidation in 1924. During the 1930s the refusal of supply by wholesalers in NZ was partially overcome by buying through the NDA, which established a merchandise department to service co-operative stores in 1933. There was also a push for the NZCA to establish a New Zealand Co-operative Wholesale Society (NZCWS), which began trading in October 1937 but faced many obsta- cles. Some manufacturers refused to supply it, allegedly due to concerns about its viability; and it was not supported by many consumer co-operatives and thus lacked capital. The NZCWS operated for less than a year, and when it collapsed in June 1938, so too did the Alliance. The last issue of The New Zealand Co-operator was printed in March 1938. The collapse of the Alliance and the NZCWS had a dramatic effect on the NZ consumer co-operative movement as many local co-operatives closed and in 1938 the New Zealand Co-operative Women’s Guild became a voluntary organization (Balnave and Patmore, 2008, p. 101). There was an expansion of agricultural co-operatives in Australia. The organization of Westralian Farmers Limited (WFL), a co-operative trading company, in WA in 1914 prompted the formation of many autonomous farmers’ co-operatives, 142 Challenges which initially acted as agents but later developed extensive trading activities. The WFL in 1933 also played a role in launching Co-operative Bulk Handling (CBH), which built new grain elevators at stations to reduce the costs of handling during the Great Depression, and by 1937–1938 more than 80 percent of WA wheat was co-operatively handled. The WA experience contrasted to other Australian states where grain elevators were state owned, which inhibited the formation of co-operatives (Ayris, 1999, p. 12; Birchall, 1997, p. 163). As elsewhere, there was an Australian interest in state marketing boards, with Queensland leading the way in 1922 legislation that provided for compulsory boards if supported by two-thirds of the producers of two-thirds of the commodity, and wheat pools. Farmers in NSW, Victoria, and SA formed a voluntary wheat pool, which handled 75 percent of their wheat harvest in 1922–1923, following the end of a federal government wheat pool in 1921. The market functions of the various wheat pools ended with the formation of the Australian Wheat Board in 1939 (Digby, 1970, pp. 39–47). As Lewis argues, the rise of statutory marketing boards in Australian agriculture during the interwar period “severely narrowed the scope for co-operation, limiting it to relatively simple economic functions, retarding development and confining development to a state-based level of operations” (2006, p. 27). The Australian co-operative movement, particularly in rural areas, found support from the Country Party. This party represented farmers and in its early years was influenced by agrarian socialism, but generally aligned itself with the Liberal Party and its predecessors rather than with the Labor Party. The NSW Co-operation Act of 1924, which is viewed as a landmark in the history of Australian co-operation and covered a range of co-operatives, including Rochdale consumer co-operatives, was an outcome of the Country Party’s role in the then non-Labor coalition government. The legislation created a Registrar of Co-operative Societies and detailed “model rules” to assist in their formation (Balnave and Patmore, 2012, pp. 991–992). In Australia, both at state and national levels, there was interest in forming co-operative peak organizations, but they were generally short-lived. The most successful example of a state peak body was the Co-operative Federation of Western Australia (CFWA), which was formed in October 1919 at the instigation of the WFL. It was dominated by farmers’ co-operatives, but did include Rochdale consumer co-operatives. The annual conference of the CFWA in February 1932 at the Westralian Farmers building in Perth attracted 100 delegates from 42 co-operatives. The Westralian Farmers, through their influence on the CFWA, created a climate in WA that was hostile to attempts to democratize co-operatives or to introduce legislation that defined co-operatives along Rochdale lines. Towards the end of the Second World War, a Commonwealth Consumers Co-operative Conference in December 1943, with representatives of producer and consumer co-operatives from six states, met at the Albert Hall in Canberra. The CFWA organized the conference and those present saw the Australian co-operative movement as having a vital role in postwar reconstruction, even suggesting that co-operative principles should form Challenges 143 the basis of that reconstruction. The conference resolved to establish a permanent secretariat in Canberra, known as the Co-operative Federation of Australia (CFA), and state co-operative federations (Balnave and Patmore, 2012, pp. 992–993). There was an upsurge in building societies in Australia just prior to the Second World War in NSW. The Great Depression had led to a decline in co-operative building societies and Starr-Bowkett societies, with falls in building activity and employment. The NSW government decided to stimulate building construction and increase the quality of housing by encouraging the formation of terminating building societies with a government underwriting guarantee, with the first being formed in September 1936, 191 societies were registered by June 1939 with 18,911 members (Withycombe, 1987, pp. 8–18). While the entry of Japan into the Second World War briefly curtailed the growth of building societies in NSW, the Victorian government boosted building societies there in 1944 with a similar government guarantee (Lyons, 1988, p. 392). The first major shift towards credit unions in Australia and NZ occurred in NSW. There was little activity following the NSW Co-operation Act of 1924, which provided for financial co-operatives but restricted the geographical coverage and the loan amount to £100. There were further limitations to growth after a decline in savings due to the Great Depression and the wartime restrictions on small loans in favor of government bonds. The NSW government enacted the Small Loans Facilities Act in 1941, which led to an upsurge of credit unions after the War, to regulate a personal credit market dominated by loan sharks and hire purchase companies who could charge exorbitant interest rates. The first registered credit union was the Home Owners’ Co-operative Credit Society, established in 1945 by a building society to provide credit for its members (Cutcher and Kerr, 2006, p. 34). During the Second World War, there was contact between activists interested in forming credit unions in NZ and CUNA in the USA. The first credit union under friendly societies legislation was registered in May 1943 by the Manchester Unity Independent Order of Oddfellows, a friendly society (Smith, 1969, p. 208). There was also a spread of co-operatives on the Pacific Islands, particularly the British territories. On the Gilbert and Ellice Islands (now the separate countries of Kiribati and Tuvalu respectively), where the main marketable commodity was coconuts and the main export was copra, the British authorities encouraged co-operatives among the indigenous people to cut out European traders as early as 1927 (Buckley and Klugman, 1983, pp. 139, 280, 319, 336). A schoolteacher on one of the Ellice Islands in 1936 set up a retail co-operative where coconuts were collected in exchange for retail goods. This idea was spread to the other islands by the British authorities, with membership limited to 200, and co-operatives not allowed to trade with non-members. While the Japanese occupied the Gilbert Islands and the Ellice Islands were in a war zone, copra exports ceased, however the Ellice co-operatives still functioned for the distribution of supplies. There were also early experiments in co-operation in Fiji, with the Rewa Co-operative Dairy Company being founded in 1923, 144 Challenges and in Nauru, where a co-operative general trading society was founded in 1921 and had a total loss of property and stock during the Japanese occupation (Digby, 1970, pp. 105–108, 111).

An international movement While its congresses and executive meetings were disrupted by the two World Wars, the ICA continued to function and diversify its activities. At its peak in 1932, 40 countries were represented covering 99,600,000 members, and by 1938 it had representatives from 34 countries, covering 168,672 co-operatives and 72,384,164 members (Parker and Cowan, 1944, p. 35). By 1937 membership had extended beyond Europe to include Argentina, India, Japan, and Palestine (ICA, 1937, pp. 17–25). The ICA Executive was transformed in 1921 from a purely British group to one with representatives from the leading co-operative countries. At the first Congress after the First World War in Basel in 1919, the ICA set up three specialized committees to focus on co-operative banking and the possibility of creating an International Co-operative Bank, co-operative insurance, and encouraging women in the co-operative movement. This last became the International Co-operative Women’s Guild (ICWG) in 1924, which had 17 affiliates by 1940 and became an advocate for the political rights of women, world peace, and international disarmament. The ICA continued to support world peace and developed a close relationship with the ILO (International Labour Organization), which was an agency of the newly created League of Nations that established a Co-operative Service to assist the international development of co-operatives (Cole, 1944, p. 358; Parker and Cowan, 1944, pp. 40–42; Shaffer, 1999, pp. 14, 118–120). The ICA clarified and reinforced the co-operative identity. It began a process of reviewing the co-operative principles with ICA members, arguing from the late 1920s that they were outdated due to dramatic changes in the global economy. The 1930 Congress in Vienna approved a Special Committee to review the Rochdale principles, with the 1937 Paris Congress adopting seven principles of which four were obligatory for any co-operative: open membership; democratic control; dividends on purchases; and limited interest on capital. To highlight the international significance of co-operatives in 1923 the Executive Committee declared the first Saturday in July to be International Co-operative Day, and in 1925 formally adopted the Rainbow Flag as its official ensign. The ICA’s publication, Review of International Co-operation, continued to be published through the whole period, including the two World Wars (Shaffer, 1999, pp. 14, 120–122). There were divisions within the ICA and rivals emerged. There was a split between those countries, such as Austria and Belgium, that called for political involvement in the issues of the day, and those, such as the Nordic countries, that wanted to focus on purely “co-operative” issues (Hilson, 2011, p. 208). While the ICA represented a wide range of co-operatives, it was still dominated by consumer co-operatives at the outbreak of the Second World War (Parker and Cowan, 1944, p. 35) and a separate international organization for the emerging credit union Challenges 145 movement was begun with the decision of CUNA in May 1940 to include credit unions from anywhere in the Western Hemisphere (MacPherson, 1999a, p. 32). The ICA had to confront the rise of totalitarian states and their implications for co-operatives and ICA membership. While the Basel Congress voted to keep Centrosoyus as a member in 1921, there were increasing tensions over the use of the co-operative movement by the USSR to expound communist propaganda. The Stockholm ICA Congress of 1927 reduced the influence of the USSR and other large movements by amending the rules so that one country had no more than 20 percent of Congress votes and that the USSR be counted as one country. The ICA refused to recognize the co-operative movements that arose in fascist Italy and Nazi Germany, and intervened in Austria, where in Vienna alone there were 144 co-operative stores with more than 170,000 members, to support co-operatives in 1934. A civil war had led to the Austrian Army successfully attacking socialist strongholds in Vienna and the closing or taking over of consumer co-operatives. Co-operative officials were arrested, including two ICA officers, one of whom was Freundlich, who had been the ICWG President since its formation. Henry May, the ICA Director, met with the dictator Chancellor Engelbert Dollfuss, who was linked to agricultural co-operatives but hostile to socialist-linked consumer co- operatives. Consumer co-operatives returned to member control once they broke links with opposition parties and the ICA officers were freed. Following criticism of Japanese militarism, particularly following the invasion of China, the Japanese movement left the ICA in May 1940 (Birchall, 1994, p. 111, 1997, pp. 50–51; Rhodes, 1995, pp. 39, 189, 195; Shaffer, 1999, pp. 119–122, 231). There was also the development of trade links. The ICA Congress at Ghent in 1924 established the International Co-operative Wholesale Society (ICWS), which was to be merely a clearing house of information regarding the trading activities of national co-operative wholesalers, but did not become active until 1930 (Shaffer, 1999, p. 120). An International Co-operative Trading Agency (ICTA) was also established in 1937 under the ICWS to act as a purchasing agent for the various national co-operative wholesalers, but its activities were restricted by customs regulations, currency fluctuations, and the outbreak of war, some items traded included condensed milk from the Netherlands, fresh grapes from Bulgaria, and motor oil from the USA (Parker and Cowan, 1944, p. 39). The ICA supported free trade to encourage co-operative trade and called for greater control over international monopolies and cartels (Friberg, 2017). By 1937 there was some dissent against the free-trade policy, with one Indian delegate at the Paris ICA Congress arguing that Indian co-operators were protectionist as the import of British goods had retarded the growth of manufacturing with the Indian economy becoming “over-ruralised” (ICA, 1937, pp. 259–260). The various national co-operative wholesalers also set up international trade relationships. During the interwar period the CWS increased sales to co-operatives overseas, particularly in the USSR, and by the 1930s the CWS Bank was heavily involved in financing the export of Australian wheat to the UK. It acted as a buying agent for co-operative societies in Argentina, Australia, Bermuda, Newfoundland, 146 Challenges and South Africa. The CWS set up joint arrangements with overseas agricultural movements, the first being with the NZ Producers’ Co-operative Marketing Association in 1919 to form the NZ Produce Association, and to source dairy products, and later frozen meat, with the SCWS becoming a shareholder in 1937 (Cole, 1944, p. 299; Digby, 1970, pp. 50–51; Wilson, Webster, and Vorberg- Rugh, 2013, pp. 181–183). Australian farmer co-operatives formed the Australian Producers’ Wholesale Co-operative Federation in 1919 to trade with the CWS. They also joined with the CWS and farmers from NZ and South Africa to establish the Overseas Farmers’ Wholesale Co-operative Federation (OFWCF) in 1921, with NZ farmers eventually withdrawing. An OFWCF subsidiary, Empire Dairies, operated a selling room for dairy produce in London with a telephone link-up providing futures trading information and monitoring changes in currency rates; it became the largest butter exchange in the World. The co-operative associations of Belgium, Bulgaria, Sweden, Czechoslovakia, Estonia, and the Netherlands established the International Agricultural and Purchasing Society, Intercoop, in 1929 in Rotterdam under the auspices of the International Confederation of Agriculture to arrange the sale of surplus produce and purchase supplies (Fay, 1939, p. 342; Lewis, 1992, pp. 94–95; Smith, 1961, p. 67; Watkins, 1975, p. 42). The Scandinavian NAF purchased a coffee plantation in the Dutch East Indies, now Indonesia, in 1932. While NAF turnover grew from 9,647,649 Kroner in 1919 to 66,300,000 Kroner in 1939, the outbreak of war reduced its business by nearly 75 percent by 1941 (Parker and Cowan, 1944, p. 37).

Conclusion The period from the outbreak of the First World War to the end of the Second World War saw the extension of co-operation throughout the world and the consolidation of the ICA. While the First World War enhanced the reputation of consumer co-operatives in terms of the distribution of essential foodstuffs and the fight against profiteering by private businesses, the rise of fascism and the destruction caused by the Second World War devastated consumer co-operatives in many European, Asian, and Pacific countries. While the ICA remained focused on consumer co-operatives, other forms dominated national co-operative movements, such as agricultural co-operatives in the USA and Canada, and financial co-operatives in India. Among financial co-operatives, credit unions grew in the USA and by 1941 were moving towards an international organization that would eventually rival the ICA. The Second World War, however, placed limits on financial co-operatives such as credit unions, and they went into a temporary decline in the USA as governments prioritized the war effort as a destination for citizens’ savings. While the two World Wars had mixed blessings for the co-operatives, the economic and political uncertainties of the Great Depression led to a questioning of capitalism and a need for an alternative way to obtain access to food and services. There was an upsurge of interest in consumer and financial co-operatives Challenges 147 in Australia, Canada, NZ, and the USA, with President Roosevelt’s New Deal providing a favorable climate in the USA, and the Catholic-inspired Antigonish movement playing a keep role in Eastern Canada. Favorable co-operative legislation in the USA during the 1920s and the Great Depression played a crucial role in the expansion of agricultural co-operatives, credit unions, and power supply co-operatives. Colonialism continued to play an important role in the international expansion of co-operation, particularly in the British Empire. The Indian model of financial co-operatives provided the basis for co-operative legislation in British colonies and mandated territories such as Kenya, Palestine, and Singapore. While this legislation could only apply to European settlers, the co-operative legislation could be used to incorporate indigenous movements, as in Kenya, which was a challenge to colonial authority. Outside the British Empire, the Japanese in Korea imposed their co-operative model to accelerate economic development but had to suppress an indigenous co-operative movement that was linked to independence. As the co-operative movement grew it faced opposition. Small private retailers saw the rise of co-operatives and chain stores as a threat to their businesses as they could not take advantage of economies of scale in purchasing goods. This opposition manifested itself in campaigns against tax advantages for co-operatives and fueled small business support for extremist political parties, particularly where the co-operative movement had links to left political parties. One notable response to the opposition of the small private retailers was the formation of a Co-operative Party in the UK. Totalitarian governments disliked the autonomy and democratic principles of co-operatives in their efforts to control economic activity and to create a one-party state, as occurred in Germany, Italy, and the USSR. Yet even in democratic regimes such as Australia, Norway, and the UK, the state suppressed and weakened the activities of co-operatives through the establishment of state instrumentalities to market agricultural goods. Despite these challenges during the period from 1914 to 1945, the co-operative movement survived internationally and was ready to face new challenges in the postwar period, as will be explored in the next chapter.

Notes 1 Monthly Labor Review (hereafter MLR), August 1944, p. 309. 2 MLR, August 1944, p. 320. 3 MLR, April 1941, pp. 901, 908–909. 4 MLR, April 1941, pp. 901, 905, August 1944, p. 321. 5 MLR, April 1941, p. 915. 6 MLR, August 1944, pp. 310–11, 315, 325. 7 MLR, August 1944, pp. 329–331. 8 MLR, January 1942, pp. 120, 122. 9 Letter from J. Bruce to C.J. McLanahan, June 9, 1943. CLUSA, Box 58, File—“Coop League New Service, Miscellaneous copy.” Truman Presidential Library and Archives, Independence, Missouri, USA. 148 Challenges

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The international co-operative movement faced three major challenges from the end of the Second World War to the mid-1970s: sustained economic growth and prosperity in Western industrial countries; international divisions underlying the Cold War; and decolonization, particularly in Africa and Asia. In general, despite concerns about the reappearance of another depression, Western economies responded well to the shift from a wartime to a peacetime economy following the conclusion of the Second World War. Assertive governments became involved in directing economic development along the lines of Keynesian economic theory. Pent-up demand from the scarcities of the war fed the consumer binge that would became a hallmark of Western industrialized countries until the 1970s. Housing construction and manufacturing industries also boomed (MacPherson, 2017, pp. 443–446), with industrial countries experiencing an average annual growth rate of 5 percent from 1950 to 1973, compared to 1.9 percent from 1913 to 1950, and 2.6 percent from 1870 to 1913 (Graff, Kenwood, and Loughheed, 2013, p. 282). Consumer co-operatives faced increased competition as rival retailers took advantage of the development of supermarkets, mass advertising, and supply chain management. The high standard of living generated by this period of growth weakened traditional support for consumer co-operatives as prices fell and goods became relatively plentiful, forcing consumer co-operatives to reconsider their appeal to a more affluent population (Battilani and Schröter, 2012, p. 9). By contrast the quest for personal finance to fund loans for consumer durables, such as cars and home appliances, and housing led to a growth of financial co-operatives in a number of a countries as traditional financial institutions failed to meet demand. While there was economic growth for industrialized capitalist countries, the Cold War divided the world. The extension of Soviet influence into Eastern Europe and Asia, and the rise of the People’s Republic of China brought challenges to a 156 Postwar prosperity co-operative movement that valued democracy, economic autonomy, and freedom of speech, with co-operatives being generally parastatal. In the Eastern Bloc, governments such as the People’s Republics in Hungary, Poland, Czechoslovakia, and the German Democratic Republic supported consumer co-operatives in the postwar period, not least for reasons of food supply. However, co-operative societies were allowed only in rural areas in the USSR and Czechoslovakia, while in urban/industrial areas, state-owned retailers became responsible for food distribution (Neunsinger and Patmore, 2017, p. 734). Cold War politics led to conflict within the ICA and raised concerns among conservatives in Western countries that collectives such as co-operatives and trade unions were agents of communist influence and even ideology (Birchall, 1997, pp. 187–189). Following the Second World War and up until the mid-1970s colonial rule ended in Africa and Asia, generally following struggles by independence movements. While colonial administrators continued to encourage co-operatives, newly independent governments, particularly in Africa, also saw co-operatives as an instrument of the state to shape economic development. The co-operatives, like those in communist countries, were parastatal, as they were controlled by governments and were not autonomous, voluntary, or member controlled. Governments established departments to intervene in the co-operatives and encouraged, and sometimes coerced, farmers to join them. These co-operatives generally decayed into nepotism, corruption, and mismanagement, which ended their contribution to economic development (Hoyt and Menzani, 2012, p. 54). Newly independent countries in Africa and Asia were also drawn into the Cold War, with African leaders playing one side off against another when it came to aid (MacPherson, 1999a, p. 62). While independence spread through Africa, Europeans remained entrenched in South Africa and Southern Rhodesia, where indigenous people were denied political rights and apartheid operated in South Africa.

Europe Consumer co-operative movements in western Europe experienced mixed fortunes in the postwar period. While some were able to survive or strengthen their market share, others went into decline. The survival of consumer co-operatives has been linked by Ekberg (2012; 2017) to their ability to confront three major transformations or revolutions in the food retail market. Firstly, the co-operatives had to adapt their store formats to meet the “supermarket revolution” with the growth of self-service supermarket and hypermarket retailing. Before these changes co-operative stores were small and specialized, located close to the consumer, and relied upon personal counter service. The second important challenge according to Ekberg was the “chain store revolution,” which related to the growth of large, standardized, integrated, and centralized retail chains. The third challenge identified by Ekberg was the “consumer revolution.” He notes that in their traditional form co-operatives “had sought to offer their members three parallel advantages: the political advantage of being a member of Postwar prosperity 157 a consumer organisation; the advantage of self-governance; and the economic advantage of being eligible for a share of the profits” (2017, p. 721). However, economic rewards such as the dividend lost their appeal to members of consumer co-operatives in the postwar period. After the Second World War the growing conventional retail supermarket chains could offer immediate specials or discounts at the point of sale. There were also major problems for co-operatives running supermarkets, which relied on a high turnover of sales with very low profit margins to remain competitive, providing high dividends based on a member’s purchases. As Ekberg contends, to develop and survive in the face of these challenges consumer co-operatives had to: “develop their store formats to meet with the growth of supermarket and hypermarket retailing”; “develop their system of distribution in order to secure the level of efficiency obtained by the expanding retail chains”; and “successfully re-evaluate and re-state their ideological profile in order to remain an attractive provider of retail services among increasingly affluent post-war consumers” (2017, p. 703). However, strategies were fraught with contradiction for the co-operative movement, particularly in terms of maintaining their central democratic nature. For example, as Battilani (2003, pp. 110–112) has noted for Italy, where co-operatives merged to gain standardization and economies of scale, the larger sized co-operatives distanced members from general management and reduced the importance of members and the boards of directors who represented them, thereby weakening their democratic appeal. On the other hand, movements that maintained a decentralized structure with local autonomy struggled to compete with emerging private retail chains. The movements in a number of West European countries were not proactive in their efforts to adapt to the changes occurring in retail. Consumer co-operatives in France, for example, were relatively slow in their uptake of self-service and supermarkets. In 1959 one in six people was a member of a consumer co-operative, and the regional nature of the French movement meant that they had multiple branches, and like their counterparts in other countries, they were not structured to deal with large-scale distribution. As supermarkets were established outside cities, the French co-operatives struggled (Lambersens et al., 2017, p. 111). In Belgium after the war the share of consumer co-operatives in the rapidly expanding retail sector continued to fall, reaching 2.07 percent in 1950. Opportunities in wholesale trade were missed, and from the early 1970s co-operatives had to close (Van Goethem, 2017, p. 86). In contrast, the British consumer co-operative movement was a leader in self- service and supermarkets in the postwar period. Following the end of the war, the movement had 11 million members, and a 10 percent market share (Secchi, 2017, p. 531). It was also leading the way in modernization, and by 1950 had 40 percent of the supermarkets and 90 percent of all self-service shops (Birchall, 1997, p. 84). However, its growth had stalled by the late 1950s. There was recognition that the political principles of co-operation were not sufficient to maintain the interest of members, with a 1950 internal survey finding that only 3 percent of customers gave political principles as the main reason for shopping at co-operatives. By the early 1950s UK co-operatives combined high dividends with the savings 158 Postwar prosperity arising from the adoption of self-service to maintain a competitive edge. However, as other retail stores adopted self-service, there were downward pressures on the level of dividends due to competition. The structural weaknesses of the consumer co-operative movement also became apparent: “With over 1000 societies, a range of different-sized shops, many of which were too small, and with a lack of integration between societies and their wholesalers, the movement was losing ground to the multiple chains” (Birchall, 2011, p. 54). A 1958 Co-operative Independent Commission report concluded that in order to compete with chain stores it was necessary to form larger co-operative stores and strengthen the national bodies. While this approach was adopted by the national congress of the CU, it did not have the authority to impose the reforms on local societies, which defended their independence against attempts at centralization and were “also rather hostile towards the central institutions, especially the CWS” (Secchi, 2017, p. 534). The British consumer co-operative movement experienced a significant decline between 1964 and 1969, with membership falling from close to 13 million to just over 11 million, and market share decreasing from nearly 11 percent to 7.2 percent. There were a number of reasons for this decline, including the movement’s fragmentation and failure to embrace structural reform. Added to this was the introduction of the Selective Employment Tax by the Labour government, which taxed employment in the service sector and subsidized employment in manufacturing, and the abolition of resale price maintenance (RPM). The removal of the RPM, which gave producers the ability to bind retailers to a certain price for a product, was also a significant blow to the consumer co-operative movement in Switzerland (Degen, 2017, p. 638), which, like many of its counterparts in other countries including the UK, struggled to adapt to changes in retail and by the late 1960s was in decline (Hilson, 2017c, p. 553). In Germany, while consumer co-operatives boomed during the postwar period as the movement was reconstituted and legal constraints such as “limiting the dividend and banning sales to non-members” were removed, they also faced stiff competition from private retailers. Similar to the UK, weak central direction combined with resistance from small societies protecting their autonomy impeded regionalization plans and the merging of societies. Faced with accumulating debts, consumer co-operatives in Germany began to convert to a conventional limited company form in the 1970s, and amalgamated to form one central organization, Co-op Zentrale AG (Birchall, 2011, p. 55). It became increasingly clear that mergers were required to stem the decline of consumer co-operatives in many West European countries. In the UK the CU co-ordinated revival efforts, which included the formulation of a new plan for the creation of regional societies, the formation of buying groups through the merging of societies, the contemporizing of the movement’s image, and the employment of managers from the private sector. As a result, the movement was back on stable ground by 1970 and its market share started to climb again (Secchi, 2017, pp. 532–537). The Italian movement also saw smaller co-operatives merged into larger co-operatives in order to have sufficient capital to manage the modern Postwar prosperity 159 supermarkets and hypermarkets. Patrizia Battilani argues that this process transformed the Italian consumer co-operatives during the 1960s and 1970s and explains the greater success of consumer co-operatives in Italy compared to other European countries. Indeed, by the 1970s consumer co-operatives had taken the lead in the sector (Battilani, 2017, p. 599; Battilani, Balnave, and Patmore, 2015, p. 63). Consumer co-operatives in the Nordic countries also faced strong competition from private retailers and the need to rationalize the number of societies, but, as Birchall has noted, “They made a better job of it than their southern counterparts” (2011, p. 55). Different approaches worked for different Nordic countries. For example, co-operative stores in Norway were owned and operated by local societies and buying was centralized through one co-operative wholesaler. In contrast, from the 1950s the Swedish movement began a structural reorganization by merging local societies into larger units, and “became the most dynamic and innovative of all the European sectors” (Birchall, 2011, p. 56). While the Second World War saw the defeat of fascism in Germany and Italy, totalitarian regimes continued to govern in the Iberian Peninsula. Unlike the prewar fascist regimes, consumer co-operatives in Spain and Portugal not only survived, but gained strength (Neunsinger, 2017, p. 237; Hilson, Neunsinger, and Patmore, 2017, p. 15). In 1949 there were 439 consumer co-operatives in Spain, which grew to over 1,500 by the mid-1970s (Medina-Albaladejo, 2017, p. 337). The Ley de Cooperación (Co-operative Act, 1942) of the Franco dictatorship provided fertile ground for the co-operative movement. Through measures such as low-interest loans, grants, and tax benefits, the state supported the growth of co-operatives as a means of enhancing the welfare of the population. However, as Medina- Albaladejo notes, the aim was “also to place the farmers, workers and consumers under institutions that were heavily subjected to the hierarchical structures of the dictatorship” (2017, p. 338). While maintaining some co-operative characteristics, such as voluntary and open membership, consumer co-operatives in Spain failed to meet the key co-operative principles of democratic member control, autonomy, and independence from the state. The co-operatives were subject to centralized state control, and lacked the flexibility to adapt to the developments in retail and distribution, in particular the rise in self-service supermarkets and hypermarkets. The inability to compete in the new retail landscape led to the closure of many Spanish consumer co-operatives (Medina-Albaladejo, 2017, pp. 338–339). In Portugal, democratic management and the involvement of anti-authoritarian groups and a number of influential Portuguese intellectuals, in particular António Sérgio, helped to turn co-operatives into “schools of opposition” (Freire and Pereira, 2017, p. 317). Efforts were made to unify the movement, the first being the short-lived Conselho Central Co-operativo (Central Council of Co-operatives) in 1948. From 1951 the publication Boletim Co-operativista (Co-operative Bulletin) disseminated information about local and international co-operative activities, and in 1955 UNICO-OPE (co-operative wholesale) was established and became the Portuguese representative in the ICA (Freire and Pereira, 2017, pp. 307, 318). As Friere and Pereira contend: 160 Postwar prosperity

Many of these initiatives were developed on the threshold between legality and illegality, which led to the arrest of some activists, including António Sérgio, and they brought together various political tendencies such as socialists, republicans, communists, anarchists and social Catholics to reinforce the democratic front that had fought against the dictatorship since the end of Second World War. (2017, p. 307)

Attempts to merge consumer co-operatives into a national organization based on regional services met resistance from local societies, which guarded their autonomy and emphasized their strong identity with the community. These co-operatives sought to maintain their traditional character at the expense of responding to societal changes and increasing competition from private retailers. In 1973 there were 132 consumer co-operatives in Portugal, with approximately 100 associated with UNICO-OPE, and they were considered by some to be “a movement in crisis” (Friere and Pereira, 2017, p. 321). There were significant developments in the agricultural co-operative movement in Europe following the ratification of the Treaty of Rome (officially the Treaty Establishing the European Economic Community) in 1957 which, among its many proposals, included the creation of the European Commission (EC) and a Common Agricultural Policy. The EC brought national agricultural organizations together as observers at its 1958 conference, and the first European organization representing farmers—the Committee of Professional Agricultural Organisations (Copa)—was subsequently created in September 1958. A year later, the national agricultural co-operative organizations decided to create their own umbrella organization—the General Committee for Agricultural Cooperation in the European Union (Cogeca)—to represent the agricultural and fisheries co-operative sector in the European Union. The Cogeca Secretariat subsequently merged with that of Copa in December 1962 (Cogeca, 2015, p. 14). In England, there was a revival of agricultural co-operatives with the formation of the Agricultural Co-operative Association in 1946 and by 1965 at least two-thirds of English farmers were members of agricultural co-operative societies (Digby, 1970, pp. 15–16). Financial co-operatives in Europe recovered from the Second World War and expanded. The Raifeissen and Schulze-Delitzsch banks in Germany merged to form one credit co-operative sector umbrella organization in 1972 (Aschhoff and Henningsen, 1986, p. 40). In the same year, the two Dutch umbrella organizations—the Coöperatieve Centrale Raiffeisen-Bank in Utrecht and the Coöperatieve Centrale Boerenleenbank in Eindhoven—merged to become Rabobank, a co-operative in which all local Rabobanks became members and shareholders (Rabobank, 2017). Indicative of developments in co-operative banking in Europe and a sign of things to come was the formation of the European Association of Co-operative Banks (EACB) in 1970. This association, which was based on co-operative principles including one member, one vote, was established to represent, promote, and defend the common interests Postwar prosperity 161 of its members with regard to banking and co-operative legislation. The Association became the official spokesperson of co-operative banks of the European Union. The credit union movement in the UK experienced a significant boost from immigrants arriving from the West Indies in the postwar period. These immigrants brought their experiences from home to organize credit unions in London, and later in the Midlands, northern England, and Scotland. The Credit Union League of Great Britain was formed in 1969. However, the most significant strides of the credit union movement into Europe during this period occurred in Ireland. A combination of events, including the final severing of ties with the UK in 1948, a depression in the 1950s, and personal credit stress caused by the pressures of the hire purchase and credit card systems, provided the social and economic context for the emergence of a credit union movement in Ireland in the 1950s. A credit union extension service was organized by activists associated with the National Co-operative Council in 1957, and a year later the Donore and Dun Laoghaire Credit Unions were formed. The Irish Credit Union League (name changed to the Irish League of Credit Unions in 1972) was established in 1960, when there were just four credit unions in Ireland. By 1965 there were 113, and by 1970 the movement involved 360 credit unions with over 222,000 members (MacPherson, 1999a, pp. 65–67, 92–93). Italy, followed by France, had the largest worker co-operative sectors in Western Europe during the postwar period. In Britain, the worker co-operative movement received a boost in 1951 when the chemical manufacturer, Scott Bader, was converted into a co-operative. As Birchall notes, Bader established a promotion organization that became the Industrial Common Ownership Movement in 1971 and “helped to organise a few more conversions and to set up hundreds of small co-ops in a ‘new wave’ of wholefood shops, alternative bookshops, community printers, alternative technology companies and other small businesses” (1997, p. 98). However, the most significant development in worker co-operatives in Europe during this period was the establishment of the Mondragon group of co-operatives in the Basque region of Spain. In 1956 five graduates of the Escuela Politécnica Profesional (Professional Polytechnic School), influenced by Don José Maria Arizmendi, a Catholic priest and promoter of co-operatives, established the first worker co-operative in Mondragon. Due to difficulties in obtaining finance, they founded their own savings bank in 1959, which channeled its savings into investments in new co-operatives (Birchall, 1997, pp. 100–101).

Africa Colonial authorities encouraged co-operatives in Africa. France extended its 1947 co-operative legislation to its colonies, which provided for autonomous co-operatives but without anyone responsible for promoting them, and many new co-operatives only lasted a few years due to poor preparation, inefficiency, or corrupt management. A 1955 decree replaced this legislation and introduced 162 Postwar prosperity a special agency for technical assistance, similar to the British colonial registrar for co-operative societies. Existing SIPs became mutual societies to promote rural development as part of a centrally organized plan (Birchall, 1997, p. 135; Thompson and Adloff, 1958, p. 359). While the Belgian government had allowed indigenous people to set up their own co-operatives from the 1920s, after the Second World War it began promoting co-operatives as part of social, educational, and agricultural policy, with special co-operative departments at national and provincial levels. The Labour Party government in the UK, which held power from 1945 to 1951, was interested in ‘Fabianizing’ the British Empire by encouraging co-operatives, mutuals, and trade unions, the same institutions that had assisted its rise to power. The British colonial authorities in Kenya introduced new co- operative legislation in 1945 with the explicit aim of fostering co-operatives among the African population, and 790 agricultural marketing societies were registered in African areas during the period 1946–1962. By 1959 there were British colonies with large co-operative sectors, including Tanganyika, with 617 societies and 325,000 members, and Uganda, with 1,598 societies with 188,000 members, with 3.4 percent and 2.7 percent of the population in Tanganyika and Uganda respectively being a member of a co-operative. The French colonies, by contrast, had a less extensive co-operative sector by the time of independence with less than 1 percent of the population being involved in co-operatives, with the exception of three colonies in the former French West Africa—Mali (8 percent), Senegal (5 percent), and Guinea (2.4 percent). The Belgian colonies had a little more than 1 percent of the population covered by co-operatives (Develtere, 2008, pp. 9–13; Gyllstrom, 1991, pp. 37, 44; Keleman, 2006, p. 223). The new independent governments inherited the colonial co-operative systems and there was initially a rapid growth of co-operatives in Africa, primarily agricultural, from 6,637 with 1.3 million members in 1951 to 7,342 with 1.8 million members in 1966. There were flaws already in these co-operatives in terms of ICA principles, such as in Burundi, where the Belgian colonial government had set up large multipurpose co-operatives and nominated people to manage them with little member interest. The French also left a tradition of strong and direct government control of mainly rural co-operatives and the co-operative sector was less integrated than in British colonies. Where democracy faded in some countries, co-operative democracy and autonomy were not seen as government priorities, while co-operatives as vehicles of state economic development were. These co-operatives were run by a new stratum of officials, who maintained control though the appointment of co-operative managers based on family and tribal loyalty, and with minimal opportunities for members to voice their views. Overseas development aid was channeled through these ruling elites, which reinforced their power and existing co-operative structures. Overseas agencies such as the ILO believed that co-operative promotion in African countries was best done by governments (Birchall, 1997, pp. 136–138; Develtere, 2008, pp. 12–13). An example of the development of African co-operatives following independence is in Tanzania, the former British colony of Tanganyika which gained Postwar prosperity 163 independence in 1961. The Co-operative Union of Tanzania was formed in 1961 and a Co-operative College was established in 1963 at Moshi, the headquarters of the KNCU, which trained several generations of co-operative leaders. The Tanzanian government under Julius Nyerere desired to increase African control of the economy and many societies registered but, due to lack of government supervision and poor management, there was corruption and dissatisfaction among members. In 1966 the government took over 16 co-operative unions and hundreds of co-operative societies, and in the following year Nyerere announced the twin policies of the nationalization of the strategic areas of the economy and the formation of ujamma, a multipurpose village co-operative. Above the ujamma the supply and marketing functions of existing co-operative federations were abolished and absorbed into state supply and trading organizations. While the ujamma were initially voluntary, the policy changed to compulsory ‘villagization,’ a system of village organizations that took over the functions of traditional co-operatives, which were dissolved (Birchall, 1997, pp. 138–139; Shaffer, 1999, p. 381; Spaull, 1965, pp. 96–97). There was a strong Nordic interest in promoting co-operatives in Tanzania through education and aid, attracted partially by Nyerere’s personal charisma and espousal of a social democratic “middle way” (Hilson, 2017b, pp. 38–39). African countries that had not been colonized faced similar issues. Following the 1952 Egyptian Revolution that overthrew the monarchy, 600 village Agrarian Reform co-operatives were formed in areas where farmers benefited from land reform through the breaking up of large estates, and membership became compulsory in 1961. The number of shares that each farmer could hold was related to the size of their landholdings, which was limited by the state. The co-operatives provided a range of multiple services to farmers, including agricultural inputs, credit, technical expertise, and marketing services. State-controlled sources provided most of the inputs and the farmers were forced to sell many of their products to state organizations through the co-operative at fixed prices well below those obtainable on the world market. The co-operatives’ primary objective was not to improve the economic status of its members but to meet government concerns that given areas were planted with specific crops to ensure adequate supplies for the domestic and foreign markets. While the co-operative was governed, in principle, by a board elected by members, many of their duties were undertaken by a government-appointed supervisor, who was free from board intervention in day-to-day management. The supervisors rarely consulted with members and the co-operatives had too little scope for economic decision making. There were further complications with different ministries being responsible for different types of co-operatives and different functions, with the price of wheat being regulated by the Ministry of Economy, and the price of fertilizers being determined by the Ministry of Industry. The Union of Agrarian Reform Co-operatives, which was a federation of agricultural co-operatives, did not pursue the interests of the local co-operatives, and became embroiled in scandals relating to the embezzlement of the funds it accumulated from the net 164 Postwar prosperity profits of co-operatives and Swedish development aid contributions, leading to its liquidation in 1976 (Abdel Aal, 2008, pp. 242, 253; Albaum, 1966; Kirsch, 1977, pp. 259–262; Spaull, 1965, pp. 86–87). There was resistance to attempts by African governments to establish parastatal co-operatives, for example in Ghana and Egypt. While consumer co-operatives failed to gain ground in Ghana, financial and agricultural marketing co-operatives, particularly of cocoa, flourished. A co-operative union, later known as the Ghana Co-operative Alliance (GCA), was formed in 1951 and became a member of the ICA in 1953. By 1960 there were 460 co-operatives in Ghana, with 50,000 members and sales of £8 million. The Ghana government formed a National Co-operative Council in 1960 but the GCA refused to join to preserve their autonomy. The government dissolved the GCA, seized its assets, and converted the Co-operative Bank into a branch of the newly formed Ghana Commercial Bank. The ICA condemned the Ghana government after it arrested and expelled Jack Bailey, the Secretary of the UK Co-operative Party visiting Ghana on an ICA fact-finding mission, for spying. Following the overthrow of President Nkrumah in a coup in 1966 the GCA eventually regained control of its assets and re-joined the ICA (Birchall, 1994, p. 189; Digby, 1970, pp. 142–147; Watkins, 1970, pp. 298–299).1 There was resistance to the Tanzanian government’s unpopular ujamaa policy, and the rural co- operatives persisted. The Tanzanian police and military forcibly closed those district and regional co-operative unions that refused to cease operations in May 1976 (Gibbon, 2001, p. 394). Egyptian farmers ignored government policy and planted more lucrative crops such as fruit and vegetables, where free market prices applied, at the expense of cotton, which was crucial for exports and maintaining the balance of payments (Kirsch, 1977, pp. 259–260). The credit union movement made some inroads in Africa. Colonial governments, development agencies, and nationalist movements encouraged the development of savings and thrift co-operatives to escape poverty in countries such as Nigeria and Uganda. The first continuing credit was probably formed at Jirapa in north-west Ghana in September 1955 by a Catholic priest and they then spread through networks associated with the Catholic Church (MacPherson, 1999a, pp. 62–63). In Upper Volta, now Burkina Faso, which gained full independence from France in 1960, the economy depended on subsistence agriculture and the annual rate of economic growth was low. Despite this credit unions grew because of traditional practices based on mutuality, such as village grain banks, the influence of credit unions in neighboring Ghana, and the role of a church-based organization, the Association for the Development of the Kaya Region, founded in 1972. By 1973, 13 credit unions had established an Association of Burkinabe Credit Unions. In Southern Rhodesia, which remained under the control of European settlers, credit unions were introduced from the Antigonish movement in 1962, when a local Catholic priest established one at the Chishawasha mission on the principle that no loans could be made unless they were fully covered by savings. Following a poor harvest in the Seke region, loans were helpful for indigenous farmers to improve crop production and bulk purchase agricultural Postwar prosperity 165 supplies. By 1968 there were 11 registered credit unions, and over 30 savings clubs, with a National Council (Birchall, 1997, pp. 153–156). By 1970 there were nearly 3,400 credit unions in Africa, with a membership of 193,000, and assets of US$248,000,000 (MacPherson, 1999a, p. 82). The co-operative movement in South Africa, where apartheid became official policy of the minority European government in 1948, was dominated by European agricultural co-operatives, which numbered 252 in 1952, of which 225 were marketing co-operatives, with a total membership of 231,655. They covered every form of agricultural activity with each co-operative focusing on a product or specific group of products. Alongside these agricultural co-operatives there grew many consumer co-operatives, which numbered 171 in 1952 with a membership of over 100,000. During the 1950s the national co-operative legislation was inter- preted as excluding African societies so the development of African co-operatives was limited, except in the Transkei where a proclamation allowed co-operatives in native areas. There were 17 small financial co-operatives in the Transkei with a total membership of 3,444 in 1954. One notable example of an African farmers’ co-operative was the Letaba Bantu Farmers’ Co-operative (LBFC), which had 852 members in 1952, who cultivated fruit and vegetables. Unlike European co- operatives, the African ones could not obtain finance from the Union Land Bank, and the LBFC went into liquidation by 1971 (Companies and Intellectual Property Commission, 2017, p. 3; Hailey, 1957, pp. 1460–1461). While the co-operative movement was dominated by Europeans, Africans saw co-operatives as playing a role in ending white minority rule, with the Congress Youth League of the African National Congress including in its 1949 program support for rural and urban co- operatives as a way of achieving African “national freedom” (Rich, 1993, p. 315). European co-operatives also dominated South West Africa, now Namibia, which was administered by South Africa, with ten agricultural co-operatives in 1956 largely concerned with the acquisition of breeding stock (Hailey, 1957, p. 1462).

Asia As in Africa, state support for co-operatives in some Asian countries came in the wake of decolonization. Following independence from the UK in 1947, the Indian government promoted all forms of co-operatives by supplying share capital and establishing three development agencies: a National Co-operative Development Corporation; a National Dairy Development Board; and the National Bank for Agricultural and Rural Development (Birchall, 1997, pp. 168–169). After gaining independence from Japan in 1945, the South Korean government enacted the Agricultural Cooperative Law in 1957 to promote the establishment of co-operatives at village level, as a means of helping rural communities recover from the devastating effects of war, and to increase agricultural productivity (Kim, 2013, p. 149). Most Asian governments saw agricultural co-operatives as a means of modernizing their rural economies in the postwar period. The Indian government, for example, committed itself to developing a welfare state, with co-operatives as 166 Postwar prosperity integrated institutions, and adopted the goal of becoming a Socialist Co-operative Commonwealth by its second five-year plan from 1956–1961 (Sami, 2011, pp. 30–31; Shaffer, 1999, p. 256). According to Birchall, there were two phases of development in Asia and phase one lasted until around 1960, and ‘“was characterised by a top-down, ‘blue-print’ based approach, with new co-operative sectors being organised by the state” (1997, p. 168). In Malaysia, the state sponsored three types of co-operative—non-agricultural in urban areas, agro- and farmers’ organizations, and fishermen’s associations—while multipurpose agricultural co- operatives were established in countries such as China and Iran. During the second phase, from the 1960s, co-operatives became central to the development strategies of many Asian governments in the context of significant economic growth and rapid urbanization, along with continuing rural poverty. Amalgamations between co-operatives occurred in many countries, sometimes voluntarily as in the case of Japan and India, while in other countries such as Ceylon (which became Sri Lanka in 1972), Indonesia, and Bangladesh, these mergers were imposed by the government. New federal bodies were established and there occurred a gradual integration of co-operative structures, in particular in Japan and Korea, and in the dairy and sugar industries in India (Birchall, 1997, pp. 168–171). The amalgamation of agricultural co-operatives and the Agricultural Bank in Korea in 1961 was followed by the government forming the National Agricultural Cooperative Federation (NACF) to develop a multipurpose co-operative system (Birchall, 1997, pp. 168–169). According to Kim (2013, p. 149), the scope of NACF extended from village-level agricultural co-operatives that provided farm loans and fertilizer, to county and city co-operatives that provided financial services (including credit and insurance) and managerial advice. While it lacked the co-operative principles of member democracy and autonomy, the NACF provided significant assistance to farmers, “such as a 50 percent reduction of interest burden, enhanced distribution of products, bargaining power against wholesalers, and access to inexpensive necessity goods . . . [and] . . . helped increase rice production and satisfy the food demands of the nation” (Kim, 2013, p. 150). The contribution of consumer co-operatives to Asian economies was generally limited during this period (Birchall, 1997), although there were exceptions such as Japan and, in the 1970s, Singapore. Following the Japanese surrender, the economy was in crisis due to the destruction of war, and many Japanese urban populations faced food shortages and rampant inflation. Buying groups were formed in neighborhoods or workplaces, with more than 6,500 co-operatives of this kind operating in 1947. However, most were short-lived due to ineffective management and support systems, as were the worker-led consumer co-operatives established by trade unions in the 1950s. Against the background of rapid economic growth, which began in Japan in the late 1950s, and the coinciding changes in consumption and distribution, consumers became increasingly concerned with the price and quality of food, and with ecological issues such as pollution. ‘Citizen’s co-ops’ backed by housewives were established in each prefecture in the 1960s in response to these concerns. These consumer co-operatives expanded rapidly during the 1960s, and Postwar prosperity 167 had grown to a membership of 2 million by 1970 (Kurimoto, 2010, pp. 4–6). They also took on a distinctive style, namely the Han system, and joint buying through home delivery (Kurimoto, 2010, pp. 12–13). The Consumer Co-operative Law of 1948 provided a legal framework for postwar consumer co-operatives in Japan and contributed significantly to the distinctive traits of the Japanese consumer co-operative movement. This legislation recognized co-operative principles and provided tax relief (Birchall, 1997, p. 180), but, as Kurimoto outlines, it constrained their development in a number of ways: “co-operatives were not allowed to sell to non-members, establish wholesale societies, trade in other prefectures or conduct credit business” (2017, p. 672). The Special Retail Measures Law of 1959 further tightened the prohi- bition of non-member trade, requiring that co-operatives co-ordinate interests with small retailers, and while the ban on wholesale societies was lifted in 1954, the provisions against interprefectural trade and engagement in banking remained intact (Kurimoto, 2017, p. 673). Following a stagnant 1960s in terms of co-operative development, the Singaporean movement experienced a resurgence in the 1970s when the National Trade Union Congress (NTUC), the peak trade union body in Singapore, pursued a strategy to modernize the labor movement through co-operation. NTUC co-operatives established before 1975 included the life insurance co-operative, INCOME (1970), a workers’ transport co-operative of taxi drivers, COMFORT (1970), a co-operative dental care society, DENTICARE (1971), and a book co-operative, FAIRDEAL (1974). Three labor-managed co-operative supermarkets were also registered in the early 1970s—the SILO Multi-purpose Co-operative Society, run by the Singapore Industrial Labour Organization (1971), the PIEU Multi-purpose Co-operative Society, operated by the Pioneer Industries Employees’ Union (1972) and the NTUC (WELCOME) consumers’ co-operative (1973). The latter was established with a social mission to control the cost of living in Singapore against the background of the 1973 oil shock and rising inflation (Tan, 2015, pp. 101–120; Fairprice, 2017). Co-operatives were recognized as having a significant role in the economy during the early years of the People’s Republic of China (PRC). As Ip and Chan outline, the first chair of the PRC, Mao (Chairman of the Central Committee of the Communist Party of China) believed that:

if there was only state-owned economy but no co-operative economy, it would be impossible to collectivize the private economy, to transform democratic society into a future socialist society and to consolidate the right of the proletariat class to leadership in the state. (Ip and Chan, 2017, p. 387)

Just prior to the founding of the PRC, a designated bureau was established to oversee co-operative businesses, and the Chinese provisional constitution also stipulated that government encouragement, support, and preferential treatment 168 Postwar prosperity should be given to the development of co-operative businesses. However, despite such intent, consumer co-operatives in urban areas were replaced by state-owned retailers in 1954 and the following year they were placed under the jurisdiction of the commercial sector of the state. While the co-operative economy was ultimately written into the first constitution of the PRC in 1954, from 1958 the constitution was disregarded as Mao started his push towards a socialist system in China. The approximately 740,000 co-operatives in rural areas were merged, either with state- run entities or with each other, and converted into people’s communes (Ip and Chan, 2017, pp. 387–389). Credit unions continued to develop in Asia during the 1950s and 1960s. According to MacPherson, by 1970 the movements in Korea, the Philippines, and Hong Kong had made “impressive beginnings,” those in Indonesia were “on good footing,” and the Japanese movement was “stable,” although—as with its counterparts in Bangladesh, Pakistan, and India—it was “still restricted to the small Christian minority” (1999ap. 122). The Association of Asian Confederation of Credit Unions (ACCU) was launched on April 28, 1971, at the World Council of Credit Unions’ (WOCCU’s) Fourth Regional Training Conference, themed ‘The Future is Asian,’ held at the International Cooperative Education Institute in Seoul, South Korea (WOCCU, 2011). The first member organizations were from Korea, Japan, Taiwan, Hong Kong, Indonesia, Malaysia, Vietnam, Thailand, and the Philippines. ACCU sponsored two training programs a year during the 1970s, with financial assistance from WOCCU, CUNA Mutual, the Asia Foundation, the Co-operative Development Foundation of Canada, and the Australia Credit Union Foundation, along with various religious groups, and CUNA/USAID (MacPherson, 1999a, p. 123).

The Americas From the high point of the 1940s, consumer co-operatives in the USA generally went into decline. As in some European countries, postwar prosperity, with its relatively low levels of unemployment and inflation, removed the main economic factor that had driven individuals to form and maintain co-operatives. Co-operatives in the USA were also caught up in the anti-communism of the Cold War, which cast doubts over the loyalty to American values of collective organizations such as co-operatives and unions. There was a peak of active support by the organized labor movement for the co-operative movement in the late 1940s, with unions encouraging members to join co-operatives, and in a few cases providing union funds to assist co-operatives, but this waned. There was continued political controversy, raised particularly by the Republicans, over whether co-operatives should receive aid through tax concessions and direct financial assistance. There was also increased competition from non-co-operative chain stores, which offered consumers a wider range of goods at competitive prices without the need to wait for a dividend, but fewer services. Co-operatives in smaller rural communities lost business to larger regional or urban centers, where there was the Postwar prosperity 169 volume of business to justify large supermarkets. Residents, attracted by the spread of urban advertising, had greater mobility to shop elsewhere due to cars and better roads. The populations of smaller rural communities grew only marginally and even declined. Consumer co-operatives received no significant support from the federal government relative to the agricultural co-operatives and credit unions, and smaller co-operatives were geographically dispersed and did not have access to co-operative wholesalers and the capital required for modernization. CLUSA tried to improve the efficiency of the retail co-operatives by conducting forums on business management for board members and managers of local co-operatives, and by running training institutes for consumer co-operative employees. The co-operative sector was a small and declining sector of all food sales in the USA. The proportion of co-operative food store sales to all food sales fell from 0.45 percent in 1948 to 0.28 percent in 1954. There was consolidation with National Co-operatives Inc., the national co-operative wholesaler, merging with an agricultural wholesaler in 1971 to form Universal Co-operatives Inc., which focused on farmers’ co-operatives (Hoyt and Menzani, 2012, p. 36; Patmore, 2017, pp. 520–525). While small rural consumer co-operatives declined, larger existing co- operatives—such as Berkeley and the Greenbelt Co-operative near Washington DC—had major increases in members as the population of the area grew, providing opportunities to open modern supermarkets, expand through the opening of new stores, and purchase existing ones, and the Berkeley Co-operative grew from 2,668 members in 1950 to 80,500 in 1975. There were two strategies underlying this growth: the first was expansion into new areas, such as Walnut Creek (1957), Marin County (1967), and the San Francisco North Point Shopping Center (1975); the second involved the taking over of non- co-operative stores, such as five Sid chain stores in 1962 and three Mayfair chain stores in Oakland in 1974. The Berkeley Co-operative also became a center for consumer activism. It hired a home economist in 1955 to help with maintaining the quality of its merchandise and educating members on nutrition. Their home economists issued advocacy statements, the first one in 1964 called for labeling standards. It published a low-cost cookbook in 1965 and introduced organic produce in 1970. In 1968 the co-operative supported the struggles of Californian farm workers to form a union by boycotting non-union grapes and lettuce, and in 1969 by demanding the immediate withdrawal of the National Guard from Berkeley after governor Ronald Reagan ordered them to end the protests in the People’s Park (Patmore, 2017, pp. 520–522). While Canadian consumer co-operatives faced similar challenges to those in the USA they coped better and by the 1960s there were over 400 consumer co-operatives on the Prairies and in British Columbia. In 1955 the co-operative wholesalers in Saskatchewan and Manitoba merged to form the Federated Co-operatives Limited (FCL), with the Alberta and British Columbia wholesalers joining in 1961 and 1970 respectively. This merger of wholesalers gave consumer co-operatives greater access to capital and the buying power necessary to compete with the supermarket chains. With the growth in the co-operative stores, as in the 170 Postwar prosperity

FIGURE 6.1 Products and publications of the Berkeley Co-operative (Courtesy of Greg Patmore)

USA, FCL and other co-operative organizations invested in staff training. There also arose a cadre of managers in the Canadian wholesalers who had financial expertise and created effective management structures, but they did face criticism from local consumer co-operatives that feared a loss of autonomy. There were also new ideas, such as the service fee co-operatives, where members paid a fee equal to at least the overhead costs of the store, and then purchased their goods at cost. The idea was promoted by Ralph Staples, the President of the CUC from 1953 to 1967, who was concerned that the conspicuous consumption of the postwar period was not meeting everyone’s needs, he rejected frivolous choices for essentially the same product and questioned unnecessary advertising costs. Staples supported strong education programs to counter conspicuous consumption and to encourage greater member involvement in stores. While the idea had an impact in British Columbia and Atlantic Canada, the FOC were not convinced that it was viable in affluent areas with consumer choice, and some service fee co-operatives did eventually transform into more conventional co-operatives. Many Canadian consumer co-operatives in the 1960s and 1970s became involved in a wide range of educational and social programs for youth, people with disabilities, and the elderly, such as food banks, and were active in international co-operative development programs. One example of an innovative retail Canadian co-operative in this period was the Mountain Equipment Co-op established by a small group of outdoor enthusiasts in 1971 for the sale of outdoor equipment and apparel. Consumer co-operation, however, struggled in Quebec, Atlantic Canada, and Ontario, where the UFCC struggled to Postwar prosperity 171 expand beyond its rural base into Ontario urban areas (Hoyt and Menzani, 2012, p. 36; MacPherson, 1999b, pp. 346–353, 2017, pp. 443–446; Zamagni and Zamagni, 2010, p. 43). A significant development within the Canadian consumer co-operative movement was the growth of indigenous co-operatives in the Canadian North from 1959, particularly in the Arctic region among the Inuit. While establishing a reputation for marketing artworks, they developed stores in over 70 communities by the mid-1970s, offering serious competition to consumer and supply companies in the North, notably the Hudson Bay Company and Frères, and lowering the cost of living in the region. They also further expanded into managing hotels, automotive repairs, restaurants, and providing facilities for government services such as post offices and tourism. In the early 1970s the Arctic co-operatives formed their own central institutions for training and business reasons and, as MacPherson notes, “they became vital centers for much of the economic and social life of the northern communities” (2017, p. 446). The economic boom following the Second World War brought enormous growth in business activity among agricultural co-operatives, both in the USA and Canada. Turnover in the USA for farmer marketing, purchasing, and related service co-operatives went from US$6,070,000 in 1945–1946 to US$40,051,000 in 1975–1976. While the number of these co-operatives fell from 10,150 to 7,535 for the same periods, membership grew from 5,010,000 in 1945–1946 to 7,731,735 in 1955–1956, but fell to 5,906,379 by 1975–1976. This reflected the growing aggregation of farms with the economies of scale required to overcome the costs of mechanization and the decline of rural communities (Hoyt and Menzani, 2012, pp. 35–36; Ingalsbe and Groves, 1989, p. 118). In Canada there was also a massive increase in the turnover of agricultural co-operatives involved in the marketing of a range of commodities, including dairy, grain, and livestock, from C$634 million in 1945 to C$2,558 million in 1975 (Statistics Canada, 2017). With the growth in demand for consumer finance in both the USA and Canada there was an upsurge in credit unions as blue-collar workers, many of whom were earning significant incomes, found their needs were being poorly met by the larger financial institutions in terms of consumer and housing finance. In the USA, the growth of credit unions was linked to specific workplaces, with workers looking to improve their economic position, and managers willing to support credit unions as part of an enlightened management practice to make the workplace attractive to staff and reduce labor turnover during a period of labor shortages. These credit unions tended to take a narrow view of co-operation and rejected perspectives that called for co-operation to play a more active role in shaping the economy and society. By contrast, Canadian co-operatives were generally linked to their communities. Thousands of small credit unions were formed as the movement promoted itself extensively through radio programs, newspaper articles, pamphlets, songs, and plays. CUNA prospered, and in 1946 it opened offices in Washington to lobby the US federal government, and in Hamilton to serve the Canadian credit unions. Some Canadian credit unions preferred their own national association 172 Postwar prosperity and formed the Canadian Confederation of Credit Unions in 1945, which faced difficulties in obtaining a consensus on how the Canadian movement should be organized given national and regional differences. As the credit union movement grew, its character changed, with credit unions moving to main streets and occupying buildings that mimicked other financial institutions. There was a growing professionalization of management, and an increased emphasis on staff training, with paid unionized labor replacing volunteers (MacPherson, 1999a, pp. 39–42, 47–49, 66–68; Voorhis, 1961, pp. 119–120). From 1958 CUNA tried to extend credit unions to low-income groups in the USA by holding conferences with inner city and minority groups, training representatives on credit union management, and financially subsidizing demonstration credit unions in poor areas such as in Chicago. Despite federal government assistance, by 1970 CUNA was disappointed with the meagre success of credit unions in poor areas, with average shares per member being a “mere” $US44 in 1968 (Moody and Fite, 1971, pp. 338–341). The US credit union movement grew between 1945 and 1975 from 8,823 to 22,677 credit unions, 2,834,488 to 31,320,514 members, and US$415,357,464 to US$37, 553,618,342 in total assets. The peak number of credit unions reached 23,687 in 1970 (CUNA, 2017, p. 1), with credit unions starting to diversify and amalgamate to obtain economies of scale (Birchall, 2011, p. 145). There was also an expansion of housing co-operatives in the USA and Canada where there were concerns about housing affordability in growing cities. Against the background of the US National Housing Act of 1950, which authorized long-term guaranteed loans to non-profit associations engaged in the provision of housing, 16 housing co-operatives in New York met in April 1953 for the first members’ meeting of the United Housing Foundation (UHF), which aimed to sponsor co-operative housing in the city.2 The UHF developed a limited equity model that aimed to provide access to low- and moderate-income people and, in 1965, built Rochdale Village in Queens with 5,860 units.3 New York trade unions sponsored Co-op City, which opened in the Bronx in 1972 with over 15,382 units and 50,000 residents, with its own schools, shopping centers, and police (Birchall, 1997, p. 214). There was also co-operative housing in the Bay Area with the International Longshore and Warehousemen’s Union founded in 1964 in St. Francis Square in San Francisco with 297 units for low- to moderate- income people (Curl, 2012, p. 238). In Canada the first non-profit housing co-operative, Willow Park, was opened in 1965, and the Co-operative Union of Canada, trade unions, and churches sponsored the founding of a national Co-operative Housing Foundation, which obtained amendments to the federal Housing Act in 1973 to make housing co-operatives eligible for government finance (Birchall, 1997, p. 213). There was an expansion of health co-operatives in the USA, particularly in urban areas. These had begun in the USA before the end of the Second World War, with notable examples being the first founded by Dr. Michael Shadid at Elk City, Oklahoma, in 1929 and the Group Health Association of Washington, DC, Postwar prosperity 173 founded in 1937 by a group of government employees. Farmer co-operatives, trade unions, and members of consumer and student co-operatives established the Group Health Co-operative (GHC) in Seattle in 1947. They wanted to ensure a continuation of the system of prepaid care that had operated in the Second World War and rejected a return to a totally private system of medical care. There were also doctors who supported the prepaid system in defiance of the local medical society that preferred the ‘fee for service’ model. The GHC bought a small hospi- tal, employed the doctors who worked there on contract, and took successful legal action against the local medical society to allow the use of specialist doctors. There remained tensions within the GHC between consumers and medical practitioners, but these were largely overcome by 1955 through a joint committee for resolving differences, and by medical staff gaining autonomy through self-management based on a contract with the Board of Directors. It was estimated that by 1960 approximately five million people in the USA were involved in a health co-operative. While there was an expansion of urban health co-operatives, rural health co- operatives in the US declined due to growing affluence and a decline in state funding. After the introduction of Medicare and Medicaid in 1965 governments preferred community-based rural health centers that did not require patients to become members (Birchall, 2011, pp. 110, 119–121; Voorhis, 1961, pp. 28–32, 35) There was a major growth in co-operatives, particularly credit unions, in the British Caribbean. The British colonial authorities introduced co-operative ordinances and established Registrars of Co-operative Societies in colonies such as the Barbados and Jamaica, where co-operatives included fishing and housing, and in Trinidad and Tobago, Guyana, and British Honduras (Digby, 1970, pp. 129–138; Spaull, 1965, pp. 101–104). There were strong outside influences, with the Catholic Church using Antigonish methods to sponsor credit unions, and affiliation by local credit unions with CUNA. In Trinidad by 1956 credit unions accounted for 85 percent of the registered co-operative societies and 75 percent of the membership. They did not have government support and escaped the problems of dependency and patronage that were associated with the government support of co-operative movements in other developing economies (Birchall, 1997, pp. 211–212). Overall, by 1962 there were 406 credit unions in the Caribbean with 62,000 members (Birchall, 2011, p. 154). Co-operatives expanded in Central and South America. Argentina remained one of the strongest countries for co-operative movements. Co-operatives grew from approximately 1,000 co-operatives with 550,000 members in 1946, to 4,800 co-operatives with seven million members in 1976. The Peronist government in its five-year plan for 1947–1952 explicitly promoted consumer and agricultural co- operatives, and a national law in October 1950 required all educational institutions, including universities, to teach co-operation. In Brazil there was slow growth and by 1960 there were 4,627 co-operatives with a membership of 185,000, primarily agricultural, financial, and consumer co-operatives (Birchall, 1997, p. 199; Smith, 1961, p. 107; Vuotto, Verbeke, and Caruana, 2017, p. 493). During the period 174 Postwar prosperity of military dictatorships from 1964 to 1984 Brazilian co-operatives survived by presenting themselves as free from political and religious ideologies, and as serving members to protect them from forms of speculation. The Brazilian government helped co-operatives form an umbrella organization to represent their interests in 1968 (Hoyt and Menzani, 2012, p. 50). The neglect of basic health infrastructure and unemployment among doctors led to the formation in Santos in 1967 of Unimed, a worker co-operative health care system that ultimately spread throughout Brazil (Birchall, 1997, p. 217). In Guatemala, secular reformist governments from 1944 favored the development of co-operatives, encouraged by the desire of the US UFC to protect its economic interests, in the context of the Cold War, but were thwarted by a US-backed coup in 1954. While co-operatives established by these governments were condemned as communist, Catholic-inspired co-operatives survived the coup. The military government encouraged foreign Catholic clergy to overcome a shortage of priests and aid in the fight against communism. The US government encouraged the presence of Catholic clergy and advocated the creation of co-operatives, which would improve living standards and minimize the appeal of left-wing guerillas. The co-operatives facilitated the engagement of indigenous Mayans in Guatemala’s market economy and reduced their reliance on plantation labor. The military government saw the Mayan co-operative leaders as a threat and the military governor in El Quiché sanctioned the kidnapping of a group of Mayan co-operativists in 1965 because of the competitive threat to local business interests. The military government sought to minimize the role of the clergy, and to incorporate co-operatives into their plans for economic development in 1973, with the military increasingly seeing co-operative leaders as subversives, as armed resistance against their rule intensified (Fitzpatrick-Behrens and LeGrand, 2017, pp. 164–173). The credit union movement in Latin America began in 1955 in Peru, when Father Daniel McLellan, a Catholic priest, arrived and organized a credit union at the village of Puno, on the shore of Lake Titicaca in the Andes, to challenge the exploitation of native Indians by moneylenders, with assistance from CUNA and the Antigonish movement. The Peruvian movement received widespread publicity for showing what credit unions could do in a developing country to fight abject poverty, it galvanized support in the USA and Canada for Latin American programs, and by 1963 it had over 300 credit unions with approximately 96,000 members. A training center established at Lima in 1962 played a key role in training credit union leaders from Peru and other South American countries, from where the trainees returned to work with other local leaders, and in many instances US Peace Corps volunteers, to build credit unions. The involvement of the Peace Corps and other US government assistance for the credit unions did lead to tensions where anti-Americanism was high. Despite this, by 1970 there were 2,949 credit unions, with 950,000 members, and US$120,000,000 in assets in Latin America (MacPherson, 1999b, pp. 60–61, 78–81; Spaull, 1965, pp. 114–115). Postwar prosperity 175

Australia, NZ, and the Pacific Rochdale consumer co-operatives in Australia and NZ generally failed to exploit the potential of the economic buoyancy of the postwar era. Postwar prosperity in Australia, with its relatively low levels of unemployment and inflation, removed the main economic factor that had driven individuals to form and maintain co-operatives. Increased competition from capitalist chain stores, and a failure of many consumer co-operatives to adopt self-service and modernize, meant many consumer co-operatives in smaller rural communities lost business to larger regional or urban centers, where there was the volume of business to justify large supermarkets. The populations of smaller rural communities grew only marginally and even declined, and in the coalmining communities in Australia where the co- operatives had been sustained, mines closed and the working-class aspect of these towns evaporated. There were also problems with high levels of credit, particularly in rural areas, and cases of mismanagement. Even in larger centers consumer co-operatives struggled, the Adelaide Co-operative was an early casualty and went into liquidation in February 1962 after 94 years of trading. By 1949 the NSWCWS had 110 affiliates, including a number in Victoria. However, the body went into permanent decline after 1957 and ceased publication of the Co-operative News in 1959. The co-operative women’s guilds in Australia also folded. Efforts to extend the co-operative movement to Aboriginal communities to encourage economic sustainability were also unsuccessful. From the 1950s to the 1970s the Reverend Alfred Clint, an Anglican priest, led this movement, but many of the co-operatives eventually collapsed, with Tranby College in Sydney being a significant survivor as a training center for Aboriginals (Balnave and Patmore, 2008, pp. 102–106; 2012, pp. 994–996). The postwar years witnessed some promising developments in the NZ consumer co-operative movement. In January 1945 the Manuwatu Co-operative convened a meeting of consumer co-operatives in Palmerston North, which set up the Co-operative Information Service to advise new co-operatives on registration, organization, and trading. The initial success of this service encouraged 22 consumer co-operatives to form the New Zealand Federation of Co-operatives (NZFC) at a conference in May 1946. The NZFC launched the publication Common Wealth, grew to 30 affiliates by March 1948, and initiated a policy of grouping co-operatives together into a number of central offices with branch shops. There was also support from the then Labour government which, in December 1946, announced that if 75 percent of the residents in new state housing areas voted to establish a consumer co-operative, privately owned traders would be prohibited from setting up competing businesses in the same area (Balnave and Patmore, 2008, pp. 102–106). State support came to an end, however, with the election of the conservative National Party to power in 1949. This government (1949–1957) also introduced taxation reforms that weakened the financial viability of consumer co-operatives. 176 Postwar prosperity

Only six new co-operatives were registered between 1950 and 1957 of which just one survived until the late 1960s. The NZFC failed to survive and the co-operative women’s organizations also collapsed. The Manawatu Women’s Co-operative Guild was wound up in 1958 and the sole surviving guild at Taita voted in February 1961 to disband the New Zealand National Co-operative Women’s Guild (Balnave and Patmore, 2008, pp. 102–106). While consumer co-operatives in Australia faced growing competition from large chain stores in this period, dairy co-operatives were also presented with the entry of a new competitor, but rather than a capitalist firm in this case it was one of their own. The Murray Goulburn Co-operative (originally known as the Murray Valley Co-operative) originated from a 1949 public meeting of 14 soldier settlers at Katunga in the Goulburn Valley region of Northern Victoria. With the assistance of the federal and state governments, the co- operative developed at a swift pace, with close to 60 suppliers in 1951 and 264 by 1956. By 1965 the co-operative was Victoria’s largest dairy company; by 1969 it was Australia’s largest exporter of dairy products to Japan, the USA, and south-east Asia; and by the early 1970s it was Australia’s largest producer and manufacturer of processed dairy foods. Having already expanded into the Southern Riverina of NSW and the Western District of Victoria, in the early 1970s Murray Goulburn moved further into the NSW market through various mergers and acquisitions (Lewis, 2006, pp. 48–49). In 1974 it called for “an Australian-wide dairy products marketing co-operative, ‘a co-operative of co-operatives’, with each constituent co-operative holding equal shares in an entity possessing exclusive marketing rights for members’ produce,” and while the proposal had the strong support of the federal government, it failed to mate- rialize due largely to “interstate co-operative politics” and the lack of national co-operatives legislation (Lewis, 2006, p. 50). The decline in consumer co-operatives in Australia was matched by a surge in the number of credit unions serving postwar consumer demand, and a resurgence of building societies providing finance for a booming housing market. A Savings and Loan Co-operative Association was formed by credit unions in 1956 to “provide loan syndication and support activities” (MacPherson, 1999a, p. 64), and by 1962 there were 126 credit unions in that state, with another 36 in Victoria. The Australian credit union movement formed close ties with its North American counterpart during the 1950s, with representatives frequently visiting each other’s shores (MacPherson, 1999a, p. 64). The Australian credit union movement continued to grow during the 1960s, and by 1975 there were 748 credit unions Australia-wide, with 910,000 members. Approximately two-thirds of these credit unions were in NSW (Lewis, 1996, p. XXIII; Catturani and Cutcher, 2015, p. 78). By 1976 building societies held 8.9 percent of the total deposits of Australian financial institutions (Lyons, 1988, p. 397). There was an expansion of co-operatives in the South Pacific. Papua New Guinea (PNG), which was an Australian territory until 1975, assisted the embryonic co-operative movement with a Co-operative Societies Ordinance Postwar prosperity 177 in 1948. Reverend Clint, who had been an Anglican minister in PNG during the late 1940s, had promoted co-operatives among indigenous communities. By 1972 the PNG movement grew to almost 400 societies with about 300,000 members, but faced financial difficulties, management problems, and disillusionment with the effectiveness of the relevant Australian territorial regulator (Loos and Keast, 1992, p. 289; PNG, 1972, pp. 6–7). In Fiji, which gained independence from the UK in 1970, British colonial authorities enacted a Co-operative Ordinance in 1947 to encourage co-operatives (Digby, 1970, p. 108). There was international co-operative support for the Fijian credit union movement with financial support for its educational programs. The credit union movement arrived in Fiji in late 1953 with the invited visit by American Jesuit priest, Father Marion Ganey. Father Ganey had been working for many years as a missionary in British Honduras, where he had introduced credit unions. He saw credit unions as the way to educate the people in the art of saving, thrift, and initiative, and hence self-reliance. He established the first credit union in Fiji in January 1954, helped to establish the Credit Union Ordinance in July 1954, which later became the Fiji Credit Union Act, and organized insurance underwriting for the Pacific credit unions through CUNA Mutual Group. At the end of 1954, within a year of his arrival in Fiji, 66 credit unions had been established. This number rose to 139 and 187 by the end of 1955 and 1956 respectively. Father Ganey believed that the training of leaders was crucial to the development of the movement in Fiji, and after years of holding classes in his home, and later a vacant church, he established the Roy F. Bergengren Credit Union Training Center in 1964. He also contributed to the formation of the South Pacific Association of Credit Union Leagues (McPherson, 1999a, p. 91; Arbuckle, 1969, 91–108). By December 31, 1964, there were 288 credit unions in Fiji with a total of 32,407 members (Arbuckle, 1969, p. 97). Father Ganey also played a significant role in the development of the NZ credit union movement, which built momentum during the late 1950s and early 1960s, with a further eight organized within the lodges of the Order of Oddfellows. Visits from Father Ganey in 1955 and 1961 to promote credit unions to church leaders and the community led to the formation of the New Zealand Credit Union League, and the creation of over 100 credit unions throughout NZ by 1970, both in and outside the Roman Catholic Church (MacPherson; 1999a, p. 90; Arbuckle, 1969, p. 209).

International organization and trade The ICA’s international standing expanded in the decades following the Second World War. The ICA’s Relief Fund, which raised £311,215 by 1946—with British co-operatives contributing the largest donation of £257,011 through the CU—assisted refugees and the rebuilding of the co-operative movements in Germany, Italy, and Austria. By 1946 membership had recovered to 97.9 million members affiliated from 30 countries. The ICA gained observer status on the UN Economic and Social Council in 1946 and on other international organizations, 178 Postwar prosperity where it advocated a co-operative solution to problems in the developing world (Birchall, 1994, pp. 186–188; Redfern, 1977, p. 135; Rhodes, 1995, pp. 297–303; Schaffer, 1999, p. 124; Watkins, 1970, p. 223, 1975, p. 27). The Cold War produced tensions and distrust within the ICA over the issues of political neutrality and democratic autonomy. Centrosoyus, the co-operative representative of the USSR, was now the ideological leader of several co-operative movements and there were fears that it would take over the ICA. Five republics within the USSR tried to join the ICA but were rejected as they were too dependent on Centrosoyus to be awarded membership, and the Russians retaliated by trying unsuccessfully to block the membership of the West German wholesale co-operative society until Germany was reunified. The ICA blocked membership from Hungary, East Germany, Albania, and Poland, noting that free and independent co-operatives could not exist where freedom of association was denied and divergent opinions suppressed. Centrosoyus, at the 1948 Paris Congress, tried unsuccessfully to amend 14 of the 35 articles of the ICA. These resolutions included: having Russian as an official language of the ICA; ensuring that the two assistant secretaries came from the “biggest national movements,” which gave Centrosoyus a positon because of its size; downgrading the role of the ICA Executive; requiring a two-thirds rather than a simple majority on resolutions; and excluding “fascists” (Birchall, 1993, pp. 187–188; Rhodes, 1995, pp. 316–317, 323–346; Shaffer, 1999, p. 125). Despite these tensions the ICA, according to Birchall, “was almost alone in the world in being able to maintain links between two world powers” (1993, p. 188) having a British president, and Russian and US vice-presidents. The ICA began to expand geographically, and a development fund was established in May 1953 to promote co-operation and establish bilateral links with developing countries, particularly in Asia and Africa. By 1960 the number of non- European countries exceeded the number of European countries for the first time. It also further extended beyond consumer co-operatives, with the admission of housing and fishing co-operative federations, and greater coverage of agricultural and financial co-operatives. The ICA set up its first regional office for south-east Asia in New Delhi, India, in 1960 with the support of the Swedish KF, and in 1968 it established its first African regional office in Moshi, Tanzania, again with considerable support from the Swedish co-operative movement. The Japanese movement accelerated the shift away from Europe and the push towards international co-operation by establishing an International Co-operative Training Center in 1963 (Birchall, 1993, pp. 188–190; Rhodes, 2012, p. 299; Schaffer, 1999, pp. 126–127; Watkins, 1970, p. 269, 1975, p. 40). As Table 6.1 (Watkins, 1975, p. 27) indicates, the membership of ICA-affiliated organizations more than tripled from 1946 to 1975, with relative European membership, including the USSR, declining, and membership of the Americas particularly growing. The ICA continued to gain support from other international agencies. During the Second World War, the UN Conference on Food and Agriculture in May– June 1943 passed resolutions favorable to co-operatives as a way of reducing the Postwar prosperity 179

TABLE 6.1 Members of ICA-affiliated organizations, 1946–1975, in millions (and percentages)

Year Europe Africa Americas Asia Oceania Total

1946 67.00 0.004 1.92 28.95 0.01 97.90 (68.4) (0) (2.0) (29.6) (0) (100) 1955 62.70 0.11 13.54 23.24 0.41 100.00 (62.7) (0.1) (13.5) (23.2) (0.4) (100) 1965 118.65 1.29 29.54 72.50 0.99 222.90 (53.2) (0.1) (13.3) (32.5) (0) (100) 1975 157.57 2.67 63.02 101.40 2.87 321.00 (49.1) (0.8) (19.6) (31.6) (0.9) (100)

costs of production, distribution, and marketing (Watkins, 1970, p. 221). The UN Food and Agricultural Organization (FAO) sent experts to developing countries, such as Libya, to teach farmers more modern forms of agriculture, such as improving the quality of Libyan olive oil by using more modern presses, and promoted co-operatives as an organizational form to help them apply the new methods and to sell on the open market. The ILO, which had an interest in consumer and worker co-operatives, arranged short courses and seminars for different countries, and by 1964 had approximately 40 co-operative experts working in countries such as Madagascar, Niger, and Pakistan (Spaull, 1965, pp. 88–89, 132–136). The UN recognized the role of co-operatives in developing countries by declaring 1965 to be an International Co-operative Year (Shaffer, 1999, p. 127). The ICA, to celebrate its 75th anniversary and to respond to the UN’s Economic and Social Council decision to recognize the contribution that co- operatives could make to its second decade of development, decided in 1970 to declare a co-operative development decade between 1971 and 1981. The decade’s aims included the increased transfer of knowledge between ICA regional offices, and education and training with a focus on how to increase the role of women, young people, and the poor in the co-operative movement. There was also to be an emphasis on rural development. The ICA, as part of its development decade and with Swedish co-operative funding, established an advisory group for the international training of co-operators, and to provide advice on co-operative education and training in developing countries. The ICA joined with the FAO, the ILO, the International Federation of Agricultural Producers, and the International Federation of Plantation, Agricultural and Allied Workers in 1971 to form the Committee for the Promotion and Advancement of Co-operatives (Rhodes, 2012, pp. 299–300). The ICA continued to promote international trade. Its efforts had largely related to the exchange of information, and the ICTA had suspended business in May 1952, with heavy losses being borne by the participating wholesale societies, but there were major developments in petroleum production and distribution. The 1946 Congress in Zurich had passed a resolution calling for international control of 180 Postwar prosperity the world’s oil resources and a UN body to administer Middle Eastern Oil. While the UN did not act upon the resolution, the ICA established the International Co-operative Petroleum Association, which began operations in 1947, to supply oil at reasonable prices to members. By 1960 it had 34 member organizations in 22 countries and in 1963 opened its first oil blending plant in the Netherlands. The ICA granted membership to the Scandinavian NAF in 1963, and reconstituted the International Co-operative Bank at Basel as a commercial bank, and began expanding its business (Birchall, 1993, p. 190; Shaffer, 1999, pp. 124–126; Watkins, 1970, p. 264, 1975, pp. 37, 41–42). There was a further expansion of international trading operations among national co-operative wholesalers. The European Intercoop, which had suspended operations during the war, was reconstituted in 1948 by its original members, except for Bulgaria and Estonia, and resumed its role as an intermediary supplying agricultural goods to its members. By 1975 it had 28 national organizations in 19 countries as members. In Japan, the USA, and Canada agricultural co-operatives established export and import agencies, with the Japanese Unicoopjapan, founded in 1961, importing wheat and sorghum in bulk from the USA and Argentina (Watkins, 1975, pp. 42–43). There was also growing international organization among credit unions. Both the USA and Canadian credit union movements took a strong interest in promoting credit unions throughout the world, seeing their form of economic democracy as part of the struggle for a more democratic world, with CUNA national directors in 1952 publicly opposing the spread of communism in the USA and throughout the world. Bergengren, who had resigned in 1945 as managing director of CUNA but remained influential, argued that credit unions were important tools in fighting poverty, which was exacerbated by loan sharks and provided fertile ground for communism to flourish (MacPherson, 1999a, pp. 37–41, 50–51). In 1953 CUNA became involved in international development activities with the establishment of a World Extension Division (WED), which began work in October 1954, contacted 82 countries and territories in 1955, and gave training to 65 people from 40 countries. WED staff established the West Indian Confederation of Credit Societies in 1956, which was the forerunner of similar organizations in Africa (1968), Latin America (1970), and Asia (1971). CUNA signed its first contract with the US Agency for International Development in 1961, which provided US federal foreign funds to assist credit unions internationally. CUNA’s growing international activities placed a strain on its organization and in 1970 the World Council of Credit Unions (WOCCU) was established after much discussion (MacPherson, 1999b, p. 60; Shaffer, 1999, pp. 135–136). US credit unions dominated the WOCCU, with 41 percent of the world’s credit unions, 55 percent of world credit union membership, and 73 percent of international assets. US sources also provided approximately 90 percent of the WOCCU budget and the WOCCU was closely tied to CUNA (MacPherson, 1999a, p. 106). Postwar prosperity 181

One international organization that faced difficulties in the postwar period was the ICWG. The growing number of women entering the workforce in developed economies due to the labor shortages that accompanied the postwar boom undermined interest in the women’s guilds, and there were questions about the suitability of the guilds for organizing co-operatives in developing countries, with few countries having guilds based on the West European model. The ICA did not have sufficient funds to subsidize the ICWG, which was running out of money and operating from one room in London. After unsuccessful negotiations with the ICWG the ICA decided to appoint a specialist in women’s co-operative issues in 1963, who took up the post in January 1965, and established its own advisory committee with representatives from national women’s co-operative organizations. There were those within the ICWG who supported some integration with the ICA, and those who wanted the ICWG to remain independent. The ICWG eventually voted for its dissolution at its last Congress in Vienna in 1966 (Gaffin and Thoms, 1983, pp. 177–178; Watkins, 1970, pp. 310–311, 1975, pp. 38–39).

Conclusion The postwar boom offered both opportunities and challenges to co-operatives. While consumer co-operative movements faced challenges in terms of competition from larger-scale supermarket chains and the growing complexity of supply chain management, those in Italy and Japan were able to rise and grow out of the ashes of the Second World War. The quest for finance to fund personal loans and housing also led to a growth of financial co-operatives and building societies in a number of countries. In the context of decolonization in Africa and Asia, and the emergence of the Soviet bloc, the creation and support of co-operatives was part of a strategy to shape economic development. The co-operative movement became even more international as European dominance of the ICA declined and it established regional offices in Africa and Asia. The ICA also developed a close relationship with international agencies such as the UN. The shift away from Europe was also highlighted by the growth of WOCCU, which was based in the USA, and spread the credit union message throughout the world. There was even one case where emigrants to Europe, West Indians in the UK, reversed the traditional flow of ideas from Europe by promoting credit unions there. The next chapter will explore a new set of challenges for the international co-operative that followed the end of the period of postwar prosperity and saw the rise of neo-liberalism.

Notes 1 The Times (London), March 2, 1961, p. 8. 2 New York Times, April 2, 1953, p. 48. 3 New York Times, October 9, 1966, p. 58 182 Postwar prosperity

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Watkins, W.P., 1975, The International Co-operative Movement: Its Growth, Structure and Future Possibilities, Manchester, CU. World Council of Credit Unions (WOCCU), 2011, “Asian CU Confederation Turns 40: WOCCU officials helped launch ACCU in 1971” News Release, May 3. Available at www.woccu.org/newsroom/releases/Asian_CU_Confederation_Turns_40 Accessed September 4, 2017. Zamagni, S. and Zamagni, V., 2010, Cooperative Enterprise: Facing the Challenge of Globalization, Cheltenham, UK, Edward Elgar. 7 CONTRASTS Neo-liberalism and the UN International Year of Co-operatives from 1975 to the present

Introduction The postwar boom came to an end with the 1975 global recession and stagflation, triggered by the first oil shock. The following decades witnessed major fluctuations in the world economy, with further global recessions in 1982, 1991, and 2009. Globalization meant that severe economic and financial disruptions in certain countries had profound effects on others. A number of factors played a significant role in the 1982 recession, including a second oil shock in 1979, the US Federal Reserve’s struggle against high inflation, and the Latin American debt crisis. Financial problems in the USA, Japan, and a number of Scandinavian countries, exchange rate crises in Europe, German unification, and the collapse of the Soviet Union were all factors in the 1991 recession, and the 2009 GFC began in the USA in 2007 but quickly spread to other economies due to the growing integration of trade and finance in the world economy (Kose and Ozturk, 2014, pp. 7, 9–10). During the postwar boom the dominant economic thinking was that governments should be actively involved in managing the economy, but by the end of the 1970s the philosophy of ‘economic rationalism’ was emerging among economists. Economic rationalism promoted neo-liberal policies and values: deregulation; a free market economy; privatization of state-owned industries; and a reduction in the size of the welfare state. The rise of neo-liberalism began in the UK in 1979 with the election of the Conservative government led by Margaret Thatcher, and in the USA in 1980 with the election of Republican Ronald Reagan. It even infiltrated the policies of some labor governments, including the Australian Hawke Labor government (1983–1996) and the New Zealand Lange Labour government (1984–1990) (Suter, n.d.). Neo-liberalism emphasizes the role of individuals and markets at the expense of government intervention and collectives such as trade unions and co-operatives. Along with the pressures of globalization, this fueled the push to demutualization, 188 1975 to the present which began in the USA and spread along with other aspects of ‘Americanization’ first to Western countries, and then to other parts of the world. France was one exception where regional banks were mutualizing at the same time as co-operatives were demutualizing elsewhere. In the other few cases where demutualization did not occur, this was generally due to legislative restrictions on converting co-operatives into companies (Battilani and Schröter, 2012a, p. 151). The rise of neo-liberalism also had implications for co-operatives in developing countries where state control of co-operatives came under question. From the early 1980s economies in Africa began a process of liberalization. Public budgets were cut dramatically and the role of the state was significantly reduced. Previously sponsored and used by the state as a tool for development, co-operatives were no longer operating in a protected environment. As Birchall states, “Because they had been such an important part of the economy, co-ops became both victims—of deregulation of trade, fiscal and monetary reforms, and currency devaluation—and targets—seen as themselves in need of reform or even privatisation” (1997, p. 143). As in advanced Western countries, co-operatives in Africa were simultaneously “becoming exposed to a global market in which power is held elsewhere,” such as in transnational corporations, powerful economic groups such as the EU, and international banks (Birchall, 1997, p. 144). The breakdown of the Soviet Union and its allies prompted new challenges for co-operatives in Eastern Europe that had not been established voluntarily by members, and their link to the communist regime meant that most preferred other forms of organization. Faced with a rapid decline in co-operatives, legislation was passed in many Eastern Europe countries to enable co-operatives to become truly autonomous from the state. This, however, presented further challenges as, after years of state sponsorship and interference they found themselves needing to compete in a market economy (Battilani and Schröter, 2012b, p. 6; Birchall, 1994, pp. 200–201). Similarly, the opening up of Communist China raised issues for the co-operative movement in that country, with mixed results over this period (Ip and Chan, 2017). The above challenges led to the collapse of the consumer co-operative movements in a number of countries, including Germany, Australia, and New Zealand. Other countries lost agricultural and financial co-operatives to demutualization. There were further problems in the UK against the background of the GFC with the bailing out of the Co-operative Bank in a rescue operation in 2013, and the Co-operative Group selling its farms and pharmacy chain in 2014 to reduce debt (BBC News, 2014; Secchi, 2017, p. 546). Despite such losses, the international co-operative movement survived the challenges of this period, and has adapted to societal changes with new initiatives such as social co-operatives in Italy, and the rise of alternative food co-operatives in Australia and the USA. The UN International Year of Co-operatives in 2012 highlighted the economic and social significance of co-operatives and fueled favorable developments, such as in Australia where there is a new national organization and increased political action. 1975 to the present 189

Europe Consumer co-operatives in Europe continued the series of mergers and takeovers that began in the early 1970s. In the UK local societies held on steadfastly to their autonomy, which meant that mergers generally occurred when a co-operative could not continue trading rather than through a co-ordinated strategy directed by the CU. As Birchall notes, the process was therefore “relatively unplanned, opportunistic, and demoralising for active co-op members” (1997, p. 84). As the mergers often occurred as a last-ditch effort for survival, rather than from a position of strength, at times they resulted in failure (Secchi, 2017, p. 537). As the societies merged and grew in size, they formed buying groups, and depended increasingly less on the Co-operative Union and CWS, further weakening the position of these national bodies. The CWS regained some strength by merging with the Scottish CWS in 1977 and by successfully responding to consumer concerns over issues such as fair trade. The Co-operative Retail Service (CRS) also grew in strength during the 1970s, as did the CIS and the Co-operative Bank, which became increasingly independent from the CWS. However, the CU weakened further over the decade and many of its former roles were assumed by the national congress, individual societies, the CWS, and the CRS (Secchi, 2017, pp. 337–340). The CU eventually merged with the Industrial Common Ownership Movement in 2001 to become Co-operatives UK, which is now the central organization for all types of co-operatives in the UK.1 In the context of Margaret Thatcher’s first and second Conservative governments, “the six years between 1978 and 1984 were one of the worst periods in British co-operative history” (Secchi, 2017, p. 540). There was a decline in membership to eight million and market share fell from 7.9 percent to 4.2 percent. The main purpose of the CRS, and indeed the reason for its growth, was to “rescue and reorganize failing societies” (Secchi, 2017, p. 540). However, in 1980 when it took over the movement’s largest society, the London Co-operative Society, widespread corruption was uncovered and it was forced to close many shops to mitigate the loss of resources for the movement as a whole. There were growing concerns that such corruption ran deep. CWS Retail was subsequently created, a retail branch similar to that of the Scottish CWS before the merger, and it started buying out societies in the same way as had the CRS. This led to a new era in the UK consumer co-operative movement. While divisions in the movement remained, as Secchi argues, these divisions

took new forms and the structure of the movement was radically changed from a federal one with more or less independent societies, to a more centralized institution with two major powers, CRS and the CWS. These changes were a direct consequence of the crisis and were conceived as medium-term emergency measures, primarily to counter corruption and to involve members. (Secchi, 2017, pp. 543–544) 190 1975 to the present

This move appeared to stem the decline in membership and, for the first time since 1963, co-operative membership grew in 1989 (Secchi, 2017, p. 544). Ultimately the CWS and CRS merged in 2000, which brought all consumer co-operatives under the umbrella of The Co-operative Group. A period of rationalization followed, as a number of unprofitable sections of the business were sold off, including a number of the Group’s larger supermarkets and hypermarkets, as attention was redirected to expanding its convenience store sector. Over the years, the Co-operative Group significantly scaled back its operations to focus on its food, funeral, insurance, legal, and electrical/digital businesses. The Co-operative Group continued the CWS strategy of the 1980s and 1990s to position itself as a responsible retailer. In 1985 both the CWS and the CRS severed supply links with South Africa during the years of apartheid, and in 1989 began an Environmental Care campaign that resulted in them being the first retailers to provide ‘green’ products. Clear and honest labeling was promoted and product lines with reduced salt, sugar, and fat were introduced. The CWS also launched Fairtrade products through its stores during the 1990s. In an effort to build on its improved public image, the Co-operative Group established a Brand Panel to develop a single consistent national branding standard for the movement, to overcome a legacy of inconsistent names, standards, confusion, and incoherent marketing activities. It was also widely felt that the “CO-OP” was associated with the years of decline within the movement. The new brand— The Co-operative—was launched in the 2005, along with a set of standards that societies using the branding were required to adhere to. In the same year, the membership ‘divi’ was reintroduced, renewing the link between membership and trading with the Society. At the time of the relaunch of the divi, membership of the Group was 1.1 million. Within a year this had risen to 1.6 million and the Co-operative Group was named as the UK’s most trusted retailer. By 2012, membership had grown to over seven million (Wilson, Webster, and Vorberg- Rugh, 2013, pp. 323–325, 360–364). The Co-operative Group was dealt a major blow to its reputation and finances in 2013 when a £1.4 billion black hole was found in the Co-operative Bank (discussed further below). In 2014 it began its Rebuild program, and at the 2016 AGM announced significant changes to its membership rewards program, such as returning 5 percent to member accounts when buying Co-op branded products and services, and 1 percent to local charities to re-emphasize its social values and commitment to members and their communities. To signify the “return to the values of ethical commerce we’re best known for” the Group brought back its distinctive blue ‘cloverleaf’ design logo in 2016; it aims to increase membership by one million, from four to five million active members, by December 2017 (Co-op Annual Report, 2016, p. 17). In contrast to the UK consumer co-operative movement, its counterparts in many Western European countries, including France, Germany, and Austria, were unable to rise above allegations of corruption and other challenges of the 1980s and 1990s (Secchi, 2017, p. 543). While the Co-op Zentrale AG in Germany was 1975 to the present 191 back in profit by 1980, weak accountability structures and fraudulent management resulted in further reorganization, and by 1989 the movement had just 37 societies and 650,000 members. In Austria significant debt led societies to amalgamate into one Konsum Austria, which ultimately went under in 1995. A decade earlier, around 40 percent of the French movement had been sold off and only a few small societies remained (Birchall, 2011). While consumer co-operatives have managed to survive in other parts of Europe, Italy presents an example of a thriving movement. The movement currently includes: 10 large-sized and around 100 small- and middle-sized co-operatives; one wholesaling society organized as a consortium (Coop Italia); one national association; and many small companies providing specific services to all co-operatives. The group presents a consistent front, sharing the same brand, marketing, and advertising strategy, and private label (Battilani, Balnave, and Patmore, 2015, p. 63). This reflects the existence of networks of co-operatives that have made it possible to adopt a unified strategy for thousands of small co-operatives and to create a group of not more than 100 co-operatives with the same brand. This, according to Battilani (2017), is one of three main factors that explain the success of consumer co- operatives in Italy since the mid-1970s. Another factor is a series of favorable legislative measures that recognized their economic and social role and contributed to their institutional viability. Finally, the Italian movement has adapted to the changing needs and wants of consumers, shifting its values and objectives since the 1980s from the protection of worker purchasing power to the promotion of responsible consumption and the protection of consumer health (Battilani, 2017; Battilani, Balnave, and Patmore, 2015). With regard to the European agricultural co-operative sector, Birchall (1997, p. 109) outlines that by the mid-1990s there were 58,000 co-operatives, with close to 13.8 million members, and a turnover of US$265 billion. The German movement had the most members, followed by Austria and Poland, while France had the largest number of co-operatives (followed by Poland and Italy) and turnover (followed by Germany and Belgium). However, the period since 1975 has presented both challenges and opportunities to agricultural co-operatives. Against the background of deregulation, globalization, and increased competition from transnational agri-food corporations, the tight links between the farming sector and the state in many countries began to break down. Agricultural co-operatives looked for new ways to raise capital, including investing in joint ventures and strategic alliances with investor-owned businesses with the required capital. Birchall (2011, pp. 162–164) outlines the various hybrid forms of business that have emerged that blend different combinations of farmer-owned and investor-owned capital. At the most extreme, some co-operatives in Europe opted for demutualization, particularly in former socialist countries during the 1990s (Battilani and Schröter, 2012a, p. 156). On a more positive note, some agricultural co-operatives have thrived in the globalized environment in which they now operate. One example is Arla Foods, a dairy co-operative that was formed as a result of a merger between Sweden’s Arla and Denmark’s MD Foods in 2000 (Birchall, 2011, p. 164). In 2017 Arla products 192 1975 to the present are sold in over 100 countries, with the group’s largest markets being the UK, Germany, Sweden, and Denmark (Arla, 2017). Other examples include the dairy co-operative Valio Group and the forestry co-operative Metsäliitto, both in Finland (Birchall, 2011, p. 164). Since the fall of the Soviet Union, 38 national farmer and co-operative organizations from the new Member States of the European Union have joined Copa, or Cogeca, taking their combined membership to 76 organizations, and consolidating their position as Europe’s strongest farming representative organization. Cogeca (which is now called the General Confederation of Agricultural Cooperatives in the European Union), currently represents around 40,000 farmers’ co-operatives, employing approximately 660,000 people, and with a global annual turnover in excess of €300 billion. As stated on its website, Cogeca is “recognised by the European Institutions as the main representative body and indeed the spokesman for the entire agricultural and fisheries cooperative sector” (Cogeca, 2017; see, http://www.copa-cogeca.be/CogecaHistory.aspx). The European co-operative banking sector continued to thrive during this period. While the GFC of 2007–2009 shook the global financial sector to its core—causing many banks to incur significant losses and requiring government intervention to safeguard financial stability and avoid a credit crunch—co-operative banks proved resilient throughout the crisis. As the then President of the EACB, Piet Moerland, emphasized in its 2009 annual report:

Co-operative banks with their characteristic strong focus on customers and members, long-term orientation and unique capital and governance structure operate on the basis of a business model that is different from the mainstream banking model. The primary purpose of a co-operative bank is to promote its members’ economic interest rather than to generate maximum profit for the shareholders. Thus the 4,100 co-operative banks in Europe are mainly focused on traditional retail banking and serving households and SMEs. Their long-term approach and solidity have revealed an important asset to the financial system in these turbulent times as they contributed to sustaining the real economy at local level, acting as a key driving force to the recovery. (EACB, 2009)

Starting out in 1970 as the voice of co-operative banks in Europe, the EACB extended this to the international level, accepting two new members in 2008: the Japanese co-operative Bank, Norinchukin Bank; and the Canadian group Caisses Desjardins (EACB, 2008). In 2016 the EACB consisted of 28 member institutions and co-operative banks, located in 23 countries worldwide. As the representative of the world’s largest co-operative banking cluster, the EACB was the voice of 4,050 small, regional, and large member banks at European and international levels, had 79 million members, 210 million customers, and €7 trillion in banking assets (EACB, 2016). 1975 to the present 193

Credit unions formed a significant proportion of the co-operative bank sector in Europe during this period. This was particularly the case in Ireland, which— according to the WOCCU 2015 statistical report—had 421 credit unions with a total of 3,400,000 members, compared to Great Britain’s total of 342 credit unions and 1,269,345 members, despite the latter’s much larger population. The former Soviet Bloc countries also featured prominently in the statistics, as Table 7.1 shows. Of the 2,220 credit unions in Europe, comprised of 8,351,249 members, those in former Soviet states represent a significant proportion. Two scandals have rocked the European co-operative bank sector in recent years. Rabobank became a global leader in food and agriculture financing and sustainability-orientated banking. The Dutch group first began operating in the global market in the early 1980s, initially for business clients doing business internationally. Following growth and expansion during the 1980s Rabobank opened offices in major financial centers and acquired retail banks in agricultural regions such as Australia and California in the USA. In 2002 Rabobank expanded its international activities by tapping into the new opportunities offered by the Internet and launching International Direct Banking (IDB). While the bank’s network now covers the world, its main focus remains the food and agricultural business (Rabobank, www.rabobank.com/en/about-rabobank/profile/history/index.html). Initially it made it through the GFC relatively unscathed but Rabobank was engulfed in a scandal in 2013 that resulted in it being fined €774 million by US, British, and Dutch regulators for manipulating the interest rate benchmark, Libor (London Interbank Offered Rate). It was the fifth bank to be fined in the scandal, and the Chief Executive, Piet Moerland, immediately resigned after a distinguished history in the co-operative banking sector. The UK Co-operative Bank has also taken a major hit in recent years. The Bank grew strongly as a result of innovative measures during the 1990s, including

TABLE 7.1 Credit unions in the former Soviet Bloc, 2015

Country Credit unions Members Albania * 117 48,410 Belarus * 6 500 Estonia 21 7,689 Latvia * 31 25,788 Lithuania * 63 142,603 Moldova 295 126,453 Poland 48 2,072,598 Romania 19 68,103 Russia 250 416,397 Ukraine 588 764,600 Total 1438 3,673,141

Unless otherwise indicated, data are current as of December 31, 2015. Data extracted from source: www. woccu.org/documents/2015_Statistical_Report_WOCCU. * indicates data as of December 31, 2013 or 2014. 194 1975 to the present abolishing bank charges on current accounts, and refusing to lend to businesses its members regarded as unethical (Birchall, 1997, p. 84, 2011, p. 9). The Co-operative Bank and the CIS merged in 2002 to form Co-operative Financial Services (CFS), which built on the ethical stance developed earlier (Wilson, Webster, and Vorberg- Rugh, 2013, p. 355) and acquired the Britannia Insurance Group in 2010 (Secchi, 2017, p. 523). However, in December 2013, the bank required a £1.5 billion rescue in a deal in which the Co-operative Group lost control of the bank to a group of US hedge funds. At the time of writing, the Co-operative Group will be left with only a 1 percent stake after another complex deal was reached with hedge funds and other investors to inject £700 million into the bank (Treanor, 2017). Beyond the traditional co-operative forms and activities outlined above, there have been a number of developments since the mid-1970s, including the emergence of organic and local food movements in countries such as Denmark, Spain, and France. As with Rabobank, other co-operatives have developed into multinational companies with capitalist subsidiaries abroad. Mondragon, Spain, is a key example in the worker co-operative sector which at the time of writing consists of 268 companies, with corporate delegations in 41 countries, and sales in over 150 countries (Mondragon Corporation, 2017). Social co-operatives represent a further major development. This form of co-operative emerged in the 1970s in response to “deficiencies and inefficiencies of both the market and the State in the provision of social services” (Borzaga, Depedri, and Galera, 2015, p. 209), and are primarily concerned with the provision of social services and work integration. In some countries, such as Italy, they have obtained their own legal status.

The Americas The older consumer co-operatives in the USA were unable to compete with the larger private retail chain stores and their continuous consolidation of retailers. From 1991 to 2001 the four-firm share of the retail food market increased from 23.3 to 27.8 percent, while the eight-firm share increased from 35.2 to 43.6 percent. There was less competition on the supply side with the four-firm concentration ratio in 1999 ranging from 49 to 80 percent in beef-packing, pork-packing, broiler processing, flour milling, dry corn milling, wet corn milling, and soybean crushing, with some economists suggesting that if the four-firm concentration exceeds 40 percent then that market is no longer competitive (Dunn et al., 2002, p. 12). Within this environment both small and large older co-operatives collapsed. Greenbelt Co-operative in Maryland, which had a peak membership of 116,018 in 1986, dissolved in 1991 (Cooper and Mohn, 1992). One small rural US Rochdale co-operative survived in Sault St. Marie, Michigan, but had to close in May 2012 after 99 years of operation following the opening of a nearby Walmart Supercenter and disruption to its trade caused by lengthy roadworks (Brand, 2012). A significant collapse was the Berkeley Co-operative, which faced falling membership, from 107,000 in 1981 to 87,000 in 1987, and deteriorating finances during the 1980s. From 1981 the co-operative began shutting stores to save costs. 1975 to the present 195

In 1987 there was an unsuccessful attempt to create a hybrid consumer-worker co-operative to save the organization, which would be half-owned and managed by employees and consumers. In 1988 the co-operative filed for bankruptcy and closed the last three stores. From 1989 to 1991 the co-operative board sold off the remaining assets. The final payments were made to creditors in 1992, with members’ shares of US$4.4 million written off. The Supreme Court approved the dissolution of the co-operative in May 1993 (Patmore, 2017, pp. 522–523). Why did the Berkeley Co-operative collapse? There are at least six major reasons for its decline. The first reason was the expansion policy after 1962. Prior to 1962 the co-operative would only expand using accumulated funds rather than borrowing. The purchases of the Sids and Mayfair chain stores included their debts and customers who were not co-operative members and were not necessarily loyal to the co-operative ideal. The second reason was bitter political divisions in the co-operative. Issues such as boycotts divided the board. There were clashes between those who saw the co-operative as a business and those who saw it as a platform for political issues. There was a rule that allowed runners-up to fill vacant positions. In a factionalized environment, this meant that a defeated faction could obtain a position on the board if a vacancy occurred. When conservatives gained control, they alienated liberal shoppers, and vice versa. The third reason was turnover of the co-operative management. In 1971, with the departure of a manager with 24 years of experience, changes in senior management continued, which exacerbated poor decision making and planning. Fourth, there was a collapse in the relationship with the traditional co-operative wholesaler, Associated Co-operatives (AC). The lack of cash flow led the wholesaler to request cash for all deliveries to the co-operative in December 1986. The co-operative then obtained supplies from a new non-co-operative wholesaler based in Los Angeles. There was criticism of the quality of goods provided by AC; that the produce was not fresh as it was stored too long between purchase and delivery. The loss of the Berkeley Co-operative was a serious blow to AC as it was its major customer and it was forced to close its warehouse operations. Fifth, the supermarket industry was one of the most competitive in the USA, with the Berkeley Co-operative’s major rival being the supermarket giant Safeway. The major chain stores adopted many of the innovations of the Berkeley Co-operative, such as unit pricing. In the 1980s there was little effort by the Reagan administration to restrain anti-competitive practices in retailing. The co-operative’s main competitive advantage was the avoidance of protracted labor disputes because of its pro-union policies. Finally, there was the loss of member support for the co-operative. There was member criticism of product quality, prices, erratic check cashing policies, the failure to pay dividends, unfriendly staff, ending of childminding services for shoppers, and an inability to stock new products (Patmore, 2017, pp. 523–524). While many of the older consumer co-operatives did not survive, the disillusionment with capitalism during the late 1960s and 1970s led to the formation of new consumer co-operatives at various locations. Protestors against the Vietnam War, environmentalists, community control advocates, and civil rights activists 196 1975 to the present saw co-operatives as a symbol of the counterculture. Some of these co-operatives have been able to prosper by specifically focusing on organic foods and locally produced goods. Current examples include the GreenStar Co-operative at Ithaca, New York, which was founded in 1971 and had 12,325 members in 2016, and the New Pioneer Food Co-operative in Iowa City, which was also founded in 1971. Both co-operatives provide an opportunity for members to work in the store and receive a discount on their purchases. They also contribute to the local community with the GreenStar Co-operative donating US$43,965 in 2016 to community organizations, including associations that promoted healthy eating and cultural activities. The growth of these consumer co-operatives followed the earlier pattern of establishing regional associations and then forming the National Co-operative Grocers’ Association (NCGA) in 1999 (GreenStar Co-operative, 2016; Patmore, 2017, pp. 524–525). In 2017 the NCGA represented 147 food co-operatives, operating over 200 stores in 38 states, with combined annual sales of over US$2 billion, and with over 1.3 million consumer owners. The states with the largest numbers of these stores in 2017 were Minnesota (28), Washington (21), Wisconsin (15), and California (13) (NCGA, 2017). The disillusionment of the 1960s and 1970s in the USA also fueled an interest in worker co-operatives as an alternative to capitalist enterprise. The emergence of mass unemployment from the 1970s further encouraged workers to take over and rescue businesses that were on the verge of collapse (Birchall, 1994, p. 196) and worker co-operatives reached their peak in 1979 with approximately 17,000 members. Particularly notable in size were the plywood co-operatives of the Pacific north-west and the Hoedads Reforestation Cooperative in Eugene, Oregon, which had 300 members. While an adverse political and economic climate weakened the producer co-operatives in the 1980s, several new initiatives have developed since. The Network of Bay Area Worker Cooperatives in San Francisco, which has a high concentration of worker co-operatives, was founded in 1994 to bring together existing worker co-operatives and to promote new ones. The United States Federation of Worker Cooperatives was formed in 2004 to promote worker co-operatives nationally. An initiative announced in October 2009 involved collaboration between the United Steelworkers and the Mondragon co-operative movement in Spain, with the goal of establishing manufacturing co-operatives in Canada and the United States (Patmore, 2013, p. 154). By 2013 it was estimated that there were only 256 worker co-operatives in the USA, with 6,311workers, and an estimated total revenue of US$367 million. They tended to be small, with a median workforce of ten, and concentrated in the San Francisco Bay Area, the Bronx in New York, and Madison, Wisconsin. Most worker co-operatives were found in five key sectors—manufacturing, retail, food, administration/waste management, and professional services (Democracy at Work Institute, 2013). Worker co-operatives are to be distinguished from an Employee Stock Ownership Plan (ESOP), which are not co-operatives but allow workers to become owners of the business through shares invested in their retirement plans. Most ESOPs are not majority-owned by workers and few ESOPs have workers on their boards of 1975 to the present 197 directors (Curl, 2012, p. 233). By 2017 there were approximately 7,000 ESOPs, covering approximately 14 million employees in the USA (National Center for Employee Ownership, 2017). Agricultural co-operatives in the USA faced several significant challenges following the 1970s. An agricultural depression from 1983 to 1987, particularly in the Midwest, helped decrease gross and net margins of agricultural production, processing, and inputs, with some ‘experts’ calling for relocating farmers from North Dakota and returning the land to the buffalo. There was the rise of ‘information- age’ agriculture, where there was a shift from the sale of individual products sold by farmers to independent processing firms to an integrated approach where agriculture is part of an interdependent value chain that focuses on the final good. This vertical integration of agriculture required more finance for capital intensive production, which led to a debt spiral and to a transformational spiral, such as the formation of New Generation Co-operatives (NGC) or the ‘value added’ co-operative, that undermined some co-operatives and paved the way for demutualization. The NGC producers became involved in the value-adding processing of their commodities, such as the Dakota Grain Pasta Company (DGPC), founded in 1991 to specialize in the processing of durum wheat for pasta production. The promoters of an NGC decide what the capacity of the processing plant will be and then enter into contracts with farmers to take a predetermined amount for the plant. The right of delivery to the co-operative is sold in shares, which can be traded at a price that reflects expectations of financial returns, with voting still based on the one member one vote principle. The DGPC, however, grew so rapidly that the grower’s original investment significantly appreciated, and it demutualized in 2002 into a publicly listed company to allow members to take full advantage of their investment, especially those farmers nearing retirement and desiring to liqui- date their equity, and to bring more non-member investor dollars into the DGPC (Birchall, 1997, pp. 201–202; Chaddad and Cook, 2012, p. 183; Gray, Stofferahn, and Hipple, 2014, p. 46; Kramper, 2012, pp. 142–146). Overall, there was a rapid decline in the number of agricultural co-operatives in the USA from 7,535 in 1975–1976 to 2,047 in 2015, with membership also falling from 5.9 million to 1.9 million (Eversull, 2015, p. 5; USDA, 2017, pp. 5–6). Since 2000 there have been significant setbacks for US agricultural co-operation with several large bankruptcies—including Agway, Farmland Industries, and Tri-Valley Growers—and demutualizations, in addition to the DGPC, including Calavo and Gold Kist (Hoyt and Menzani, 2012, p. 39). Universal Co-operatives Inc., the wholesaler that focused on farmers’ co-operatives and traded under the brand name CO-OP, went out of business in December 2015 after it filed for bankruptcy (Bloomberg, 2017; Patmore, 2017, p. 525). Despite this, the gross volume business of agricultural co-operatives grew from US$55.8 billion in 1975–1976 to US$212.1 billion in 2015, with a fall from US$246.7 billion in 2014 due to lower commodity and input prices, but with agricultural co-operatives generally remaining financially sound with a higher net income (Eversull, 2015, p. 5; USDA, 2017, pp. 5–6). The growing volume of business reflected the consolidation of agricultural co-operatives 198 1975 to the present

(Hoyt and Menzani, 2012, p. 36). Land O’Lakes, for example, combined with CHS Co-operatives and Farmland Industries in February 2000 to form Agriliance LLC, to improve the efficiency of fertilizer production and to sell seeds, crop nutrients, and crop protection products to co-operatives and producer members in the USA, Canada, and Mexico (Dunn et al., 2002, p. 14). While the number of credit unions in the USA declined from 22,677 in 1975 to 6,259 in 2015 due to mergers, credit unions dominate the US co-operative movement in terms of the numbers of societies, members, and assets. In 2008 credit union assets were nearly 7 percent of the total assets of the banks and by 2015 credit unions had US$1,278 billion in assets (CUNA, 2017, p. 1; Hoyt and Menzani, 2012, p. 39). One feature of the US credit union movement was the development of the Credit Union Service Organization (CUSO), which was a co-operative venture formed by one or more credit unions to provide services to credit unions and their members. The CUSOs allowed credit unions to combine resources to obtain the economies of scale needed for services such as insurance, data processing, and credit card processing. By 1985 there were 509 CUSOs operating on behalf of 17,311 credit unions (Thompson, 2012, pp. 179–180). The US credit unions, particularly the central co-operative banks, and credit unions that provided banking services for the surpluses of credit unions, got caught up in the GFC through buying investment products that lost their value from mainstream banks. US regulators in March 2009 seized the US Central Credit Union and Westcorp for being involved in the type of mortgage-backed securities that the major banks were involved in and ultimately liquidated them (Birchall, 2011, p. 149; Thompson, 2012, pp. 504–524). Despite this, while there was a very slight contraction of loans given by US credit unions in 2010 and 2011, both credit union savings and assets continued to grow (CUNA, 2017, p. 1). Despite all the problems for US co-operatives since the mid-1970s, CLUSA survived. Following lobbying from CLUSA in 1978, Congress, with the support of President Jimmy Carter, established the federally funded Co-operative Bank to provide cheap finance to co-operatives. The Reagan administration moved to close the Co-operative Bank as part of budget cuts, but agreed to privatize it in 1981 after the co-operatives raised close to US$200 million in capital for the bank. CLUSA became the National Co-operative Business Association (NCBA) in 1985 and its membership still covers all forms of co-operatives. It conducts education programs and lobbies Congress on behalf of co-operatives. The NCBA successfully lobbied Congress in 1991 to establish the Rural Co-operative Development Grants program to encourage new co-operative businesses in rural areas; and in 2000 it successfully lobbied the Internet Corporation for Assigned Names and Numbers to create a new top-level Internet domain—.coop—exclusively for co-operatives (Patmore, 2017, pp. 524–525). Canadian consumer co-operatives, like their US counterparts, had mixed fortunes. Economic uncertainty and widely fluctuating interest rates in the 1980s undermined efforts by consumer co-operatives to meet the challenges of growing chain store competition and the growing concentration of agro-food industries on 1975 to the present 199 the supply side. Consumer co-operatives in Atlantic Canada adapted by closing stores and converting them into a chain store system, alongside a series of convenience stores. In 1994 Growmark, a US agricultural co-operative, purchased the assets of the bankrupt United Co-operatives of Canada, formerly the UFCC, adding more than 30 co-operatives to its network and providing both agricultural products and consumer goods. While the FCL in western Canada has benefited since the 1990s from its involvement in the lucrative oil industry, the number of its co-operative stores has fallen due to amalgamations as declining rural populations reduce local demand. Many Canadian consumer co-operatives, particularly in Atlantic Canada, have consistently used their purchasing power to support the development of fair trade (Growmark, 2017; MacPherson, 2017, pp. 451–452). As in the USA, there was a shift in Canada towards organic food co-operatives as Canadians protested how the agro-food industry in North America used chemi- cals in the production of crops and the traditional way in which stores, including traditional retail co-operatives, were managed. In Canada the largest concentration of these food stores was found in British Columbia in the 1980s, they organized their own wholesales, including one called The Fed Up Co-op Wholesale, whose title was a satirical criticism of the FCL. While they flourished in urban neighborhoods and smaller communities, many disappeared within 15 years because of the demands of voluntary labor, but there are still about 70 organic food co-operatives, which play an important role in promoting local sustainable food through farmers’ markets (MacPherson, 2017, pp. 450, 452). As in the USA, credit unions dominate the Canadian co-operative movement, while agricultural co-operatives have faced major challenges. Canadian credit unions went through similar processes of amalgamation and rationalization as in the USA, and by the first quarter of 2017 there were 574 credit unions in Canada with 2,842 locations, 10,173,687 members, and C$371 billion in assets. As in the USA, the GFC placed financial pressures on credit unions with the Desjardins in Quebec experiencing significant losses. There were major demutualizations of agricultural co-operatives as with the Saskatchewan Wheat Pool in 2007, once the largest agricultural co-operative in Canada (Birchall, 2011, p. 150; Canadian Credit Union Association and Association Canadienne des Coopératives Financières, 2017; Fulton and Larson, 2009; Hoyt and Menzani, 2012, p. 39). There were setbacks for Canadian housing co-operatives when the federal government withdrew its funding in 1992 and the provinces followed in 1995 in response to lobbying by private landlords who resented the competition, and criticism that co-operatives were not meeting the needs of the poor (Birchall, 2011, p. 102). There continued to be major co-operative developments in Central and South America. During the 1970s and most of the 1980s there were issues with hyperinflation and debt servicing arising from uneconomic investments and an easier flow of money into South America, with Argentina having an annual inflation rate of 180 percent from 1974 to 1978. This placed pressure on South American credit unions, who were dependent on foreign aid and provided loans for the purposes of survival rather than economic self-sufficiency. This ultimately encouraged the 200 1975 to the present

South American credit unions to become more “managerial” with more attractive savings programs to increase liquidity, planning, training, and a lower reliance on outside aid (MacPherson, 1999, pp. 146–7; Vuotto, Verbeke, and Caruana, 2017, p. 497). While military regimes held power in countries such as Argentina, Brazi1, Chile, and Guatemala, where Catholic co-operators were killed, there was a wave of democratization from the mid-1980s (Fitzpatrick-Behrens and LeGrand, 2017, p. 171). The Brazilian movement benefited from the return to democracy and dramatic economic growth before 2013, and the number of Brazilian co-operatives doubled from 5,399 in 1991 to 6,652 in 2010. There was robust growth in social co-operatives since 2001 (Hoyt and Menzani, 2012, pp. 49–50) and by 2015 Unimed, the Brazilian health co-operative, consisted of 354 medical co-operatives, which provided services to 20 million Brazilians, with over 110,000 doctors, and 113 hospitals (Voinea, 2015). In Argentina there were developments in both consumer and worker co- operatives. From 1980 economic policy was aimed at reducing state intervention in the economy and controlling inflation, with trade opening to foreign investment, which allowed multinational food retail chains to enter the country, and 64,000 food stores disappeared, along with almost 125,000 jobs between 1984 and 1993. Despite expansion by the EHO in the 1980s, hyperinflation and deregulation of the currency in 1991 led the EHO to suspend its savings bank operations and to hold a meeting of creditors to avoid bankruptcy, and until 2005 it remained under court intervention and supervision, with membership dramatically falling from 1,887,304 in 1990 to 2,899 in 2000. By contrast, the CO, through the prudent management of members’ savings grew from 135,259 members in 1990 to 1,017,134 in 2011, and took advantage of a recovery in the retail trade and economic activity from 2003 to begin a program of regional expansion that was continuing in 2016. By 2010 CO was the eighth largest hypermarket and supermarket chain in Argentina (Vuotto, Verbeke, and Caruana, 2017, pp. 498–504). Against the background of the most extreme state neo-liberal reforms and consequent rising unemployment in Argentina during the 1990s and 2000s, a movement of worker-owned factories commenced in 1998 when 190 workers occupied Metallurgical and Plastic Industries of Argentina, a medium-sized factory, to stop its closure and turned it into a worker co-operative. This movement grew rapidly and by 2010 approximately 205 factories were occupied, mainly small- to medium-sized companies, in industries ranging from chocolate manufacturing to metallurgic products (Rossi, 2015, pp. 98–99).

Africa By the end of the 1980s, the development of co-operative movements in most African countries had been captured by the state. This is despite evidence that the process was not achieving the expected social and economic outcomes. A 1970s study of African co-operatives by the United Nations Research Institute 1975 to the present 201 for Social Development (UNRISD) (cited in Wanyama, Develtere, and Pollet, 2009) found that the co-operatives “reinforced existing patterns of exploitation and social stratification or introduced new forms of inequality.” As Wanyama et al. outline: “The poor had seldom been reached by the cooperative programmes under review; the position of women was negatively affected under the cooperative development process; and the means of production did not really come into the hands of co-operators” (2009, p. 370). However, there was no attempt to change the state-directed approach to co-operative development in Africa. Co-operatives were required to serve the agenda not only of governments but also of external development agencies and donor organizations rather than developing their own. They were subject to such extreme price controls that they could not realize sufficient returns or profits, and were heavily regulated by laws that were not easily comprehended by the average member. Their role as aid- or subsidy- lobbying organizations led members and leaders of co-operatives to develop a “highly opportunistic, passive and instrumental attitude that compromised their financial contributions.” Insufficient share capital and membership fee payments led to undercapitalization, and co-operatives became more and more dependent on external funding, and hence external rather than internal accountability. The autonomy and economic rationale of co-operatives was further eroded by political patronage. All these factors “led to widespread inefficiencies, mismanagement and irregularities in the sector” (Wanyama et al., 2009, p. 371). By the end of the 1980s the ability of co-operatives in Africa to survive without state and or donor support was highly questionable. With the liberalization of the economy in most African countries through the adoption of Structural Adjustment Programmes (SAPs) in the 1990s, it was feared that they would not survive in an increasingly competitive market. However, a major study of 11 African countries (Develtere, Pollett, and Wanyama, 2008; Wanyama et al., 2009) revealed that the co-operative movements have not only survived market forces, but have continued to grow in terms of number and membership. However, as Wanyama et al. (2009, p. 378) note, it is only “the fit” co-operatives that have survived liberalization and, according to them,

liberalization seems to have facilitated the purification and revamping of the co-operative sector in many countries. Some old co-operatives have been revitalized to survive the liberalization process while the insolvent and non- competitive ones have been closed down. In addition, there is a proliferation of new co-operatives that are less dependent on state support as was the case in the past. (2009, p. 375)

There have been a number of structural changes to the movements, with state- imposed federative and apex co-operative organizations gradually disappearing, and being replaced by independent voluntary unions and networks formed by 202 1975 to the present co-operative societies themselves. In the Rwandan agricultural sector, for example, rice farmers formed the Rice Cooperative Union (UCORIRWA) to negotiate prices with the government (Wanyama et al., 2009). In the saving and credit co-operative (SACCO) sector, the Kenya Rural Savings and Credit Cooperatives Societies Union (KERUSSU) was registered in 1998 as the umbrella national co-operative organization for rural SACCOs. This trend signified a move away from the unified model of co-operative development, with its top-down structure of apex organizations, as “bottom-up consensual networking and integration is taking place between cooperatives involved in similar trades or activities” (Wanyama et al., 2009, p. 377). While this resulted in co-operatives having greater control over their own agenda, it also led to greater fragmentation of some movements. In other cases, such as post- apartheid South Africa, the top-down approach persisted but with dismal outcomes. In 1997 the Agricultural Cooperative Business Chamber (ACB), the National Community Cooperative Union (NCCU), the South African Cooperative Network (SACNET), and the Savings and Credit Cooperative League (SACCOL) came together to launch the National Co-operative Association of South Africa (NCASA). This development was supported by the ICA and the new democratic government, and received significant funding by the Canadian Co-operative Association supported by CIDA. However, according to Satgar (2007), the top- down approach resulted in the failure to establish appropriate provincial structures and sectoral bodies. Tensions built, many of the original sectoral bodies departed, and the Canadian Co-operative Association withdrew funding. There followed major attempts to restructure the organization, such as the inclusion of sectoral and provincial bodies on the board. However, such changes remained driven from the top. Other “continuities with the past” included “a strong emphasis on building provincial cooperative associations (many of which were divided and organisation- ally under-resourced)” and “the misguided idea that the role of the cooperative movement was to be a development agency” (Satgar, 2007, p. 17). Overall, while such attempts were aimed at defining a national, united voice for the South African co-operative movement in the post-apartheid policy environment, such errors in judgment over organizational forms and roles led to the demise of the National Co-operative Association in the mid-2000s. Co-operatives in Africa have also diversified their activities in response to the liberalized economic environment and the interests and demands of their members. As previous chapters have demonstrated, agriculture and credit have traditionally been the main co-operative sectors in Africa, with the latter largely serving as a complement to the former. While agricultural co-operatives remain significant in most countries, those that are no longer profitable are increasingly being replaced by more viable ones. Wanyama et al. (2009, p. 379) provide the examples of Kenya, where cotton and pyrethrum co-operatives have been abandoned in favor of dairy and SACCOs, and Ghana, Egypt, and Kenya where agricultural co-operatives have diversified their activities by also venturing into 1975 to the present 203 the fields of savings and credit. They suggest that the diversification of ventures partly explains why Africa has experienced a substantial growth of co-operatives in the financial sector. In 2009 SACCOs were the second largest co-operative sector in countries such as Kenya, Nigeria, Niger, Rwanda, and Cape Verde. In Kenya they are financially the strongest and have replaced agricultural marketing co-operatives as the leading shareholders in the Co-operative Bank of Kenya, which itself was the fourth largest bank in the country. This success has continued, with the WOCCU 2015 statistical report indicating that there were 5,769 credit unions in Kenya with a total membership of 5,432,009. Kenya was followed by Tanzania (5,559 credit unions and 1,153,248 members) and Ethiopia (5,500 credit union and 1,112,195 members). Overall, there were 21,040 credit unions on the African continent, with a total of 19,438,146 members (WOCCU, 2015). In addition to SACCOs, co-operatives in Africa are increasingly venturing into other ‘non-traditional’ sectors such as housing (e.g. Senegal, Ethiopia, and Egypt), consumer (e.g. Cape Verde and Egypt), and handicraft, cottage industry, and other small productive co-operatives such as distilleries (e.g. Ethiopia, Ghana, Kenya, and Egypt). Others are shifting from being unifunctional to multifunc- tional co-operatives by adopting additional activities as demanded by members and the competitive market in which they operate (Wanyama et al., 2009, p. 381). Wanyama et al. conclude that:

Those cooperatives that have managed to adapt to the new market system, the number of which continue to increase in many countries, are recording better performance than they did in the past era of state control. Such cooperatives seem to have reinvented the business wheel that they had lost in the past era when they were prematurely arrested by the state. (2009, p. 387)

Asia Agricultural co-operatives have continued to be important to the economies of many Asian countries since 1975. By 1978 the Chinese government had accepted the failure of the commune system to improve agricultural production or alleviate the country’s widespread rural poverty, and began moving the farmer sector to a more market-driven system. The communes were dissolved, and the government permitted individual households to take long-term leases on land, and farmers were paid on the basis of their output. In response to the more open market and globalization, farmers from the mid-1990s organized farmer professional co-operatives (FPCs) which were encouraged, but not managed, by the government (Hoyt and Menzani, 2012, p. 46). While a number of FPCs were established in the 1990s and early 2000s, the adoption of a national law on the promotion of FPCs in 2007 saw their numbers rapidly increase. Article 1 of the legislation outlines its purpose as “to facilitate and direct the development 204 1975 to the present of farmer cooperatives, standardize organization and behaviors of them, protect legal interests of cooperatives and members, and foster growth of agricultural and rural economy” (cited in Bijman and Hu, 2011, p. 103). The law provides support for FPCs through the establishment of local agricultural administrative departments and measures such as “support with state financial revenue, preferential tax treatment, financial support, technical support, as well as guidance in industrial policies” (Bijman and Hu, 2011, p. 103). While 80 percent of all members should be farmers, the law allows non-farmers to become members of an FPC, and the co-operative principle of one member one vote does not apply, with the maximum voting rights one member can have capped at 20 percent. In South Korea the relative success of agricultural co-operatives and the NACF led the government to enact similar laws to allow for forestry co-operatives, fishery co-operatives, credit unions, and consumer co-operatives. Like the agricultural co- operatives, the co-operatives established under these laws were subject to intense governmental involvement and guidance (Kim, 2013, p. 150). While agricultural co-operatives were gradually democratized from the late 1980s (see Jung and Rösner, 2012, pp. 89–91) it was not until new legislation, the Framework Act on Cooperatives which was passed in December 2011 and officially endorsed in December 2012, that co-operatives in South Korea were provided with substantial autonomy. The Act reduced the restrictive nature of previous co-operative legislation, reflected co-operative principles and values, and acknowledged the contribution of the co-operative sector in dealing with the GFC. The purpose of the Act, according to Article 1, was to “facilitate independent, self-supportive, and autonomous activities of cooperatives and so contribute to social integration and balanced development of the national economy by providing for basic matters regarding the establishment and operation of cooperatives” (cited in Kim, 2013, p. 151). In addition, a restructure of the NACF was brought about by legislative amendment and a resolution by the Board of Directors in 2011 to allow for two separate holding companies under the NACF umbrella: the financial holding company (NongHyup Financial Group); and the agricultural holding company (NongHyup Agribusiness Group) for economic (production and marketing) business. The banking side of the NACF had flourished, and in terms of deposits, it had become the second largest commercial bank in South Korea by 2000 and, together with its co-operative members, was the largest banking institution in the country. However, the success of the credit division contrasted glaringly with the stagnant state of the economic division, and a separation was deemed necessary to refocus the NACF on promoting and enhancing profits, not for the holding company, but for farmers and co-operatives in the agricultural sector (Jung and Rösner, 2012, p. 91). In 2016 the NACF consisted of 1,134 primary member co-operatives representing more than 2.29 million member farmers (defined as owners, users, and control- lers of the agricultural co-operatives in which they were involved) in South Korea (NACF, www.fdic.gov/regulations/reform/resplans/plans/nacf-165–1612.pdf). The South Korean consumer co-operative movement has experienced waves of opportunities and challenges since 1975. As in Japan during the 1970s, a strong 1975 to the present 205 network of well-educated South Korean housewives interested in conscious consumption for reasons of food safety and environmental protection emerged in the late 1980s. In April 1987 the Hansalim Community Consumer Co-operative (now Seoul Hansalim), a door-to-door delivery system based on units of five households, was formed by 350 households in Seoul and Gwacheon. The political democratization movement also allowed the right of assembly in the late 1980s, and a significant number of civic organizations emerged in South Korea, including consumer, university, medical, and childcare co-operatives. The national body— the Korean Consumer Co-operative Federation (KCCF)—was formed in 1983 with 76 member societies, it struggled in its early years and was hit hard when South Korea fell victim to the Asian economic crisis in 1997. In exchange for a bailout from the IMF, South Korea was required to undertake structural adjustment, and two-thirds of consumer co-operatives, including about 90 percent of co-operatives in non-metropolitan areas, went bankrupt. The surviving co- operatives formed the Metropolitan Business Consortium of Saenghyup (now Dure Saenghyup) in July 1997 with the purpose of achieving economies of scale in the purchase and distribution systems, and in September the same year Gyeong-in Saenghyup Yondae (now iCOOP KOREA) was launched, and the Women’s Minwoo Saenghyup began to work as a consortium (Hyung-mi, 2017, pp. 371–375). According to Hyung-mi, these three retail co-operatives, along with Hansalim, have all been growing well and

to overcome the poor business infrastructure of consumer co-operative businesses, these four co-operative unions developed a sound basis to the management of their payment, logistics, and production, and put great effort into expanding the direct trade of eco-friendly agricultural products both in quality and quantity. (2017, p. 375)

The Han group system in Japan continued to expand from the mid-1970s, by its very nature it allowed for strong democratic processes and closer connec- tions with members. ‘Citizen’s co-ops,’ backed by housewives, continued to be established in each prefecture until the 1980s, and membership grew from two million in 1970 to 14 million in 1990, with the turnover growing ten- fold. As stated by Kurimoto, “this is why it is said that Japanese-style consumer co-operatives have been created with housewives as the driving force” (2010, p. 6). However, faced with strong competition from private retailers along with the prolonged recession, annual turnover of consumer co-operatives stagnated in the 1990s. In response, they have formed regional consortiums extending beyond prefectural borders in order to improve their buying power, increase sales in home delivery, and extend their social welfare activities in the areas of child and senior care, and have enhanced their efforts towards responsible consumerism and democratic management (Kurimoto, 2010, pp. x–xv, 6–7; Hoyt and Menzani, 2012, pp. 42–43). 206 1975 to the present

There were also developments in the consumer sector in Singapore. The SILO and PIEU co-operatives merged with the NTUC-run co-operative WELCOME in 1981 and 1983 respectively, and the business was renamed NTUC Fairprice Co-operative Ltd (Tan, 2015, p. 114). It has since grown to become Singapore’s largest retailer, with a network of over 230 outlets, including FairPrice supermarkets (more than 100 island-wide), FairPrice Finest (upmarket products catering to the changing tastes and needs of customers), FairPrice Xtra (hypermarkets providing an extensive range of products and services), and the FairPrice Xpress (in alliance with ExxonMobil) and Cheers convenience stores. In addition, FairPrice Online provides the option for online shopping and home delivery, operates Singapore’s first membership-only retail warehouse for groceries and household goods, Warehouse Club, and in 2016 launched FairPrice Shop, which is located near the community in the heartlands and which stocks basic products. The NTUC Fairprice co-operative also owns a Fresh Food Distribution Centre, opened in 2003, and a centralized warehousing and distribution company, Grocery Logistics of Singapore (www.fairprice.com.sg/wps/portal/fp/ourretailformats). In 2008 it launched the FairPrice Foundation with a focus on “the poor and needy, nation building and community bonding, and advancing workers’ welfare” and has since donated over S$98 million to the Foundation (www.fairprice.com.sg/wps/portal/fp/aboutus). The Saigon Co-operative in Vietnam has sought to emulate the FairPrice model (Kurimoto, n.d., p. 3). Credit unions have continued to proliferate in Asia, with the WOCCU reporting 27,492 on the continent in its 2015 Statistical Report, with 45,484,815 members. In contrast to Africa, many Asian movements experienced significant growth in the 1980s as their economies progressed, the political situation stabilized, and liberal democratic political systems developed (MacPherson, 1999, p. 156). In 1985, WOCCU began a three-year program to expand the movement to regions in Asia without credit unions (MacPherson, 1999, p. 156), and between 1985 and 1990 there was an 8 percent growth in membership, and 17 percent in savings across the continent (Birchall, 2011, p. 193). The Indian credit union movement joined the South Asian members of WOCCU, Bangladesh, Pakistan, and Sri Lanka in 1985. A decade later there were 14,500 credit unions in Asia who were members, affiliates, or associates of WOCCU, with over six million members, and by 2005 this had increased to 16,576 affiliates with 11,092,757 members (WOCCU, 2005, www.woccu.org/documents/2005_Stat_Report). While their market penetration was low (at only 0.34% in 1995 and 2.41% in 2005), as Birchall notes, “a low market share was not necessarily an indication of failure; it indicated that the poor- est people were benefiting from small savings and loans” (2011, p. 193). In 2015, there were three Asian peak organizations that were direct members of WOCCU: Afghanistan (Islamic Investment and Finance Cooperatives Group); South Korea (National Credit Union Federation of Korea); and Singapore (Singapore National Co-operative Federation). The Association of Asian Confederation of Credit Unions in Thailand was an associate member. 1975 to the present 207

Overall in 2015, the number of credit unions in Asian member countries totaled 959 with 5,974,849 members, and those in non-member countries—including Azerbaijan, Bangladesh, Cambodia, Hong Kong, Indonesia, Iran, Kyrgyzstan, Laos, Malaysia, Mongolia, Taiwan, Thailand, and Vietnam—totaled 26,533 with 39,509,966 members. The lead countries in terms of the number of credit unions were Sri Lanka (8,423), Nepal (4,207), India (2,705), Thailand (2,277) and Myanmar (2,228). In terms of members, India was the front runner with 21,060,430 members, followed by South Korea (5,752,000), the Philippines (4,091,059), and Nepal (2,500,000 members) (WOCCU, 2015). In addition to agricultural, consumer, and credit co-operatives, a range of other types of co-operatives have developed in Asia with government encouragement. The 2012 legislation in South Korea, for example, provided for social co-operatives, defined by the Act as a co-operative that “carries out business activities related to the enhancement of rights, interests, and welfare of local residents or provides social services or jobs to disadvantaged people . . . but is not run for profit” (Kim, 2013, p. 151). University co-operatives are common in Japan, South Korea, Philippines, Vietnam, Thailand, Malaysia, Singapore, and India. These co-operatives provide staff, and students in some countries, with meals, books, appliances, and credit/ insurance. Health co-operatives have been organized by consumers, in the case of Japan, South Korea, the Philippines, and Singapore, and/or professionals in the case of Mongolia, Malaysia, India, Sri Lanka, and Nepal. These co-operatives play an important role in providing effective and vital health services at hospitals and clinics in a range of different socio-economic contexts, and importantly, where services are otherwise unavailable. Women’s co-operatives have also been formed in countries such as South Korea, Malaysia, India, and Iran. The focus of these co-operatives varies from the need to abide by gender-segregation rules, to giving women a voice in an otherwise male-dominated co-operative movement, and/or to progress a feminist agenda (Kurimoto, n.d., pp. 3–4).

Australia, NZ, and the Pacific Islands This period witnessed the collapse of the consumer co-operative movements in Australia and NZ. The most spectacular collapse of an Australian Rochdale consumer co-operative was that of the Newcastle and Suburban Co-operative. After reaching a peak membership of 95,000 in 1978, there were rumors of impending insolvency which led to a run on capital in 1979 as 9,000 members left. Despite a freeze on capital withdrawals the co-operative closed in 1981. A subsequent investi- gation of the collapse found there were problems such as overstaffing and inadequate accounting practices. There were also problems on the wholesaling side caused by the NSWCWS closing business in 1979 (Balnave and Patmore, 2012, pp. 989–990). In NZ, the Manawatu Cooperative, which had 34,000 members in June 1981, went into receivership in February 1988. Faced with increased competition and rising costs, it discontinued its grocery delivery service in April 1976, and 208 1975 to the present withdrew from the food business in November 1984. This affected other departments and turnover went into decline. The co-operative covered these losses by selling off property and borrowing to invest in property development. However, rising interest rates eroded returns, while the share market crash of October 1987 thwarted plans for financial restructuring, and the Manawatu Co-operative folded soon afterwards (Balnave and Patmore, 2008a, pp. 103–104). While retail Rochdale co-operatives collapsed, wholesaler Foodstuffs, a retailer co-operative with retail members that are not co-operatives, has grown to be one of the largest co-operatives in NZ (Foodstuffs NZ, 2016). Surviving Rochdale consumer co-operatives in Australia have overcome the lack of a co-operative wholesaler by combining the Rochdale model with franchising. The co-operatives in Junee, Victoria, and Denmark, South Australia, are both franchisees for the Independent Grocers of Australia (IGA)—an offshoot of the Independent Grocers’ Alliance, which is an alliance between wholesalers, retailers, and manufacturers founded in the USA in 1926 and which arrived in Australia in 1988. The Nuriootpa Co-operative in the Barossa Valley of South Australia is also a franchisee of IGA, along with numerous other business entities including, but not limited to, Mitre 10 hardware and Betta Electrical. These consumer co-operatives, all in rural areas, have successfully linked their business survival to that of the town, and have drawn on their sense of locality. In other words, they have a reciprocal relationship with the town, in that the co-operatives provide or contribute to the economic, social, and shopping needs of the community, and in return people shop local as members of the co-operative. Along with

FIGURE 7.1 Barossa Co-operative Supermarket, South Australia (Courtesy of Richard O’Leary) 1975 to the present 209 these older co-operatives in Australia, a small number of local food co-operatives have developed in recent years that focus on local and organic food, such as Alfalfa House in Sydney (Balnave and Patmore, 2012, pp. 994, 998). During the 1980s, dairy co-operatives in Australia were faced with impending deregulation of the industry. Larger co-operatives in Victoria led the way in building strategic alliances, while smaller co-operatives and those in other states tended to bide their time, awaiting the pressures deregulation would bring. The situation was made worse following the breakdown of the Soviet Union and the flooding

FIGURE 7.2 Alfalfa House Community Food Co-op, Sydney (Courtesy of Greg Patmore) 210 1975 to the present of world markets with cheap dairy products from former Soviet states. Recession, growing competition from NZ producers, and their continuing inability to unite, placed further pressures on Australian dairy co-operatives in the lead up to deregulation in June 2000, when they found themselves subject to market forces, with no regulations on who could supply milk or what it should cost. Market forces now dictated price, and farmers and producers were required to sell wherever they could get the best price, creating greater competition between farmers, and between farmers and producers (Lewis, 2006, pp. 57–66). As Lewis states:

The motivation to defend farmer co-operatives as unique and intrinsically valuable was unraveling and, in this context, the idea of accessing a co-operative’s assets to aid members adjusting to deregulation or exiting the industry was more appealing. More than a century in the making, the Australian dairy co- operative movement faced its greatest identity crisis ever. (2006, pp. 65–66)

While some producer co-operatives went under, others demutualized. Apart from the dairy industry, the sugar industry provides a notable example of where a number of co-operatives are now owned by foreign corporations. Nevertheless, agricultural co-operatives remain a significant player in Australia, producing more than 17 percent of the total turnover in the sector in 2010. In 2015 they made up close to half of total co-operative turnover and around a quarter of total co-operative employment (excluding members) (Fontanari, O’Leary, Nuhanovic-Ribic, and Tortia, 2015, p. 131). However, their future is unclear after Murray Goulburn announced in April 2016 that they had overpaid their milk suppliers for the 2016 financial year. The co-operative established a con- troversial milk supply support package (MSSP) under which suppliers had two options: to ‘repay’ the amounts by paying upfront in a lump sum; or by accepting a lower milk price over three years. Some farmers subsequently switched to other processors, meaning those that were left had to repay more. The scheme was suspended in September 2016 and in May 2017 Murray Goulburn announced it would ‘forgive’ the MSSP and make a payment to those who had made MSSP contributions; Chief Executive Ari Mervis stated: “Not only had it created a financial burden on the farmers, perhaps more importantly it created an emo- tional burden or disconnect between the suppliers and their co-op” (Sky News, 2017). However, the co-operative also announced the closure of a number of its factories, and in August 2017 mandated its adviser, Deutsche Bank, to seek potential bids for all or some of its assets (Financial Review, 2017). While the NZ co-operative, Fonterra, put in a strong bid, at the time of writing Murray Goulburn is to be sold to a Canadian company, subject to a members’ vote. Agricultural co-operatives also remained strong within many of NZ’s agribusiness industries in this period. Within meat processing and marketing, two large co-operative companies—PPCS (formerly Primary Producers Co-operative Society) and Alliance—hold a combined market share of more than 50 percent. 1975 to the present 211

However, it is in the dairy processing and marketing industries that the most significant NZ agricultural co-operative, Fonterra, operates. Fonterra was formed in 2001 with the amalgamation of Kiwi Dairy Co-operative, New Zealand Dairy Group (NZDG), and the New Zealand Dairy Board. Kiwi Dairy Co-operative and NZDG were previously the two largest of the four remaining dairy co-operatives in NZ, and the NZDG Board had legislative responsibility for marketing all of NZ’s dairy products. Fonterra processes and markets approximately 95 percent of NZ’s dairy production and 25 percent of NZ’s exports (Woodford, 2008, pp. 4, 8; Fonterra website, www.fonterra.com/nz/en.html). The credit union movements in Australia and NZ, while continuing to develop during this period, were also subject to a raft of amalgamations so that smaller credit unions would survive in an increasingly competitive market. Prior to the 1980s, credit unions in Australia had their own legislative requirements and were provided with tax incentives. However, as the effects of globalization and neo-liberalism hit, in particular the demutualization of producer co-operatives, the privatization of the public sector, and the deregulation of the financial services sector, the need to amalgamate became glaringly apparent, and credit union numbers fell from 549 in 1983 (Catturani and Cutcher, 2015, p. 78) to 88 in 2012 (Denniss and Baker, 2012, p. 14). There were also seven building societies in 2012 and seven mutual banks planned. The combined membership of these organizations was more than 4.6 million (Denniss and Baker, 2012, p. 14). The credit union movement in NZ also continued to grow during this period, but also faced the need for amalgamations in the 1980s. By 1979, when the credit union act was passed, there were 235 credit unions in NZ and over 100,000 members (MacPherson, 1999, p. 127). The number of credit unions peaked at over 300 in the 1980s, following which the smaller ones began to amalgamate by merger or transfer of engagement. There are now around 36 credit unions in NZ (NZCU website, https://nzcuemployees. co.nz/about-nzcu-employees/our-cooperative/our-history). The New Zealand Credit Union League, which changed its name to the New Zealand Association of Credit Unions (NZACU) in 1989, focused its international efforts on supporting the Bergengren School in Fiji, providing scholarships for Fijian and Tongan leaders to attend, as well as New Zealanders. The Australian Credit Union Foundation also remained active in fostering developments in Fiji, Papua New Guinea, the Solomon Islands, and Tonga. Among the Pacific Islands, Fiji’s remained the most important credit union movement, although it was faced with a number of significant challenges during this period, particularly following the death of Father Ganey in 1984. As MacPherson attests, “his death left a void; like a giant oak he had cast a large shadow that made it difficult for a new generation of leaders to develop” (1999, p. 160). Furthermore, Father Ganey’s concern for the creation of small credit unions meant that the movement consisted of 114, largely uneconomic, credit unions in small communities. Droughts, the devaluation of the Fijian dollar, and a military coup further destabilized the movement in the mid- to late 1980s. The movement in Papua New Guinea also faced problems during the 1980s. Like its Fijian counterpart, the movement began the decade with 212 1975 to the present a large number of small societies, mainly in rural areas, but due to inadequate training and lack of managerial expertise, many closed in the latter half of the 1980s, and the number shrank from around 300 to 20; the majority of surviving credit unions were located in Port Moresby. The movement was temporarily placed under the control of the Bank of Papua New Guinea in 1989, which, with government backing and financial assistance from the Australian Credit Union Foundation, restructured the movement, and supported its expansion into metropolitan areas (MacPherson, 1999, pp. 160–161). WOCCU’s 2015 Statistical Report indicates that there were 16 credit unions in Fiji and 20 in Papua New Guinea, serving 12,477 and 244,986 members respectively (WOCCU, 2015). On a national front in Australia, despite the hopes of forming a strong national co-operative organization, state and local concerns dominated the co-operative movement. The CFA remained weak, fluctuated in its level of activity, and became moribund in 1986, while the Co-operative Federation of NSW (CFNSW) formed its own Australian Association of Co-operatives (AAC). The AAC made an unsuccessful attempt to float the idea of reforming a co-operative grocery buying group in the early 1980s, and finally collapsed in 1993 due to financial problems associated with its internal banking services to members, and a number of co-operatives lost funds. The CFNSW was re-formed in the wake of the collapse of the AAC, but restricted its activities to lobbying government agencies and providing advice on legal and financial matters. It joined with other state co-operative associations in 1993 to form a national body, now known as Co-operatives Australia, which performed a similar role at a national level. These peak bodies represent a broader range of co-operatives than just consumer co-operatives. In the wake of the UN International Year of Co-operatives 2012, a new organization called Business Council of Co-operatives and Mutuals was launched in July 2013 to represent the whole sector. One of the main foci of this Council is raising awareness in the community and among politicians and other policy makers of the economic and social significance of the co-operative sector. The Australian Institute discovered in 2012 that

despite the fact that 79 per cent of people are members of a co-op only three in ten Australians could name a co-operative or mutually owned enterprise and only 16 per cent of Australians believe that they are a member of one. (Denniss and Baker, 2012, p. v)

According to the CEO of the Council, Melina Morrison (in an interview with the authors), the strategy consists of four pillars: voice, choice, growth, and networking (co-operation). Voice, according to Morrison, is about increasing awareness and giving voice to a co-operative business sector that was previously unrepresented. It is also about ensuring that the Council is the credible and recognized voice of the sector. Choice is about “making sure that you have parity in the enabling environment for co-operatives,” in other words, the legislative and regulatory regime, in particular 1975 to the present 213 in relation to capital. “Unless we get the capital conundrum sorted, growth and innovation will just continue to be stymied . . . if you starve a sector of capital agil- ity, it’s just not going to be able to compete.” Growth is twofold. First, it refers to BCCM’s objective “to grow the number and prevalence and economic and social contribution of co-operatives and mutuals in the economy.” Second, growth refers to increasing the “credibility and representation of the council through membership.” BCCM began in 2013 with ten members, by mid-2017 they had 50. While 15 of these are associate members, 35 are ‘one member one vote’ members of the council. Morrison explains that

the desire around growth is not to have all 2,000 co-operatives and mutuals members of the council because many of them would be better to deploy their surplus back into their communities, but enough in the council that we can genuinely claim to be a peak body[,] in other words, to be truly representative across all sectors. And finally, networking and co-operation is about two things: “co-operation amongst co-operatives,” and “sharing best practice for growth, innovation, and competitive advantage.” She concludes that these are “the main things that the BCCM does, but the overarching mission is to increase recognition and awareness of the important contribution of co-operatives and mutuals to the economy through those four pillars.”2 The BCCM has played an important role in placing co-operatives on the Australian political agenda. In 2015 there was an Australian senate inquiry into co-operatives and mutuals, with major political parties such as the National Party and the Labor Party adopting its recommendations as party policy, including the collection of national statistics on co-operatives and co-operative education programs (Balnave and Patmore, 2017, p. 17).

International By the early 1990s, WOCCU had developed into a complex organization representing a wide range of interests across 70 countries. It had successfully adapted to the changing economic, political, and social contexts of the 1980s; “an age of ideological divisions to an age of ideological conformity” (MacPherson, 1999, p. 166). Between 1984 and 1992 the number of WOCCU-affiliated societies increased from 38,500 to 71,500, and members increased from 55,750,000 to 92,300,000. The role of president rotated among a broadening number of countries in the 1980s, and the CEO, Al Charbonneau, worked tirelessly to promote greater cohesion within the international co-operative movement during his 11 years in the role (he retired in 1993). Charbonneau’s successor, Chris Baker, and his WOCCU team were faced with the swings in the global economy that were to follow, and the tough decisions of reducing staff numbers, closing the Geneva office, and narrowing the objectives of WOCCU to trade association and international development, with the latter having a focus on savings as opposed to credit. This reflected the co-operative values 214 1975 to the present of self-reliance and self-help, rather than a dependence on credit that might never be repaid (MacPherson, 1999, pp. 170–172). While in 1997 WOCCU represented 36,244 credit unions, serving 89,685,210 members across 85 countries (MacPherson, 1999, pp. 167–168), two decades later it has a reach of 68,882 credit unions across 109 countries with a combined total of 231,205,348 members (WOCCU website, www.woccu.org/impact/global_reach). Also in the credit and savings sector, the EACB has recently looked to expand its reach beyond European co-operative banking groups. While it remains focused on lobbying at the European level, the EACB has recognized the need to “extend its lobbying activities at the G20 level and the international economic and financial institutions international level.” To this end, it welcomed two non-EU members in 2008—the Japanese co-operative bank Norinchukin Bank, and the Canadian group Caisses Desjardins—and signed a Memorandum of Understanding with the WOCCU “in order to lead, where appropriate, common lobbying campaigns at the international level” (EACB Annual Report, 2008). The ICA has shifted headquarters twice since 1975. First, it moved from London to Geneva in 1982. Birchall notes that this signaled “a determination to be at the centre of world affairs, close to the United Nations and next door to the International Labour Organization” (1997, p. 62). In 2016 it moved from Geneva to Brussels. According to the Director General of the ICA, Charles Gould, this move was prompted by a number of factors, including the rising financial cost of being based in Geneva, and that the reasons the ICA had moved there from London were either “no longer clear to the Board, or were at least no longer relevant.” The ICA had enjoyed their close relationship with the ILO. However, continuing this relationship no longer required them to be located in Geneva. Further, it was felt that that the ICA’s UN work “was better served by stationing policy staff closer to the UN headquarters in New York, rather than working with the Geneva office of the UN.” There was a general consensus that the ICA should leave Geneva but remain in Europe, not only because the European Region needed to have its offices in Brussels, but also because this location was convenient to many of the ICA members, including those outside of Europe, who may have reason to visit the headquarters.3 This focus on accessibility for members reflects changes to the ICA dating back to its 1992 Congress when it decided on a new decentralized structure organized around four world regions—Europe, Africa, the Americas, and Asia-Pacific—which continue up to today. It also has eight sectoral organizations—Banking, Agriculture, Fisheries, Insurance, Health, Housing, Consumer Co-operatives, Industry, and Services—and, as of August 2017, it represents 303 members across 105 countries. These members include national co-operative federations, individual co-operatives, organizations that support co-operatives, and co-operative-related government offices (ICA website, https://ica.coop/en/international-co-operative-alliance). Perhaps the biggest boost to the international co-operative movement over its long history occurred in 2009 when the UN declared 2012 as the International Year of Cooperatives (IYC). The United Nations General Assembly Resolution A/RES/64/136 encouraged 1975 to the present 215

all Member States, as well as the United Nations and all other relevant stake- holders, to take advantage of the International Year of Cooperatives as a way of promoting cooperatives and raising awareness of their contribution to social and economic development. (UN, 2010)

With the theme of ‘Cooperative Enterprises Build a Better World,’ the year sought to build public awareness of the strength of the co-operative business model as an alternative means of doing business and “highlighting the contribution of co-operatives to socio-economic development, particularly their impact on poverty reduction, employment generation and social integration” (UN website, https://social.un.org/coopsyear/index.html). The ICA website provides readers with the range of activities organized by the ICA and national, regional, and local co-operatives in celebration of the 2012 IYC (https://social.un.org/coopsyear/ about-iyc.html). The main objectives of the IYC were to:

Increase public awareness about co-operatives and their contributions to socio-development . . . Promote the formation and growth of co-operatives among individuals and institutions to address common economic needs and for socio-economic empowerment . . . Encourage Governments and regulatory bodies to establish policies, laws and regulation conducive to co-operative formation and growth. (UN website, https://social.un.org/coopsyear/objectives-of-the-year.html)

The ICA recognized the IYC as more than just an opportunity to celebrate, and as a chance to “really refocus the global co-operative movement around a common agenda.”4 There is no doubt that the IYC was about reflecting and celebrating what the international movement has accomplished, but according to Charles Gould the ICA could also use the

opportunity to really see if we could agree among global leaders on what were our priorities for, say, a decade-long horizon so we can move from this one year of celebration to really a decade perspective. That led us to develop the blueprint for a “co-operative decade,” which our membership then approved at the end of that international year.

He was referring to the Blueprint for a Co-operative Decade (2010–2020) which aims for co-operative businesses to become: (1) the acknowledged leader in economic, social, and environmental sustainability; (2) the model preferred by people; and (3) the fastest growing form of enterprise.5 The ICA identified five areas where significant change was required to take advantage of potential opportunities (participation; sustainability; co-operative message and identity; legal frameworks; capital). According to Gould, participation in the form of voice was a key theme. 216 1975 to the present

People were feeling so disconnected from these large institutions that dominated their lives, whether they’re business or social. We were seeing the effects of the global recession still continuing. There was hope of a New York spring at that time. There was this Occupy Wall Street idea that spread to a number of western cities.

In Gould’s view, people were tired of “large multinational corporations controlling their lives,” banks being the particular “iconic image” of this. Co-operatives, on the other hand, give members a chance to have a voice, be heard, and make a difference. The ICA was also intrinsically aware of the importance of sustainability, “the idea that increasingly each generation is more aware of the importance of how you do business, how you conduct your lives, how you build products.”6 The third issue raised in the Blue Print is that of communication, in other words raising awareness of the co-operative model and its social and economic value. The ICA recognizes that despite the achievements of co-operatives globally, the co-operative model is neither relatively well known nor understood. This is partly due to the lack of education in business schools around the world (Kurimoto, n.d.; Patmore and Balnave, 2015). As Gould says,

It doesn’t really accomplish our goals of expanding the co-operative model if people aren’t aware of it . . . we have this model that we think is very timely and yet it’s not well known. So as young people start businesses, they don’t share about the co-operative. They start some other model.

The legal and capital environments are the other two areas that the ICA felt were important if co-operatives were to be successful; making sure co-operatives are at least playing on a level playing field “but also that you have recognition of what makes your co-operative unique so you’re not trying to pitch yourself with a multinational corporate business structure.” The need for co-operative capital (capital that does not undermine member control) for growth is the final issue. In September 2017 the ICA was “delighted to see progress in each of those areas.”7

Conclusion Since 1975 the co-operative movement has continued to face both opportunities and challenges. The end of postwar prosperity saw the collapse of consumer co- operative movements in Australia, NZ, and the USA. Those in parts of Europe recognized the need for mergers but, while these were successful in Italy, and ultimately the UK, those in other countries were unable to overcome the pressures of the new competitive environment and/or allegations of poor and corrupt management structures, and fell into permanent decline. The rise in neo-liberalism, with its emphasis on small government, individualism, and the superiority of free markets, brought mixed fortunes. On the one hand, it fueled the push to demutualization of agricultural and banking co-operatives in some regions of the world. 1975 to the present 217

On the other, in parts of Africa and Asia, the new liberalized economy presented opportunities for co-operative movements to detach themselves from state control, and restructure around their own bottom-up agenda, with a focus on serving their member’s needs and interests first and foremost. While there have been challenges, the international co-operative movement has survived and adapted to societal changes since the mid-1970s. Financial co-operatives such as credit unions have continued to grow, and new forms of co- operatives have emerged around organic and local food movements and energy, along with social co-operatives, such as those in Italy. The UN International Year of Cooperatives in 2012 provided the international movement with a significant opportunity to highlight the economic and social significance of co-operatives in all parts of the world, and to refocus the global co-operative movement around a common agenda. It, along with a disillusionment with neo-liberalism in the wake of the GFC, has increased interest in co-operatives as an alternative business model in a number of countries, such as Australia, where MOBs are now organized and represented at the national level, and are facing a more favorable political climate.

Notes 1 Ed Mayo, Secretary-General, Co-operatives UK. Interview with Greg Patmore, September 6, 2016. 2 Melina Morrison, CEO, Business Council of Co-operatives and Mutuals. Interview with Greg Patmore and Nikola Balnave, March 23, 2017. 3 Charles Gould, Director-General, International Co-operative Alliance. Email correspondence with Nikola Balnave, September 21, 2017. 4 Charles Gould, Director-General, International Co-operative Alliance. Interview with Nikola Balnave, September 7, 2017. 5 See https://ica.coop/sites/default/files/media_items/ICA%20Blueprint%20–%20Final% 20version%20issued%207%20Feb%2013.pdf). 6 Charles Gould, Director-General, International Co-operative Alliance. Interview with Nikola Balnave, September 7, 2017. 7 Ibid.

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Co-operatives have a long and remarkable history in all regions of our world. They present a business model that has been tried and tested for well over a century, and despite a legacy of both success and failure of various forms of co-operatives, the model and co-operative principles remain relevant to all sectors, and in all countries. As this book has demonstrated, co-operatives have made a significant contribution to the economic and social development of communities in all parts of the globe since the mid-1800s, and remain an important part of business activity today. They differ from other types of businesses in many respects, but in particular in their principle that one member has one vote irrespective of their number of shares, and that their focus is on members and the communities they serve rather than on external investors, as occurs with an IOB. The success or failure of co-operatives can be influenced by many factors, including the failure of markets to serve the needs of individuals, periods of political and social unrest, immigration, government policies, and community support. However, co-operatives are not just passive reactors to their changing environment. They have agency, as shown in the political mobilization and organization in the UK during the mid-nineteenth century that provided a favorable legal environment for their further development and growth, and in more recent times the formation of national or apex bodies. Argentina also provides an example of people themselves being proactive in relation to the creation of worker co-operatives. However, there are also factors that weaken co-operatives, including competition from the non-co-operative sector, anti-democratic governments, and unfavorable ideologies such as neo-classical economics. Despite these setbacks, co-operatives have a capacity to develop and take on different forms as circumstances change. However, individual co-operatives can fail like any other business if they are poorly managed. Conclusion 223

The birth of the modern co-operative movement is linked to the industrial revolution, particularly in the UK, where there was a major upheaval of traditional life and growing inequality among the rising army of industrial workers and their families. The early period highlights two approaches to the development of the co-operative movement. One approach involved creating a ‘New Moral Order’ through co-operative communities such as Orbiston in Scotland and New Harmony in the USA. Another approach was to work within capitalism to improve the conditions of working life through establishing consumer-owned stores or worker co-operatives. These two approaches remained themes in co-operative thinking well beyond this period. While the formation of the Rochdale consumer co-operative was a landmark in the international history of co-operatives, it drew upon a rich earlier history of co-operatives that included flour and bread co-operatives in England, and a wave of co-operatives in Great Britain and Ireland inspired by Owen and King from 1826 to 1834. While this wave collapsed there was continuity, with some societies surviving, and new societies forming between 1834 and 1844. These co-operatives followed many of the practices and principles that the Rochdale consumer co-operative pioneers viewed as the cornerstone of their co-operative business model. The period from the foundation of the Rochdale consumer co-operative to the formation of the CWS highlighted several features of the emerging international co-operative movement. In the UK the emphasis on establishing co-operative communities shifted to the formation of consumer co-operatives that served members needs regarding unadulterated consumables, with the benefits of a dividend on purchases, interest on capital, and democratic participation in the organization. Consumer co-operatives do well where there is a strong sense of occupational community and locality. They develop at a time of increasing living standards, particularly for the skilled working class, and in broadening domestic markets. The Rochdale pioneers were strong promoters of their co-operative model, assisted by the introduction of the penny post, sympathetic newspapers, and the seminal work of Holyoake. They expanded through diversifying their products, establishing branches through vertical integration into manufacturing, and by the establishment of the CWS on a federal model after several unsuccessful attempts. They also shaped their own environment through political lobbying to ensure favorable legislation. While production co-operatives did exist they did not develop into worker co-operatives, as investor members were necessary for capital, and workers were denied bonuses for their participation in the co-operative. Beyond the UK, developments highlighted that co-operative models could appeal to a broader range of people than just workers. These included farmers and the operators of small businesses, and took a variety of forms. In France worker co-operatives were more significant, particularly during the revolution of 1848. In the wake of major changes in German society, which saw the breakdown of the craft guilds and land ownership, and the turmoil of poor harvests in 1846–1847 and the 1848 revolution, financial co-operatives arose to meet the credit needs of 224 Conclusion farmers and artisans trying to deal with increased competition and the pressures of industrialization. Dairy farmers in the USA turned to co-operatives to pool their resources and avoid agents, and Italian workers developed their own version of the Rochdale model. Immigrant workers brought their ideas about co-operatives to North America and Australasia, with the local environment shaping the form that co-operatives took. The period from 1864 to 1914 witnessed the development of many of the underlying features of the modern co-operative movement. Industrialization, technological changes, market failures, occupational identity, colonialism, immigration, and social unrest encouraged the formation of co-operatives by workers, farmers, and small business owners. British consumer co-operatives moved into a wide range of activities, including wholesaling, factory production, housing, insurance, and banking. They lobbied for favorable legislation that assisted their expansion. The CWS developed an international trade network that included shipping, overseas depots, and tea plantations in India and Sri Lanka. They adopted the principle of consumer sovereignty. This overrode the interests of their employees in participating in the benefits of co-operation through profit sharing, and retarded the development of agricultural and financial co-operatives. British consumer co- operatives developed a culture built round local co-operatives, with the CU and WCG promoting education and political engagement. British co-operators played a significant role in the formation and early operations of the ICA. While the British developed a strong consumer co-operative movement, other countries took different paths. In Denmark, farmers in small rural communities—not workers—took the lead in establishing consumer co-operatives. Financial co-operatives dominated the co-operative landscape in countries such as Germany, India, Japan, and Russia. Denmark became an international center for the spread of dairy co-operatives. Agricultural co-operatives played a crucial role in Ireland and in settler economies such as Australia, New Zealand, Canada, the USA, and South Africa. The period from the outbreak of the First World War to the end of the Second World War saw the extension of co-operation throughout the world and the consolidation of the ICA. While the First World War enhanced the reputation of consumer co-operatives in terms of the distribution of essential foodstuffs and the fight against profiteering by private businesses, the rise of fascism and the destruction resulting from the Second World War devastated consumer co- operatives in many European, Asian, and Pacific countries. While consumer co-operatives dominated the UK movement, other forms of co-operatives dominated elsewhere, such as with agricultural co-operatives in the USA and Canada, and financial co-operatives in India. Favorable legislation in the USA during the 1920s assisted the growth of agricultural co-operatives. Among financial co- operatives credit unions grew in the USA and by 1941 were moving towards an international organization that would eventually rival the ICA. However, the Second World War did place limits on financial co-operatives such as credit unions, which went into a temporary decline in the USA as governments prioritized the war effort as a destination for citizens’ savings. Conclusion 225

While the two World Wars had mixed blessings for the co-operatives, the economic and political uncertainties of the Great Depression led to a questioning of capitalism, and a need for an alternative way to obtain access to goods and services. There was an upsurge of interest in consumer and financial co-operatives in Australia, Canada, and New Zealand. The Great Depression inspired President Roosevelt’s ‘New Deal,’ thereby providing a favorable climate in the USA for the expansion of agricultural co-operatives, credit unions, and electricity co-operatives. Colonialism and religion played an important role in the international expansion of co-operation, particularly in the British Empire. The Indian model of financial co-operatives provided the basis for co-operative legislation in British colonies or mandated territories, such as Kenya and Palestine. While this legislation only applied to European settlers, co-operative legislation could be used to incorporate indigenous movements, as in Kenya where it challenged colonial authority. Outside the British Empire, the Japanese in Korea imposed their co-operative model to accelerate economic development while suppressing an indigenous co-operative movement that was linked to independence. Against the background of the Great Depression, the Catholic-inspired Antigonish movement played a key role in the expansion of co-operatives in eastern Canada and the Caribbean. Opposition to the growing co-operative movement existed. Small private retailers saw the rise of co-operatives and chain stores as a threat to their businesses as they could not take advantage of economies of scale in purchasing goods. This opposition manifested itself in campaigns against tax advantages for co-operatives, and fueled small business support for extremist political parties, particularly where the co-operative movement had links to left-leaning political parties. One notable response to the opposition of the small private retailers was the formation of a Co-operative Party in the UK. Totalitarian governments, in their efforts to control economic activity and create a one-party state—as occurred in Germany, Italy, and the USSR—disliked the autonomy and democratic principles of co-operatives. Yet, even in such democratic regimes as Australia, Norway, and the UK the state suppressed and weakened the activities of co-operatives through the establishment of state instrumentalities to market agricultural goods. Despite international upheavals, the co-operative movement survived internationally but remained largely European, with the ICA dominated by consumer co-operatives. Since the end of the Second World War co-operatives have weathered the postwar boom and the more volatile economic climate since the 1970s, with the GFC being a recent example. While consumer co-operative movements generally collapsed in a number of countries, including Germany, the USA, and New Zealand, they have survived in others, such as the UK, and even prospered in countries such as Italy and Japan. The co-operative movements that survived generally moved towards centralization and more integrated supply chain management to compete with non-co-operative supermarket chains. There has also been 226 Conclusion a resurgence in food co-operatives as an alternative to mainstream supermarket chains, and a growth in financial co-operatives as conventional financial markets failed to meet growing consumer demand for financing the purchase of consumer goods and housing. Since the 1970s there has been a move towards the centralization of financial co-operatives such as credit unions, however, financial crises such as the GFC have highlighted the advantages of MOBs compared to IOBs in following more prudent financial practices. The end of the postwar boom fueled the push to neo-liberal economic policies, which challenged traditional collective responses to market failure, such as co-operatives and trade unions. Deregulation and the opening of national markets further fueled economic uncertainties and created financial pressures for co-operatives in many countries, including Argentina and New Zealand. This drove the push to demutualization, which impacted particularly on agricultural and financial co-operatives. Asian and African co-operatives in former colonies, which had become extensions of the state after decolonization, were reorganized to reduce their dependence on the state and to be more responsive to the market, they thereby survived, and developed a more bottom-up structure that was responsive to members’ needs. Alongside the rise of neo-liberalism was the collapse of Soviet communism, which saw the end of the Soviet model of co-operatives in Europe, and provided opportunities for co-operatives such as credit unions to provide finance for members in uncertain financial markets. Neo-liberal policies provided opportunities for co-operatives in Argentina and Italy. Extreme state neo-liberal reforms, and a consequent rising unemployment in Argentina during the 1990s and 2000s, fueled worker co-operatives, while the development of social co-operatives in Italy provided a way of bringing services to the disadvantaged in a climate of reduced public expenditure on social services. Since the Second World War co-operatives have become truly international, with a shift away from Europe. One impact of this is the rise of the credit union movement, with the international organization being headquartered in the USA. The ICA, while still headquartered in Europe, has regional offices throughout the world, and a membership no longer dominated by European co-operatives. International agencies such as the UN have further promoted the significance of co-operatives worldwide, particularly in economic development. The UN International Year of Co-operation in 2012 raised international awareness of the co-operative business model, and has had a major impact in at least one country, Australia, where the organizational and political environment of co-operatives has been enhanced. As we approach 2020, and the end of the co-operative decade, where to from here? For those in the movement, it comes back to a continuing growing awareness that co-operatives offer an alternative business model. As Charles Gould states, “I don’t think there’s any reason for us to denigrate capitalism or multinational corporations or family-run businesses, or government-owned enterprises. It’s great Conclusion 227 that we are part of a big diverse economy in a diverse world, but the co-operative is a very specific model and a very strong model proven over a century. I think that’s a very positive message at a time when the world needs positive messages.”1 The history presented in this book would agree with this assessment.

Note 1 Charles Gould, Director-General, International Co-operative Alliance. Interview with Nikola Balnave, September 7, 2017. INDEX

Abdel Aal, M.H. 164 171, 180; 1975–present 8, 191–192, Ace Hardware, USA 6 197–198, 199, 202–203, 204, 210–211; activism 58, 169 Africa 162, 202–203; Argentina 139; Adelaide Co-operative 175 Asia 165–166, 203–204; Australia Adloff, R. 103, 162 and NZ 141–142, 210–211; Belgium adulterated food, avoiding 3, 29, 30, 36, 54 95, 191; Canada 9, 17, 65, 138, 180, advertising 5, 120, 121, 169 199; Co-operative Wholesale Society Afghanistan 206 (CWS) 77; definition of a co-operative Africa: 1864–1914 76, 103–105; 2; Denmark 90, 94; Europe 94–95, 1914–1945 127–132; 1945–1975 156, 121, 126, 160; Finland 95; France 191; 161–165, 178–179, 180; 1975–present Germany 116, 125, 127, 191; Great 188, 200–203; agricultural co-operatives Britain 87, 117, 121–122, 125; and the 162, 202–203; consumer co-operatives ICA 107; India 128–129; Intercoop 103, 104, 164; credit unions 27, 180; international trade relationships 164–165, 180, 202–203; dairy 145–146; Ireland 86, 87; Japan 131, co-operatives 202; financial 180; Korea 131; New Zealand 65; co-operatives 103, 130, 202–203; overview 4; Palestine 129; pre-industrial and the ICA 178–179; parastatal co-operatives 9, 34; SCWS 80; South co-operatives 12; pre-industrial Africa 103, 129–130, 165; types of co-operatives 27 see also individual co-operatives 8–9, 12; US 97–98; USA countries 63, 98, 133, 135, 136, 137–138, 169, Afrikaner nationalist movement 130 171, 197–198; USSR 123 agrarianism 121 Agricultural Wholesale Society 121 Agricultural and Horticultural Association 87 Ainsworth, Manchester (UK) 72 Agricultural Co-operative Association 160 AirBNB 11 agricultural co-operatives: 1844–1864 Akers, P. 78 17, 63, 65; 1864–1914 16, 77, 80, Albania 178, 193 86, 87, 90, 94–95, 97–98, 103, 107, Albaum, M. 164 224; 1914–1945 16, 114, 116, 117, alcohol 31, 35, 37, 41, 81 121–122, 124–125, 126, 127, 128–130, Aléx, P. 119 131, 133, 135, 136, 137–138, 139, Alexander, Albert 127 141–142, 145–146, 224; 1945–1975 Alfalfa House, Sydney 209 160, 162, 163–164, 165–166, 169, Algeria 103, 127 Index 229

All-American Co-operative Commission 133 Atherton, J. 3 Alley, Rewi 132 Atlas Ironworks Company 52 alternative food co-operatives 188 audits, financial 93 Amalgamated Clothing Trades Union 135 Australia: 1844–1864 64–65; 1864–1914 Amalgamated Society of Engineers (ASE) 15, 71, 100–102; 1914–1945 16, 51, 52, 82 115–116, 123, 140–144; 1945–1975 Amalgamated Union of Co-operative 141–142, 145, 175–177; 1975–present Employees (AUCE) 79, 85, 117, 120 188, 207–211; agricultural co-operatives American Federation of Labor (AFL) 132, 141–142, 210–211; banking 102; 133, 134 building societies 102, 143, 211; American Institute of Co-operation consumer co-operatives 64–65, 133–134 100–101, 140, 141, 142, 175–176, 208; Americanization 188 credit unions 143, 176, 211; and the annual dinners 85 CWS 145; dairy co-operatives 176; anti-co-operative literature 88 see also financial co-operatives 102, 143; health oppositions to co-operatives mutuals 13; hybrid business models anti-democratic movements 18 14; pre-industrial co-operatives 29; Antigonish movement 16, 136–137, 139, producer co-operatives 101–102 140, 164, 173, 174, 225 Australian Association of Co-operatives anti-socialism 92 (AAC) 212 Antsiferov, A. 89, 90, 93, 118 Australian Credit Union Foundation 211, 212 apartheid 165 Australian Producers’ Wholesale apex organizations 201–202 see also peak Co-operative Federation 146 co-operatives Austria 90, 94, 107, 120, 125, 127, 144, apprenticeships 40 145, 190–191 Arab co-operatives 129 Ayris, C. 142 Arbuckle, G.A. 177 Argentina: 1864–1914 99–100, 116; Bab, J.G. 10, 30, 88 1914–1945 139–140, 145; 1945–1975 bacon industry 70, 75, 76, 94 173, 180, 226; 1975–present 15, Bacup consumer co-operative 55 199, 200 Bader, Scott 161 Arizmendi, José Maria 161 Bailey, Jack 164 Arkwright, Richard 28 bail-outs 188, 205 Arla Foods 191–192 Baker, Chris 214 Aschhoff, G. 26, 61, 62, 93, 121, 125, 127, 160 Baker, D. 211, 212 Ashworth, Samuel 41 bakeries, co-operative 29–30, 59, 62 see also Asia: 1914–1945 127–132; 1945–1975 flour and bread societies 156, 165–168; 1975–present 203–207; Ballin, Nicolas 89 agricultural co-operatives 165–166, Balmain co-operative, Sydney 101, 140 203–204; consumer co-operatives Balnave, N. 2, 3, 4–5, 6, 7, 8, 9, 11, 13, 166–167, 204; credit unions 27, 168, 180, 14, 15, 17, 60, 65, 91, 100, 101, 115, 204, 206–207; financial co-operatives 71, 116, 119, 122, 123, 139, 140, 141, 142, 168; and the ICA 178–179 see also specific 143, 159, 175, 176, 191, 207, 208, 209, countries 213, 216 Asiwaju, A.I. 103 Bamfield, J.29 , 30 Aspatria Agriculture Co-operative Society 87 Bamford, Samuel 84 asset seizures 18 bananas 139 Associated Co-operatives (AC) 195 Bangladesh 166, 168 Association of All Classes and All Nations 39 banking: 1844–1864 61–62; 1864–1914 Association of Asian Confederation of 82–83, 84, 88, 93, 94; 1945–1975 160, Credit Unions (ACCU) 168 161; 1975–present 192–194, 198, 200, Association of Working Tailors 51 214; Argentina 200; Australia and NZ Associationist formula 63 102; Canada 192; Co-operative Bank Associazione Artistica Vetraria 60 11, 123, 124, 188, 189, 190, 193–194, 230 Index

198; co-operatives and other business board members 12–13, 37, 74 models 13; and financial co-operatives bogus co-operatives 133 11; Germany 121; India 105; Bonthron, David 100 International Co-operative Bank 144, Bonus Loan Funds 80 180; international networks 214; Italy bonuses 77–78, 80, 81 123; Rochdale 48; South Korea 204; bookselling 48 USA 198; USSR 123 Borzaga, C. 11, 194 bankruptcies 119, 197, 205 Bowen, E.R. 135, 137 Barbados 99, 173 boycotts 6, 56, 93, 101, 106, 117, 120, Barossa Co-operative Supermarket 208 169, 195 Barrowman, James 81 Boyd, R. 16 Barton, D. 9, 12 Brand, S. 194 Basel Congress 144, 145 brands, co-operative 85, 190, 191 Battilani, P. 1, 15, 18, 39, 60, 91, 115, 119, Brazda, J. 120 122, 123, 155, 157, 159, 188, 191 Brazil 99, 140, 173–174, 200 Belarus 193 bread, as focus 92, 139 Belgium: 1864–1914 89, 90, 91–92, 94, bread societies 29 see also bakeries; flour 95; 1914–1945 116, 123, 124, 126, and bread societies 127, 144, 146; 1945–1975 157, 162; Bridgeton Society 30 1975–present 191; organization along Brierley, Eliza 42 religious/ political lines 4, 16 Brighton Co-operative Society 33, 35, 38 Belize 139 Brighton District Society 32 Beluze, Jean-Pierre 60 Brisbane, Albert 63 Bemis, E.W. 63, 65, 96, 97 Brisbane Co-operative Society 64–65 Bendix, R. 28 British Association for the Promotion of Bergengren, Roy 134, 136, 177, 180, 211 Co-operative Knowledge 33 Berkeley Buyers Group 136 British Confederation of Co-operative Berkeley Co-operative 5, 169, 170, Youth 120 194–195 British Honduras 139, 173, 177 Berkeley Historical Society 11 Brook Farm Community, Boston, Bermuda 145 USA 63 Bijman, H. 204 Brotherhood Economics (Toyohiko Kagawa, Birchall, J. 2, 3, 4, 6, 7, 8, 9, 10, 12, 13, 1934) 16 14, 16, 17, 18, 26, 27, 28, 30, 32, 33, Bryan, William 33, 38 35, 39, 40, 41, 42, 43, 48, 54, 55, 56, Buchez, Philippe 38, 51 58, 60, 61, 62, 70, 71, 76, 77, 78, 84, Buckley, K. 143 85, 89, 92, 94, 95, 97, 98, 99, 103, building societies 10, 30, 38, 82, 88, 102, 105, 106, 115, 116, 118, 120, 121, 143, 176, 211 124, 126, 127, 128, 129, 130, 132, Bulgaria 126, 145, 146, 180 135, 137, 138, 142, 145, 156, 157, Burkina Faso 27, 164 158, 159, 161, 162, 163, 164, 165, Burma 128 166, 167, 172, 173, 178, 180, 188, Burundi 162 189, 191, 194, 196, 197, 198, 199, Bury consumer co-operative 55, 72 206, 214 Bury Redemptorists 51 Birkbeck Building Society failure 88 Business Council of Co-operatives and Birmingham, UK 30, 33, 34, 39 Mutuals 212–213 Birmingham Equitable Labour Exchange 34 business services, provision of 82 black markets 116 Butt, J. 55, 56, 79, 81, 83, 84, 103 Blanc, Louis 39, 51, 60 butter 12, 17, 58, 70, 75–76, 86, 94, Blatchley, Cornelius 36 101–102, 146 see also dairy Blaydon consumer co-operative 55 co-operatives Blue Ball Club 30 ‘buy local’ campaigns 17 Blue Print for a Co-operative Decade buyers’ clubs 4, 64 215–216 buying groups 158, 166, 189, 212 Index 231

Cameron, J. 137 charity giving 42, 190, 196, 206 Campbell, Alexander 42 Chartist movement 29, 35, 41, 42, 51, 58 Canada: 1844–1864 65; 1864–1914 76, 80, Chatham Docks 29 97–99; 1914–1945 115–116, 136–137, Chen, Y. 132 138, 145; 1945–1975 169–171, 180; Chicago School of Economics 18 1975–present 192, 198–199, 214; childcare co-operatives 205 agricultural co-operatives 9, 65, children’s activities 85 138, 180; banking 192; consumer Chile 200 co-operatives 65, 97–98, 137, 198–199; China 115, 131–132, 155, 166, 167–168, credit unions 16, 137, 171–172, 188, 203–204 180, 199; and the CWS 145; depots China International Famine Relief of SCWS 80; and the EACB 214; Commission (CIFRC) 131–132 financial co-operatives 98–99, 171; Chinese Industrial Co-operatives (CIC) 132 grain elevators/ wheat silos 17; spread of Christian Socialist movement 32–33, co-operative ideas 16 51–52, 53, 54, 57, 77, 82, 94, 131 Cape Verde 203 Christianity 32–33, 62, 136 see also Catholic capital: capital withdrawals 6; consumer Church; Protestant Church; religion co-operatives 4; crucial problem of Christiansen, N.F. 89, 90, 91 working class accumulation of 55; financial citizen’s co-operatives 166, 205 co-operatives 9–10; from philanthropy 62; Clegg, J. 115, 132 Rochdale consumer co-operative model Clint, Alf 16, 175, 177 48; worker co-operatives 7–8 Coady, Moses 136, 137, 138 Caribbean 139, 173 coalmining 6, 26, 56, 65, 74, 77, 100–101, Carpenter, W. 34, 41, 43 141, 175 Carr-Saunders, A.M. 3, 6, 124 Cobden, Alfred 103 cartels 145 cocoa 16, 164 Caruana, M. 139, 173, 200 coconuts 143 cash trading principle 3, 4, 85, 96 coffee 16, 58, 128, 129, 146 Catanach, I.J. 105, 128 Cogeca 160–161, 192 Catholic African Union 130 Cold War 155–156, 168, 174, 178 Catholic Church: 1864–1914 15–16, 85, Cole, G.D.H. 2, 3, 11, 29, 30, 31, 33, 91, 92, 94, 95, 98; 1914–1945 122, 34–35, 39, 40, 41, 43, 48, 49, 50, 51, 134, 139; 1945–1975 164, 173, 174, 52, 53, 54, 56, 57, 58, 71, 72, 74, 77, 177; 1975–present 200; Antigonish 78, 79, 80, 81, 82, 83, 84, 85, 86, 88, movement 16, 136–137, 139, 140, 114, 117, 119, 120, 122, 124, 126, 164, 173, 174, 225; pre-industrial 144, 146 co-operatives 42 collectivism 103, 122 Catturani, I. 94, 122, 123, 176, 211 Colombia 140 Central Board 82 colonialism 15, 16, 27, 71, 76, 102, 103, Central Co-operative Agency (CCA) 57 105, 129, 156, 225 central laboratories for testing 117 commercial licenses 93 Central Union of Co-operative Societies of Committee for the Promotion and Japan (CUCSJ) 105 Advancement of Co-operatives 179 centralization 124, 225, 226 Committee of Professional Agricultural Centrosoyus (All Russian Union of Organisations (Copa) 160, 192 Consumer Societies) 123, 145, 178 Common Agricultural Policy 160 cereal banks 103 see also agricultural Common Wealth 175 co-operatives; wheat Commons, J.R. 31 Cesio, Giuseppe 60 communism 18, 115, 132, 145, 156, 180, Ceylon 105, 115, 166 188, 226 Chaddad, F. 197 community concern, principle of 4 chain stores 156, 169, 195, 199 community co-operatives 11–12, 36–37, Chan, K. 132, 167, 168, 188 39, 50–51, 58, 63, 129 see also village Charbonneau, Al 214 co-operatives 232 Index

Community Memory Project, California 11 Japan 131; Korea 131; loans by CWS community retail consumer co-operatives 83; overview 4–12; pre-industrial 4–5 see also retail consumer co-operatives 38, 39; role of factory co-operatives trades in 89; Russia 118; South Africa company law 28 165; South Korea 205; survival of competition: 1945–1975 155; chain and 17; USA 64, 95, 96, 97, 133, 134, ‘dime’ stores 119, 175; international 135, 137, 168–169, 195–196; USSR non-co-operative subsidiaries 13; 123; workers of 6 see also Rochdale between local co-operatives 48, consumer co-operative model; 72, 124, 176; New Zealand 140; wholesale consumer co-operatives from non-co-operative businesses 6, consumer revolution 156–157, 170 18, 76–77; post-Great Depression consumer sovereignty 224 123–124; retail consumer co-operatives consumerism 155 119, 156–157, 158, 168, 175; threats of Consumers Advisory Board 135 co-operatives 56–57 Consumers’ Co-operative of Berkeley 136 compulsory co-operative membership 118, Consumers’ Co-operative Refineries 123, 163 Limited 138 computer technology 5 conversions into co-operatives 161 see also Comrade Circles 120 mutualization Confederazione Nazionale delle Cooperative 122 Cook, I.G. 115, 132 Congress Youth League 165 Cook, M.J. 197 conscription 117 Co-op City 172 conservative co-operatives 92 Co-op Zentrale AG 158, 190–191 consumer activism 169 Cooper, D. 194 consumer communes 123 Cooper, William 41, 54 consumer co-operatives: 1844–1864 54, co-operation among co-operatives 4, 213 55–56, 60, 62, 64–65; 1864–1914 see also federations of co-operatives 71–81, 83, 89–91, 92, 95, 96, 97–98, Cooperativa Obrera Limitada (CO) 100–101, 103, 104, 107; 1914–1945 139, 200 114–121, 123–128, 131, 133, 134, Co-operative and Mutual Enterprises 13 135, 137, 140, 141, 142, 144, 145, Co-operative Bank 11, 123, 124, 188, 189, 224, 225; 1945–1975 155–161, 164, 190, 193–194, 198 165, 166–167, 168–169, 170–171, Co-operative Bulk Handling (CBH) 142 175–176; 1975–present 188, 189–190, Co-operative Central Exchange 15 191, 195–196, 198–199, 200, 204, Co-operative College 120–121 205, 208; Africa 103, 104, 164; Co-operative Commonwealth 12, 92 Argentina 200; Asia 166–167, 204; Co-operative Commonwealth Foundation Australia and NZ 64–65, 100–101, (CCF) 138–139 140, 141, 142, 175–176, 208; Belgium co-operative commonwealths 12, 63, 92 116, 126; Canada 65, 97–98, 137, Co-operative Congresses 33–34, 41, 57, 198–199; collapse of 188; competition 82, 85, 86, 105–106, 120, 144, 145, with agricultural 124; conclusions 165, 178, 179–180, 181, 214 on 223, 225; and credit provision Co-operative Consumer 132 3; definition of a co-operative 2; co-operative development decade Denmark 91; as distribution centers 179, 215 for rationed food 114–115, 127; Co-operative Federation of Australia Europe 89–91, 118, 119, 126, (CFA) 143, 212 156–161; Finland 95, 123; formation Co-operative Federation of NSW of 4; France 39, 60, 120, 157; (CFNSW) 212 Germany 62, 64, 91, 92, 115, 116, Co-operative Federation of Western 119, 123, 125, 127, 158; Great Britain Australia (CFWA) 142–143 55–56, 71–81, 117, 120–121, 127; Co-operative Financial Services (CFS) 194 and the ICA 107, 144, 145, 225; India Co-operative for American Remittances to 128; Italy 91, 114–115, 119, 159, 191; Europe (CARE) 137 Index 233

Co-operative Group (UK) 188, 190, 194 copra 143 Co-operative Independent Commission 158 corruption 156, 163–164 Co-operative Information Service 175 cottage industry co-operatives 203 Co-operative Insurance Society (CIS) Cotton Famine 48, 50, 55 83–84, 189, 194 Country Life Commission 98 Co-operative Investment Society 80–81 Cowan, H.I. 139, 144, 145, 146 Co-operative League of the United States Cramlington, Newcastle, UK 56–57 of America (CLUSA) 11, 132–133, 134, cream separator technology 17, 94, 101 135, 137, 169, 198 creameries, co-operative 9, 63, 86, 87, 98, Co-operative National Fascist Organization 101–102, 103, 122, 124–125 (Ente nazionale fascista per la cooperazione) 123 credit: Australia 175; cash trading Co-operative News 81–82, 84, 141, 175 principle 3; early origins of Co-operative Ordinances 129, 176, 177 co-operative movements 42; financial Co-operative Party 3, 117–118, 120, 124, co-operatives 9–10, 14; Germany 127, 164, 225 61, 93; India 128; loans by CWS Co-operative Permanent Building Society 83; provision of 85; in US consumer (CPBS) 88 co-operatives 96 Co-operative Press 124 Crédit Mutuel D’Alger 103 Co-operative Productive Federation (CPF) Credit Union League 161 78, 124 Credit Union National Association Co-operative Republic 92 (CUNA) 136, 145, 171, 172, 173, 174, Co-operative Retail Service 189 180, 198 Co-operative Service (League of Nations) 144 Credit Union Service Organization Co-operative Union and Wholesale (CUSO) 198 Society (CUWS) 141 credit unions: 1844–1864 61; 1864–1914 Co-operative Union (CU) 82, 84, 86, 87, 99; 1914–1945 15, 131, 133, 134, 105, 158, 177, 189, 224 139, 143, 144–145; 1945–1975 161, Co-operative Union of America 96 164–165, 168, 169, 171–172, 173, Co-operative Union of Canada 97 176, 177, 180; 1975–present 193, 198, Co-operative Wholesale Society (CWS): 199–200, 202–203, 204, 206–207, 1864–1914 71–81, 82–88, 104; 211–212, 226; Africa 27, 164–165, 1914–1945 117, 118, 120, 121, 124, 202–203; Argentina 139; Asia 27, 127, 145–146; 1945–1975 158; banking 168, 204, 206–207; Australia and NZ 11, 82–83, 84, 145; conclusions on 143, 176, 177, 211; Canada 16, 137, 224; co-operatives of co-operatives 171–172, 180, 199; centralization 226; 11; CWS Retail 189; depots outside financial co-operatives precursors of 10; Britain 76; formation of 6, 58, 223; Germany 61; international organization international trade relationships 180; international organization of 145–146; mergers 189; People’s co-operatives 144–145; Korea 131; Co-operative Society 74; production Latin America 199–200; Pacific Islands of basic products 76–77; Retail Society 211–212; pre-industrial co-operatives 124; Second World War 127; in South 27; South Korea 204; USA 99, 133, Africa 104; tourism 77 134, 136, 137, 169, 171, 180, 198 co-operative workshops 51, 52 Crisis, The 32 Co-operative Youth Movement 120 Croatia 118 Co-operatives Australia 212 culture, co-operative 85 co-operatives of co-operatives 11, 58 see also CUNA Mutual Insurance Society 136, federations of co-operatives; International 143, 168, 177 Co-operative Alliance (ICA) Curl, J. 5, 15, 18, 26, 27, 31, 32, 36, 37, Co-operatives UK 189 38, 63, 64, 98, 99, 134, 136, 172, 197 Co-operator, The 33, 41, 54, 140 Cutcher, L. 94, 122, 123, 143, 176, 211 Copa (Committee of Professional Cyprus 127 Agricultural Organisations) 160, 192 Czechoslovakia 119, 122, 125, 126, 127, co-partnership 78–79, 87, 107 146, 156 234 Index dairy co-operatives: 1844–1864 63; postwar period 157; principle of 144; 1864–1914 17, 86–87, 94, 98, 101–102, and recruitment of new members 5; 103; 1914–1945 121, 122, 124–125, Rochdale movement 35 140, 146; 1945–1975 176; 1975–present dockyard workers 29 191–192, 202, 209–211 see also creameries, Dollfuss, Engelbert 145 co-operative Donnachie, I. 35 Dairy Disposal Company 122 Dos Palos Rochdale Co. 96 Dakota Grain Pasta Company 197 dried fruit 76, 98, 104 Darnell, M. 10, 88, 102 Drury, John 50 Davies, M.L. 84, 85, 99 Dubb, S. 6 de Boyve, Edward 106 Dunn, J.R. 194, 198 debating fora 82 Dupernex, H. 104, 105 decentralized structures 157 Durr, A. 33 decline, theories of 14–18 Duttweiler, Gottleib 4, 127 decline of co-operatives 18 decolonization 156, 165 Earle, J. 60, 62, 89, 94, 95, 122 Deeg, R. 93 Earle, M. 65 definition of a co-operative 2–4 early origins of co-operative movements Degen, B. 59, 91, 124, 127, 158 26–46 Delom, B. 100, 140 ecological issues 166, 190 democratic principles 2, 3, 4, 42, 97, 115, economic rationalism 187 125, 132, 144, 157, 159, 162, 178 economies of scale 6, 9, 94, 157 demographics 18 Economist, The 31 demutualization 7, 18, 187–188, 191, 197, education: 1864–1914 90, 91; 1914–1945 199, 210, 226 120–121, 127; 1945–1975 170; and Denmark: 1864–1914 17, 76, 86, 89, 90, the CWS 82; New Lanark mills 31; as 91, 94, 95, 224; 1914–1945 118, 119, permitted object 54; principle of 3, 4; 122, 126, 127; 1975–present Rochdale consumer co-operative model 191–192, 194 48; university co-operatives 207; of Denniss, R. 211, 212 women 84, 141 Denoon, D. 101 Eellend, J. 121, 126 depots 76, 79–80, 104 Egypt 130, 163–164, 202, 203 Depredi, S. 11, 194 Ekberg, E. 6, 156 deregulation 18, 188, 200, 209, 226 Eklund, E. 65, 71 Desjardins, Alphonse 98, 99, 136, 199, 214 El Hogar Obrero (EHO) 100, 139, 200 development decade 179, 215 electricity co-operatives 15, 95, 136 Develtere, P. 103, 104, 128, 129, 162, 201 Ellice Islands 143 Devonport Union Mill 29 Emmanuel, J. 138 Digby, M. 86, 88, 104, 122, 125, 126, 127, Employee Stock Ownership Plans (ESOP) 128, 129, 135, 138, 139, 142, 144, 146, 196–197 160, 164, 173, 177 employees of co-operatives 79, 80, 117, directors, co-operatives versus IOBs 12–13 158, 169, 172; Amalgamated Union distribution centers, co-operatives as of Co-operative Employees (AUCE). 114–115, 127 See also Amalgamated Union of distribution systems 157 Co-operative Employees (AUCEU) distributive co-operatives 96 enfranchisement 29, 30, 53 dividends (the ‘divi’): 1945–1975 157–158; English Agricultural Society 87 1975–present 190; coupons/ dockets 91; English and Scottish Joint Co-operative distribution of the surplus as a dividend Wholesale Society 120 on purchases 3; drops in 6; early origins Ente nazionale fascista per la cooperazione of co-operative movements 42; financial (Co-operative National Fascist co-operatives 10; flour and bread Organization) 123 societies 30; fundamental principles 3; Entwistle, E. 141 mutuals/ Mutual Benefit Societies13 ; Environmental Care campaign 190 Index 235 equality, values of 4, 37, 42 federations of co-operatives: 1844–1864 Equitable Banks of Exchange 32 53, 58, 223; 1864–1914 89; 1914–1945 Equitable Labour Exchanges 32, 34, 35 4, 143; 1945–1975 166, 175; 1975– equity, values of 4 present 8, 11, 196, 212–213 Eroski, Spain 12 Fici, A. 15 Estonia 121, 125–126, 146, 180, 193 Fiji 143–144, 177, 211 ethical commerce 190, 194 Filene, Edward 99 Ethiopia 203 financial co-operatives: 1844–1864 61–62; Europe: 1864–1914 94; 1914–1945 1864–1914 71, 82, 87, 88, 93–94, 116–127, 121, 126; 1945–1975 156, 98–99, 102, 103, 104–105, 198, 224; 156–161, 160–161; 1975–present 1914–1945 116, 118, 121, 122, 123, 189–194; European perspective of book 126, 128, 129, 130, 131, 132, 143, 20 see also individual countries 225; 1945–1975 155, 160–161, 165, European Association of Co-operative 168, 171, 226; 1975–present 198, Banks (EACB) 160–161, 192, 214 202–203, 204, 226; Africa 103, 130, European Economic Community 160 202–203; Asia 71, 168; Australia and European Union 161, 192 NZ 102, 143; Canada 98–99, 171; Eversull, E. 133, 134, 138, 197 China 132; conclusions on 223–224; Exeter, UK 33 demutualization 18; Denmark 94; exhibitions 85 Europe 94, 121, 126, 160–161; expansion of co-operatives 5, 11, 48–56 Germany 61–62, 93–94, 121; Great Britain 82; and the ICA 107; India Fabianization 162 104–105, 128; Ireland 87, 88, 122; failures of early co-operative movements Japan 105; Korea 131; overview 35, 133, 135 4; Palestine 129; pre-industrial fair wages 77, 79, 81 co-operatives 38; Russia 118; South Fairbairn, B. 115 Africa 165; types of co-operatives 9–11; FairPrice 206 USA 38, 98–99, 116, 171, 198, 224; Fairprice 167 USSR 123 see also building societies; Fairtrade 190, 199 credit unions famine 132 Finland: 1864–1914 90, 91, 95; 1914–1945 Farm Bureau Oil Company 135 116, 118, 119, 123, 126; 1975–present 192 Farm Credit System 98 First World War 107, 114–154 farmer co-operatives see agricultural fishing co-operatives 121, 137, 138, 166, co-operatives 173, 204 farmer professional co-operatives (FPCs) Fite, G.C. 15, 116, 134, 136, 172 203–204 Fitzpatrick-Behrens, S. 136, 137, Farmer-Labor Conference 133 174, 200 Farmers’ Co-operative Company, fixed and limited interest on capital Michigan 15 2–3, 42 Farmers’ Educational and Co-operative Flanagan, J. 55, 79, 80, 81, 82, 84, 85, 87, Union 98 88, 106 farming see also agricultural co-operatives Fletcher, James 65 fascism 18, 115, 122, 145, 159 flour and bread societies 29, 42, 59, 223 Fay, C.R. 8, 17, 30, 59, 60, 88, 92, 105, 121, Fontanari, E. 210 122, 124, 125, 126, 137, 138, 141, 146 Fonterra 210, 211 Fearns, H.S. 116 food banks 170 Fed Up Co-op Wholesale 199 food co-operatives 188, 226 see also federalist principle 78, 97, 133 agricultural co-operatives; consumer Federated Co-operatives Limited (FCL) co-operatives 169, 170, 199 food prices 55, 59, 61, 70, 75–76 Fédération des Sociétés Coopératives Belges 92 food retailing revolution 156 Fédération Nationale des Coopératives de food riots 28, 29 Consommation (FNCC) 92, 120 Foodstuffs, New Zealand 6, 208 236 Index

Foreign Inquiry Committee 105–106 General Confederation of Agricultural forestry co-operatives 192, 196, 204 Cooperatives in the European Union 192 Forman, J.D. 39 German Central Union 18 Fourier, Charles 38, 63 Germany: 1844–1864 61, 62, 64, Fox, William 65 223–224; 1864–1914 76, 89, 90, 91, fragmentation of the co-operative 92, 93, 94–95, 107; 1914–1945 115, movement 53 116, 117, 119, 121, 123, 125, 127; France: 1844–1864 51, 60; 1864–1914 1945–1975 156, 158, 159, 160, 178; 84, 89, 90, 91–93, 94, 95, 103, 107; 1975–present 188, 190–191; agricultural 1914–1945 116–117, 120, 123, co-operatives 94–95, 116, 127; banking 124, 126, 127; 1945–1975 4, 157, 121; consumer co-operatives 62, 64, 90, 161; 1975–present 7, 188, 190–191, 91, 92, 115, 116, 119, 123, 125, 127, 194; agricultural co-operatives 95; 158; co-operative legislation 93; credit colonies 103, 127, 161; consumer unions 61; fascism and co-operatives co-operatives 39, 60, 116–117, 18, 115, 145; financial co-operatives 120, 157; co-operative legislation 9–10, 61–62, 93–94, 121, 160, 223–224; 92–93, 95, 116–117; co-operative housing co-operatives 62; and the workshops 51; education 120; ICA 107; pre-industrial co-operatives financial co-operatives 94; French 26; socialist politics 91, 92; wholesale Women’s Co-operative League consumer co-operatives 89, 92 84; and the ICA 107; oppositions Ghana 12, 27, 127, 164, 202, 203 to co-operatives 93; pre-industrial Ghent Congress 145 co-operatives 39; socialism 91–92; Gibbon, P. 164 wholesale consumer co-operatives 89; Gide, C. 60, 89, 92 worker co-operatives 7, 38–39, 60, Gilbert Islands 143 95, 120, 126 Gjöres, Axel 119 franchise 29, 30, 53 Glasgow Co-operative Cooperage Society 81 Franklin, New York 37 Glasgow Co-operative Society 56 free trade 145 Global Financial Crisis (GFC) 1, 14, 18, freedom funds 137 187, 188, 198, 199, 225 Freire,D. 159–160 globalization 13, 187, 191, 203 French West Africa (Mali) 103, 162 Gold Coast 127 Freundlich, Emmy 120, 145 Goldsmith, Isaac 39 Friberg, K. 119, 145 Gollan, R. 65 friendly societies 26, 30, 35, 41, 42, 50, 53, Gorst, S. 86, 88, 122, 125 59, 143 Gould, Charles 214, 215–216, 226–227 Friendly Society legislation 53–54 Govan Victualling Society 30 fruit co-operatives 138, 140 government funding 87, 93, 104, 116–117, Fulton, M. 199 121, 159, 168–169 fundamental principles 2–4 government loans/ subsidies 86, 87, 103, Furlough, E. 84, 92, 93, 103, 117, 119 104, 121, 123, 133 government surveillance 118 Gaffin, J. 84, 85, 181 Graff, M. 71, 155 Galera, G. 11, 194 grain elevators/ wheat silos 17, 80, 98, Gallagher, D.G. 6, 13 138, 142 Ganey, Fr. Marion 177, 211 Grand National Consolidated Trades Garnett, R.G. 42, 83, 84 Union (GNCTU) 32, 35 Garnlwyd, South Wales 50 Grange Movement 95, 97, 98 Gateshead Industrial Co-operative Gray, T.W. 197 Society 56 Greenbelt Co-operative 169 Gebhard, Hannes 95 Great Britain: 1844–1864 55–56, 58; General Committee for Agricultural 1864–1914 6, 10, 71–88, 90, 106; Cooperation in the European Union 1914–1945 117, 120–122, 123, 124, (Cogeca) 160–161, 192 125, 126, 127–128; 1945–1975 157–158, Index 237

160, 162, 173; 1975–present 189–190, Herr, F.A. 27 193; agricultural co-operatives 121–122, Hibberd, P. 26, 36, 43 124, 125; colonies 10, 12, 16, 71, 103, Hillquit, M. 31, 32, 36, 37 105, 127–128, 162, 173; consumer Hilson, M. 3, 4, 15, 20, 60, 95, 107, 118, co-operatives 55–56, 71–81, 90, 117, 119, 121, 130, 144, 158, 159, 163 120–121, 126, 127; credit unions 193; Hinduism 27 dominance of the ICA 106; early origins Histadruth, General Federation of Jewish of co-operative movements 30; education Labor in Palestine 129 120–121; financial co-operatives 10, 82; Hitler, Adolf 116 movement, diversification and Ireland Holyoake, G.J. 3, 27, 32, 34, 35, 39, 40, 42, 81–88; pre-industrial co-operatives 26, 28, 48, 49, 55, 57, 58, 60, 64, 89, 103, 223 30, 33; producer co-operatives 78; retail Holyoake House 74, 75 consumer co-operatives 71–81; spread of Honduras 139, 173, 177 co-operative ideas 55; stores, co-operative Hong Kong 168 31; wholesale consumer co-operatives 6 Horace Plunkett Foundation 99, 121 Great Depression 14–15, 115–116, 122, Hough, E.M. 27, 128 123–124, 128, 131, 134, 136, 138, 140, house building 85, 88, 143 143, 225 houses of call 31 Greece 126 housing co-operatives 62, 125, 172, 199, 203 Greeley, Horace 63, 64 housing finance 10, 38, 50, 83, 102, 173 ‘green’ products 190 Howarth, Charles 41 Greening, Edward 87 Hoyt, A. 156, 169, 171, 174, 197, 198, GreenStar Co-operative 196 199, 200, 203, 205 Greenwood, Abraham 58, 82 Hu, D. 204 Grocer, The 88 Huber, Victor Aimé 61, 62 Gronlund, Laurence 12 Huddersfield Co-operative Trading Groves, F.W. 98, 134, 135, 136, Association 35–36 138, 171 Hugman, J. 55, 56, 85 Growmark 199 Hull Anti-Mill 29 Grubel, P. 105, 131 Hungary 90, 119, 123, 126, Guatemala 174, 200 156, 178 guilds 26, 27, 61, 84 Hussein, Ahmed 130 Guinea 162 hybrid business models 14, 128, 195 Gung Ho 132 hyperinflation 119, 121, 199, 200 Gurney, P. 6, 40, 55, 74, 76, 77, 79, 85, hypermarkets 156–157, 206 88, 107, 117, 118, 120, 121 Hyung-mi, K. 131, 205 Guyana 173 Gyllström, B. 128, 162 Iceland 95, 118, 121 ideological appeal 5 Hailey, W.H. 16, 129, 130, 165 ideological challenges 18, 157 Hamburg co-operative society 92 immigration 15, 71, 161 Hampson, D.P. 65 Inca Empire 27 Han system 167, 205 income tax 54, 88, 132 handicraft/ cottage industry co-operatives 203 Independent Grocers’ Alliance 208 Hansalim Community Consumer India: 1864–1914 10, 16, 17, 71, 104–105; Co-operative 205 1914–1945 128–129, 145; 1945–1975 Harmony Hall, USA 39–40 165–166, 168; 1975–present 12, 207; health co-operatives 13, 126, 172–173, banking 105; consumer co-operatives 174, 200, 205, 207 128; credit unions 207; decline of health insurance 84 co-operatives 18; financial co-operatives health mutuals 13 10, 104–105, 128, 168, 225; and the Heaton, H. 119, 121, 123 ICA 145; pre-industrial co-operatives Henningsen, E. 26, 61, 62, 93, 121, 125, 27; spread of co-operative ideas 16, 17; 127, 160 village co-operatives 12 238 Index

Indian Farmers Fertilizer Co-operative International Direct Banking (IDB) 193 Limited (IFFCO) 8 International Labor Organization (ILO) indigenous people 16–17, 27, 101, 128, 144, 179, 214 129, 143, 171, 174, 175, 177 International League of Agricultural individualism 18, 28, 78 Co-operative Societies 107 Indonesia 166, 168 International Year of the Co-operative Industrial and Provident Societies 53 (1965) 179 Industrial and Provident Societies Act International Year of the Co-operatives (IAPSA) of 1852 53–54, 58, 82, 83, 88 2012 (UN) 1, 188 Industrial Common Ownership Movement internet, platform co-operatives 11 161, 189 Internet domain .coop 198 industrial revolution 27–32, 223 investor-owned businesses (IOBs) 2, inflation 14, 28, 119, 187 12–13, 28 information clearing houses 145 Ip, M. 132, 167, 168, 188 infrastructure 8, 14, 85, 114 Iran 20, 166, 207 Ingalsbe, G. 98, 134, 135, 136, 138, 171 Ireland: 1844–1864 33; 1864–1914 76, insurance 83–84, 95, 136, 144 86–88; 1914–1945 117, 121–122, International Agricultural and Purchasing 126; 1945–1975 161; 1975–present Society, Intercoop 146, 180 193; agricultural co-operatives 34–35, International Alliance of Friends of 121–122, 126; consumer co-operatives Co-operative Production 106 117; credit unions 161, 193; financial International Association of Mutual Benefit co-operatives 87, 88, 122; pre-industrial Societies 13 co-operatives 33, 34–35; retail consumer International Congresses 33–34, 41, 57, 82, co-operatives 86, 87 85, 86, 105–106, 120, 144, 145, 165, Irish Agricultural Organisation Society 178, 179–180, 181, 214 (IAOS) 86 International Co-operative Alliance Irish Agricultural Wholesale Society 87 (ICA): 1864–1914 1, 4, 96, 105–107, Irish Co-operative Aid Association 224; 1914–1945 18, 144–146, 225; (ICAA) 86 1945–1975 156, 164, 177–181; Irish Women’s Co-operative Guild 86 1975–present 202, 214–216, 226; Italy: 1844–1864 59–60, 62; 1864–1914 Association of All Classes and 89, 90, 91, 92–93, 95; 1914–1945 All Nations as precursor of 39; 114–115, 119, 122–123, 126, 145; Co-operative Union of America 1945–1975 15–16, 157, 158–159, 96; co-operatives of co-operatives 161; 1975–present 11, 188, 191, 11; definition of a co-operative 4; 194, 226; banking 123; consumer development fund 178; and fascist co-operatives 90, 91, 114–115, 119, Germany 18; formation of 1, 105–107, 159, 191; co-operative legislation 92–93; 224; Relief Fund 177–178; and the co-operatives as distribution centers Rochdale principles 4 for rationed food 114; divisions in International Co-operative Bank 144, 180 co-operative movements 122; fascism International Co-operative Day 144 and co-operatives 115, 122, 145; International Co-operative Petroleum federations of co-operatives 89; financial Association 180 co-operatives 94; influence of Rochdale International Co-operative Trading Agency movement 59–60, 89; organization (ICTA) 145, 179–180 along religious/ political lines 4; International Co-operative Trading People’s Banks 62; social co-operatives Committee 107 11, 194, 226; socialism 188; spread International Co-operative Training of co-operative ideas 15–16; worker Center 178 co-operatives 95, 126 International Co-operative Wholesale Society (ICWS) 145 Jackson, R.V. 102 International Co-operative Women’s Guild jam 77 (ICWG) 144, 181 Jamaica 99, 173 Index 239

Japan: 1864–1914 71, 105; 1914–1945 16, Kirk, N. 53 131, 145; 1945–1975 166, 167, 168, Kirsch, O. 164 178, 180; 1975–present 192, 205, 207, Kjartansson, H. 95, 121 214; agricultural co-operatives 180; Klinoch, J. 55, 56, 79, 81, 83, 84, 103 banking 192; consumer co-operatives Klugman, K. 143 13; and the EACB 214; financial Knapp, J.G. 98, 134, 135 co-operatives 105; health co-operatives Knights of Labor (KOL) 63, 96, 97, 99 207; and the ICA 145, 178 Knights of St Crispin 96 Jarrow and Hebburn Society 57 Knowles, H. 13 Jay, Pierre 99 Knupfer, A.M. 14 Jeffs, M. 84, 85 Konsumverien Zürich (KVZ) 59 Jenny-Ryffel, Jean 59 Kooperativa förbundet (KF) 119, 127 Jesse Williams Cheese Factory 63 Korea 16, 17, 105, 131, 165, 166, Jewish co-operatives in Palestine 129 204–205, 206, 207, 225 joint buying organizations 134, 135 see also Korean Consumer Co-operative buying groups Federation (KCCF) 205 Joint Committee of Trade Unionists and Kose, M. A. 187 Co-operators 82 Kramper, P. 197 Joint Insurance Department 84 Krasheninnikov, A.I. 107, 123 joint-stock companies 28, 57 Kurimoto, A. 105, 131, 167, 205, 206, Jones, B. 35, 36, 49, 51, 52, 53, 54, 55, 77, 207, 216 78, 80, 81 Jones, D. 29 labeling standards 169, 190 Jones, D.C. 14 Labor Bank 123 Jonsson, P. 120 labor exchanges 32, 34, 35, 42, 64, 96, 134 journals 54–55 labor notes 34, 38 Jumbo Farm, Middleton, UK 58 labor organizations 96 see also trade unions Jung, H. 16, 17, 71, 105, 131, 204 Labour Association for Promoting Justo, Juan B. 100 Co-operative Production 78 Labour Co-partnership Association 78–79 Kagawa, T. 16, 131, 136, 140 Labour Party (UK) 3, 118, 120, 162 Kalmi, P. 1 Lambersens, S. 120, 157 Kaulback, John 64 land colonies 58 Kayden, E. 89, 90, 93, 118 land purchases 33, 41, 65, 80, 83, 86, 117 Kealey, G. 99 land redistributions (postwar) 121 Keast, R. 16, 177 Lander, William 76 Keen, George 97 large-scale co-operatives 134 Keillor, S.J. 96, 98, 134 Larkhall Victualling Society 30 Keleman, P. 162 Larson, K. 199 Kellet, J. 14 Latin America 139–140, 173, 174, 180, Kenwood, A.G. 71, 155 199–200 see also individual countries Kenya 12, 16, 104, 127, 128, 162, 202, Latvia 125, 126, 193 203, 225 Lavelle, Ferdinand 91 Kerr, M. 143 League of Nations 129, 144 Keynsian economics 155 Leeds Co-operative Corn Mill 50 kibbutzum 129 Leeds Co-operative Store 50 Kilimanjaro Native Co-operative Union Leeds Redemption Society 50, 51 (KNCU) 129, 163 legislation about co-operatives: Argentina Kilimanjaro Native Planters’ Association 140; Australia 176; China 203–204; (KNPA) 17, 129 Europe 92–93; France 92–93, 95, Kim, S. 165, 166, 204, 207 116–117; Great Britain 35–36, 53, 58; King, William 32–33, 38, 41, 223 India 104; Italy 15, 191; Japan 105, Kingsley, Charles 51, 52 131, 167; Russia 118; South Africa 103; Kiribati 143 South Korea 204; USA 99, 133, 134 240 Index

LeGrand, C. 136, 137, 174, 200 137, 138, 145, 155, 156, 161, 164, 165, Leicester, UK 79 168, 171, 172, 174, 176, 177, 180, 199, Leicester Equity 78 200, 206, 211, 212, 214 Leiken, S. 64 Madagascar 179 Lennoxtown Co-operative Society 30, 42 Magnanie, L. 85 Leo XII, Pope 16, 94 Maisons de Peuple 91 Lesotho 127 Malaya 16, 127, 128 Letaba Bantu Farmers’ Co-operative Malaysia 166, 207 (LBFC) 165 Mali (French West Africa) 103, 162 Lever, W. 76, 79, 88 Malthus, T. 28 levies 3, 58, 60 management: Africa 162; Berkeley Lewis, G. 9, 16, 65, 102, 140, 141, 142, Co-operative, USA 195; in China 146, 176, 210 132; co-operatives versus IOBs 13; libel case 88 flour and bread societies 30; growth liberalization 188, 201 of co-operative movement 57, 72; Liberator Building Society failure 88 problems in early co-operatives 35; Libya 179 professionalization 72 life insurance 83, 84 Manawatu Co-operative 141, 176, limited interest on capital principle 207–208 2, 42, 144 Manchester, UK 28, 42, 58, 74, 75 limited liability 53–54, 92–93, 104 Manchester and Salford Co-operative Linn, R. 102 Society 54–55 Lithuania 126, 193 Manchester Congress 33–34 Little Knight cigars 99 manufacturing co-operatives 41, 77, Liverpool, UK 34, 51, 52 80, 119, 137, 138 see also producer living standard rises 54, 72, 155 co-operatives Llewellyn Davies, Margaret 84 Manuwatu Co-operative 175 Loan Funds 83 Mao, Chairman 167–168 lobbying 11, 53, 66, 82, 198, 201, 212, market cash transactions 3, 4, 63, 85, 96 214, 223 marketing associations 98 local communities and the survival of marketing boards, state 124–125, 130 co-operatives 17 marketing co-operatives 135, 137, 138, local food movements 194, 209 171, 176, 210–211 localism 17, 85, 196, 208 Markey, R. 1, 7, 8, 102 logos 190 Markkola, P. 121 Logue, J. 8 Marxism 92 London 51, 52, 53, 55, 72–74, 121 Massachusetts Credit Union London Co-operative Society 57, 121, Association 99 132, 189 mass-produced goods 119 London Needlewomen’s Association 51 Maunier, R. 39 Loos, N. 16, 177 Maurice, Frederick 51, 52 lotteries 58 May, Henry 145 Loughheed, A.L. 71, 155 Mayhew, H. 51 Luddites 28–29 Mayo, E. 11 Ludlow, John 51, 52, 53, 103 Mazzarol, T. 13 Lumley, E. 52, 57 Mazzini, Giuseppe 59 Luton Cocoa 85 Mbeki, Govan 130 Luzzati, Luigi 62, 98 McCabe, C. 117 Lyons, M. 10, 143, 176 McLauchlan, G. 65 medical co-operatives 126, 172–173, 205 Macleay Co-operative, New South Wales medieval guilds 26 (NSW), Australia 12 Medina-Albaladejo, F.J. 159 MacPherson, I. 9, 10, 16, 17, 20, 27, 61, Melmoth, G. 78 65, 93, 94, 97, 98, 99, 130, 134, 136, Meltham Mills, Yorkshire, UK 42 Index 241 member-owned businesses (MOBs), mutuals/ Mutual Benefit Societies 13, 162 definition 2–4 Myanmar 207 membership classes 9 membership numbers 55, 71, 72–73, 114, Namibia 165 119, 124, 126 Nashoba, Tennessee 37 men’s guilds 84, 141 National Agricultural Cooperative Menzani, T. 156, 169, 171, 174, 197, 198, Federation (NACF) 166, 204 199, 200, 203, 205 National Association of Co-operative Mercer, T.W. 32, 33, 34, 118 Managers 72 mergers 158, 160, 166, 172, 176, 189, 211 National Association of Co-operative Mervis, Ari 210 Secretaries 72 Methodism 42 National Association of United Trades for Metsäliitto 192 the Protection of Labour 50 middle classes 37, 61, 79, 88, 89, 91, 95, National Co-operative Association of 116, 119, 125, 131 South Africa (NCASA) 202 “middle way,” co-operatives as 15, 116, National Co-operative Authority 124 121, 135, 163 National Co-operative Bank (NCB) 11 Midlands Counties Wholesale Society 57 National Co-operative Business Association Migros, Switzerland 4, 127 (NCBA) 198 military supplies, manufacture of 115 National Co-operative Council 161 milk see creameries, co-operative; dairy National Co-operative Festival 85 co-operatives National Co-operative Grocers’ Milk Marketing Board 125 Association (NCGA) 196 milk supply support package 210 National Co-operative Publishing Mill, J.S. 28, 55 Company 121 mills 29, 49, 77, 80 National Co-operatives Inc. 134, 135, minimum wage 41, 85 137, 169 mining 6, 18, 26, 28, 56, 65, 74, 97, National Council of Farmer 100–101, 141, 175 Co-operatives 134 missionaries 130 National Farmers’ Union 121 “missionaries,” co-operative 34, 39 National Industrial Recovery Act Mitchell, John 74, 78 (NIRA) 135 Moerland, Piet 192, 193 National Labor Union (NLU) 99 Mohn, P. 194 National League of Cooperative and Moldova 193 Mutual Companies 122 Mondragon 7, 161, 194, 196 National Tax Equality Association 137 money clubs 102 National Union and Distributive and Allied monopolies 133, 145 Workers 120 Moody, J.C. 15, 116, 134, 136, 172 National Union of Railwaymen 6 Moore, B. 102 National United Trades Association for the Morocco 127 Employment of Labour 50 Morris, J. 115 National Wheat Board 138 Morrison, Melina 212 Nazis 115, 116, 125, 145 Mountain Equipment Co-op 170 Neal, R. 65 Mt. Barker Co-operative in Western Neale, Edward 51, 52, 53, 57, 82, 89, 106 Australia (WA) 9 Nembhard, J.G. 135 Mukherji, P. 105 neoliberalism 15, 187–188, 226 Müller, Hans 106 Nepal 207 Murray Goulburn Co-operative 176, 210 Neptune, R. 4, 16, 96 Muslim Brotherhoods 103 Netherlands 16, 84, 90, 94, 124, 126, 127, mutual aid societies 59 145, 146, 160 mutual insurance societies 95 Neunsinger, S. 20, 156, 159 mutual loan societies 61–62 ‘New Australia’ (Paraguay) 14 mutualization 4, 8 New Deal 116, 135, 147, 225 242 Index

New Generation Co-operatives (NGC) 197 O’Connor, Fergus 58 New Harmony community 14, 36–37, 223 Ogata, K. 105, 107 New Lanark mills 31 OIdham Co-operative Supply Company 30 New Moral World 39, 223 oil 180, 187, 199 New Pioneer Food Co-operative 196 Okbandrias, M. 104 New Zealand: 1844–1864 65; 1864–1914 Okem, A. 104 15, 100–102; 1914–1945 116, 140–144, O’Leary, R. 1, 208 146; 1945–1975 175–177; 1975–present one member one vote 2, 7, 9, 42 188, 207–210; agricultural co-operatives open membership principle 2, 4, 33, 85, 144 65; banking 102; consumer co-operatives oppositions to co-operatives 6, 56, 86, 88, 65, 116; credit unions 177; and the CWS 93, 115, 137, 225 146; dairy co-operatives 140 Orbison, Scotland 33, 35, 223 New Zealand Association of Credit Unions organic food movements 194, 196, 199, 209 (NZACU) 211 Örne, Anders 119 New Zealand Co-operative Alliance Orvis, John 63 (NZCA) 140 Östman, A. 121 New Zealand Co-operative Wholesale Ouseburn Engineering Works, Tyneside, Society (NZCWS) 141 UK 77 New Zealand Federation of Co-operatives outsider co-operatives 11 175, 176 Oved, Y. 36 New Zealand Produce Association 146 overseas development aid 162, 164, 201 Newcastle and Suburban Co-operative Overseas Farmers’ Wholesale Co-operative 101, 207 Federation (OFWCF) 146 Newport Rising 29 Owen, Robert 14, 31–40, 41, 42, 51, newspapers 121 61, 223 newsrooms 48 Owen, Robert Dale 37 NH Nonghyup , South Korea 8 Ozturk, E. O. 187 Nicholson, Sir Frederick 104 Niger 179, 203 Pacific Islands143 –144, 176–177, 211–212 Nigeria 127, 164 Paddock co-operative society, West Nimes School of co-operative economics 92 Yorkshire, UK 36 non-co-operative subsidiaries 13 Pakistan 168, 179 non-profit status 2 Palestine 15, 129, 225 North Coast Fresh Food and Cold Storage Palmer, B. 99 Limited/ NORCO (North Coast Panama Canal 70 Co-operative Company) 102 Papua New Guinea (PNG) 176–177, North of England Co-operative Wholesale 211, 212 Agency and Depot Society Limited 58 Paraguay 14, 102 North of England Joint Stock Co-operative parastatal co-operatives 11–12, 156, 164 Society of Newcastle, UK 36 Pare, W. 34 North West of England United Paris Congress 144, 145, 178 Co-operative Company 34 Parker, F.E. 38, 65, 96, 97, 116, 133, 139, Norway 90, 118, 124–125, 159 144, 145, 146 Nothern Rhodesia 104 Parti Ouvrier 91 NSW Co-operative Wholesale Society partnerships 12, 28, 60 (NSWCWS) 101, 141, 175, 207 Patmore, G. 1, 2, 3, 4–5, 6, 7, 8, 9, 11, 12, Nuriootpa Co-operative, Barossa Valley of 13, 14, 15, 17, 20, 28, 35, 60, 64, 65, South Australia (SA) 4, 13, 208 75, 91, 100, 101, 115, 116, 119, 122, Nyerere, Julius 163 123, 132, 133, 134, 135, 136, 139, 140, 141, 142, 143, 156, 159, 169, 170, 175, Oak Mill Society of Tillicoultry 81 176, 191, 195, 196, 197, 198, 207, 208, O’Brien, C. 86, 87 209, 213, 216 occupation movements 200 patronage 173 Occupy movement 216 Patrons of Husbandry 95 Index 243 peace resolutions 106 CWS 78, 83; Great Britain 78; and peak co-operatives 11, 142, 206, 212 the ICA 106; SCWS 80, 81; types of see also federations of co-operatives co-operatives 7; USA and Canada 99 see Pellervo Society 95 also worker co-operatives Pelling, H. 32, 35 profit 2, 3, 7, 35, 36 peoples’ banks 61–62, 98 profit sharing 78–79, 107, 157 see also People’s Co-operative Society 74 dividends (the ‘divi’) Pereira, J.D. 159–160 profiteering 117, 127 Perth Building Society 102 proportional representation 118 Peru 27, 174 proprietorships 12 petrol 135, 137, 179 protectionism 145 Petrou, T. 65 protective store wholesalers 64 pharmacy services 188 Protective Unions 64 Philadelphia Industrial Co-operative Protestant Church 16, 137 Society 96 protests 28–29 philanthropy 62 Provident Institution 32 Philippines 168, 207 provident societies 103 Phillips, Thomas 64 publishing 121 Pioneers’ Newsroom Committee 48 Pulsford, F.E. 101 platform co-operatives 11 Purvis, M. 6, 36, 39, 40, 53, 54, 55, 56, Plunkett, Sir Horace 86, 106, 121 57, 59, 60, 62, 89, 90, 91, 92, 93, 94, Plymouth Co-operative Society 88 95, 118 Poland 90, 123, 126, 127, 156, 178, 191, 193 political activism 195, 213 quality standards 117, 125, 166, 169 political challenges 123 Queenswood community, political neutrality, principle of 3, 4, 90–91, Rochdale 41 107, 117, 119, 139, 178 Queenwood, USA 39–40, 50 Pollard, S. 32 Pollett, I. 201 Rabobank, Netherlands 13, 160, 193 Port Sunlight 79 race 37, 99, 129–130, 165 Portugal 16, 159–160 Rahmer, F.A. 63 postage systems 54 Raiffeisen, Friedrich Wilhelm 9–10, 13, Postgate, R. 29 16, 61, 62, 87, 93, 98, 104, 121, 130, postwar reconstruction 142–143 132, 160 Potato Board 125 railway workers 56, 89, 93 Potter, B. 43, 55, 78, 80, 81 railways expansion 54, 56, 70, 95, poverty alleviation, as goal 30, 40, 132, 97–98 136, 180 Rainbow Flag 144 Powell, J. 34 Ralahine estate, Ireland 34–35 precinct co-operatives 26 Rational Sick and Burial Society 42 press coverage 54–55, 121 Rational Society 39 Preussische Central-Genossenschafts-Kasse rationing 114, 116, 117, 127, 137 (Preussenkasse) 93, 121 Rayback, J.G. 31 Pribićević, B. 6 reading rooms 85 price-fixing rings 120 recessions 133, 187, 205, 210, 216 Priestley, J.H. 36, 43, 85 recording systems 5 Prinz, M. 61, 62, 91, 93, 115, 116, recreational activities 85 119, 125 Redemptionists 50, 54, 55 privatization 18 see also demutualization Redfern, P. 57, 58, 74, 76, 78, 79, 83, 84, producer co-operatives: 1844–1864 49, 50, 87, 88, 120, 124, 178 51; 1864–1914 76, 77, 78, 80, 81, 83, refineries 138 99, 101–102, 106; Australia 101–102; Reform Act (1867) 53 conclusions on 223; Co-operative refrigeration technology 101 Wholesale Society (CWS) 76; and the regional associations 134, 196, 205 244 Index registrars 15, 16, 53, 88, 104, 128, 129, Rochdale Equitable Provident Sick and 142, 162, 173 Benefit Society 50 Reichsverband 121 Rochdale Friendly Co-operative Society 41 religion: early origins of co-operative Rochdale pioneers 41–43 movements 32–33, 36; and the Rochdale Society of Equitable Pioneers expansion of co-operation 225; 41, 57 principle of religious neutrality 3, 4; Rochdale Village, New York 172 and the Redemption movement 51; Rogers, S. 129 Rochdale pioneers 40–41, 42; and the Roman Catholic Church see Catholic Church spread of co-operative ideas 15–16 see Romania 193 also Catholic Church; Christianity; Roosevelt, F.D.R. 15, 19, 116, 135–136, 225 Protestant Church Roosevelt, T. 98 Rerum Novarum (Poe Leo XIII) 16, 94 Rösner, H.J. 16, 17, 71, 105, 131, 204 resale price maintenance (RPM) 158 Rossi, F. 15, 200 retail consumer co-operatives: 1864–1914 Royal Arsenal Society 74 71–81, 86, 87; 1914–1945 124, 125, Rumania 126 143; 1945–1975 156, 169; 1975–present rural areas 17, 18, 56, 90, 95, 115, 121, 189–190, 194, 205, 206; Europe 156; 173, 175 Germany 125; Great Britain 71–81; rural banks 94–95 Ireland 86, 87; overview 4–6; Pacific Rural Co-operative Development Grants Islands 143; post-Great Depression 124; program 198 pre-industrial co-operatives 30, 36; and rural mutualism 95 producer co-operatives 78; SCWS 80; Russia: 1864–1914 89, 90, 91, 93, 94; Singapore 206; South Korea 205; USA 1914–1945 115, 118; 1945–1975 178; 169, 194 1975–present 192, 193 see also USSR retirement savings 79 Russian Revolution 93, 115, 118, Review of International Co-operation 144 123, 133 Reynold’s News 121 Rwanda 202, 203 Rhodes, R. 16, 86, 87, 104, 106, 107, 118, 122, 123, 129, 130, 145, Saint-Simon, Comte Henri de 38, 61 178, 179 Sami, L. 27, 71, 88, 105, 128, 166 Ribas, A. 140 Sapiro, Albert 133, 138 Ricardo, David 28 Sarina, T. 15 Rich, P. 130, 165 Saskatchewan Wheat Pool 98, 199 Richardson, C. 30 Satgar, V. 202 Richmond Co-operative Society 34 saving and loan associations 10 Right Relationship League (RLL) 97 savings 3, 54, 137, 143, 164–165 riots 129 Savings and Credit Co-operative Ripponden Co-operative, UK 36, 42, 85 Organizations (SACCOs) 202, 203 risk 9, 13, 18 Schröter, H. 1, 18, 39, 155, 188, 191 Robertson, N. 17, 117, 127 Schulze-Delitzsch, Hermann 9–10, 61, 82, Rochdale consumer co-operative 89, 93, 160 model: Australia and NZ 100–102, Scotland: agricultural co-operatives 87, 140, 142, 207–208; banking 48; 125; banking 88; early origins of Canada 97; establishment of (1844) co-operative movements 30, 31, 36; 2, 40–43; growth of 47–56; history growth of co-operative movement 74; of co-operatives 223; Japan 105; pre-industrial co-operatives 26; producer principles of co-operatives as MOBs 2; co-operatives 81; spread of co-operative Rochdale principles 2–4; Sweden 119; ideas 56 USA 96, 98, 134 Scottish Co-operative Ironworks 81 Rochdale Co-operative Land and Building Scottish Co-operative Wholesale Society Company 50 (SCWS) 6, 71, 79–81, 82, 83, 84, 124, Rochdale Co-operative Manufacturing 146, 189 Society (RCMS) 49–50, 78 Scottish Co-operator, The 54–55 Index 245

Scottish Women’s Guild 84 social workshops 39 Secchi, C. 157, 158, 188, 189, 190, 194 socialism: 1844–1864 51, 60, 64; Second World War 126–127, 137 1864–1914 16, 72, 89, 91, 92, 95, 97, Selective Employment Tax 158 107; 1914–1945 118, 122, 133, 145; self-dependency 28 1945–1975 166; China 168; and the ICA self-help, values of 4 107; India 166; Italy 122; pre-industrial Self-Help by the People (Holyoake) 64 co-operatives 39, 41; rural co-operation self-help societies 59, 61, 90, 91, 132, 134 as alternative to 133; “third way,” self-responsibility, values of 4, 61 co-operatives as 15, 116, 121, 135, 163 self-service retail 156, 157–158, 159 Socialist International 91 self-sufficient communities 31, 33 Societé Indigène de Prévoyance (SIP) 103 Senegal 103, 162, 203 Society for Promoting Communities 36 Serbia 118, 126, 127 Society for Promoting Industrial and Sérgio, António 159–160 Provident Societies 53 service fee co-operatives 170 Society for Promoting Working Men’s Shaffer, J. 99, 106, 127, 128, 134, 144, Associations (SPWMA) 51, 53 145, 163, 166, 178, 180 solidarity, values of 4 shares: disposal of net assets without profit to Solomon Islands 211 members 3; financial co-operatives 9–10; Sonne, Hans Christian 89 flour and bread societies 29–30; investor- South Africa 103–104, 129–130, 146, 156, owned businesses (IOBs) 12; limitations 165, 190, 202 on size of shareholdings 3; one member South African Dried Fruit Company 104 one vote 2; worker co-operatives 7 see South America 139–140, 173, 174, 180, also dividends (the ‘divi’) 199–200 see also individual countries Sheerness Economical Society 30 South Coast and West Camden Sherman Antitrust Act 98 Co-operative Company (SCWCCS) 102 Shillito, John 74 South Korea 16, 17, 105, 131, 165, 166, shipping 70–71, 76, 83, 86, 118 204–205, 206, 207, 225 shop steward movements 6 Southern Rhodesia 104, 128, 156, 164 Shorter, T. 52, 57 Sovereigns of Industry 63 Sierra Leone 76 Soviet break-up 187, 188, 192, 193, 226 silk 105 Spain 7, 90, 127, 159, 161, 194, 196 Simon’s Town co-operative 104 Spanish Civil War 127 Sinclair, K. 101 Spaull, H. 140, 163, 164, 173, 174, 179 Singapore 127, 128, 167, 206 Sri Lanka 207 see also Ceylon slavery 37 SS Pioneer 76 Small Holdings and Allotments Act Stalin, J. 18, 126 (1908) 87 Staples, Ralph 170 Smiles, S. 28 Starr-Bowkett societies 10, 88, 102, 143 Smith, Adam 28 state concessions 93 Smith, C. 102, 143 state incorporation 18 Smith, L. 35, 63, 119, 124, 125, 146, 173 state marketing boards 124–125, 142 Smith-Gordon, L. 86, 87 state privatizations 188 Smithies, James 41 state role 11–12 soap 58, 76, 79, 88 state takeovers 118, 122, 125, 131, social change 63, 92, 93 138, 163 social co-operatives 11, 188, 194, 200, Staundinger, F. 116 207, 226 steamship transportation 70, 76 Social Democrats 90, 91, 92, 122, 138 Stiglitz, J. 14 social justice 36, 97 Stockholm Congress 145 social order 91 stores, co-operative: Canada 138; France social programs 141, 170 61; Germany 61; Great Britain 31, 33, social unrest, and the growth of 35, 52, 55–56; Ireland 86; Italy 59–60; co-operatives 14 Rochdale 31, 33, 35, 41, 48; USA 5, 38, 246 Index

64, 96, 97, 137 see also retail consumer Toad Lane store, Rochdale 41, 48 co-operatives tobacco 104, 130, 133 Strickland, C.F. 128 Todd, J. 102 strikes 15, 31, 41, 63, 78, 79, 81, 83, 95, 117 token/ voucher systems 5 Strikwerda, C. 90, 92, 94, 95, 124 Tolpuddle martyrs 35 Structural Adjustment Programmes Tompkins, Jimmy 136 (SAPs) 201 Tonga 211 study circles 136 Toniolo, Giuseppe 15–16 substitute ingredients, avoiding 3, 29 totalitarianism 115, 125–126, 145, 159, 225 subversiveness 60 Toucas-Truyen, P. 60 Suez Canal 70 tourism 77, 171 sugar 58, 70, 106–107, 117, 118, 166, 210 Trade Insurance Fund 83 Sullivan, J. 11 trade links, development of 145 supermarkets 14, 156–157, 195, 206, 225 Trade Union Congress (TUC) 82, 86, 120 surplus 3, 11, 77–78, 82 trade unions: Amalgamated Union of survival of co-operatives 17 Co-operative Employees (AUCE) 79, sustainability 199 85, 117, 120; Australia 102; beginnings sweatshops 51 of 29; collective bargaining 14; Grand Sweden: 1864–1914 90, 106; 1914–1945 National Consolidated Trades Union 118, 119–120, 124, 126, 127, 135, 146; (GNCTU) 32; and history of worker 1945–1975 178, 179; 1975–present co-operatives 6; and the ICA 107; links 191–192 with co-operative movement 33, 35, Swing Riots 29 59, 72, 82, 83, 118, 120, 129, 134, 168; Switzerland 4, 59, 89, 90, 95, 119, 123, observed by co-operatives 79, 81; and 126, 127, 158 producer co-operatives 50; and Robert Owen 32; in Rochdale 41; Singapore tailors’ co-operatives 30, 60 167; USA and Canada 99, 134 Takamara, I. 131 Traders’ Defence Association 88 take-overs 3, 169 Tranby College, Sydney 175 Tan, K.Y.L. 167 transformational co-operatives 12 Tanganyika 17, 129, 162 Transkei 130, 165 Tanzania 12, 16, 18, 162–163, 164, 178, 203 transport 94 tariffs 40, 116 transportation co-operatives 129 tax exemptions 54, 88, 93, 168, 225 Transvaal Civil Service Co-operative 104 taxes 117, 124, 158, 175 Treanor, J. 194 tea 57, 58, 70, 76, 79, 80, 105, 120 Treaty of Rome 160 tea parties 85 Trinidad and Tobago 173 technology 17, 70–71 truck system 28, 56 telephones 70–71 Tucker, D. 61, 62 temperance 31, 35, 37, 41, 81 Tunisia 103, 127 textile industry 40 Turkey 20 Thailand 130, 206, 207 Tuvalu 143 The Co-operative (brand) 190 Tweedale, Samuel 42 Theien, I. 122 types of co-operatives 2–12 “third way,” co-operatives as 15, 116, 121, 135, 163 Uber 11 Thomis, M.I. 29 Uganda 104, 162, 164 Thompson, D.J. 31, 32, 33, 38, 40, 41, 42, Uganda Growers’ Co-operative 43, 48, 58, 198 Society 128 Thompson, V. 103, 162 ujamma 163, 164 Thoms, D. 84, 85, 181 UK see Great Britain Thornes, R. 36 Ukraine 91, 193 Thrift Funds 79 UN Conference of Food and Agriculture Time Store, Cincinnati 38 178–179 Index 247

UN Economic and Social Council retail consumer co-operatives 169, 194; 177, 179 utopian communities 14; wholesale UN Food and Agricultural Organization consumer co-operatives 97; worker (FAO) 179 co-operatives 63–64 UN International Year of Co-operatives USSR 18, 123, 126, 145, 156, 178, 188 (2012) 212, 214–215, 226 utopian communities 14 UN International Year of the Co-operative (1965) 179 Valio Group 192 UN Research Institute for Social Valley Forge, Pennsylvania 37 Development 200–201 value-added co-operatives 197 unemployment 32, 40, 48, 116, values of a co-operative 4 134, 196 Van Goethem, G. 157 Unicoopjapan 180 Vandaleur, John 34–35 Unilever soap combine 120 Vanek, J. 8 Unimed 174, 200 Verbeke, G. 139, 173, 200 unincorporated status 30 vertical integration 8, 48–49, 71, 76, 197, 223 Union Co-opérative 92 Vienna Congress 144, 181 Union Co-operative Association of Vietnam 206 Philadelphia (UCA) 64 village co-operatives 12, 130, 163 Union Land Bank 165 villages of mutual co-operation 31–32 union shops 33 voice 8, 107, 117, 124, 192, 202, 212–213, unionism 99 215, 216 unit pricing 195 Voinea, A. 200 United Co-operative 135 voluntary membership principle 4, United Co-operatives of Canada 199 125, 159 United Farmers’ Co-operative Company Voorhis, J. 5, 99, 172, 173 (UFCC) 98, 138, 199 Vorberg-Rugh, R. 2, 3, 7, 11, 28, 29, 33, United Fruit Company (UFC) 139, 174 34, 35, 40, 43, 51, 54, 57, 58, 59, 72, United General Sea Box of 74, 76, 77, 80, 82, 83, 84, 85, 86, 87, Borrowstounness Friendly Society 26 117, 118, 124, 127, 146, 190, 194 United Housing Foundation (UHF) 172 Vuotto, M. 139, 173, 200 United States Federation of Worker Co-operatives 196 Waddell, P.D.S. 6 Universal Co-operatives Inc. 169, 197 Wales 33, 55, 56, 72, 74, 87, 124 Universal Provider 57 Walton, J.K. 2, 41, 42, 71, 72 university co-operatives 207 Wanyama, F.O. 201, 202, 203 US Peace Corps 174 war 106 see also First World War; Second USA: 1844–1864 63–64, 224; 1864–1914 World War 71, 76, 95–100; 1914–1945 14–15, war profiteering 117 115–116, 132–138, 145, 147, 225; Warbasse, A. 132–133 1945–1975 168–170, 171, 180; Warbasse, J.P. 64, 128, 132, 135, 137 1975–present 5, 11, 180, 194–201; Warren, Joseph 38 agricultural co-operatives 8, 63, waste elimination 97, 134 171, 180; banking 198; community water co-operatives 95, 129 co-operatives 39; consumer Watkins, W.P. 39, 51, 53, 60, 106, 107, 115, co-operatives 38, 64, 95, 96, 97, 133, 117, 119, 146, 164, 178, 179, 180, 181 134, 135, 137, 168–169, 195–196; Watson, A.C. 140 credit unions 99, 133, 134, 136, Watts, D.C.H. 80 137, 169, 171, 180, 198; financial Webb, B. 3, 6, 7 co-operatives 10, 11, 38, 98–99, 116, Webb, C. 51, 52, 53, 54, 59, 74, 76, 77, 171, 198, 224; and the ICA 145; New 78, 79, 80, 81, 82, 83, 85, 86, 87, 88 Deal 116, 135, 147, 225; pre-industrial Webb, S. 3, 6, 7 co-operatives 26–27, 30–31, 36, 38, Webster, A. 2, 3, 7, 11, 17, 28, 29, 33, 34, 39–40; producer co-operatives 99; 35, 40, 43, 51, 54, 57, 58, 59, 72, 74, 248 Index

76, 77, 80, 82, 83, 84, 86, 87, 118, 124, Woolf, H. 10 127, 146, 190, 194 Woolwich Docks 29, 74 Weigand, H.J. 116 Woolworths 119 Weitling, Wilhelm 64 work credits 37 see also labor notes welfare 79, 91, 126, 205 worker co-operatives: 1844–1864 51–52, Westcott, M. 13 60, 63–64; 1864–1914 91, 95, 99; Western Native Township Co-operative 1914–1945 120, 122, 126; 1945–1975 Society 130 161; 1975–present 196, 200, 226; Westralian Farmers Limited (WFL) 141–142 conclusions on 223; definition of Wetzel, K.W. 6, 13 a co-operative 2; Denmark 91, wheat 17, 34, 70, 80, 117, 127, 133, 138, 95; dividends 3; early origins of 142, 145, 180, 199 co-operative movements 30; France wheat silos/grain elevators 17, 80, 98, 38–39, 60, 95, 120; Italy 60, 95, 122; 138, 142 Latin America 200; overview 4, 6–8; White Coppice 71 pre-industrial co-operatives 38–39; wholesale consumer co-operatives: USA and Canada 63–64, 99, 196 Argentina 139; Australia and NZ 101, workers’ control 6–7 141, 208; Britain (1864–1914) 74–81; Workers’ Co-operative Housing Canada 138, 169–170; Denmark 90; Society 95 early origins of co-operative movements Working Associations 51–52, 34; in Europe 89; Finland 95; Germany 53, 57 92, 178; and the ICA 106, 145, 180; and Working Men’s College, localism 17; Netherlands 124; overview London 53 6; rise of 56–59; USA 97, 133, 134, 135, Workingmen’s Protective Store 64 137, 169 World Council of Credit Unions Wilson, J. 2, 3, 7, 11, 28, 29, 33, 34, 35, (WOCCU) 168, 180, 193, 203, 206, 40, 43, 51, 54, 57, 58, 59, 72, 74, 76, 207, 212, 213–214 77, 80, 82, 83, 84, 86, 87, 118, 124, World Extension Division 127, 146, 190, 194 (WED) 180 Windsor Foundry 51 Wright, Frances 37 wine 130 wineries, co-operative 103–104 Yates, J.S. 8 Withycombe, S.M. 143 Year Book of Agricultural Co-operation Wollemborg, Leone 94 121–122 women: Africa 201; Asia 207; Australia and yeast 57 NZ 141, 175, 176; democratic principles Yoshino, Suzako 131 2; as employees 79, 85; and the ICA 144; Young Negroes Co-operative International Co-operative Women’s Leagues 135 Guild (ICWG) 144, 181; Irish Women’s youth movements 120, 135, 165 Co-operative Guild 86; Japan 131; Korea Yugoslavia 126 205; as members in their own right 84, 85; Rochdale co-operative movement Zamagni, S. 16, 60, 95, 42; Second World War 127; South 123, 171 America 139–140; in sweatshops 51; Zamagni, V. 11, 12, 16, 60, 95, USA and Canada 99, 135 123, 171 Women’s Co-operative Guild (WCG) 72, Zentralverband deutscher 84–85, 127, 132, 224 Konsumvereine 92 women’s guilds 175, 176, 181 Zevi, A. 1 Woodcraft Folk 120 Zimbabwe 16 Woodford, K. 211 Zurich Congress 179–180