Co-operation

by the Rev. Michael O'Flanagan, 1922.

The word "co-operation," taken at its face value, means merely working together. Whenever, then, a number of people combine and work together to attain some common end, there is co-operation. In this general sense every company or society, in fact every group of people organised to carry out some work in common, would be a Co-operative Society.

It is, however, in a special and technical sense that we use the word. We use it to signify a particular form of organisation for the purpose of manufacture or commerce. A co-operative organisation in this sense is distinguished from a Proprietary Concern and from a Joint Stock Company. In a Proprietary Concern, one person—the owner—is the sole authority. Everybody else is subject to him. All the profits made are the property of the owner, and any losses that may be incurred are his alone. The remaining people concerned in the enterprise are hired. They work for wages or salary.

Joint Stock Company differs from the Proprietary Concern having a number of owners instead of one. Each owner holds a certain amount of what is called stock, for which he pays a proportion in cash, or something that is equivalent to cash. The Company is ruled by the stockholders through a Board of Directors and a Manager. Each stockholder has votes in proportion to the amount of stock which he holds.

Thus a man who has £200 in shares in a company has twice as much power in the affairs of the enterprise as the man who has £100 in shares. The profits are divided among the shareholders in proportion to the shares held. The £200 man gets twice as large a part of the yearly profits as the £100 man.

Thus in the Proprietary and Joint Stock the link that binds the enterprise and gives authority to rule is money, or Capital. Hence we have the word "Capitalist," and the expression, Capital as distinguished from Labour.

Co-operation seeks a different and higher bond. Instead of a money link, co-operation seeks to substitute a human link. Instead of building with the pound as a unit, co-operation builds with the man as a unit. The Co-operative Society has members where the Joint Stock Company has shareholders.

The rule of the Co-operative Society is one man one vote. The poor member who subscribes for a £1 share has the same voting power as the well-to-do member who subscribes for a £100 share. The object of a Joint Stock Company is to earn dividends. The object of a Co-operative Society is to make some common service as beneficial and convenient as possible to the participating members.

Articles of commerce have each a source of origin, a channel of transmission, and a place of consumption. They make their appearance through the activity of certain people at the source of origin. They pass through the hands of certain intermediate people, and they disappear into the hands of the consumers. Some articles such as potatoes, eggs and fruit, go to the consumer in the form in which they are produced.

In other cases, as when milk is made into butter and separated milk, or into cheese and whey, a process of manufacture which is best done near the source of supply, is necessary. In another set of cases, such as the turning of live cattle into fresh meat, or the cooking of food stuffs, it is more important to be near the consumer. Butter is best made near the cow that gives the milk, but it may be eaten hundreds or thousands of miles away.

Bread, on the other hand is made, not near the wheat fields, but near the people who eat the bread. In the case of woolen cloth, the weaving may be done far away from the sheep that grows the wool, and from the man that wears the cloth.

A consideration of these factors helps us to understand some of the lines upon which co-operative enterprise has traveled. The producers of certain articles may combine, gather together the results of their individual activities, and bring them in the direction of the consumer. The consumers, on the other hand, may combine and go in search of the goods they require.

An egg-selling society or a creamery is a good example of the first class. A co-operative store is a good example of the second class. Many of the ordinary Agricultural Societies perform both of these functions. They purchase for their members manures and agricultural implements, and they sell eggs and other farm produce.

It is difficult, if not impossible, to divide into classes the various kinds of Co-operative Societies in Ireland. The reason is that societies started for one specific purpose often branch out into activities not contemplated at first. The most distinctive characteristic of co-operation in Ireland as compared with other countries is this tendency of societies started for one purpose, such as butter-making, branching out till they become societies for general purposes. This should be born in mind while following the classification which I now propose to pass in review.

By far the largest and most important class are the co-operative creameries. Affiliated with the Irish Agricultural Organisation Society in the year 1919, there were 339 co-operative societies occupied mainly in the manufacture of butter. These societies stretch across the country in two belts, corresponding with the two great dairying sections of Ireland. The southern belt stretches from the north of Kerry, through Limerick and Tipperary to Kilkenny and Wexford. The northern belt runs across from Sligo through Leitrim, Tyrone, Fermanagh and Cavan, with outlying creameries running into the Ulster counties, as well as into the north end of Roscommon.

The total sales of butter, cream, cheese and milk, for all these co-operative societies during the year mentioned, amounted to over five million pounds, of which approximately two-thirds belong to the southern districts and one-third to the northern. The county Limerick is easily first with fifty-eight co-operative creameries, and a turn-over of £1,400,000, followed by Tipperary with fifty-two creameries and a turn-over of more than a million. Between them they account for nearly half the turn-over of all Ireland. The next counties in order are: Kilkenny, Cork, Tyrone, Kerry, Fermanagh, Sligo and Cavan. The turn-over in these counties varies from £400,000 in Kilkenny to just under £200,000 in Cavan.

Side by side with the co-operative creameries there are scattered throughout these two tracts of country, numbers of proprietary creameries. In the way in which the milk is handled there is, of course, no difference between the proprietary creameries and the co-operative creameries. The proprietor induces all the people he can to bring milk to him, either because his place is more convenient than any co-operative creamery, or because he pays a better price, or makes his terms more attractive, or at least appear more attractive, than the terms of any competing co-operative creamery.

The primary object of a proprietor is to make money. He buys as much milk as he can. He pays as little as he can for it. The object of the co-operative creamery, on the other hand, is to accommodate its members. It is not allowed by its rules to pay any dividend on its capital, over and above the fixed rate of interest, which is not usually more than five per cent. If there are any profits to be distributed at the end of the year, they are distributed not in proportion to the capital invested, but in proportion to the value of the milk supplied. In other words, the object of a co-operative creamery is to secure for its members the largest possible price for their milk. The object of a capitalist creamery is to earn the largest possible dividend on the money invested.

A co-operative creamery is an organisation of producers who combine for the purpose of manufacture and sale. The raw material, namely milk, is not produced by co-operation; it is produced individually by each co-operator on his own farm. It is carried from the farm to the creamery, sometimes individually on the farmer's own cart, sometimes co-operatively by milk wagons owned and operated by the company. It is manufactured co-operatively into butter or cheese. It is sold co-operatively in the open market. As a rule it is sold indifferently, either to proprietary or co-operative wholesalers, who pass it on through the ordinary retail channels to the consumer.

The development of co-operative poultry societies in Ireland affords a strong and interesting contrast to that of creameries. Affiliated with the "Irish Agricultural Organisation Society" there are only twelve purely poultry societies in all Ireland. Of these there are two each in Aintrim, Derry and Limerick, and one each in Donegal, Cork, Carlow, Kilkenny, Galway and Roscommon. Their recorded sales last year totaled £230,000. The special co-operative poultry society is, therefore, not a big factor in the egg trade, as is the co-operative creamery in the butter trade.

As might be expected, a similar contrast is found in other countries. The marketing of eggs appears not to afford as favorable a field for co-operation as the making and marketing of butter. A co-operative creamery manufactures the milk into butter and then puts it on the market. An egg society merely collects the eggs and puts them on the market just as they came from the producers. The expensive machinery required to manufacture butter is not within the reach of the individual small farmers, hence they co-operate to purchase it and erect a substantial house in which to put it. This machinery and house become the property of the co-operative society, and the desire to retain the ownership of it serves as a permanent bond to restrain the members from deserting their society.

If a proprietor wishes to compete with a co-operative creamery, he must invest a large amount of capital, bring in similar expensive machinery, and erect a similar building. Hence it is difficult to begin competition with a co-operative creamery, and the issue is doubtful.

In addition to this a co-operative creamery mixes all the milk of a countryside and produces from it a large quantity of uniform butter. While this butter may not be equal to the very highest grade of home-made butter, it is certainly better than the average. It can be sent to a distant market so that the consumer may know what he is getting, and feel certain that he will get the same quality day after day. This is manifestly impossible for small farmers who produce their butter separately and in small quantities.

All these advantages are absent in the case of an egg society. In order to engage in the marketing of eggs, the only thing required is a store room and packing material. The eggs of a countryside cannot be mixed up together and blended to produce a uniform product. The consumer must take his chance with each individual egg as it is placed before him on the table.

At the same time the very absence of these external helps makes the development of a co-operative egg society more than usually interesting. Where the co-operative spirit is sufficiently well developed a society would not require this help. If the egg producers of a countryside would unite together and work together in a genuine spirit of co-operation, sending their eggs to the market immediately after they are laid, so that the consumer could rely on getting them fresh, and if they could thereby send to the market a supply in which there was no chance of stale eggs getting mixed, they would undoubtedly get a corresponding reward. For the flavor of an egg that is only three or four days old is entirely different from the flavor of an egg that is even a week old. Of course the same thing could be done by a proprietary organisation; for, if the highest type of commercial honesty were universal in a community, it would not matter much whether its business was done by co-operation, joint stock, or proprietary concerns. It is the spirit that counts rather than the form. The great advantage of the co-operative form is that it is more favorable to the development of the unselfish spirit than the other. The one fundamental reason why co-operation has been such a great success in butter and such a comparatively small success in eggs, is that the co-operative spirit is not yet fully developed in Ireland, and therefore it marches with crutches better than on its own legs.

A few small but interesting attempts have been made in the promotion of industries societies in Ireland. There are only seven of them in the country that are listed as working in last year's report of the Irish Agricultural Organisation Society. Three of them are fairly well known, "The Dun Emer Guild" and "Cuala," Dublin, and "The Irish Decorative Society," Belfast. They are engaged in the production of Art Industries such as embroidery, and hand-tufted rugs. The members of an industries society are not the producers of the raw material, but the people who carry on some form of the work of transforming it from the raw material to the finished product.

For example, the "Dun Emer Guild," is composed of nineteen members. But they buy thread and other materials in the open market. They manufacture it co-operatively into rugs, tapestries, etc., and then they sell them on again in the open market. To bring out the idea more clearly, one may contrast an Industries Society to a co-operative creamery. In the co-operative creamery it is the farmers who produce the milk who are the members. They own the building and plant, and hire the hands that work in the creamery. If one were to conceive the creamery workers themselves becoming the members of a co-operative society, owning and operating the creamery and buying the milk in the open market from the farmers, then such a creamery could be listed as an Industries Society.

There is one very remarkable case in Ireland of an Agricultural Wholesale Society, but which has really developed into what is in the main an Industries Society. This is the great Templecrone Society, Dungloe, Co. Donegal, which is the most interesting, as it certainly is the most famous, co-operative society in Ireland.

Even a short paper on Irish co-operation would be incomplete without giving a summary of its history.

In 1906 the society was started in a poor, congested district, away amid the barren but beautiful mountains of north-west Donegal. The men who started the society were so poor that all the capital they were able to procure was £2 14s. The object was to purchase artificial manure for the members. Even this modest programmer met with bitter opposition. The wives of the members were told to get their bread and groceries where their husbands got their manure. The Society was thus compelled to start a bakery and a shop.

The old women and very young girls of the countryside earned a little money by knitting socks. They had to carry for many miles across the mountains the woolen thread they needed, and return to the market with the resultant socks. The Society employed a cart to carry the thread and socks for them. Afterwards knitting machines were purchased, and at present there is a large co-operative knitting factory in the village of Dungloe. One hundred and fifty women and girls are employed at wages ranging from 30s. to £3 10s. per week. The total sales of the Society in 1918 were £75,000. The moving spirit of that great Society is one of the most interesting personalities in Ireland. He should be induced to go round and tell the history of Templecrone in every parish in the country.

Little need be said of the Flax Societies. There are only twenty-nine of them in all Ireland. All of them, except two, are, as might be expected, in the north. The entire turnover of all of them put together is only £21,000, about, about as much as one good-sized creamery.

We now come to what are known as Agricultural Societies. With the exception of the creameries they form the largest and most important branch of co-operative societies in Ireland. They are more widely spread than any other class of societies, being represented in practically every county. There are thirty-nine of them in Mayo, twenty-six in Galway, eighteen in Roscommon, seventeen in Cavan, thirteen each in Clare and Meath, eleven each in Donegal, Down and Westmeath, and ten in Tipperary.

As a rule these organisations are small and have a small turnover. The total of them all put together is a little under a million pounds. But the great bulk of that is done by a small number of great societies, notably Lisburn, with £100,000, Templecrone £75,000 and Enniscorthy £68,000. In less than forty cases does the turnover exceed £5,000.

Strictly speaking the Agricultural Society is a society supplying merely implements, seeds and manures—things that are necessary for carrying on agriculture. But many of the societies that are listed as Agricultural have developed in two other directions, namely the direction of supplying food, clothing and household requirements to the members and their families, and sending to the market eggs, grain, and other products of the farm.

We now come to a class of co-operative society which has been artificially retarded in Ireland by the influence of a competing interest. This is the co-operative store.

A store is unlike the societies already described, in as much as it is a society for consumers instead of producers.

Shop-keeping is a business that has been well done all along in Ireland. A shop is nothing new. The whole country was well supplied with shops long before any co-operative movement was heard of.

The co-operative creamery came into a new field. The co-operative shop has come into a field already occupied. Hence, where the co-operative creamery had only to pioneer its way, the co-operative shop has had to fight its way.

The great advantage of co-operative shopkeeping is that it is a very simple way of teaching people the rudiments of co-operation. People who begin with a co-operative shop will find themselves drawn towards co-operative production. Instead of retailing bread made in Belfast or Cork, a co-operative shop in Roscommon might start a bakery to make its own bread. After a time it might not merely be content with making bread. It might wish to start a mill and make its own flour.

In the same way a co-operative drapery might first branch out into tailoring and then into spinning and weaving. Enterprises that were too big for one co-operative shop might be undertaken by the federated shops of a county. Still more ambitious projects would come within the reach of a great National Federation.

Co-operation in some foreign countries has already brought enterprises of this character to success, and interesting examples are not wanting in Ireland itself.

It is greatly to be desired that the Irish shopkeepers should study Co-operation. They are a very able and intelligent body of men. With their assistance co-operative enterprises could be developed along lines that would bring great benefit to the general community without doing injury to their own or any other class.

The last class of co-operative society to which I refer is the society that deals with credit or money— "The Credit Society or Bank." A person who wants to engage in any activity requires money. If he has not got the money himself he must borrow it. The Agricultural Credit Society is an organisation that enables a man to borrow money by co-operation. If a man wants to borrow money he must first prove that he can be relied on to give it back, and the people who want the money most are the people who find it hardest to prove this. A man who is very poor may be able to give nothing but his word, and perhaps the word of one or two other men like himself. The value of the poor man's word may be in itself a very safe guarantee for money, but it is difficult for an ordinary Banker to investigate it at such a small cost that he can give a loan on reasonable terms of interest. To overcome this difficulty is the aim of the Agricultural Credit Society.

A number of poor men unite together. They give their combined word to a Banker for a sum of money. They then divide this money amongst them according to their needs. The ordinary Banker who lends the money in the first instance has got the combined guarantee of all the members of the society, and each individual member is liable for the entire amount borrowed by the society. Thus it is in the interest of all the members not to accept any member whose word is not good. Having allowed a member in, it is to their interest to use their combined pressure upon him to make him pay. Hence, the Co-operative Credit Society is able to get money for its poor members on much more reasonable terms than they could get individually.

The desire to get money for reproductive purposes arises from two causes, poverty or enterprise. These are, in fact, but two forms of the same cause. Everybody has the ambition to live.

If people are in want of the bare necessaries of life, and if they have no opportunity for working for wages, the strong necessity of making a living will force them to enterprising. These conditions exist in Ireland mainly along the western seaboard. It is here we have the great bulk of the Agricultural Credit Societies. Mayo has twenty-seven, Donegal seventeen, Galway nine, and Kerry seven.

The principal development of these Agricultural Credit Societies arose out of the extreme poverty of the people. A poor man wanted to buy a pig or a cow, but he had not got enough money to do even this. His barren patch of mountain or bog farm did not give him sufficient standing to be able to borrow the money from the Bank. He combined with a number of others similarly situated, and thus formed a Credit Society. They got a sum of money from a local Bank on their combined credit. This was distributed. The member we speak of got his share and bought a bonham. In less than a year it was full grown and was sold for four or five times the price paid for it. The loan was then paid back to the Credit Society, and perhaps a new and larger loan procured.

A lot of these poor people in the West are not now as poor as they were half a dozen years ago. Hence it is not surprising that this class of society is dying out. In the year 1917 one hundred and seventy-one of these societies were affiliated in all Ireland. In 1918 the number had fallen to one hundred and thirty-eight. So that in one year alone, thirty-three societies, one fifth of the entire number, had gone out of existence. This might at first seem a sign of decay. It is, on the contrary, the best possible sign of the good work these societies have done. They are disappearing with the extreme poverty that called them into existence.

The growth of Agricultural Societies out of enterprise, instead of out of necessity, is a development of the future. Anything that will quicken the enterprise of the Irish people will create a new demand for these Credit Societies. Credit Societies that grow out of progressive enterprise are not limited in their growth like those that grow out of want. The more good work they do for the people, the larger and more numerous they will become. A Credit Society may develop into an Agricultural Bank in the full sense, and may become the means of investing the surplus money of its members instead of a means of borrowing. The most interesting development of this kind in Ireland is the Society of St. Columcille, Co. Longford. This Society holds deposits amounting to over £17,000, while its total loans are only £4,000.

A fully developed Bank must be at the same time a borrower and a lender. It must borrow from the people who have money and lend to people who require it. All the money that it receives on deposit, or in other words, all the money that it borrows from one set of people, it must lend to another set. The practice of the ordinary Bank is to give the smallest possible interest for the money deposited in it, and to charge the largest possible interest for the money that it lends, and in this way to make the biggest possible dividend for the shareholders.

The object of the Co-operative Bank, on the other hand, will be to give the largest it can afford to give its depositors, and to charge at the same time the smallest interest to those who borrow from it. There are a lot of people in Ireland who have more money than enterprise. These people put their money into whatever bank they think safest. They get two or three per cent. interest.

There are other people who have more enterprise than money. A young man, for example, has the enterprise and ambition to acquire a farm of land and build a house, or perhaps he has a strong to buy and run a motor car for hire, or a threshing machine, or start a shop. He wants money. He goes to the bank, but may, perhaps, find the greatest difficulty in borrowing from the bank at ten per cent. interest some of the money for which the banker pays two or three per cent.

When a system of Co-operative Banking is developed in Ireland the people who have money to spare will be able to get good security and five per cent. interest on their money, and the young man who wants to buy the farm or set up the shop, will, if he is of the right type, be able to borrow it at six per cent.

The development of Co-operative Banking that has taken place in Ireland so far is but a one-sided development. In the western districts the co-operators have more enterprise than money, and the Society is a mere borrowing institution. It borrows money from a Joint Stock Bank and divides it up amongst its members. In Columcille, Co. Longford, on the other hand, the co-operators have more money than enterprise. There the Bank is rather an investing than a borrowing institution. Out of the money received from its members the bank was able to supply all those who had borrowed from it, and it still had £13,000 to spare. This £13,000 had to be sent away to be lent to people somewhere else in the world who had more enterprise than they had money. By federating the co-operative Banks all over Ireland, money could be sent from a part of the country where it is more plentiful than enterprise to a part where it was less plentiful than enterprise. This would be to the mutual advantage of both parts.

This brings me to the general question of federation. Just as many people combined in a co-operative society are more powerful than the same number acting without combination, so, several societies combined in one federation are more powerful than the same societies acting independently.

An attempt to organise the Co-operative Societies in Ireland on a national basis is made by the Irish Agricultural Wholesale Society. Its aim is to become a great connecting link between the individual societies and one another, as well as between the Co-operative Societies as a whole, and the general market outside. To collect butter, for example, from the co-operative creameries and sent it out to be sold through the co-operative stores, would be a function of the I.A.W.S. The Irish Co-operative Agency Society, as a matter of fact, markets a far larger quantity of Irish butter than any other Society. To collect butter and eggs from all over Ireland and send them out through the ordinary

channels of trade to be sold abroad would be another function. To receive through its bank, money from places like Columcille, that have money to spare, and send it down to a Credit Society in the West would be a third.

The weak point in Irish co-operative development is the intermediate link between the local unit and the national organisation.

There are two obvious units of territory that might serve in developing an intermediate link, namely the county and province. The province, however, is too large in proportion to the nation. If Ireland were divided into fifteen or twenty provinces, instead of four, it might be worthwhile to consider the development of provincial federation within the co-operative movement.

The county would be a better unit. But the counties are very unequal in size. While some of them would make quite convenient economic units, there are others that would be required to be divided. The most interesting case of county development is in Wexford, where the co-operators have tried to bring about a strong federation of all the societies in the county. It will be interesting to see how far they can perfect a scheme that may be extended all over the country.

Side by side with the federation of the societies for trading purposes, represented by the Irish Agricultural Wholesale Society, there is also a combination for purposes of propaganda called the Irish Agricultural Organisation Society. The object of the Organisation Society is to educate the people of the country on the co-operative lines, and to promote new societies and to guide those already in existence. The Wholesale Society, on the other hand, is a business organisation that aims at transacting a wholesale trade with the individual societies.

The Irish Agricultural Organisation Society employs a number of organisers who attend meetings held for the purpose of starting new societies. They visit the societies. from time to time, and give them expert advice on their difficulties.

Within the past year a number of interesting experiments have been made in the formation of co-operative societies. for the purpose of acquiring land, either by rent or purchase. This is a branch of co-operation that has been developed to a high degree in Italy and Roumania.

There are three classes of Co-operative Land Societies. In one class the society acts merely as an agent between the landlord and the members. The society buys or rents the land from the landholder and subdivides it and re-sells or sublets it to the individual members. In another class the society, in addition to this, looks after the marketing of the produce. In the third and highest class, the society conducts the farming, and no division is made of the land.

If this great movement is to be developed to the full, Irish money must be kept at home in Ireland. If by a system of Co-operative Banking the strong current of Irish money were poured back upon the land, it would be possible to bring about a great and peaceful revolution in agricultural conditions. Knowledge and Organisation are all that are needed. For those who wish to help, the first step is to get in touch with the Irish Agricultural Organisation Society, Plunkett House, Merrion Square, Dublin.

Source: National Library of Ireland.