become popular with the working people, and not with them alone.

But the question arises, how is it that retail dealers exist in such numbers as to be able to conduct their business only at such disadvantage? Probably the principal reason why retail shops so predominate in the towns and particularly in the villages and country districts over the requirements of the inhabitants is because the people are unable on account of the artificial obstructions that exist to settle in the country districts or suburbs on suitable patches of land of their own. There are therefore a disproportionate number who reside in the towns, and resort to the retail trade to obtain or to eke out a livelihood. Retired ship captains and sailors form a class who would greedily invest their savings in land, instead of in a town's business, if it were in their power to do so. That is the case in the Channel Islands; and where the agriculturalists have been able to possess land in Ireland the capital is probably chiefly acquired at sea. The large numbers of small shops therefore must be regarded in this light as an indication of an abnormal condition of things, without which the co-operative stores would not possess such preponderating advantages as they are known to do.

Societies or combinations of workmen for the purposes of production flourish chiefly in France, and they have also been successfully established in Sweden. Where property on the whole is not very unequally distributed, the circumstances for the existence of societies of cooperative production will be most favourable, for then there will be the less difficulty experienced in obtaining the capital necessary to start and maintain them, and when that capital is obtained, they will not be so likely to be outdone by the competition of very large and therefore more economically conducted works. Additionally, however, as regards France it may be said that many and

CH. VIII. WHY CO-OPERATIVE SOCIETIES HAVE FAILED. 315

strong efforts have frequently been made to set on foot such establishments, and State aid has been asked and extensively granted. The total result has, however, been that few of the whole number that have been started have survived more than one or two years, and the members of those who have have distinguished themselves by their extraordinary perseverance and heroic resolution in combating the most dreadful privations. The exceptional exertion and self-denial have produced in this direction, as they are capable of doing in all other directions, exceptional results. In England, these societies have generally, though not always, failed, and they have failed in spite of the extraordinary exertions of their members, on account of their having to run in competition with the works of capitalists, whose advantages must, because of their ability to do everything in first-class style and on the largest scale, be always overwhelming. Some cooperative societies for production in this country have not been able to withstand the temptation of denying themselves the benefits of an extended employment of capital. It has been felt at these times that the capital and credit of the working members were insufficient to enable them to reap the fullest benefit from the labour expended. The result is that subscribers to the capital who do not partake in the labour of the work are admitted. The interests of these members are necessarily in some degree different from those of the workers, for if a comparatively high bonus be paid to labour they begin to feel that so much that might have been added to swell the profits of capital is lost. These diverse interests then gradually pull different ways, till at the time that the work is gaining the fullest advantage from the employment of ample capital, a struggle commences, which ends either in the expulsion of the new capital held by non-workers, which will generally, if not always, be impossible, or in the conversion of the concern into a

joint-stock company, wherein the principle of co-operation is necessarily abandoned.

Whatever associations for co-operative production have succeeded, have succeeded through the energy and selfdenial of their original members; and when they have passed the initial stage, and the particular trade in which they are engaged remains in a healthy condition, a continuance of the same exceptional exertion will eventually produce a great success, for every step in advance, owing to the gradual accumulation of capital, is an easier one than that which has preceded it. We thus see a few wonderful examples of the success of this system, at which its advocates point, full of hope; but there remain still only a few,-out of the large numbers that have been started. It may be said, then, that there is no record of experience, nor any process of economical reasoning, to convince us that any large number of manufacturing enterprises can be conducted upon what are known as "co-operative principles." . . . They are essentially exceptional undertakings.'

In Prussia, through the extraordinary and persistent exertions of M. Schulze-Delitsch, a system of credit co-operation was established among the working classes. This system has spread considerably, and is reckoned to have produced very advantageous results to the members of the various societies. The principle adopted is that of mutual credit, whereby every one enrolled becomes responsible for the debts of the whole society, so that when it consists of many individuals, every one of them possesses an amount of credit he could not otherwise enjoy. The society receives contributions from the members, that form a fund, upon the basis of which it borrows capital on credit. With such capital, the members are in a comparatively favourable position

1 Times, December 29, 1875.

CH. VIII.

CO-OPERATION IN PRUSSIA.

317

to supply themselves with the tools, machinery, and appliances of their respective trades. At the present time, the credit of these societies is able to procure ample funds in the open market on favourable terms. It is the same principle that has been adopted by the Government of Russia in carrying out the emancipation of the serfs. Each individual was made amenable to his commune for the payment of the redemption dues on the land, and the commune was made responsible to the State, so that the credit of the aggregation of individuals in the commune was conferred upon the unit. The same principle is also adhered to in the transaction of business generally wherever possible, although individuals trading with each other continually become accustomed to put faith in each other to such an extent, that so far as it is found to be inconvenient or not easily practicable, the principle begins to be lost sight of. The spreading of responsibility over numbers acts as a safeguard, and the amount of security thereby obtained is valuable to the co-operators, and it becomes all the more valuable and all the more necessary in proportion as the co-operators are men of indifferent means.

But the necessity for the establishment of such cooperative credit societies is only apparent when capital is not introduced amongst a population in the usual way. Capitalists, if alive to their own interests, will prefer to invest their capital where the most profit will be expected from it; and if there are good means of communication, and equal advantages in other respects, capital will be distributed over a country pretty uniformly. There are always, however, centres of industry where trades locate themselves, because for one reason or other they derive special advantages at these. In the country districts, however, unless minerals are to be readily found, there is a relative dearth of capital experienced. In purely

agricultural districts, especially where the winter is long and dark, the people may generally be without full means of employment, and indeed in many European countries, while they may possess full work during summer upon their farms, there is little remunerative work to be had in the winter. In these circumstances credit co-operative societies do good, for they enable the people to procure tools, machinery, and appliances that assist them to work most profitably in the winter time; and even in the summer their field occupations are conducted much more successfully on account of the fuller employment of capital that is so obtained. In England there appears to be no appreciable space or occasion for such societies, for large works, the productions of large capital, exist at frequent points over the most part of the country except in the outlying rural districts, and otherwise the poorer classes do not possess any lands of their own upon which they may apply capital.

Thus, then, there does not appear to be any prospect of a permanent and regular advantage derivable from the adoption of the principle of co-operation by the working classes, unless when the circumstances are exceptional; and when they are so, it is often, if not always, on account of an unhealthy, or at any rate a not very robust, condition of the industrial community. Where capital is made, it will tend to reproduce itself more easily in the future, for it facilitates labour, and the labourer must therefore, in preferring his own interest, prefer to work by its unstinted aid. The system of co-operation in a degree prefers a combination amongst labourers to the most profitable kind of combination between capital and labour; in the first case a distinct sacrifice is made, but with the view that what remains shall be securely divided amongst the labourer recipients, who have therefore a greater inducement to work hard and spare penuriously. From another