Consumers' Cooperative Societies in New York State

Part 1

CONSUMERS' COOPERATIVE SOCIETIES IN NEW YORK STATE

Published April 1922

The Consumers' League of New York

289 FOURTH AVENUE

NEW YORK CITY

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This study was originally prepared for the Consumers' League of New York in 1921 by Mr. Cedric Long. It has been revised by the League in April, 1922. The Consumers' League wishes to express its appreciation of the valuable advice and assistance given by Mr. Louis B. Blachly of the Bureau of Cooperative Associations of the State Department of Farms and Markets both in the original preparation of the material and in its revision.

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COOPERATIVE PRINCIPLES

The principles established by the Rochdale Pioneers in England in 1844 and observed consistently by successful societies since that time are as follows:

1. Earnings of capital stock limited to legal or current rate of interest.

2. Surplus earnings to be returned to members in proportion to patronage.

3. One vote for each member regardless of amount of stock owned. No proxy voting permitted.

In addition, the majority of societies adhere to the following principles:

1. Business to be done for cash.

2. Goods to be sold at current market prices.

3. Education given in the principles and aims of cooperation.

CONSUMERS' COOPERATIVE SOCIETIES IN NEW YORK STATE

The Extent of Consumers' Cooperation.

The Tenth International Cooperative Congress, held in Switzerland in 1921, disclosed the fact that since the last Congress, in 1913, the number of cooperators in the twenty-five countries represented had increased from approximately eight million to thirty million and that cooperative trade had increased correspondingly.

Today in Great Britain the cooperative societies number more than four million members, nearly one-third of the entire population being represented in these societies. Switzerland, in 1920, boasted three hundred and sixty-two thousand members and a third of the Swiss people bought goods through their own societies. Cooperation is still alive in Russia in spite of its unsettled economic conditions. In 1920 there were twenty-five thousand societies with twelve million heads of families. In the same year the German cooperative societies were two million seven hundred thousand members strong.

In the United States cooperation has had an erratic development. Within the past seven years, however, there has been a rapid increase in new societies until today it is estimated that there are about three thousand with a membership of half a million. In number of societies New York is far behind most of its sister states. It has one hundred and twenty-five genuine consumers' cooperative associations, seventy-five of which are among farmer groups and the remaining fifty among city consumers. There are in addition some twenty cooperative buying groups connected with large commercial organizations. No complete tabulation has been made of the total business of all these cooperative groups, but in 1921 the five largest cooperative societies among the city consumers, with an average membership of 1,800 persons, all located in New York City, did a total business of approximately one million dollars. These societies and many others are prospering. On the other hand there are many cooperatives which have failed. Whether they have failed or succeeded more knowledge of practical cooperation can be gained from their experience than can ever be learned from books.

The Consumers' League feels that the experience of these societies should not be wasted. For this reason it is telling the stories of several cooperatives in New York, some of which are successfully established and some of which have fallen by the roadside. In these brief stories are written a hundred lessons that cooperatives should heed.

SUCCESSFUL COOPERATION

The Utica Cooperative Society.

At the corner of Court and Schuyler Streets in Utica stands a grocery store which is different from an ordinary store. It is different because it is a cooperative store and it belongs to those who buy as well as to those who serve. There is no need for the purchaser to be on guard lest the bargain be to his disadvantage, for he is dealing with friendly clerks who are there to help him find what he wants, not to sell him something he cannot use. In this store the purchaser can find all the articles carried by a first-class grocer, canned goods, green goods, dairy products and, in addition, a complete supply of baked goods, baked by the cooperative society itself.

The bakery is to be found behind the grocery. Large, high windows throw a flood of light into the mixing room. The oven is of a modern type, large, easily controlled and economical. Five men work at the baking and a boy wraps bread in waxed paper with a mechanical device which automatically folds and seals. The three delivery wagons bear the cooperative motto, "Each for All, and All for Each." They are used in the morning for the delivery of baked goods and in the afternoon for the delivery of groceries. It keeps three boys busy all day covering the territory between the cooperators' homes. The delivery system is essential because the membership is scattered throughout the entire city.

There are fourteen employees in the grocery and bakery. Hitherto they have received wages higher than those generally prevailing throughout the city for the same kind of work, but recently on their own initiative they voted themselves a ten per cent decrease. In a cooperative all members may know the financial status of the business and the employees found that, due to the diminishing margin of profit, the business could not support such a high scale of wages. Their wage cut followed because as members of the cooperative they were interested not only in their own wages but in the good of the society as a whole.

Part 2

The Utica Cooperative Society was organized in 1915 by a group of Germans. Half a dozen nationalities are now represented, although Americans predominate. Although they had only ninety-two members and $1,250 to start, they bought out a private store and began cooperative business. Their bakery was originally in the cellar under the store. The former owner was employed as manager. For three or four years they experienced many difficulties. Within two years two managers proved inefficient and had to be replaced. Only the tenacious loyalty of a few kept the society alive. But they had the foresight and determination to fight through those lean years.

Now for five years they have had the same manager. He insists upon scrupulous bookkeeping methods, careful buying, close supervision of his work by the board of fifteen directors, strict regard for the needs and desires of the membership, and exceptional precautions against waste and leakage. The president, a man having a private business of his, own, has an idealism almost religious in quality. These two men cooperate closely on matters of policy and provide much of the leadership which has brought success.

The membership is now 380. The capital stock has increased from $1,250 to $27,594. The business in 1921 amounted to $105,598, forty per cent of which was done by the bakery. Since 1915 the rebates to members on patronage have totaled $8,207, fluctuating from nothing at all in some years to eight per cent and ten per cent in other years. During this period the lump sum saved to purchasers, including rebates, the earnings on stock shares, and reserve fund, amounted to $12,642. This sum would have gone into the pockets of private storekeepers except for the cooperative store.

The Utica Society has succeeded because it has met the prime requirements for effective cooperation. The greater part of the membership was loyal during critical times when the easy way would have been to withdraw and trade at chain stores. The management worked unceasingly to put the business on an economical basis. Finally they won out because they put Service over Profit and carried out that rule in the most practical and businesslike way they could find.

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Our Cooperative Cafeteria.

If you should drop in for lunch at any one of the three branches of our Cooperative Cafeteria in New York City the first thing that would strike you would be the friendly spirit of those back of the serving tables. Before you paid your check you would observe further that the food had a variety and flavor not found in the ordinary restaurant. If you were discerning you would detect that a complex machinery was at work which had nearly escaped you because of its smooth operation.

That genial spirit which infects the whole place and those subtle things which appeal to your eye and palate explain the success of the cafeteria. But there are some underlying causes for these things that we must get hold of and to do that we must go back to the year 1919. In October of that year a private cafeteria was started by two women with a record of successful cafeteria experience behind them. The experiment proved successful and the following April a momentous step was taken. It was proposed that the persons who ate there become the owners. A cooperative society was formed and in two weeks shares were sold to the value of two thousand dollars. The new owners took over the cafeteria and the former owners became their hired employees. This was the beginning of Our Cooperative Cafeteria.

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