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.

* * * * *

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.

The cafeteria had from the outset advantages which are gained by many cooperatives only after bitter and costly experience. They had skillful and experienced management to which they immediately gave over all technical control, holding them responsible through an active Board of Directors and an accounting system devised by experts. The management justified the confidence of the shareholders. On April 1, 1921, after one year of operation they had outgrown the first plant and a new branch had been running for two months. There were in all 379 members. The year's business had been $96,000, of which $6,000 were net earnings. The stockholders had received six per cent on their investment, a reserve fund had been laid aside, and every month the member-patrons had received rebates on the food eaten of from six per cent to sixteen per cent. At the end of the second year the third branch, larger than either of the others, located in the Wall Street business section, had been in operation for three months. The membership of the society had increased to 750. The business for the year had been $190,000 and the net earnings were $12,000.

The cafeteria now employs sixty-eight workers, most of whom are shareholders and vote as such in membership meetings. The worker receives the same food as the patrons, served at the same counter. Against all restaurant traditions the worker is served before the meal so that she may have the best there is and have it before she is too tired to eat it. The minimum wage is higher than the customary rate for restaurant workers in New York. The forty-eight hour week is the standard, although as yet some of the help work over that time. Overtime is one thing that the management has not yet been able wholly to eliminate.

It has been found that the policy determining function of the stockholders and Board of Directors cannot operate independently of the plans of the management. The two in a business organization must be closely inter-related. The stockholders have not tried to supervise the details of the business, as has sometimes been done to the disaster of cooperatives. The general manager instead has gone to the Board of Directors and sits there practically as a full member. As a result the policy function of the Board and the management function are closely linked together as they must be in a business that is to be permanent.

The stockholders are not idle, however. Through their committees, they have amended the by-laws. They have recently called a general meeting for the consideration of labor policy, and they publish monthly a little paper known as "The Cooperative Crier." The average attendance at the shareholders' monthly meetings is sixty or sixty-five.

To an unusual degree the success of Our Cooperative Cafeteria is bound up with its management, not only because it is technically expert, but because it is thoroughly imbued with the cooperative spirit. Around the first nucleus has grown a staff of intelligent young men and women, usually college bred, who are devoting all their brains and energy to see that this cooperative cafeteria succeeds. They seem to find a peculiar satisfaction in knowing that their efforts will not enrich a few individuals at the expense of patron and employee alike, but will increase the common welfare of the community itself.

Like other cooperatives, the cafeteria has found the need for expert and trained workers in place of the hard-pressed volunteer. Much of the work on education and cooperative organization is carried on by trained members of the staff. This interest of the paid employees in things other than mere technical efficiency contributes much to that friendly spirit which makes Our Cooperative Cafeteria unique among the restaurants of New York.

* * * * *

The Village Cooperative Society, Inc.

After nearly two years of discussion and meetings and after long consultation with experts a group composed largely of the housewives in Greenwich Village in the heart of New York City started in January, 1921, a cooperative laundry. The second-hand machinery which they purchased was not a laundry unit, the capacity of the washer being one-fourth that of the ironer; they had insufficient capital, half of it borrowed; they employed an inexperienced manager and a green bookkeeper; and for the first eight months the supervision was almost entirely carried on by volunteers, hard working, but without the foresight and power of control so essential to a new organization. Under these handicaps the cooperative laundry lost money every month.

It existed through those months due largely to two things. First, they were forced almost immediately to employ a new manager who consistently turned out high grade work, and secondly, a small group of volunteers put all their energy into making the thing a success.

Then the causes of the continued failure were one by one eliminated. A business manager who had an intense interest in cooperation was hired to supervise general operations. He took over much of the work of the volunteers and for the first time the laundry developed a well thought out policy. The inexperienced bookkeeper was eliminated and all supervision headed up in the new manager. Better service brought more work, and new machinery made greater output possible without additional labor. The manager found labor cost too high and introduced methods which saved both labor and money. He found the machinery badly arranged. When the plumber told him it would cost twenty-five dollars to rearrange it he spent a dollar and forty cents and did it himself. After a discussion in the Board of Directors which nearly wrecked the organization, a Board policy of leaving all details of management to the manager and chairman of a managing committee was determined upon, while the Board devoted itself to the determination of general policies.

The results of these changes were soon apparent. For the first time the dead line between losses and earnings was crossed and net earnings gradually began to mount. In September, 1921, the amount of business wavered around a hundred dollars a week. In March, 1922, it averaged about $330 per week, and net earnings have run as high as $75 per week.

The laundry is still small and is located in quarters for which it pays a regular commercial rent. It has expanded several times and now has three power washers, an ironer or mangle, a dry room and other equipment. It employs a business manager, who supervises the plant and does everything from keeping the books to collecting the laundry in a pinch, a work manager, a washer, a sorter and marker, four ironers and a delivery boy. It still holds hard to the policy of putting out the very best kind of work and economizing in every particular.

Its very success has in a way embarrassed the laundry. The manager has been offered special inducements to leave. The delivery system has been tampered with. There has even been acid thrown on the clothes by outsiders jealous of its business. But this has only stimulated the whole membership to fight harder to realize their aim of getting their own laundry work done the way they want it, and without profit.

* * * * *

The Finnish Cooperative Societies of Brooklyn.

What is it that makes the Finns so successful at Cooperation? Industry and cleanliness. At any rate those are the striking characteristics of the Finns of Brooklyn.

Up to the present time they have never paid any dividends. It has been explained to them, as their manager says, that if the business is to serve them properly it must grow, and in order to grow it needs all the surplus earnings for expansion. And so, because the members are industrious and far-sighted, they have foregone their dividends. The cleanliness of their stores, too, is an inspiration not only to their membership but to hundreds of others who have visited their plant. This is one of the biggest business assets they possess.

These virtues have enabled the Finnish group in Brooklyn to build cooperatively a three-story modern business block, to run therein a wholesale bakery, a retail bakery, a meat shop and grocery store, a cooperative restaurant and a cooperative pool room, to build adjacent to this two modern cooperative apartment houses and to lay the foundations for a third now under construction. Outside of the housing venture the business done last year was $175,000 and today there are nearly two thousand members.

Although these undertakings are practically a part of the same group there are three separate corporations. The largest of these is the Finnish Cooperative Trading Association, Inc. The restaurant is operated as the Workers' Cooperative Restaurant, Inc., and the housing association as the Finnish Homebuilders' Association, Inc.