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CO-OPERATIVE STORES: A REPLY
TO THE SHOPKEEPERS.
A CONTROVERSY is going on which commands keen public interest, as evidenced by the voluminous correspondence in the daily papers, between the foes and the advocates of co-operative societies. The former, of course, are the shopkeepers, who have had a great meeting at the Office of the District Board of Works at Westminster, though why that should have been placed at their disposal is not apparent nor quite consistent with their complaint of civil servants possibly working during office hours for their co-operative societies. Those societies, when they require to hold a meeting, have to pay for the use of a
As an outcome of this controversy, there has been an almost overwhelming number of new applicants for admission to the stores, and fresh co-operative companies are starting up in all directions.
The complaints against them, and the replies, may be briefly recapitulated as follows:
It has been urged and prominently brought forward over and over again that these societies are exempt from stamp duty and income tax. So far as the leading society-the Army and Navy-is concerned, this is not the fact, as it pays both, and, having no interest in doing otherwise, it pays to the uttermost farthing. The Civil Service Supply Association, being registered under the Provident and Industrial Act, although subject to stamp duty, does not, in common with other societies similarly registered, pay income tax; all the rest, being registered under the Companies Acts, pay both.
It is said that distress is caused to the people heretofore employed by the tradesmen. To this the reply is that at all events one society employs over sixteen hundred servants on terms probably more advantageous than under their old employers. Thus labour is simply diverted from one channel into another. The unfair prestige which is given by the titles Civil Service' and 'Army and Navy' is the latest grievance; but abolish them, and the results, so long as business is conducted on the same principles, will remain the same.
The enormous profits are spoken of; but, taking again the largest society, it is found that it pays only 5 per cent. dividend to its
shareholders, and goes on constantly reducing prices. A threat is held out not to vote for members of Parliament who are not hostile to co-operation; the counter-move is a suggestion from an officer at Stoke not to vote for members who are hostile, and it need scarcely be pointed out that the co-operators or consumers form the great majority, and would be therefore likely to have the best of it.
The tradesmen represent themselves as being the great taxpayers of the country. They have, no doubt, paid taxes in proportion to their numbers and the extent of their trade, but that has been from the profits derived from their customers, who now pay their quota through the stores. Here, again, it is lost sight of that it is not the tradesmen who are the taxpayers, but the purchasers who form the great majority as compared with the tradesmen.
The final and the most important plea is the serious injury that is being done to the tradesmen themselves. This is a matter which deserves the fullest sympathy and the most grave consideration. Sorry as all must be, there is no doubt about it that the shopkeepers must suffer from the process, which will gradually lead to their almost total extinction; and how to alleviate that suffering is the point to which public attention should be directed. To attempt to do so by the abolition of co-operative stores would be futile, as they have taken too deep a root. As well might we demand the extinction of railways and the restoration of the old stage coaches. Progress cannot be impeded. Should the electric light prove a success, no consideration for the losses of the gas companies will prevent its adoption.
But there is one more point, and a vital one-how far has the system of multiplying middlemen and their profits contributed to the prevailing stagnation of trade and the almost universal distress? It is admitted on all sides that the continuous workmen's strikes have driven trade out of the country, as we could no longer compete with foreign labour. Why has this been so? We remember that some thirty or thirty-five years ago artisans' wages were very much lower than they are now, and that young men could marry on much smaller incomes; but why? It was simply because the cost of living was so much cheaper, and that since then the necessaries of life have gradually but largely increased in price. The causes which have led to that increase are matters to be inquired into, and whether the cost of distribution has not been excessive owing to the large profits of dealers, agents, and shopkeepers. The first and natural effect of higher prices on the labouring classes is to induce a strike for more wages to enable them to live. This leads to increased cost of their productions, and these causes acting and reacting upon each other, finally, through strike upon strike, raise the cost of English manufactures to so high a figure that they can no longer compete with the foreign markets.
Trade, therefore, deserts the country, and there is an universal cry
of distress. The only remedy appears to be to reduce the cost of the necessaries of life, so as to enable the workman to correspondingly reduce his wage and thus to attract trade back again. The remedy sought by workmen in strikes is not open to men with definite fixed incomes, such as officers in the Army and Navy and Civil servants, and they, therefore, naturally struggle at the opposite side. As they cannot increase their means to keep pace with increased prices, they not unreasonably try to reduce those prices, and this is what they are now engaged in doing-with what effect remains to be seen, but that it must be to the benefit of all, except, in a measure, the middlemen and tradesmen, there can be but little doubt.
So far the result has been a great reduction, not only at the stores, but in the shops, and thus the general public participate in the advantage, including the shopkeepers themselves for goods they do not deal in; but nevertheless for many things the poor man pays more than the comparatively rich. For instance, for his peck of coal, his pound or two of potatoes, or his bit of inferior bacon, he has to give higher rates than members of the stores. Finally, co-operative societies, by bringing manufacturers and producers face to face with the consumers-saving large intermediate profits, often the result of speculation-are pioneering the way to a new era of moderate prices for the necessaries of life, which will naturally lead to returning trade and to a consequent revival of prosperity.
The complaints of the shopkeepers are those which have been principally dealt with, but in the controversy they have not escaped from counter-charges more serious than those of high prices, which are attempted to be excused on the plea of the credit system and bad debts necessitating a sufficient margin to provide against loss. Adulteration and short weight are denied; but though the denial may be and no doubt is true of many, the fact cannot be overlooked that they were prevalent to so great an extent as to provoke recent legislative enactments for their discontinuance under pains and penalties. And then again there is the charge of giving commission or fees to servants who have the checking of the goods supplied, and of the charges made for them-what this may lead to can be easily understood. And this system is one of the difficulties which have been experienced by the stores, whose goods, in the absence of douceurs, are not in favour where it has prevailed until the heads of the establishment have satisfied themselves as to the cause. Mere Christmas presents are not here referred to, but even these are excluded by dealing on the co-operative plan, and many employers consequently compensate their servants by a liberal gift at Christmas time, and find it to their interest to do so.
The only remedy proposed to meet the co-operative movement is reduced prices with cash payments and no credit; but this, it is feared, is too late. The stores have gained the confidence of the public, and
even were the shopkeepers to sell at the same prices, which they cannot do for reasons to be explained, they would not be trusted to the same extent, as it is known that in co-operative societies, properly so called, no one has any interest in wrong-doing, and that if, by any accident, there be short weight or some omission, the person in fault can derive no benefit therefrom, but, on the contrary, runs serious risk of severe punishment; and no real grievance, as a rule, is left unredressed.
The credit system, however, still possesses some advantages, because it is outside the pale of the co-operative influence, and there are very many to whom it is a convenience, who receive their incomes at distant intervals-as, for instance, the family doctor, who sends in his bill but once a year. Formerly the civil servants were paid quarterly, and a large proportion of them were glad to have quarterly accounts, but the change which was made some years ago to monthly payments has enabled them to revolutionise the whole system of credit accounts.
Another reason why shopkeepers cannot hope to contend with co-operative societies is that their trading is so insignificant in comparison that they cannot hope to buy on anything like the same favourable terms. The operations of some of the leading co-operative stores are on so gigantic a scale, enabling them almost to command the markets, that the ordinary shopkeeper is left far behind in the race. For instance, one co-operative society last season bought up within one week twenty-six tons of crystallised fruits, such as apricots, cherries, greengages, &c.
It is notorious that the larger the buyer the better terms he can get, that manufacturers have a sliding scale of discounts increasing in proportion to the magnitude of the order, that this enables the larger co-operative stores to sell retail to their members at less, in many cases, than the ordinary wholesale prices to the shopkeepers, and that retail tradesmen have themselves been attracted to the stores to make purchases, through some friend, of goods to sell again. This requires ready money, with which, it is to be observed, the co-operatives with sufficient capital get extra discounts, while without ready money the shopkeepers are in the hands of factors
Although established in London, the influence of the co-operative stores is not confined thereto, as they do a very large country trade; and one of them at least-whose present rate of business is considerably over a million and a half per annum-supplies its members largely throughout the United Kingdom as well as abroad, its demands from India especially being continually on the increase.
Allusion has been made to co-operative societies bringing producers and manufacturers face to face with consumers, but one of these societies goes further than this, for it has itself become a manufacturer on an extensive and increasing scale. A very large number of working-men are employed on the premises in tailoring,
and over one hundred women constantly at shirt-making, receiving good and even liberal wages, in favourable contrast with those exposed in Hood's famous Song of the Shirt; and it must be some satisfaction to the wearers of these garments that, though they get them at reduced prices, that reduction has not been wrung from the misery of the poor workers.
It embarks, moreover, in mantle-making, perfumes, and in the manufacture of portmanteaus, dressing bags, purses, and other leather goods, tin-work, japanned ware, cabinets, &c. in fancy woods, also in printing and die-sinking. This may be deprecated by many, but the society has in fact been forced into it by the difficulty, and almost in some instances impossibility, of procuring really sound and good articles that could be confidently warranted to its members, owing to the system of scamping and concealing defects. The results have quite kept pace with the most sanguine expectations. The prices have been reduced, the members are satisfied, and the working men, many of them the best in their respective trades, are well content. As an illustration of this it may be related that a director conversing with one of them a few days ago inquired how he liked his employment, and received the reply 'Very much.' 'Why so?' he then asked. 'Because, sir, I have regular work. Before I came here I made bags which I sold to a factor. He would put on a large profit and sell them to a shopkeeper, and before they reached the regular customers my price was more than doubled. And then I often had two or three idle days at a time, as I could not sell my work. But now, owing to the small profit put on by the stores, I suppose there are a hundred bags sold where there used not to be ten; and I have regular employment and no idle time.' 'But how do you like the rule which prevents beer being taken into the workshops?' 'Well, sir, I didn't like it at first, but now I am used to it, and it has saved me a lot of money.'
The reduction in the cost of the necessaries of life has been principally dwelt upon, but it cannot be concealed that luxuries, and in fact everything in which the stores deal, from the most costly jewellery downwards, are similarly affected; but the argument still holds good that reduced prices create a greater consumption, and the consequent increased demand benefits the workers of all classes.
It will thus be seen that co-operative societies are likely to prove friends to the working man, however they may affect the traders; and another beneficial effect, a national one, must follow. By largely reducing the selling prices of these manufactures, they compete more favourably with those of foreign production, and tend, therefore, to keep the trade in our own hands.
The society which originated this co-operative movement, and to which all honour is due, is the Civil Service Supply Association; but the one more particularly referred to herein is the 'Army and Navy ;'