from its own members. Further, it goes without saying that this capital is of great service to the society, it is fair that this service should be paid for. Moreover, the rate of interest is generally limited to 5 per cent., which is the rule in nearly all societies. It does not fail, however, to excite a fairly strong opposition, and not only from the socialist side. In Germany it is the rule not to pay interest on share capital. It may be said that if the share-holding member, or lending member, is loyal to the society he gains nothing by getting interest on his money, because he will get it in the form of an extra bonus on his purchases. He ought to see that if the social profits are to be as high as possible they should be free from all interest charges. If, on the other hand, the member does not use the shop, and so fails in his duty as a member, it is only fair to punish him by refusing him any interest on his shares.

This does not really get to the root of the question. The reasoning would be right if all the members had brought to the society an equal amount of capital-either in the form of shares or of loans-and if it were in their power to make the same amount of purchases; in this case it would be of no importance whether they obtained their interest separately or as part of the dividend. But neither one nor the other of these conditions is, or can be, fulfilled, and therefore it seems fair that service rendered in the form of capital advanced, which is not of less value that that rendered in the form of purchases, should be rewarded. According to Professor Hall (quoted in the Co-operative News), half of the share capital is owned by one-tenth of the members. Half of the British co-operators do not own more than three shares. It is curious to observe that in the little world of co-operators the division of wealth is scarcely less unequal than in the great world of individualists.

Is it necessary to say further, that, if the society does not allow any interest on capital, no member will subscribe for

more than one share, since the possession of a single share entitles him to make all the purchases he desires and to gain the dividend, and that the subscription for a larger number of shares will not bring with it any advantage? By this course the society limits its share capital to a minimum incompatible with progress. This is exactly what happens in Germany. Each member takes up one share only. Therefore, it is necessary to make the shares expensive-30s., and sometimes £3.

Thus it happens that even those societies which wish to remain faithful to the principle of the abolition of interest, confine themselves to the formality of paying no interest on the first share subscribed for by each member, but allow interest on all further shares for which a member wishes to subscribe, and, in any case, on money which he leaves on deposit, or invests in the form of a loan. This was the rule in the Wholesale Society of the old French Co-operative Union (which has disappeared since the amalgamation), and it is the rule followed in the big "Produktion" society at Hamburg.5

(3) The Use of Capital

We have just remarked, that as soon as a consumers' society has succeeded in getting together a good number of members it does not know how to use such of its capital as is in the excess of the needs of its business, and it finds itself embarrased by its riches. Thus the British societies, both retail and wholesale, have in the form of shares and deposits nearly £60,000,000, but they only need at the most half of this as working capital. Therefore, the question arises how to employ the superabundant capital.

5 A few societies in the United States are able to follow this plan of paying interest only on shares subsequent to the first, but usually (except in the weakest societies where there is no money for payment of any interest at all) the current rate of interest is paid on all shares. Some of the more radical societies pay interest only on loan capital.

If the money be invested, as the bourgeois invest, in consols or other securities, it is giving to the capitalist organizations those very arms which have been forged for use against them; it is helping those very businesses which it is sought to supersede. What is needed is that co-operation should use these resources for its own ends, namely, in building factories and buying farms, or helping workmen's productive associations; the question which of these two systems is to be chosen is so difficult that it will be the subject of a special chapter. (See below, Chapter, X, "Housing.") For such great enterprises as these cooperation need not fear having too much capital. The English and Scottish Wholesale Societies have invested in their productive enterprises more than £4,000,000 of capital, and the retail societies have invested half this sum. The late war will have the effect of giving a strong impetus to this movement, for the rise in prices has made co-operators feel the necessity of going back to the very sources of production and controlling raw materials first of all if they wish to remedy the position. (See Chapter XV, Production by Consumers' Societies.)

There is yet another and less ambitious way of using it, but one which is of great use for the working, in fact, for all classes, and which offers the best possible security, that is the building of comfortable and cheap houses or flats. But these uses are far from absorbing all the available capital, so that more than a quarter of it is used in various other ways-public funds, mortgages, &c.-and sometimes goes even into industrial enterprises competing with co-operative ones.

Still, partly by its use in production and partly by the building of workmen's houses, or by the increase in the range of a consumers' society's business, the greater part of the capital accumulated by co-operation returns to thc people. In this way consumers' co-operative societies

already do a better social work than the savings banks, because the millions paid into savings banks are nearly all invested in consols (above all, in France) or in capitalist securities. As M. Luzzatti says, with his usual eloquence, "In the savings bank the poor man's mite is lent to the rich, while in co-operation the poor man's mite is lent to the poor."

In France, societies have not been so successful as to be much worried by the question of how to use their capital. As soon as they have sufficient capital their first thought is to build a fine shop, and many of them do not even wait to have enough, but borrow from their members for this purpose. This mania for building can be justified in part by the wish to show the strength of the society, and as an advertisement in rivalry to the big shops. However it is a dangerous thing, and has brought several big Parisian societies to ruin. For many of them, the day when they opened their "palace" has marked the beginning of their decay.

6 Such impatience is not unknown in the United States. The more common form of extravagance, however, is laying in excessive stocks of goods and over-furnishing the store or employing too many clerks.

CHAPTER X

VARIOUS TYPES OF CONSUMERS'

SOCIETIES

A consumers' society, to fulfil completely the definition which we have given of it, ought to be able to supply its members with everything they may require, so that the members need not spend anything outside the co-operative store. But such a complete realization is impossible under the existing economic organization. There are some social requirements which are supplied by the State, by municipalities, by private monopolies, or by the liberal professions, which are not yet, and which never will be, supplied co-operatively. We cannot, for example, go to the co-operative store to pay taxes, law costs, examination fees, or lawyers' or doctors' fees, nor even to purchase tickets for the train, tram, or theatre, though, indeed, this ought not to be impossible with regard to these last-named items.1 But, making allowances for all these expenses, which at best do not occupy an important place in the workman's budget—at the most 5 per cent., according to monographs published on the subject-a co-operative store should very easily supply everything else -food, clothing, housing, furniture, ornaments, books, even medicine, everything, in fact, a man needs from the cradle to the grave, from the layette to the shroud. We find all these

1 There are great differences of opinion on this subject. Already there are co-operative medical societies in Europe and the excellent. sick and death benefit societies in the United States which supply doctors, nurses and hospital care to the members. We already have co-operatively owned and controlled moving picture theatres. And many of our co-operators look forward to the time when vast wholesale societies shall control the railroads, and when the activities of the co-operatives shall so encroach upon the domains of the State hat its taxing power will be reduced to the vanishing point.

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