banks, have succeeded brilliantly; but this is because these forms of association allow more independence to their members; they secure advantages for them without demanding from them, we may say, any sacrifice. On the other hand, agriculturists have very little sympathy with consumers' co-operative societies, because they think more of the interests of the producer than those of the consumer. They are protectionists; they want high prices; they supply the middle class and the petty traders. And this is why we see the "syndicats agricoles" in France, while claiming the right to sell to their members all their agricultural requirements, disapproving of those among them who sell goods and merchandise for their members' personal use, thereby becoming consumers' societies; they do not wish to enter into competition with the local traders.† A proof that this antagonism is real is that every attempt made during the last thirty years to effect an agreement between the consumers' co-operative societies and the agricultural societies has failed, though it would seem quite natural that the former should obtain from the latter all the food commodities they require. As industrial districts are more favourable for the development of consumers' co-operation than for agricultural co-operation, it follows that consumers' societies thrive better in towns than in the country. They are products of urban life.* However, there is one notable exception to this rule. Consumers' societies are not really successful in very + Author's Note. It must be admitted, however, that in Denmark consumers' co-operative societies are very numerous in country districts. * Author's Note. This question arose recently, owing to a judgment of the Court of Appeal, which prohibited the "syndicats agricoles" from selling goods to their members. This decision caused much perturbation in the syndical world. But the majority of syndicats adopted the distinction which we have indicated, namely, the right of the syndicats to sell all requirements for agricultural production, but not for personal consumption. large cities, that is to say, in capital towns. We might assert that up to the present London is a desert as far as co-operation is concerned and in Paris it is only in the suburbs that co-operative stores are to be found, and many of these are still only badly managed. As far as country districts are concerned, the explanation is simple; in a sparsely populated neighbourhood the people cannot group themselves round a common shop, every village has its small hucksters, or is satisfied with travelling salesmen." But as for the capital towns, the explanation is not clear. It may be, inversely, that the most powerful commercial oganizations are found in them; it is very difficult for co-operative stores to fight against the competition of large strongly organized businesses, whether it be for grocery, for fancy goods, or for furniture. It may, perhaps, also be that the inhabitants of a capital city often move from house to house, which renders it difficult to form the nucleus of crystallization which is indispensable to the prosperity of a co-operative society.8 But this is no longer the case; in 1922 the three London societies have 300,000 members. 7 The farmers have developed a good consumers movement in the United States and fully hold their own with the workers of the small towns. They are aided, of course, by the absence of much of the chainstore competition which the town worker has to contend with. And again, they have in many states a good buying agency in the farmers' central exchange. But in this country also, the farmers have developed their marketing organizations far beyond their purchasing societies. In the majority of cases the latter spring out of the former as the farmers realize it is just as important to control the spending of their money as it is to get that money in the first place. 8 New York, Chicago, and other large cities suffer from a dearth of co-operative societies. Much of this can be laid to the nature of the life which the city resident leads; the multiplicity of his daily contacts and the superficiality of his interests tear down within him those qualities that go to the making of a good co-operator. He develops the mental and spiritual life of the gambler. CHAPTER XIV THE RELATIONS BETWEEN CO-OPERATIVE SOCIETIES AND THE STATE [Author's Note.-This chapter, which does not appear under this title in the French text, takes the place of Chapters XIII and XIV in the French edition, which are entitled, "The Legal Aspect of Consumers' Societies" and "Taxation," respectively. These chapters are of little interest to American readers. We have retained those parts which are of general interest, and added a short summary of the new relations which have been established be tween the State and the co-operative societies as a result of the war]. The relations which can be established between co-operative societies and the State are manifold, and, at least as far as concerns France, tend to multiply. They may be grouped under the four following sections: (1) Relations with the State in its capacity of legislator: The laws about co-operation can be more or less favourable. (2) Relations with the State as administrator: The Government can delegate the administration of certain public services to co-operative societies. (3) Relations with the State as regards taxation: The taxes which apply to co-operative societies can be more or less remitted. (4) Relations with the State as a lender of capital: The State may advance money to co-operative societies to help in their establishment. 1. Legislation The legal conditions necessary for the formation and good administration of a consumers' co-operative society are as follows:-1 1. A minimum of formalities and expenses in constituting the society. 2. A minimum of liability on the part of the members for the engagements entered into by the society. This is the more necessary in that, since the liability would generally fall on workmen, who usually have no property, it would, in fact, be illusory. 3. The division of the capital into very small shares, so that it can be subscribed by workers who have only small savings. 4. The possibility of increasing the capital indefinitely in accordance with the possible extension of the society and the increase in membership. 5. Civil personality allowing the society to act in its own name without having to bring in all its members. The different forms of contract of association which the law allows consumers' societies are far from satisfying all these desired conditions equally well. The form usually adopted is a society of shareholders. This offers many advantages: (a) The capital is divided into shares which are within the reach of all purses. The value of the share, which for 1 The United States is a federation of states, each having its own laws relative to business privileges and practices. Many of these states have enacted legislation favourable to the formation of co-operative corporations; other have given no attention whatever to co-operation (unless it be to co-operative marketing among the farmers). Where there is no legislation providing for the formation of cooperatives, these must be formed under the business corporation law, and such co-operative features as are desired must be written into the by-laws of the society (provided these do not openly conflict with the laws under which the society is incorporated). A good federal law or uniformity of state laws is much needed. ordinary companies is generally £20, can be reduced to £1 for co-operative societies. Further, it is not necessary to pay the whole value of the share on subscribing (to "free" the share as it is called): it is enough to pay one-tenth or the very small sum of 2s. It would be difficult to devise easier conditions for the formation of capital. (b) The liability of each member is limited to the amount of shares subscribed for. It is thus reduced to the minimum, though the member is liable for the whole share subscribed for, and not only for the part paid up. In fact, if a society failed it would be very difficult to make workmen pay up the unpaid part. This is the reason why every society of this nature in England has to have following its name a word intended to warn the public of the non-liability of members, namely, the word "Limited.” (c) A co-operative society should always keep its doors open to those who wish to become members or those who wish to leave. To this end it is necessary that the number of its shares (and in consequence the amount of its capital) can increase or diminish at any time. This is essentially different from an ordinary company where the capital and number of shares are fixed by its articles of association, and in consequence no one can become a shareholder until he finds an existing shareholder who consents to sell him his shares. Co-operative societies are known in French legal phraseology as societies "with variable membership and capital." The French word "société" is used both for companies and societies in the English sense of the word. (d) The society has legal personality, which means that it has an existence in law as distinct from its members. In England this legal personality was at first refused to co-operative societies, and the law allowed the treasurer to steal their cash without leaving them any remedy. The |