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U N IT E D ST A T E S D E P A R T M E N T OF L A B O R Frances P erkin s, S ecreta ry B U R E A U O F L A B O R S T A T IS T IC S Isador L ub in , C om m issioner (o n lea ve) A . F. H in rich s. A ctin g C om m issioner Cooperative Associations in Europe and T h eir Possibilities for P o st-W a r R econstruction By Florence E. Parker and Helen I. Cowan o f the Bureau o f Labor Statistics Bulletin 7slo. 770 U N IT E D S T A T E S G O V E R N M E N T P R IN T IN G OFFICE, W A S H IN G T O N : 1944 F or sale b y th e S u p erin ten d en t o l D ocu m en ts, U. S. G o v e rn m e n t P rin tin g O ffice W ashington, D . C Price 35 cen ts Letter of Transmittal U n it e d S tates D B epartm en t of ureau of L abor, L a b o r S t a t is t ic s , Washington, May 12, 1944* The S e c r e t a r y o f L a b o r : I have the honor to transmit herewith a report on the development of cooperative associations in Europe and their possible place in post-war reconstruction. This report was prepared by Florence E. Parker and Helen I. Cowan of the Bureau’s Editorial and Research Division, assisted by Jeannette M. Watson and Elizabeth L. Black. A. F. H Hon. F rances P in r ic h s , e r k in s , Secretary oj Labor. n Acting Commissioner• Preface Origin o f Present Report The present report was compiled as a result of requests from various official agencies concerned with the rehabilitation of the war-devas tated countries of Europe, but was extended to cover the other countries of that continent. Much of the material contained herein has already been supplied to those agencies in the form of special re ports and memoranda dealing with individual countries or with special aspects of the cooperative movement. Scope and Coverage o f Report Data on the individual countries of Europe are presented in Part 2 of the report. In most cases the account gives some historical back ground, showing how the economic events of the time, as well as the changes in governments and in national boundaries, affected the cooperative movement and helped to speed or retard its development and change the direction of its expansion. The main subject matter of this report covers the consumers’ cooperatives of various types (distributive and service, housing, credit, insurance, etc.), as well as workers’ productive and labor cooperative associations. A special attempt has been made in each country to cover certain special forms of cooperation in which the country has excelled or for the origin of which the cooperative movement of the country was responsible. For this reason certain types— such as workers’ productive associations in France, for example— are described at greater length than in other countries where they are of minor importance. The length of treatment was also determined to a great extent by the availability of material. Although the reports here given cannot be said to be exhaustive— space limitations precluded this— the basic research covered all the sources of material available to the Bureau and included not only printed reports and studies, both official and unofficial, but also unpublished material in the Bureau’s files as well as typewritten reports from consular officials and others. Certain phases of agricultural cooperation, such as rural electricpower, credit, and insurance cooperatives, are also covered. Strictly producer cooperatives—farmers’ marketing and processing and pur chasing of farm supplies— are shown mainly in statistics designed to give a national picture of the entire movement. Thus, in every country for which such figures were available, data are given showing the number, membership, and business of all the various types of associations, including the agricultural, in the latest year obtainable (generally 1937). A description is given of the movement and some indication of its place in the economic life of the country, just prior to the rise of in iv Preface National Socialism or to the country’s invasion by the Nazis. In most cases the cooperatives had largely recovered from the depression and had already completed or were undertaking a reorganization— structural and financial— designed to strengthen the movement and increase its efficiency. In general, the cooperatives had entered upon a period of both expansion and intensification of activities, when this was interrupted by the outbreak of World War II. The chronicle of subsequent events is presented here through 1942, and thereafter for each country as far into the present as reports available permitted. For countries still accessible for news and com merce (Great Britain, Sweden, Switzerland, etc.) the data include statistics and other information as late as the autumn of 1943. For invaded territories, and the Axis countries and their satellites, only fragmentary reports have seeped through, though in some cases an astonishingly complete picture can be pieced together from these. The reader will notice that certain countries (such as Great Britain and the Scandinavian countries) are treated here at less length than their importance in the movement would seem to warrant. This was deliberate. For these countries much current and popular literature is easily accessible. It was deemed advisable, therefore, to concentrate rather on those countries where the movement was well developed, but for which little information is readily available. Further, because of space limitations, certain aspects of the cooperative movement have been ignored entirely or touched upon merely in passing or only as they were necessary for the understanding of the general situation. Among these were the working conditions and the relations of co operatives with their employees, the structural machinery of the movement, and its merchandising policies. A cross-section view of the whole of Europe, as regards cooperation, is presented in Part 1, which also brings together information on the international organizations and aspects of cooperation in both the educational and commercial fields. The report does not contain a directory of the national organizations in the various branches of co operation; for such data the reader is referred to the International Directory of Cooperative Organizations, compiled by the International Labor Office (Montreal) in 1939, and available through that organi zation. Aside from the practical uses of the material here presented, on post-war problems, it is believed that the report will also fill a hitherto unsatisfied need for concise accounts of cooperation in various coun tries. It should likewise be useful to cooperative study groups, students in educational institutions, and others desiring to obtain an understanding of the extent of the cooperative movement, without resort to exhaustive study. Contents Page Preface........ ............................................................................................................ Development of European cooperatives, and their possible place in post war reconstruction: Extent of the cooperative movement___________________________________ Characteristics of cooperatives--------------------------------------------------------------National federation____________________________________________________ International cooperative organization__________________________________ Cooperatives and the totalitarian State_________________________________ Cooperatives and reconstruction------------------------------------------------------------Part 1.— Comparative analysis of the European cooperative movement: Development and characteristics-----------------------------------------------------------Types of cooperatives and extent of development------------------------- — Consumers’ cooperative movement_________________________________ Consumers’ cooperative movement during and immediately after the depression. _------_-----------------------------------------------------------------------Consumers’ cooperation just before World War I I ---------------------------Place of cooperatives in the national economy---------------------------------Cooperatives in World War I I _____________________________________ International aspects of the cooperative movement--------------------------------International Cooperative Alliance_________________________________ Scandinavian Cooperative Wholesale----------------------------------------------International Cooperative Wholesale Society_______________________ International Cooperative Trading Agency----- --------------------------- — International cooperative production_______________________________ International Cooperative Women’s Guild--------------------------------------Other international activities_______________________________________ Part 2.— Development of cooperatives in individual countries: Countries of Western Europe----------------------------------------------------------------British Isles_______________________________________________________ Types of associations---------------------------------------------------------------Structure of the consumers’ cooperative movement_____________ Retail cooperatives and their operations-----------------------------------Federations in the consumers’ cooperative movement___________ Cooperatives and the war. -----------Cooperation in Ireland________________ Belgium___________________________________________________________ Types of associations and their activities__________ Development of distributive cooperatives______________________ Social and welfare activities of distributive cooperatives________ Structural and other changes necessitated by the depression____ Trends of development of retail and central associations________ Consumers’ cooperatives just prior to outbreak of war— _______ Cooperatives and the war____ _________ France...................................... Types of associations_____________ Relations with the Government________________________________ Early development of consumers’ cooperative movement_______ World War and post-war development_________________________ Welfare work_________________________________________________ French Cooperative Wholesale Society_________________________ Cooperatives during the pre-war decade________________________ Effect of the war on cooperatives______________________________ Workers’ productive associations_____________________ Netherlands_____________________________________ Types of local cooperatives____________________________________ Development of consumers’ cooperative movement_________________ Cooperatives and the war_______________________________ . _____ y m 1 2 2 2 3 3 5 6 16 18 22 25 30 32 33 37 37 38 40 40 43 44 45 45 47 49 51 56 57 60 61 63 65 67 69 71 72 73 73 74 75 76 78 79 81 83 84 87 89 91 96 VI Contents Countries of Western Europe— Continued. Luxemburg________________________________________________________ Switzerland__________________________________________________________ Types of cooperatives___________________________________________ Structure of the consumers* cooperative movement_____________ Development of consumers* cooperative movement_______________ V. S. K.— A four-language cooperative federation_______________ Swiss cooperatives and the State________________________________ Scandinavian countries----------------------------------------------Denmark____________________________________________________________ Types of cooperatives and their activities________________________ Development of consumers* cooperatives through 1939___________ Federations of the consumers* cooperative m o v e m e n t--,_________ Cooperation under the Nazis____________________________________ Finland.......... ............................................................ Types of cooperatives___________________________________________ Development of consumers* cooperatives_________________________ Consumers* cooperatives prior to outbreak of World War I I ____ Cooperatives and the State______________________________________ Consumers* cooperatives in World War I I _______________________ Norway_____________________________________________________________ Consumers* cooperatives________________________________________ Cooperatives and the State____________________________________ Cooperatives and the war______________________________________ Sweden_____________________________________________________________ Types of cooperatives and their activities________________________ Development of consumers* cooperatives_________________________ Cooperative Union and Wholesale, Kooperativa Forbundet_____ Cooperatives in World War I I ___________________________________ Iceland______________________________________________________________ Extent of cooperative development____________________________ Effects of the war_____________________________________________ Development of cooperatives, 1921-42____________________ Baltic States.......................- .................................- .............................................. Estonia_____________________________________________________________ Types of associations........ ............................................. Development of consumers* cooperatives_________________________ Estonian cooperatives in World War II__________________________ Latvia________________________________________________________ Types of associations and their activities_________________________ Development of consumers* (trading) cooperatives________________ Cooperatives under State domination____________________________ Lithuania___________________________________________________________ Types of associations____________________________________________ Development of trading cooperatives____________________________ Lithuanian cooperatives in World War II ________________________ Countries of Central and Eastern Europe_________________________________ Austria----------------------------------------------------------------- ----------- - ............ Types of associations— _____________________________ Development of consumers* cooperatives_________________________ Depression arid the corporative State, 1930-38___________________ Cooperatives under the Nazis___________________________________ Czechoslovakia______________________________________________________ Types of cooperatives_______________________________ - ________ Development of consumers* cooperatives under Austrian rule___ Consumers* cooperation under the Republic______________________ Legal status and relations with the Government__________________ Status of cooperatives just prior to Munich Agreement___________ Cooperative movement and the Nazis____________________________ Germany____________________________________________________________ Types of cooperatives___________________________________________ Cooperative housing (building) associations______________________ Credit and agricultural associations______________________________ Distributive cooperatives________________________________________ Condition of consumers* cooperatives immediately preceding National-Socialist Regime___________________ Cooperatives under the Nazis___________________________________ 98 99 100 103 104 106 108 110 111 114 116 117 119 121 123 127 128 130 130 132 133 134 135 139 141 143 145 145 146 146 147 148 150 153 154 154 156 157 160 161 162 165 166 167 169 173 176 177 177 182 183 188 190 191 195 195 196 197 198 199 202 Contents Countries of Central and Eastern Europe— Continued. Hungary____________________________________________________________ Types of cooperatives and their activities________________________ Hangya associations, 1898-1935_________________________________ Place of cooperation in the economy of Hungary_________________ Developments since outbreak of present war_____________________ Poland. _____________________________________________________________ Types of associations____________________________________________ Consumers’ cooperatives________________________________________ Effects of the war_______________________________________________ Soviet Union________________________________________________________ Cooperatives through World War I ______________________________ Types of associations____________________________________________ Cooperation under the Soviet Government_______________________ Cooperatives in World War I I -------------------------------------Countries of Southern Europe____________________________________________ Italy________________________________________________________________ Types of associations and their activities_________________________ Consumers’ cooperative movement____________________________ Italian cooperatives in World War I I _________________________ Portugal____________________________________________________________ Spain__________________________________________________________ Types of cooperatives___________________________________________ Development of cooperatives under the Republic_________________ Cooperatives during and since the Civil War_____________________ Balkan countries_______________________________________________________ Bulgaria________________ Development of cooperatives, 1900-39________________ Relations with the Government_________________________________ Status of various branches of the movement, 1939_______________ Intercooperative relations_______________________________________ Cooperatives and the war_______________________________________ Greece______________________________________________________________ Types of associations____________________________________________ Cooperatives and the war_______________________________________ R u m an ia-._________________________________________________________ Development of cooperation under State supervision and controlTypes of cooperative associations and their activities-------------------Cooperatives of national minorities_________________________ Rumanian cooperatives just before the war---------------------------------Rumanian cooperatives in wartime_______________________ Yugoslavia----------------------------------------------------Types of cooperatives and their activities________________________ Recreational and cultural aspects of cooperatives--------------.------Cooperatives in the decade prior to the Nazi invasion----------- *Cooperation under the Nazis__________________________________ Albania_____________________________________________________________ Appendix— Par values of national currencies--------------------------------------In d ex........................................................................... VII -Pas® 207 209 210 213 215 216 217 218 221 222 222 223 224 226 227 228 228 232 237 238 239 240 240 241 242 243 244 246 246 250 250 251 252 254 254 255 257 261 262 264 267 272 272 275 277 278 Bulletin T^o. 770 o f the U n ited States Bureau o f Labor Statistics Development of European Cooperatives, and Their Possible Place in Post-War Reconstruction Extent o f the Cooperative Movement Cooperation, in its widest sense, has probably existed since the beginning of mankind. In some countries, such as China, Yugoslavia, and Russia, primitive forms of cooperatives are known to have been carried on as far back as history goes. One Russian authority states that in that country cooperatives are at least a thousand years old. In the early days in Yugoslavia, family and village life was all organ ized on the “ Zadruga,” or cooperative, basis. Even in the modern form, the consumers' cooperative movement is already 100 years old, and celebrates its centenary in 1944. The first cooperative store was open only in the evenings and had as its sole inventory a small amount of butter, sugar, flour, tea, and oatmeal pur chased with the shillings painfully saved by its poverty-stricken members— 28 cotton weavers of the town of Rochdale, England. The original store of the Rochdale Pioneers in Toad Lane, now restored to its original architecture, is a museum and the mecca of cooperative travelers. In the 100-year interval, the idea that animated the Pioneers spread not only throughout the neighboring continent but ail over the world. There is hardly a country without some form of cooperative. In Europe the distributive association, operating grocery stores, bakeries, and other shops, is the predominating type. In Asia and the Far East, where thrift and credit have been the most urgent needs of the debtridden populations, credit cooperatives have usually predominated. In agricultural countries farmers have banded together in cooperatives, to market their farm produce or process these products, and to buy their farm and household supplies. In 1937, there were over 800,000 cooperative associations of various tvpes, with a membership of about 145 million persons, in 56 countries throughout the world. In Europe—with which the present report deals— nearly 575,000 cooperatives were in existence, with over 11134 million members. Every country in Europe had cooperatives of some kind, and in some of these countries cooperators comprised a large proportion of the population and cooperative trade had become the largest single business enterprise in the country. 1 2 Development o f European Cooperatives Characteristics o f Cooperatives These cooperative organizations, wherever they have taken root, have had certain characteristics (inherited from the Rochdale Pioneers) which set them apart from all other forms of business activity. These are (1) open membership, (2) one vote per member, (3) return of surplus earnings to members in proportion to the amount of their patronage of the cooperative enterprise, (4) limited return on members’ investment (i. e., share capital), (5) political and religious neutrality, (6) transaction of business on cash basis only and at current prices, and (7) promotion of education in the cooperative philosophy. National Federation As the local associations have expanded in number, they have federated into central organizations either educational or commercial, or both. The educational federations have served as mediums o f exchange of experience, sources of education of members and training of employees, protective sentries against attacks (legislative or other) on the cooperative movement, and as bodies for formulating policies and presenting the views and ideas of the organized membership. The commercial federations have carried on wholesaling of supplies ta member associations and have more and more undertaken production of goods themselves. In a number of countries central wholesale feder ations have exerted a powerful restraint on price levels, thus benefiting all consumers as well as their own members. In all but two countries of Europe—Albania and Greece—the consumers’ cooperative move ment had become integrated into such national federations before the present war. International Cooperative Organization The national organizations, in turn, have since 1896 been organized internationally. Their superfederation, the International Cooperative Alliance, is not a commercial* organization. Its purposes are to promote the spread of cooperation throughout the world, to bring about closer relationships among the cooperative movements of the different countries, and to study means of further cooperative progress in various lines. Under its auspices one committee has had as its sole function the promotion of business and other collaboration between the agri cultural marketing and consumers’ branches of the movement. Another committee has studied the possibilities of international relationships in the field of insurance, and a third has been concerned with the estab lishment of an international cooperative bank. One of the first organ izations formed under the sponsorship of the Alliance was the International Cooperative Wholesale Society. That organization undertook no wholesaling itself; its function was to study the problems encountered by the wholesale organizations and to make the results of its studies available to them. One result of its activities was the formation of the International Cooperative Trading Agency in 1937. The Agency did not carry on warehousing. It acted as purchasing agent for the national wholesales, pooling their orders and making master contracts for goods delivered directly to the various countries. Place in P ost-W a r Reconstruction 3 It also acted as sales agent for some of the wholesales; disposing of their surplus production or stocks to the organizations in other countries. Its activities have, of course, been drastically reduced during the present war, but it is still operating and will be ready to expand immediately at the end of the war. Cooperatives and the Totalitarian State The essence of cooperative development is that it is the voluntary achievement of free people, working on a democratic basis for the attainment of definite social and economic ends. In this respect it is a twin of labor unionism and, in fact, in many of the industrial countries of Europe the two movements have been extremely close, and a great proportion of the workers were both cooperators and tradeunionists. The rise of totalitarianism meant for each of these movements added problems, increasing restrictions, and in some cases extinction, for the totalitarian state is by its very nature antagonistic to freedom of choice and action and to movements built upon these freedoms. As the Nazi ideas gained ground and the Nazi machine took possession, labor movements were absorbed into Labor Fronts on the fuehrer principle. As for the cooperatives, in some countries their networks were utilized for the benefit of the Germans’ plans; in others the movement was deliberately destroyed in whole or in part and its assets were seized by the invaders. Some cooperative leaders were killed, others fled the country or went underground. In the general Nazi program of looting and destruction, as well as in the actual processes of warfare, cooperators with others of their countrymen have lost their homes and their personal belongings, as well as the cooperative enter prises they had built up over so many years. Cooperatives and Reconstruction All of these facts are well known throughout the cooperative move ment. Cooperators in the United Nations, and nationals of oppressed countries who have fled to free territory, have therefore been very conscious of the problems of the post-war period. Particularly through the International Cooperative Alliance cooperatives have been devoting much thought, during the past 2 years, to these problems and especially to the part that cooperatives can play in the immense job of reconstruction. In those countries that have been the battle fields of the war or have been devastated and impoverished during the Nazi occupation, large proportions of the people are cooperators. All will need food, clothing, medicines, and living quarters. Their cooperative associations will need to be restocked with goods and their productive facilities—worn out, carried off, or destroyed—will need to be built up again. All these items and the problems which they entail have been in process of study by special cooperative committees in the United States and in Great Britain (the headquarters of the Alliance is in London). The president of the Cooperative League of the U. S. A. participated in the United Nations Food Conference in May 1943, as a member of the delegation appointed by the United States Govern 4 Development o f European Cooperatives ment. Some months later, a cooperative conference was held in London and one also in Washington, attended by representatives of cooperative movements from the various countries involved in reha bilitation plans as well as from Scandinavia, Great Britain, and the United States. The cooperative conferences were devoted to consider ing the problems involved, as regards the cooperative movement, in the post-war period, and the place of cooperatives in the general relief and reconstruction program.* Both conferences approved a plan for the formation of an Interna tional Cooperative Trading and Manufacturing Association, the mem bers of which would be the national cooperative organizations of the various countries. This association, plans for which have been formu lated, is to carry on production, processing, and the distribution of goods to cooperative associations abroad. All of its work would be on a loan basis, the amounts and goods advanced to be repaid eventu ally. For the immediate relief necessary to tide over until the con structive work can begin, and to aid in the preliminary work of re habilitation of cooperatives, a fund is being raised by popular sub scription among cooperators in both Great Britain and the United States. Speakers at the international cooperative conferences emphasized that cooperation is a self-help movement, that it is strongly rooted in the lives of the European people, and that all they ask is a chance to become self-sustaining again. Delegates expressed the belief that as the cooperative associations were so widespread throughout Europe they represented a practical, efficient, and nonprofit method of dis tributing the materials of relief and rehabilitation not only to their members but to others in their communities, and thus should play !a valuable part in the post-war work. They also represent a technique well known and widely practised, which can be under way in a fairly short time after the cessation of hostilities. Part 1.— Comparative Analysis o f the European Cooperative Movement Developm ent and Characteristics Just before the outbreak of war, membership in the nearly 575,000 cooperative associations in Europe exceeded 11 IK millions. Over half (54 percent) of the membership was in the Soviet Union, 12 percent in other now Allied or neutral countries, 20 percent in territory occupied by the Axis in the war, and 14 percent in Axis countries. Practically without exception the movement had recovered from the depression by 1937 and was well on the upgrade. In the Allied and neutral countries the movement has continued to advance even under war conditions. Such information as is available indicates that the same is true in the Axis and satellite countries (except Germany and Austria), although the cooperatives are usually under strict control by the Government. After the rise of National Socialism in Germany (and, later, in Austria), it became apparent that the democratic make-up and social ideals of these cooperative organizations were the exact antithesis of the “ New Order.” To this was added, in the case of the consumers* cooperatives, the fact that they were competitors of the retail trades men, of whom the Hitler regime was the avowed champion. It was natural, therefore, that the consumers’ cooperatives in those countries were at once marked for destruction. After the beginning of the war, as one country after another fell before the German war machine, consumers’ cooperatives received the unfavorable attention of the Nazis in all countries except where (as in Belgium, Denmark, and the Netherlands) they were desirous of winning the people’s good will. Even in the other countries, after the initial destruction that was characteristic, other factors operated to deter the Germans in their onslaught on cooperatives. The cooperatives represented— as did the labor unions also— a structure built by the people themselves, representing their aspirations and their desires. Not only did the cooperatives supply their members’ physical needs for food, clothing, housing, medical care, etc.; in some countries these associations were also essential in the social and cultural fields and had thus become an integral part of all phases of daily life. Further, cooperation loomed large in the economy of the countries themselves. Cooperatives had become the largest single enterprise in certain States and as such were a factor to be reckoned with. These considerations retarded the pro gram of destruction (even in Germany itself, nearly 10 years elapsed before the consumers’ cooperatives could be suppressed entirely). Furthermore, the Nazis found cooperative facilities necessary—in 5 6 Comparative Analysis some cases indispensable—to the functioning of the processes of pro duction and distribution in the territories they invaded; they there fore used them and in some cases even fostered their growth. It is believed that, because of the strong hold of the cooperatives upon the workers of Europe, the movement can be revived rather quickly where it has been destroyed, and where it still exists can be utilized immediately after the cessation of hostilities as a practical and effective form of machinery in the immense tasks involved in the reconstruction of Europe and the redirection of energies toward peace time pursuits. This will involve no new form of organization for the .millions of cooperators; it will be merely a resumption of the activities that were formerly a normal and accepted part of their lives. T ypes o f Cooperatives and Extent o f Development Of over 800,000 cooperative associations of all types in existence throughout the world in 1937, nearly 575,000 were in the various countries of Europe (including the Soviet Union). Among the European cooperatives, the Soviet Union accounted for 50 percent, the other countries still free or neutral in the present war 1 for 6 per cent, the countries that have been occupied by the Axis armies 2 for 28 percent, and Axis countries 3 for 16 percent of the associations. Nearly 70 percent of the cooperatives were farmers' marketing and processing associations; and a large part of the associations classified as credit were also farmers' organizations. T able 1.— Num ber o f European Cooperative Associations, b y Country and T yp e Country Workers’ Con Credit produc Hous Agricul Year All types sumers’ tive and ing tural labor Other 1937 1937 1937 1937 574,401 161,049 321,032 92,320 46,699 8,792 28,789 9,118 72,190 36,284 1,563 34,343 24,081 2,970 16,759 4,352 10,592 2,782 2,711 5,099 399,490 105, 508 260,849 33,133 21,349 4,713 10,361 6,275 1937 34,437 4,676 1,563 1,182 2,711 13,944 10,361 Austria................................................... 1937 1935 1930 1924 Belgium__________ ______ _________ 1938 1937 1931 1929 Bulgaria___________________________ 1939 1937 1929 1925 Czechoslovakia..................................... 1937 1936 1930 1923 Denmark_______________ __________ 1937 1931 Estonia.................................................. 1938 1936 1929 1925 Finland................................................. 1939 1937 1929 1923 5,478 222 2,205 ‘ 184 *2,169 302 2,308 402 2,114 360 203 360 203 396 200 377 157 2,378 161 154 2,115 138 1,707 187 1,335 4816 8,085 816 7,579 1,840 •6,057 •2.261 ' 5,852 1,953 100 •1,936 43 183 242 190 213 250 210 287 145 545 1,123 539 1,179 10803 1,556 596 928 (**) (») (•) 860 57 56 50 51 735 271 238 199 1,504 1,504 826 1,825 76 (*) 44 (3) 00 67 •4 4 290 00 300 263 125 124 128 128 8 10 145 79 41,341 1,341 1,590 1,326 17 15 10 28 00 (7) •100 100 00 (7) 1,998 *2,892 1,672 1,298 454 446 388 350 18 418 219 139 5,451 5,364 4,348 3,479 3,775 •6,445 1,286 1,956 790 1,324 92,933 2.933 818 1,138 763 30 790 38 2,283 2,246 1,605 1,411 138 2,541 753 263 4140 140 608 199 290 •5 192 693 1,250 •416 *575 575 2,825 •964 All countries........................................ Occupied__________ ___________ Free or neutral............................. Axis................................................. Free or neutral (excluding Soviet Union)________ ______ 5,275 5,372 4,965 3,482 3,435 2,767 2,474 3,438 5,509 3,200 2,202 17.337 16,744 15,269 14,942 6,211 8,444 1,957 3,060 2,500 2,239 5,280 5,330 6,002 3,626 See footnotes at end of table. 1 Great Britain Iceland, Ireland, Portugal, Soviet Union, Spain, Sweden, and Switzerland 8 Belgium, Czechoslovakia, Denmark, Estonia. France. Greece, Latvia. Lithuania, Luxemburg, Nether lands, Norway, Poland, and Yugoslavia. * Austria, Bulgaria. Finland, Germany, Hungary, Italy, and Rumania. Development and Characteristics T able 1.—Num ber o f European Franne____________________________ Germany_____________________ ____ Greece _ _ TTimgary _ _ . _________________ __________________ Iceland _ _ ... Irish Free State (Eire)________ ____ Italy....................................................... Latvia. __________________ __ _ _ Lithuania................. ............................ Luxemburg______________________ Netherlands_______________________ Norway___________________________ Poland............... ................................... Portugal _ .. Rumania Cooperative Associations, by Country and T yp e —Con. Workers’ Con Credit produc Hous Year All types sumers’ tive and ing labor Country Great Britain 7 _____ j Soviet Union______________________ Spain__________ __________________ Sweden___________________________ Switzerland_______________________ Yugoslavia................. ................ ........ 1937 90,433 <1,200 10,647 1936 83,804 1,200 6,148 30,741 1,237 11,397 H1931 1938, 50,254 1,488 20,005 1937 51,095 1,512 20,283 1935 51, 762 1,634 20,866 1933 49,941 1,674 21,607 1923 47,040 2,475 20,931 3,794 1937 1,136 1936 3,863 1,087 1930 3,155 1,248 1925 1,917 1,381 5,948 1937 4,327 1936 9,611 4 , 476 625 1928 6,243 3,801 115 2,064 1925 3,655 105 1937 3,516 m 1,800 1,009 1935 4,502 1,402 1,800 U1930 3,293 1,022 1,649 1926 3,366 » 1,820 « 1,016 64 1937 2 1936 96 39 528 1941 72 20 1937 668 90 21 14,948 2,812 1937 3,865 14,928 1936 3,465 i* 2, 530 1930 9,033 3,329 0 2,196 503 1938 184 1937 1,729 532 187 1930 1,780 605 295 1924 381 24 229 1939 1,332 401 275 407 1937 1,257 57 1930 1,451 460 320 1937 1,012 408 71 1934 738 ” 50 56 4,883 1937 424 1,370 879 1936 3,252 424 1929 904 3,131 409 1926 3,088 489 893 1937 3,895 i® 1,090 2,709 1936 549 1929 3,231 410 13,908 1937 5,737 1,976 1936 13,545 5,863 1,790 6,169 16,801 1930 6,128 1937 25 25 1934 150 19 1*127 (3) 1929 271 150 5,140 1938 10,080 2,791 4,740 6,444 1937 1,026 1930 10,276 2,122 4,757 1924 3,886 2,650 0 1937 286,595 24,113 1934 184,293 45,764 5,726 1937 1,803 1934 4,275 i 12 353 12,437 816 1937 811 1,008 1936 20,411 1,438 14,654 361 1930 1,609 1924 11,665 250 1,561 688 1940 11,599 898 1937 11,723 878 657 1930 533 11.176 866 1924 551 11,443 859 1938 4,912 10,832 2,530 4,563 1937 9,044 138 (23) 4,418 1930 7,077 i Data relate to 1933. * Data relate to 1934. * No data. * Data relate to 1936. * Data relate to 1929. * Includes workers’ productive associations. i Included with ‘ other.” •Includes housing associations. * Data relate to 1937. Includes a few associations of other types, n Data relate only to associations affiliated with central organizations. 12 Data relate to 1923-24. 648 642 340 1,917 1,948 1,898 1,828 3,789 159 46 78 105 437 2 278 242 3,372 3,452 3,616 3,813 3,265 1,333 356 283 238 1,721 0 446 66 216 71 «76 2 946 341 0 1 105 0 0 6 1*3 108 108 1,204 i* 1,873 17 696 ®6 6 i« 1,674 i* 1,194 1,146 18 30 0 224 8 8 17 17 26 27 *6 0 0 218 * 24 0 0 4 2 414 138 143 153 *10 10 0 330 341 864 Agricul tural 77, 501 31,000 17.500 22 ,2 3 9 22,403 22,001 18,821 16,580 1,166 1,260 1,418 1 2 181 1,621 1.007 1,187 519 1*640 806 550 «454 54 1*46 296 417 4,640 5,007 3,742 564 526 450 125 430 778 632 533 567 1,838 1,435 1,327 1,196 2,780 2,148 1*2; 821 5,357 4,844 2,516 Other *44,536 25 1,233 1,497 1,747 2,198 0 0 *1,114 128 12 836 799 521 173 1 i*8 ®26 26 753 1*859 120 927 454 430 3 2 3 29 0 9 65 820 359 302 330 2 0 290 683 1,124 4 0 657 2389 0 314 15,577 18,363 847 79 168 235 175 255 52 159 363 92 142 0 0 42,102 13 1,217 1,000 6,784 5,295 0 244 251 260 241 124 95 81 955 *101 2,447 21922 246.905 *2 78,064 3,056 2,212 3,689 4,576 3,857 3,328 5,587 5,562 5,506 5,598 1,920 3,607 2* 2,026 121 537 1146 950 0 0 0 7 402 5,953 6,370 3,357 *6,271 4,182 4,375 4,601 4,142 1,187 278 460 is Estimated; total agricultural and consumers'. 2 440. 11Data relate to 1923. i®Data relate to 1935. i®Includes fishery associations. 1? Data relate to 1932. 12 Data relate to 1931. i# Data relate to 1941. 20 Includes some agricultural associations. 21 Some associations included with agricultural. 22 Data relate to 1928. 23 Included with agricultural associations. 2<Includes consumers’ cooperatives. 8 Comparative Analysis The consumers’ cooperatives, which constituted slightly oyer 8 percent of the total number of associations in that year, had slightly over 53 percent of the total membership. The greatest relative development of this type of association was in the Allied and neutral countries, where consumers’ cooperatives accounted for 67 percent of the total membership; if the U. S. S. R. is excluded, the proportion in these countries was 80 percent. T a b l e 2.— M em bership oj European Cooperatives, by Country and T yp e o f Association Country All countries................... Occupied.................. Free or neutral____ Axis........................... Free or neutral (exeluding S o v ie t Union)................... Austria______ - ............... Belgium----------------------Bulgaria----------------------- Czechoslovakia.-----------Denmark______________ Estonia_______________ Finland _____________ Franny Germany______________ Great Britain--------------- Greece_________________ Hungary. _______ Iceland.______________ Ireland............................. Italy , Latvia_____________ __ Lithuania Luxemburg Netherlands _ Year 1937 1937 1937 1937 All types 111. 651.126 22.341,061 73,610,568 15.699.497 1937 1935 1931 1937 1935 1924 1939 1937 1929 1925 1937 1934 1930 1937 1936 1930 1938 1936 1941 1937 1929 1923 1937 1936 1931 1937 1934 1933 1937 1936 1930 1925 1937 1936 1937 1936 1931 1926 1942 1937 1941 1937 1937 1935 1930 1938 1937 1930 1938 1935 1930 1937 1934 1931 1937 1935 1931 Credit Workers’ produc tive and labor Hous* ng 59, 488, 489 12.664,618 2.902,446 1,184. 530 5,453, 735 6.631.015 86, 718 156,068 49,521,603 264. 217 2. 526, 482 147,653 4,513,151 5,769.386 289, 246 880.809 1937 12,850,676 10, 321.603 264,217 807,984 472,859 263.000 1,017,885 * 264, 464 * 275, 421 823,300 350,000 0) 825,542 98,492 510,068 346,568 815,193 (i) 77.706 626,646 405,288 950, 571 97,937 441. 981 1,008.577 84,449 389.097 709,009 72,259 319,271 516,588 80.503 199,191 4,670,388 805,544 2,983,360 3,500.300 «1,031, 714 1,000.000 2,301,281 910,705 939,104 1,653.768 391,100 21,356 1, 791,871 »437.625 *20,042 1. 383.971 331,500 0) 105.443 220.320 46,278 220.504 41, 359 2 92,775 1,120.424 676,000 t* 147,500 868,373 147,500 562,300 871, 223 456,386 138,762 467,255 352.255 63,000 8,500,605 2,671,000 642,179 4, 558.615 1,600,000 18586,372 3,354,889 1, 576, 256 732,333 8,356,370 2,010,911 3,235,582 8, 224,510 1*3,211,800 3,041,182 7, 700,623 1*3,344,410 173,205, 528 8,405,903 8,023,073 16,209 8,119,471 7, 746,184 <0 6,702,277 6,353,000 0) 5,017,464 1*4,910,983 0) 250,890 193,901 220,112 * 95,000 1,302.811 763,428 421,507 1,358,014 630,000 423,852 1,477,103 7804,821 399,005 887,863 2*870,549 0) 20,189 20,189 12,000 12,466 100,473 15, 771 8,794 9,222 159,277 8,899 1,957,000 800,000 775,000 1,895,359 310,146 900,000 1,714,920 377,918 205,964 27,577 375,088 202,696 27,047 212,587 50,320 i® 15,000 174,542 21,525 117,155 178, 797 21.322 121,000 146,053 35,617 98,300 19,588 46,701 8,576 (**) 60,671 6,321 (2 2 ) 57,907 4,879 973,422 325, 368 214,001 232,127 553,034 320,907 510,344 7222,053 223,291 See footnotes at end o f table. Consum ers' 123, 511 147,653 38,711 28,508 68,000 (i) 70,300 0) 5,608 C) 5,742 0) 5,208 h 28,804 197,974 28,541 * 141,115 7,919 58,860 36,744 7,060 71,909 23,011 7 151,472 (*) 151, 472 0) 12,980 M 0) 0) h 234 300 (*) 0) “ 1,800 1,800 0) 31,227 230,600 23,000 0) 33,000 3 22,000 18,300 736, 757 1,191 649,885 77 708,810 0) 34,835 38,438 p42,026 37,261 31,563 27,097 38,186 24,316 (0 i* 112 7,414 3,700 «17,712 17,314 » 1,177 1,177 90,000 60,000 118,500 0) 1,706 <*) 1*5,649 5,649 75,000 71,000 49,876 Agricul tural Other 33,923,166 1,487,877 9.007.088 1.006,437 20.954,624 195,989 3,961,454 285,451 1,797,703 195,989 4,906 0) * 410,000 0) 403,000 0) 211, 374 0) *243,734 0) 138,444 0) 6,898 176,977 114.924 * 250. 451 58,771 191,929 52,965 140,125 786,564 0) *100,300 *1,216,814 »* 300,000 0) 569,537 658,795 584,258 n 749,946 570,129 482.342 37.234 30,831 30.000 56,370 295,124 0) 156.773 0) 70,675 “ 205,400 *52,000 0) 5,123,199 1,000,000 <1,319,643 1,000,000 5,000 (i\ 2,373,120 1,320,452 0) i» 441,875 0) 291,732 1,616 294,000 ri 290,617 M 43,979 0) 56,989 i» 125,000 110,462 110,462 7190,000 65,565 7190,000 <i) 0) 69,082 102,423 957,000 7635, 507 635,507 18,538 21,194 54,030 “ 35,862 * 29,912 12,136 16,661 ** 52,296 » 50,575 407,169 0) “ 65,000 <4 •466 0) 31,907 35,000 43,706 11,037 125,839 122,445 93,237 * 6,553 1,876 2,054 w2,453 26,884 Development and Characteristics T a b l e 2.— M em bership o f European Cooperatives, b y Country and T yp e o f Association — Continued Country Norway _ Poland.. Portugal_____ Rumania........ Soviet Union. Spain.............. . Sweden_____ Switzerland . Yugoslavia.. Consum ers' Year All types 1939 1939 1936 1931 1937 1934 1929 1938 1937 1930 1937 1935 1930 1926 1937 1934 1942 1937 1942 1937 1937 1936 1931 584,579 24 196,234 412,672 3,122, 296 2,959, 518 353,000 825.887 1,895,984 19,000 19,000 15,000 19,000 34,000 76, 214 1,453,127 154,735 1,398,382 329,063 289, 961 1, 579, 089 60,759,892 39,200,000 57,870,400 41,000,000 62,414, 300 48,904, 200 19,129,033 11,401, 708 1,884,688 1,178,817 84,944 408,646 1, 717, 798 765, 700 1, 337,132 660,934 1,084, 214 »8 461, 000 418, 557 1,032, 210 1,105,698 86,983 288,305 933, 384 59, 302 855,836 Credit 1*1540961 1, 544,000 (1 08) 1 9 8 *7 4 3 2 1,120,130 1,102,841 1,003,082 _____ 24 111, 100 93,200 253, 214 145,909 499,856 2496,646 (28) Workers' produc tive and labor Hous ing Agricul tural 2 4 ,452 382,293 2 1,600 “ 5,876 “ 23, 367 i* 1,107, 128 2 1, 518 27,000 974 000 “ 9,632 1*1,060,465 0 0 4,000 (») 74,000 57,686 22,209 » 244, 269 201, 360 0) 2, 402,971 19,156,921 0 72,002,000 3,360,000 i« 11, 508,100 2,002,000 19 11, 508,100 0 589,173 7,138,152 0) 79, 617 63, 566 400,688 3,432 56,418 208, 286 « 7,882 i* 40,000 i* 535,116 7,882 535,116 40,000 i* 467, 744 0 467, 744 0 9,279 18, 962 385, 012 *6,272 280,172 21, 073 (28) (28) (28) Other 32,292 60,000 ('S 42,414 46,676 84,686 162,000 55, 566 258,000 0 105, 606 260, 916 796, 534 1 No data. 2 Data relate to 1934. 3 Some associations included with agricultural. 4 Data relate to 1935. * Data relate to 1936. •Data relate to 1933. 7Data relate to 1930. 8Some included with “other.0 9Includes some agricultural membership. 10 Data relate to 1929. 11 Figures not strictly comparable with other years: classification changed in official statistics. 13 Data relate to 1937. 13 Data relate to 1931. 14 Dairies only. 38Agricultural credit associations only. 18 Data relate only to associations affiliated with central organizations. 17 Data relate U 1932. 18Includes some credit membership. 19 Data relate to 1928. 20 Data relate to 1924. 21 Includes some consumers' membership. 22 No data; probably included with agricultural. 28 Probably includes consumers' membership. 24 Data relate to 1941. 28 Included with agricultural. 28 Included with “other." Naturally, the relative strength of the consumers, cooperatives was greatest in the industrial countries (as in Belgium, Great Britain, and Switzerland), and that of the agricultural associations in nations where the economy was still rural (Latvia, Ireland). Finland and Hungary, largely agricultural, were exceptions; there the consumed cooperatives’ members (many of whom were farmers) exceeded those of the agricultural marketing and processing associations. In France, Italy, Sweden, and Switzerland, cooperative membership was about equally divided between consumers’ and agricultural cooperatives. Notwithstanding the State’s absorption of the urban consumers’ cooperatives in 1935 in the Soviet Union, the membership of the con sumers’ cooperatives there far outstripped that of the agricultural cooperatives. Cooperative credit predominated in such countries as Bulgaria, Czechoslovakia, Estonia, Greece, Latvia, Lithuania, Ru mania, and Yugoslavia. Relatively even development among the three main branches of cooperation— consumers’ , credit, and agricul tural— had taken place in the Netherlands. The same was true in 588544*— 44------ 2 10 Comparative A nalysis Germany in 1937, but this had resulted from the losses sustained by the consumers, associations under the antagonism of the Nazis and the gains made by the agricultural associations which were in official favor or at least unhindered. Workers’ productive and labor-contracting associations accounted for a substantial part of the total number of cooperators only in Bulgaria. Even in other countries where they can be said to have attained a fair degree of success (France, Italy, Soviet Union), their membership never attained the level of 10 percent of the total. Most of these types of associations should prove useful in the post war reconstruction work— the consumers’ associations in the distribu tion of food and household necessaries, the agricultural associations in the inauguration of farming activities in devastated regions, and in other countries in the collection, processing, and marketing of the crops. Certain special types of cooperatives, described in succeeding pages, might also be utilized. ORGANIZATIONS FOR SOCIAL WELFARE Medical care and sanitation.— In Belgium, “ La PrSvoyance,” an insurance association at Brussels serving the consumers’ cooperative movement, maintained three welfare establishments— one for con valescent adults, and the others giving medical care to children having or threatened with tuberculosis. At all of these it had laboratories working in preventive medicine. In addition it had a 125-bed sani tarium for men with tuberculosis, and 4 medical advisory centers open to the general public as well as members. One large Czechoslovak association ran a home at which invalid children were given free care. Since 1904 the cooperative associations in Denmark had had a cooperative sanitarium at Skive, to which over 1,000 associations with nearly 360,000 members were affiliated. In France the experience gained by cooperatives after the first World War should be of assistance in the present time. Refuges for care of orphan children were established at that time by individual associations, leading later to the formation of a central association, “ L ’ Enfance Cooperative,” at Paris, for operating holiday homes. In addition it had a 100-bed tuberculosis sanitarium, open all year, for the treatment of children. In recent years the accommodations of this association have been opened to Spanish refugee children and children evacuated from areas of political and military conflict. Its facilities were also utilized by the public health authorities and others. The Cooperative Union of Paris had a medical, dental, and surgical clinic and a pharmacy, and the regional association at Limoges was, just before the outbreak of war, converting its vacation home into a sanitarium for preventive care against tuberculosis. “ De Volharding” at the Hague— the second largest distributive cooperative in the Netherlands— had a sick-fund and medical-care department with 82,000 members and had since 1939 operated its own hospital. The sick-fund associations throughout Holland, many of which were connected with consumers’ cooperatives, had their own drug association, “ Copharma,” through which their medical supplies were purchased. In Poland a number of cooperative health associations had been established, each of which served an area of 6 to 10 villages and had Development and Characteristics 11 its own dispensary, a full-time physician, and sometimes a midwife. The physician, in addition to his regular duties, gave advice on infant care, housing conditions, and personal and social hygiene. In some cases associations arranged for a weekly dental clinic. The health and sanitation cooperatives in Yugoslavia were started as an outgrowth of American relief work after the end of the first World War, as an aid in improving the appalling conditions in rural areas. The work of these associations has been of three types: Curative medicine, preventive and social medicine, and rural sanita tion work. The headquarters of these organizations had a staff of physician and nurse or midwife, and provided consulting-room, dispensary, lecture-room, and bed facilities. By 1937 there were 171 of these associations, with nearly 111,000 members. They had their own federation, started in 1922, which in 1938 organized a traveling dental clinic. A wide range of educational work in social hygiene, measures to prevent disease, and rural sanitation was carried on, en listing the interest not only of members but of whole villages. Among the Axis and satellite nations, only Bulgaria and Hungary had associations in this field. In Bulgaria at the end of 1939 there were 30 associations with 16,616 members, classified in the official statistics as engaged in “ health and public works activities." In 1934 a cooperative hospital was opened in Burgas on the Black Sea. This hospital represented the joint effort of cooperative associations of various kinds, individuals (including doctors), and even the city and national governments. Its success led to numerous others, and in 1935 a law was passed setting standards for medical-care cooperatives. In Hungary the cooperative wholesale (“ Hangya,,) and the Central Institute of Cooperative Credit had established a modern cooperative hospital in Budapest in 1922. This hospital was enlarged in 1938. General weljare activities.— The Belgian cooperative movement was outstanding for its interest in social welfare. A large share of the workers' cooperative associations' earnings was used to provide social and recreational facilities for the community as well as the members. The so-called “ peoples' houses" (maisons du peuple) of Belgium were known the world over. Probably nowhere have the cooperative associations done more to improve the moral, cultural, and social, as well as the economic, status of the members. This was especially true o f the associations formed by the industrial workers, which were early advocates of general manhood suffrage and also supported trade-union movements to improve working conditions. Cooperative associations in Czechoslovakia also had numerous “ people's houses." The Cooperative Union of Paris, “ L'Enfance Cooperative" (previ ously mentioned), and the Cooperative Union of the Somme had holiday accommodations for between 6,000 and 7,000 children, which could undoubtedly be utilized (if still intact) as sanitariums for nursing back to health the children undernourished because of war conditions. The same use might also be made of the orphanage and the aged members' home run by the national federation of workers' productive associations in France. Of Yugoslav cooperatives it was said that all were interested in cultural and welfare activities. Examples were the vacation report of the Railwayman's Cooperative Association and the day nurseries run by one o f the large credit associations. 12 Comparative Analysis Among the Axis countries cooperatives in Bulgaria and Germany showed some activity in the welfare field. In Bulgaria the Coopera tive Savings Insurance Society of Bulgarian Civil Servants— the largest cooperative insurance association in the country— carried on extensive welfare activities, including the operation of holiday homes and provision of medical care for its members, as well as a laboratory for chemical research. The consumers’ cooperatives of Germany devoted part of their surplus earnings to such welfare purposes as burial funds, convalescent and holiday homes, and unemployment relief. The cooperative wholesale (G. E. G.), and the cooperative association of Hamburg each had a holiday home; in these two resorts 210 persons could be accommodated at a time. There was at Jena a special holiday cooperative which ran 12 summer vacation places. In view of the dissolution of the consumer’ cooperatives in Germany it is doubtful that these facilities are still in cooperative possession. HOUSING AND CONSTRUCTION ASSOCIATIONS Among the most helpful associations n the devastated areas should be the housing associations, already versed in the techniques of apartment-building and house construction and other problems en countered in connection therewith. The accompanying statement shows, for such countries as information is available, the number and membership of the housing associations in 1937. Occupied countries: Belgium____________________________________ Czechoslovakia_____________________________ Greece________________ __________ ____ _____ Netherlands________________________________ Norway 4___________________________________ Poland____________________________________ Allied or neutral countries: Great Britain______________________________ Sweden____________________________________ Switzerland________ ________________________ Axis countries: Austria_____________________________________ Germany__________________________________ Hungary___________________________________ Italy............. ...................................... ....................... Number oj aesociationt . 1 125 .. 1 ,3 4 0 . 3 946 414 10 . 330 Member* 71 , 9 0 9 <*) (J) 1, 6 0 0 23, 3 6 7 . . . 356 1 ,0 0 0 251 38, 4 3 8 40, 0 0 0 . . . - 290 3 ,4 5 2 « 105 1 ,2 0 4 38 , 711 73 6, 7 5 7 <*) 75, 0 0 0 ft 1Data relate to 1938 * No data. 1 Data relate to 1936 and include building and loan associations. 4Data relate to 1934. •Data relate to 1935 Statistics published by the Czechoslovak Government for 1924 showed that the 787 reporting cooperative housing associations (of 1,418 in existence) had constructed 24,365 dwellings. In Denmark, cooperative credit associations and the Government participated with the housing associations themselves, in the financing of residential building. In 1937 the 17 housing associations (with about 13,000 members) belonging to the Danish Federation of Workers’ Coopera tive Building and Housing Associations constructed dwellings totaling 0,847,000 kroner in value. Aggregate income from the buildings con trolled by all the associations amounted to 8,870,000 kroner for the year. In Finland a central organization for housing construction, “ Haka,” was formed by joint action of the consumers’ cooperative Development and Characteristics 13 association of Helsinki, one of the cooperative wholesales, and an organization for the improvement of housing. Such housing associations as existed in France were of the savings and loan type, financing construction rather than undertaking it themselves. In May 1935 there were 460 associations of this kind. Most of the associations in Great Britain were also of this type; of 1,333 associations, in 1937, this group accounted for 977. Also, the associations that constructed housing were for the most part only semicooperative. However, the dwellings built by them included a considerable number erected by retail cooperatives of the consumers' movement, which used their surplus funds for this purpose. Prior to the rise of National Socialism in Germany, cooperative building associations were of considerable significance there. In 1927, for example, they accounted for 78,426, or 28 percent of all dwellings constructed in Germany, and for over 68 percent of those erected in Berlin. The central federation, “ Hansya,” in Hungary had con structed numerous dwellings for its employees and emarged its ac tivities in this field in 1938. The more than a thousand housing associations that were in exis tence in Poland in 1934 had erected buildings containing a total of 75,000 rooms. One of the largest associations was that at Warsaw which had over 4,000 members, who were almost entirely wage earners tad lower-salaried employees. In the 15 years of its existence it had, by 1936, built 24 apartment houses with accommodations for 1,713 families. Housing associations in Sweden were federated into a national organization, known as the “ H. S. B .” It operated as a financial center, as purchasing agency, and even as producer of building ma terials. Local associations carried on actual construction of the build ings, which were then turned over to tenants' associations to run. By 1937, 10 percent of the housing accommodations in Sweden had been constructed by cooperative associations, which had done much to improve building design and equipment and to lower prices. Cooperative activity in Switzerland was also considerable and had resulted in reducing rent levels somewhat. In five cities cooperatives had built over 10,500 dwellings (including the community, Freidorf, built by the Cooperative Association of Basel for its employees). In Yugoslavia the large railwaymen's cooperative used its surplus funds to finance the construction of houses for members. Not to be disregarded as potential aids during the reconstruction period are certain types of associations that functioned in France and Greece for a considerable period after the end of the first World War. In France the associations for the reconstruction of devastated areas at one time numbered nearly 2,300 and had a membership of 162,000 families. Although doing no construction work themselves, they made all the financial and contractual arrangements for repair and construc tion. It was estimated that they handled about 27 percent of all the repair work and 58 percent of all the construction work carried out in the devastated districts and in some cases the proportion ran as high as 76 percent. The Government of Greece, in order to care for the flood of refugees into Greece from Turkey and southern Russia and for persons involved in the population exchanges with Bulgaria and Turkey, gave housing cooperatives certain privileges, such as exemption from real-estate taxes and from import duties on 14 Comparative A nalysis building materials. Resettlement cooperatives were also formed, which received land from the Government, obtained by expropriation of large estates. Such associations at the end of 1928 numbered 1,585; they had a membership of 93,000 families and had taken possession of over 1y2 million acres of land. w orkers’ p r o d u c t iv e and labor a s s o c ia t io n s Difficulties of financing, of salesmanship, and of competing with large-scale industry have been among the chief obstacles to the growth of workers’ productive associations operating workshops or factories. For these reasons such associations have ordinarily been most successful (1) in the less-industrialized countries or those in which small-scalo enterprise has predominated (such as France and U. S. S. R.), (2) in those countries where their sales problem is minimized by virtue o f the patronage of a well-organized consumers’ cooperative movement which provides a known market (Czechoslovakia and Great Britain) or by preference extended in contracts by a friendly government (Italy, France), and (3) in those industries requiring relatively small capital. In no country has this branch of the movement attained a predomi nant place in the whole cooperative movement. Nevertheless, in a few these workers’ groups have attained considerable success, and could be a real factor in the work of renewal, both of physical proper ties and of goods after the war. In 1937, over 2% million workers were members of these European industrial cooperatives, and their skills covered a wide range. TABLE 3.— M em bership and Business oj Workers’ Productive and Labor Associations,. by Country 1937 1 Country Num ber of associa tions Members report ing Amount of business (in Swiss gold francs *) All countries........ 9,439 2,238,707 9,562,792,678 5,608 124,000 21,646 (<) 234 31,227 33,472 <«> 5,757,000 (<) 31.977.000 10.204.000 687,000 46.223.000 102,662,000 <9 Belgium............... Bulgaria»............. Czechoslovakia.. Denmark............. Estonia................. France«................ Great Britain___ H ungary............ 98 500 858 36 16 648 89 14 Country Italy..... ................ KTAthorlan^Q vvliC/i IcUlUd. Poland................. Rumania.............. Soviet Union___ Spain.................... Sweden................. Switzerland_____ Yugoslavia........... Num ber of Amount oi associa Members business (in tions Swiss gold report francs *) ing 86,500 1,568 17 (*) 5,876 155 11,152 95 1,882,350 4,555 670 32,804 2,882 27 67 (*) 956 36 88,550,000* (4) 9.292.000 (*) 9,248,931,678 2.220.000 14,524,000 0) 1,765,000< i Data (except for Bulgaria and Soviet Union) are from Cooperative Societies Throughout the World? Numerical Data (International Labor Office, 1939), pp. 31, 32. * Average exchange rate of Swiss gold franc in 1937=32.7 cents. * Data relate to 1939. <No data. •Not including “ command ites” in printing industry. These workers’ organizations are of two general types: Those which have their own workshops and equipment; and the so-called “ labor associations” which carry on a contracting business in various lines of work. The workers’ productive associations in Belgium were mainly in the printing trade, though there were others scattered through the brewing, construction, and tanning industries, and the manufacture of glass, cigars, shoes, and enameled ware. Most of Development and Characteristics 15 the cooperative labor associations of Belgium were those of dock workers. The associations in Czechoslovakia were engaged in vari ous pursuits— in the operation of transport facilities, theaters, and movies, in the printing industry, and in the manufacture of bakery products, meat products, flour, clothing, footwear, stone and glass products, toys, baskets, wooden articles, artificial limbs and paper. In France the workers’ productive associations were engaged in extraction of minerals, stone, etc.; printing; manufacture of textiles, clothing, leather, stone, clay, and glass products, chemicals, paper, and jewelry; metallurgy; woodworking; construction and public works; transportation; and the practice of liberal professions. Perhaps the best known of the workers’ productive associations in France— or indeed, in the world— was La Familist&re, an iron-foundry asso ciation engaged mainly in the production of stoves, at Guise. Nearly destroyed in the first World War, it may also have suffered during the German invasion of northern France in 1940. The small number of workers’ productive associations in Great Britain are for the most part making clothing or footwear or operating printing plants, their chief market in many cases being the con sumers’ cooperative movement. Over a sixth of the total number of cooperative associations in Greece in 1936 were classed as workers’ productives and labor associa tions. The latter consisted of associations of porters and stevedores working in the coastal cities. The former were (like most of the German associations of the pre-Nazi period) marketing or supply asso ciations for independent handicraftsmen in various trades— tailoring, shoemaking, baking, etc. In Hungary the workers’ productive associations were found in woodworking, building construction, shoemaking, tailoring, and vari ous home industries. The labor associations were engaged mainly in flood control, irrigation work, and road construction. Italy presented one of the few outstandingly successful examples of both cooperative workshops and labor cooperatives. The former were found in such industries as printing, mosaic, woodcarving, bridge and ship building, shoemaking, and tailoring; and the latter in long shore work, farming, road construction, building construction, drain age projects, and various other types of public works. Two of the country’s railroads were built and operated by worker groups. These associations had had, for many years, preference in Government con tracts— a policy which seems to have been continued by the Fascists. The workers’ cooperatives (“ artels” ) in the Soviet Union have been encouraged to the greatest extent by the Government, under the vari ous 5-year plans, and have played a substantial part in industrial pro duction. Even as late as 1938, these industrial cooperatives were producing about 20 percent of the total output of consumer goods in the country. In certain lines the proportion ran considerably higher: Piece goods, 33 percent; furniture and felt footwear, 35 percent; metal goods, 42 percent; metal beds, 65 percent; notions, 80 percent. Cer tain commodities— embroideries, toys, musical instruments, and kerosene burners— were produced entirely by the artels. The workers’ productive associations in the rural areas of Rumania quarried stone and mined coal; those in the urban areas operated printing plants, tanneries, and textile-weaving mills. 16 Comparative A n alysis OTHER ASSOCIATIONS The services of certain other special types of cooperatives might be utilized in the work of rebuilding the economy m the devastated regions. Among these may be noted the following: For the com munal feeding programs that will be necessary in the period im mediately following liberation in each country the experience of the cooperative restaurants in Belgium, Finland, and Sweden, the “ canteens” of Denmark, and the “ cooperative kitchens” and restau rants in the Netherlands should be of service. Lumber might be obtained from the forestry associations in Bulgaria, Finland, and Rumania; and fish from the fishermen’s associations in Great Britain, Greece, Italy, Latvia, Norway, Spain, Sweden, and Yugoslavia. Before the war, cooperatives distributed electric power in Czecho slovakia, Denmark, Estonia, Finland, France, and Yugoslavia (as also in certain still free countries, such as Sweden and Switzerland). In Finland where telephone service was also provided cooperatively, the farmers’ cooperative wholesale, “ Hankkija,” was recognized as the leading enterprise in electrification work and in the installation of telephone equipment. Hungary had cooperatives carrying on a transport business, and one mining association. The farmers in the various countries also had cooperatives of many •types, in addition to the usual processing and marketing of farm prod ucts and purchasing of farm supplies. In Belgium the Belgische Boerenbond opera tea a chain of retail stores and bakeries. In Czecho slovakia the farmers ran flour mills, bakeries, fruit and vegetable canneries, chicory works, and starch factories, as well as associations for the joint leasing and cultivation of land and joint use of farm machinery Except for the land associations, farmers’ cooperatives in France and Switzerland were in similar fields. Dairy associations were of especial importance in the agricultural cooperative movement of Estonia, Finland, Norway, Sweden, and Switzerland. In Denmark, Finland, Netherlands, Norway, and Sweden, practically every phase of agriculture had its marketing and purchasing cooperatives, oper ating in foreign as Well as domestic markets. Rural cooperatives were even more varied in Bulgaria. That country had in addition to the usual processing, marketing, and supply associations, cooperatives of cocoon growers and forest owners, collective-farming organizations, associations distilling ^attar of roses, and “ river” associations carrying on irrigation, drainage, flood control, electricity generation and distribution, and extraction of salt from the sea. In Rumania there were land-leasing and cultiva tion associations, forestry associations, and organizations quarrying stone and mining coal. Consumers9 Cooperative M ovem ent CHARACTERISTICS OF THE MOVEMENT Goods and services provided— In general, the European distributive associations tended to deal in groceries and household supplies. Extreme variety of type characterized the consumers' cooperatives in countries where organizations usually carried on a limited range of activities and where a new association was formed for each new avenue of activity. In many cases, on the other hand, where the Development and Characteristics 17 consumers’ cooperatives were of the usual standard types, the retail associations operated in a wide variety of lines. Thus, in France where there still remained many small associations dealing in a single commodity, such as bread, there were also large district associations operating not only grocery stores, bakeries, and restaurants, but even drug stores and department stores. The same is true in Great Britain to an even greater extent; in that country the retail coopera tives also provide services of various kinds, such as medical, dental, and optical care, beauty service, burial, laundering, auto repair, house decoration, and meals. Finnish and Lithuanian distributive cooperatives usually were of the “ general store” type, providing a wide range of commodities in a single shop. Some Finnish stores were reported to carry as many as 5,000 items of merchandise. In Germany and Sweden, on the other hand, the majority of associations tended to concentrate on food stuffs, although some also sold dry goods, housefurnishings, etc. Religious and political aspects— Typical of many countries were the cleavages along religious (Belgium, Netherlands, and Spain), political (Belgium, Czechoslovakia, Finland, and Netherlands), and social lines (Hungary). Nationality divisions were also common, especially in eastern Europe where nations had been pieced together, after the first World War, from territories previously under the rule of adjoining countries (Poland, Rumania, Yugoslavia). Such differ ences did not necessarily mean disharmony. In some countries the various branches were on friendly terms and combined forces on occasion (Czechoslovakia, Hungary). In others (as in Poland), although there were groups of associations whose members were exclusively of a single political or religious belief, they were affiliated with the general national movement. In at least one country (Bel gium), however, there was active antagonism among the various factions. One of the noteworthy features of the cooperative move ment in Czechoslovakia was the warm friendship between the German and Czechoslovakia branches of the cooperative movement, which continued even after the beginning of the Pan-German movement initiated by the Nazis and until the dismemberment of the country. Rumania contained a movement organized almost entirely on nationality lines, but compelled by Government decree to belong, to a single structure culminating in a State department. Membership in a general federation was also compulsory by law, in Yugoslavia. The Finnish distributive movement was divided into two c^mps— the cooperatives of urban, progressive, industrial workers, and those of the rural, conservative, agricultural groups. Between them existed no special antagonism; neither does there appear to have been collaboration. In spite of differences in language, political preference, and religious belief in some countries, the consumers’ cooperative movement had in many cases succeeded in becoming unified and well-integrated throughout the entire nation. National federations had been formed, for educational and commercial activities, to which all or a prepon derant proportion of the entire movement was affiliated. This was the situation in Austria (before the Anschluss), Bulgaria, Estonia, France, Great Britain, Hungary, Lithuania, Norway, Poland, Sweden,, Switzerland, and Yugoslavia. In most of these the national federa tion pursued a policy of religious and political neutrality. This latter 18 Comparative Analysis did not, however, preclude action by the movement to protect itself against legislative attack; political “ neutrality” meant that the movement did not identify itself with any existing political party. Cooperative movement in relation to the State.— In its attitude to and relations with the Government, the consumers’ cooperative movement, just prior to the present war, varied from (1) uncompromising selfreliance (as in Great Britain, Netherlands, Norway, Sweden, and Switzerland) through (2) participation with the Government, on equal terms, in various enterprises which were generally undertaken as expedients for improving the general economic situation (preAnschluss Austria, Hungary, Latvia, Lithuania) (3), through varying degrees of government assistance (usually credit, in the form of long-term loans,5 as in France), to (4) extreme dependence on Govern ments which were continually intervening in the affairs of the move ment (Bulgaria, Rumania). The attitude of the Governments, on their part, ranged from— (1) Open hostility (National-Socialist Austria, Germany), through— (2) Apparent indifference or a hands-off policy (Belgium, Great Britain, Netherlands, Switzerland) to— (3) Active interest manifested through— (а) Strict control (Latvia, Lithuania). (б) Granting of monopolies in certain lines to cooperatives (Estonia, Latvia). (c) Extension of credit or outright subsidies (France, Rumania). (d) Special Government offices to regulate, direct, or promote cooperative activities (Czechoslovakia, Estonia, France, Rumania). (e) Establishment of cooperative training schools (Bulgaria, Rumania) or introduction of cooperative courses in the schools or colleges (France, Poland, Rumania). (/) Public expressions of appreciation on the part of Government officials (Czechoslovakia, Hungary, Sweden). (g) Extension to cooperatives of representation on various Gov ernment regulatory or administrative bodies (Bulgaria, Czechoslovakia, France. Hungary, Lithuania). Since the Bolshevik Revolution in Russia, the attitude of the au thorities there has ranged from (1) extreme favor that gave the move ment the status of a Government enterprise, membership in which was made compulsory (1919-23), (2) restoration of voluntary mem bership (1924) but with operation under Communist control, to (3) absorption of urban cooperatives into the State store system (1935), but encouragement of the rural consumers’ cooperatives and other forms of cooperative effort (1935-44). Consumers’ Cooperative M ovem ent D uring and Im m ediately A fter the Depression The impact of the depression and post-depression years was felt by European cooperatives in several ways: In the decreased volume*1 4 In Great Britain the movement has its own political entity, The Cooperative Party. 1It should be pointed out that in most countries where this was the situation, similar credit was also accorded to other forms of business enterprise—and often on a much wider and more liberal scale. Among the branches of the cooperative movement, also, it was generally the credit and agricultural associations (rather than the consumers* cooperatives) that were accorded Government credit. Development and Characteristics 19 of trade caused by the diminished purchasing power of the members, who were largely industrial workers or agriculturalists; in the increased attacks by private business, resulting in efforts to prevent further expansion of cooperatives and to restrict their activities through either general legislation or measures aimed solely at cooperatives; and in the hampering effects of measures adopted by the Governments in their effort to adjust to worldwide conditions of commerce and trade. The trend toward curbs upon the cooperative movement was inten sified as the corporative type of government began to be introduced in one country after another, under the influences of a complicated set of domestic and world events and factors. ATTACKS UPON THE MOVEMENT The private traders’ attacks generally followed a similar pattern in all countries. The cooperatives were accused of being the recipients of special favors from the Government (notably in the matter of tax exemption); and their patronage refunds were declared to be an unfair trade practice. On the basis of these charges legislation was sponsored, the purpose of which was usually declared to be to “ place cooperatives on the same footing as private business.” In Finland the retail dealers had adopted the cooperatives’ technique and had established wholesale cooperatives of their own, and it was through these organ izations, ironically enough, that the attacks against the consumers’ cooperatives were launched. The measures proposed ranged from mild curbs upon the expansion o f the movement to its entire dissolution or to imposition of taxes frankly designed to put the cooperatives out of business. In reply to the charges made, the consumers’ cooperatives pointed out that they paid the usual business and real-estate taxes and license fees, that generally the only exemptions they enjoyed were on the surplus earnings returned to members on patronage; and that these could not properly be regarded as on the same basis as “ profits,” being merely the overcharge advanced by the members to insure the financial safety of the enterprise. In some countries (as in Belgium and France) some difficulty was experienced in driving home this latter point, because of the fact that the cooperative law was so loosely drawn that profit-making businesses could and did incorporate under it. Where cooperatives had exemption on amounts disbursed for social-welfare purposes (pensions, hospitals, holiday homes, etc.), the same also held true for similar expenditures by private business. For the most part the more drastic legislative restrictions attempted were defeated by the cooperatives (Denmark and Finland), though often only by concerted effort of the various branches of the move ment (Netherlands), or with the support of the trade-unions (Bel gium) or the liberal political parties (Czechoslovakia). Opponents were, however, successful in obtaining certain restrictions in Austria (by compromise, the associations agreed to discontinue production of textiles and not to attempt any further expansion of membership), in France (a special tax on all cooperative sales, and cancellation of the exemption on expenditure for social welfare), in Switzerland (limita tion of opening of branch stores, and special taxation—also levied on chain stores), and in the Netherlands (limitation on opening of new enterprises, but cooperatives were given representation on the deter mining committee). 20 Comparative A n alysis It may be noted that in Germany and, later, Austria, the drasticmeasures against consumers, cooperatives that were inaugurated, immediately after the assumption of power by the National Socialists— finally ending in the wiping out of the entire consumers' cooperative movement—were manifestations of the Nazi policy of favor toward the small shopkeepers. In most of the above cases, the attacks occurred in democratic countries having governments responsive to pressure groups but where the weight of the cooperative movement could also make itself felt. Where restrictions were finally imposed, these were ordinarily far less onerous than the original proposals. In the dictatorships or those countries in which the totalitarian state was rapidly being inaugurated (Bulgaria, Estonia, Italy, Latvia) the entire cooperative movement was subjected to the will of an unresponsive authority which in some cases favored it, but in all cases had complete control. In some countries the merchants' attacks not only failed to harm the movement in any serious way, but brought about closer relation ships among the various branches of the movement (Belgium and France) and redounded to its benefit in other ways. Thus, in Czecho slovakia the attendant publicity even resulted in a substantial increase in membership. In France a signal victory was achieved in the passage of a law, advocated for many years, setting cooperative standards and restricting the use of the word “ cooperative" to organ izations meeting these standards. The various branches of the movement in the Netherlands—neutral workers' federation. Catholic cooperatives, and agricultural associations— had always had very friendly relations. The merchants' attacks resulted in bringing them even closer, in the formation of a council for defense on which all groups were represented, in the undertaking of a 5-year plan for informing the public regarding the movement and for the better education of cooperators, and in the formation by the consumers' and agricultural cooperatives of a jointly operated chain of green-grocery stores throughout the Netherlands. DEPRESSION EFFECTS UPON TRADE AND MEMBERSHIP Cooperatives came through the depression fairly well. In general they were able to resist depression conditions in proportion to their financial resources and the degree of coordination of the various parts of the movement. Those countries the economy of which was largely dependent upon foreign trade were among the first to suffer, the shock being quickly communicated to industry or agriculture or both, depending upon the type of the country's exports and imports. The Belgian cooperative movement, although it had not regained its predepression level, had undergone a drastic structural reorganiza tion and integration designed to put it on a much firmer basis finan cially. By this action the consumers' cooperative movement of Belgium had become (with the possible exception of Rumania ®) the most strongly centralized of all Europe. Rapid progress had already begun under the new plan, when the present war broke out. The consumers' cooperative movement in France had through many years' consolidation of associations, attained a stability that enabled• •In Rumania, however, the centralization was forced by the Government, not voted by the cooperatora themselves. Development and Characteristics 21 it to hold its own remarkably well during the early years of the depression. Beginning in 1933, however, it suffered a severe blow with the sudden failure of the Cooperative Bank, whose obligations were thereupon assumed by the cooperative movement. As a result of all this and the other economic effects of depression a general reorganization of the whole consumers' network was voted, providing for greater mutual assistance and bestowing added authority on the central organizations. In the Netherlands, although the depression was severe and was greatly felt by the working-class membership, one organization was formed to give technical aid to associations in difficulties and another to lend financial assistance. Sales of local associations declined year by year throughout the depression, until 1936, when a sharply upward trend began. Such was the loyalty of the local associations, however, that the sales of the wholesale rose without a break throughout the entire depression period. The Norwegian consumers' cooperative movement not only held its own throughout this period but advanced, each year showing higher trade levels. Polish cooperatives had recovered from the depression by 1933 and consumers' and agricultural cooperatives were making rapid progress. In Czechoslovakia where depression conditions (especially in the Sudeten area, where the German branch of the movement was con centrated) continued through 1936, both the German and Czecho slovakian branches of the movement had overcome the effects of the depression and were well on the upgrade by the end of 1935. In Sweden, where there was a systematic policy of amalgamation of small associations into larger and more stable organizations and where ailing associations were taken in hand and set on their feet, the coop erative movement came through the depression without serious mis hap. The sales of both the retail associations and the wholesale rose uninterruptedly during the whole depression period. The associa tions in S w i t z e r l a n d were almost as fortunate, sustaining only alight reductions about 1932 and 1933. In the Baltic countries the trend toward the corporative State came early, dating in Lithuania from 1926, when a single-party dictatorship came into power. Similar systems followed in Estonia in 1933 and Latvia in 1934. With these changes came complete government con trol over the cooperatives, which had been severely affected by the depression (in Estonia by 1934 the number of associations and mem bership had dropped to an all-time low and many of the associations were saved only through timely assistance from the cooperative whole sale). Along with control also came favors; cooperatives were in some cases given export monopolies (Estonia, Latvia) and allowed to partic ipate m many ways in the Government’s system of economic control. In Latvia, however, this entailed a complete reorganization forced by the Government and conformity to the new ideology. Somewhat similar circumstances were found in most of the countries that later threw in their lot with Germany, and cooperatives were of course affected by the measures adopted by the New Order. In Italy the cooperatives had been incorporated into the Fascist system soon after the rise of Mussolini. The depression was unusually severe in Austria, but the coopera tives withstood the situation during the first few years better than did 22 Comparative Analysis private business, although volume of business receded. After the c r i si s of 1933 and the beginning of th* authoritarian s y s t e m cooperatives felt more and more the iron hand of the authorities, losing the Labor Bank and being themselves placed under Govern ment administrators and obliged to become members of corporative organizations created by the Government for the various branches of trade and industry. This crisis was surmounted and Government administration was withdrawn in 1935, after which the movement (retail and wholesale) began to advance again. This progress was terminated abruptly with the German invasion in 1938. From that time onward the only question was how long the movement could delay the ultimate aim of the Nazis—dissolution. Unlike the situation in most other countries, the depression in Germany had not been preceded by a period of prosperity, but was the culmination of a long downhill slide in business and employment that had begun in 1923. During this time cooperatives had been sin gled out for special taxation in many German States and municipalities, which seriously reduced their earning power and the benefits they could return to their worker members. When Government credit was made available for business, cooperatives were again victims of discrimination. In 1933 Hitler came to power. During the succeed ing years workers’ labor cooperatives disappeared entirely and in the other branches of the cooperative movement drastic amalgamations were forced. The consumers’ associations were especially singled out, the largest associations being attacked first and the wholesales merged into an association that did not even contain the word, cooperative. During the next few years, however, the attitude not only of State governments but also of the Central Government showed extreme variation. Agricultural cooperatives, alone, were consistently en couraged. Although drastic reorganizations in the cooperative movement were carried out by Government order in Hungary and Rumania, some degree of friendliness was also shown. In Hungary, the importance of “ Hangya,” the national consumer-farmer cooperative wholesale, was recognized; it was given representation on all the State-controlled syndicates, and its facilities were utilized in many ways. In Bulgaria, where the constitutional government was overthrown early in 1934, the Government began to intervene more and more in cooperative affairs. Nevertheless, all branches of the movement ex panded up to the outbreak of war, and cooperators were even given responsible posts in the Government. Consumers’ Cooperation Just Before W orld W ar I I RETAIL CONSUMERS’ COOPERATIVES Table 4 shows, for 24 countries for which data are available, the membership and business of retail consumers’ cooperatives before the beginning of the war and in the latest year obtainable. 23 Development and Characteristics T a b l e 4 .— M em bership and Business oj Retail Consumers’ Cooperatives, by Country (For par values ol currency, see Appendix table, p. 278J Year Country Austria __ ___________ _ Belgium_______________________ Bulgaria_______________________ Czechoslovakia Denmark . _ T Estonia _ ___ Finland ____ _ France_________________ _____ Germany . __ _ . . Great Britain_____„____________ Hungary __ _ _ _ _ _ Iceland_________________________ Irish Free State________________ Italy __ ______ Latvia. _ _ _ __ ___ _ ___ Lithuania______________________ Nether ands____________________ Norway. _ Poland. __ __ _ ___ ■Rumania Spain _ __ __ ___ Sweden _ T Switzerland. Yugoslavia. __ __ ____ __ _ _ __ . ,_T, ___ _ _ ___ _ _ 1937 1936 1936 1937-38 1937 1936 1941 1937 1935 1937 1936 1935 1941 1937 1935 1940 1937 1935 1941 1937 1935 1937 1936 1935 1937 1936 1935 1943 1937 1935 1940 1936 1935 1942 1936 1935 1941 1936 1935 1938 1935 1938 1936 1939 1935 1939 1936 1935 1942 1937 1935 1939 1937 1935 1938 1934 1937 1934 1942 1937 1935 1942 1937 1935 1939 1935 Number of asso ciations reporting 220 131 101 40 243 43 155 62 61 816 816 835 1,933 1,882 1,835 208 192 173 529. 537 528 1,235 1,200 1,064 1,162 1,162 1,169 ‘ 1,058 1,094 1,098 2,094 1,480 1,489 * 48 37 37 20 21 22 3,865 3,465 184 112 185 165 351 419 398 673 585 524 1,776 1,500 1,391 2,791 1,767 1,803 272 676 702 725 546 540 535 *138 97 Business done Number ol members Monetary unit 300,000 260,831 264,464 >305,197 500,000 346,568 104,992 75,000 69,000 805,544 644,400 642,700 419,200 366,100 319,000 («) 47,000 35,478 676,000 562,298 517,355 1,800,000 1,600,000 1,6 8,359 2,010,900 2,094,500 3,121,839 9,028, 218 8,084,990 7,414,376 * 701,417 630,000 627,693 20,189 9,150 8,680 15,771 9,222 9,335 825,000 775,000 27,577 18,008 25,189 21,332 304,804 325,368 320,907 200,490 160,107 138,557 412, 762 325,000 311,000 154,735 257,907 1,178,817 79,814 765,700 605,796 568,161 461,000 413,715 402,339 90,672 72,327 146,000 nonpurchasing members were dropped from rolls in this year. 3 Data relate to 1936. 3 Data relate to 1939; affiliates of central organizations only. * Data relate to 1939. * No data. * Data relate to 1942. ' Includes agricultural supply associations. * Data relate to 1941. * Data relate to 1937. Schilling_______ ........do.................. ........do.................. Franc_____ _ ........do . ............... ........do.................. Lev ........d o ................. ........do.................. Franc.................. Koruna........ ....... ........do.................. Krone.................. ........do.................. ........do.................. Kroon. _ ........do.................. ------ do.................. Markka________ ........do.................. ........do--------------Franc. ___ ........do.................. ........do.................. Reichsmark ........do......... ........ ........do.............. . Pound__ ______ ........do................. - . . . d o .................. Pengo_________ — do.................. ____ do.................. Krone _ ___ _ _ ....... do.................. ........do.................. Pound ........do.................. ____ do.................. Lira ........do.................. Lat...................... ____ do__________ Lit ........do.................. Florin ........do................... ........do.................. Krone T, _ ........do__________ ....... do................... Zloty _ _ __ ........do.................. — do.................. Leu____________ ........do.................. Franc _ Peseta_________ Krona ........do.................. ........do.................. Franc „ _ ___ ........do.... ............. ........do.................. Dinar ........do_____ . . . . . Amount 124,608,7001 118,063,603 115,200,000 663,073,337 650,000,000 728,709,299 J656,400,000 556,800,000 459,020, 700' 203,798,000 1,348,400,00) 1,299,100,000* <361,500,000 328,700,000 286,003,800 50,000,000 45,500,000 26,332,009 <7,695,000,000 4,683,077,605 3,327,000,000 1,781,409,000 1,471,772,000 2,232,540,000 532,069,098 510,000,000 659,600,009 331,547,123 251,393,047 220,429,517 3 91,306,160 91,306,160 81,148,481 109,000,000 19,200,000 17,200,000 2,474,239 186,537 180,876 * 1,300,000,000 1,180,000,000 58,900,000 13,523,000 114,285,259 33,191,364 70,769,000 63,735,779 64,775,816 210,020,700' 168,253,500 129,769,600' (*) 143,200,000 131,700,000 («) 1,259,130,054 13,638,000* 90,863,000 731,000,000 488,740,957 412,177,962 406,100,000 299,251,995 274,200,381 283,887 206,311 24 Comparative A nalysis WHOLESALE COOPERATIVES In all of the countries of Europe, except Greece and Portugal, the retail cooperatives had combined to establish wholesales through which to obtain supplies of goods. The operations of these wholesales in selected years (depression, pre-war, and war) are shown in table 5. T a b l e 5.— M em bership and Business o f Cooperative Wholesales, by Country Year Country and wholesale Austria? QoC____________________ Belgium: S. G. C .............................. Bulgaria? Napred _ _. Czechoslovakia; G .E . C . . . ................................... V. D . P ........................................ Sdruzeni....................................... Denmark: F. D . B............................ Estonia: E. T . K ............................... Finland: o t . ir S. 0 . K ......................................... France _ Germany: G. E. G____ ____ _____ Great Britain: English Wholesale _ _ __. Scottish Wholesale..................... English and Scottish Joint Wholesale. Hungary: Hangya.... ........................ Iceland? TTninn and Wholesale___ Ireland: L A. W _ ... ____ _ Italy: E. I. C. A _______ _________ Latvia: Tnriha Konzums..................................... Lithuania: Lietukis _ _ Luxemburg: General Federation Netherlands: Handelskamer______ Norway: N . K . L _____________ . . . 1937 1936 1933 1940 1937 1933 1942 1940 1933 Wholesale Currency • Amount of business Own produc tion 131 131 143 *62 43 71 78 69 58 Schilling.............. ........do.................. ........do.................. Franc................... ........do............. . ........do.................. Lev ........do.................. ........do.................. 81,700,000 73,616,832 76,249,019 138,737,000 169,000,000 186,655,531 1,140,000,000 698,167,000 432,297,514 (0 *29,718,000 4,841,000 0) 27,000,000 28,095,091 0) •117,433,998 37,000,000 1937 1936-36 1933 1940 1933 1937 1939 1937 1933 1942 1937 1933 140 *160 166 •301 331 131 1,870 1,900 1,833 7 208 192 184 Koruna............... ........do.................. ........do__________ ........do.................. ........do.................. ........do.................. Krone.................. ........do.................. ........do.................. Reich mark........ ........do.................. ........do.................. 320,954,014 295,938,000 292,165,370 638,500,000 455,549,000 203,240,000 216,200,000 206,841,653 151,900,000 41,400,000 29,107,000 12,687,000 0) 57,268,000 53,005,470 • 172,421,000 136,974,659 0) 65,100,000 60,597,998 42,900,000 8,000,000 6,206,000 ‘ 3,100,000 1942 1939 1933 1943 1939 1933 1939 1937 1933 1937 1936 1933 1943 1942 1939 1933 1943 1942 1939 1933 1942 1939 1933 <*> 127 109 0) • 417 418 (>) 1,235 1,120 1,162 1,169 1,154 1,612,000,000 1,257,000,000 604,970, 281 2,153,000,000 1,646,000,000 914,571,571 1,276,899,000 1,066,021,394 893,878,615 330,009,321 309,999,304 279,940,844 239.600.000 243.300.000 82,035, 578 450,000,000 356,000,000 183,585,602 81,200,085 62,441,343 50,390, 293 120,608,663 107,581,300 108,000,000 7,544,315 157,395,338 125,015,316 83,031,390 35,778,000 34,044,052 24,612,711 16,016,361 9,429,000 8,400,000 15,975,552 0) 47,406,257 44,243,924 30,049,108 (*) •9,816,972 7,132,330 5,361,493 230,000,000 80,053,757 43,230,547 69,000,000 8,500,000 721,806 241974 115,567,000 115,526,994 1180,000,000 1,350,000 138,911,000 73,710,000 28,716,000 27,792,000 28,118,700 21,431,000 53.162,000 54,105, 407 33,135,651 28,600,000 4,783,095 3,828,120 no, 000,000 1,589,199 1941 1937 1933 1942 1936 1942 1937 1937 1932 1938 1935 1939 1936 1937 1940 1937 1933 m i 1937 1933 See footnotes at end of table. Number of affili ated asso ciations Markka 0) •1,008 1,009 1,052 (l) •221 227 241 2 2 2 ........do.................. ........do.................. ____ d o................. ........do.................. Franc__________ ........do.................. ____ do.................. Reichsmark........ ........do.................. ........do.................. Pound -------do................... ........do................ . ........do.................. ........do.................. ........do.................. ........do.................. ........do.................. ........do.................. ........do.................. do 1*1,887 1,480 1,541 •48 40 360 373 0) 251 1*414 223 145 108 (*) *292 302 284 666 685 4*3 FengS.................. ........do.................. ------ do.................. Krone _ ........do.................. Pound_________ ........do................... Lira...................... : . . . . do.................. Lat_____ ........do.................. Lit ........do.................. Franc................... Florin _ _ _ ........do.................. ........do.................. Krone................ . ........do................... ........do.................. (0 (0 (0 0) (i) i *3,424,000 3,158,320 1,434,000 724,400,000 24,000,000 15,329,385 25 Development and Characteristics T a b l e 5.— M em bership and Business o f Cooperative Wholesales, by Country— C on . Poland ! Spolem. Rumania: Hangya_______________ Soviet Union: Centrosoyns Spain: C. C. A .................................. Sweden: K . F_. _ _ ___ Switzerland: Konkordia _ v. o. l . a ................................... 1939 1938 1933 1937 1935 1934 1933 1937 1941 1939 1933 1939-40 1937 1933 1938 1,776 1,800 794 325 315 (0 0) 1,200 706 693 763 p) 47 i* 52 329 1936 1933 1943 1939 1933 1937 1935 318 310 548 545 533 1,236 991 V. S. K ......................................... Yugoslavia, * For par values, see p. 278. * No data. * Data relate to 1935. * Data relate to 1938. * Data relate to 1936. Number of affili ated asso ciations Year Country and wholesale Whol<isale Currency • Amount of business Own produc tion Zloty . ... . 98,000,000 100,000,000 ....... do.................. 69,616, 646 Leu____________ 121,000.000 ........do.................. 2,647,589 ■Ruble .... _ 14,910,000,000 ........do.................. 14,154,400,000 Peseta.................. 4,525,000 Krona 270,930,000 ........do__________ 269,350,000 ........do.................. 152,483,000 Frano. _ 3,816,000 ........do__________ 3,340,000 ........do.................. 3,533,922 ........do.................. 43,000,000 ........do.................. 3 7 ,710,000 ........do.................. 3 9 ,822,864 ........do.... ............. 267 ,340 ,00 0 ........do.................. 227,869,001 ........do.................. 168,585,443 Dinar _________ 5 7 ,846,000 ........do............. . 37.166,955 (i) 10,000,000 5,130,937 (i) 590,469 (l) (0 0) 10 14Q, 7 0 0 ,000 144,535,346 81,759,000 (*) 0) h 1 ,500.000 (0 0) 0) 5 ,2 8 0 .1 5 2 1 ,8 86,338 Ci) W •Data relate to 1941. i° Data relate to 1940. « Estimated. 77 Includes agricultural, u Data relate to 1932. * Data relate to 1934-35. • Data relate to 1937. 7Data relate to 1939. »Data relate to 1934. Place o f Cooperatives in the National Econom y IM PO R TA NC E IN TER M S OF P O PU L ATIO N Before the outbreak of World War II, the members of the consumers, cooperatives accounted for 10 percent or more of the population in Denmark, Finland, the British Isles, Soviet Union, and Sweden. In the Soviet Union, where the urban cooperatives had been absorbed into the system of State-owned stores in 1935, the membership of the rural consumers’ cooperatives included nearly a third of the rural population (table 6). Allowing for the families of cooperators, the perceht of population served by the consumers’ cooperatives ranged from 15.0 percent (Netherlands) to 34.0 percent (Sweden). T a b l e 6.— Importance o f Consumers’ Cooperatives in Relation to Population , Just Prior to Outbreak o f W ar Cooperators as percent of popula tion Country Consum ers' cooperatives Based on members only: Denmark........................................ F in la n d Germany........................................ British Isles.................................... Latvia............................................. L it h u a n ia . Luxemburg. _ _ ...... N e t h e r la n d s . . . . Norway........................................... R u m a n ia __________ _ _ _ Soviet Union___________________ Spain_________________________ S w eden . _ . _ . Yugoslavia...................................... Including families also: B e lg iu m _ C z e c h o s lo v a k ia _ _ _____ ______ . . . _____ Denmark______________________ Germany_______ ________________ 1 0 .0 1 6 .6 6 .0 18.1 1.4 .9 6 .5 3 .5 16 .7 .8 • 3 2 .1 4 .7 1 2 .0 1 .6 2 5 .0 3 0 .0 3 3 .3 2 4 .0 C onsum ers ’ cooperatives—Con. Including families also—Con. Hungary___________ ___________ N e t h e r la n d s __________ _______ N o r w a y _______ . .. __ Sw eden _ ....... _ _ _ Switzerland____________________ 1 2 5 .0 1 5 .0 2 7 .0 3 4 .0 2 5 .0 A ll types o f associations Based on members only: B u lg a r ia . . . . . . . . . N o r w a y . . . . . ___ R u m a n ia ___ . . . 1 5 .6 2 0 .0 7 3 . Including families also: E s t o n ia F in la n d ... _ G reen e H u n gary. B o la n d R u m a n ia __ . . . ___ _... _ Yugoslavia..................................... 7 Includes only associations affiliated to central organizations. •Based on rural population; no consumers' cooperatives in urban areas. 5 8 8 5 4 4 °— 44- Cooperators as percent of popula tion Country 5 0 .6 5 0 .0 2 0 .0 4 5 .0 4 0 .0 33. B 40. *♦ 26 Comparative A n alysis IM P O R TA N C E IN TER M S O F T R A D E Outstanding among the countries, as regards the proportion of total retail trade done by cooperatives, were Bulgaria (25.0 percent), Estonia (24.0 percent), and Finland (30.0-40.0 percent). As the statement below indicates, the proportion of cooperative trade ranged relatively high as regards specified commodities or lines of trade. Perhaps the most striking instance is Lithuania, where the supply or trading associations handled from 59.5 to 84.4 percent of the total in various commodities just before the war. In five countries (pre-Anschluss Austria, Bulgaria, Estonia, Hun gary, Poland (“ Spolem” )) the central business organization of the consumers' cooperative movement was the most important com mercial enterprise in the country. In Sweden, the cooperative net work was reported as being “ the only large-scale organization in the distributive trade." Cooperative business as p e r cent of * retail trade Cooperative business as per cent of retail trade Belgium: Total retail trade____ 10. 0 Bulgaria: Total retail trade____ 25. 0 Czechoslovakia :Total retail trade. 3. 8 Denmark: Total retail trade____ 17. 0 Estonia: Total retail trade____ 24. 0 Finland: Total retail trade 30.0-40.0 France: Groceries __________ 6. 0 Germany: Total retail trade: 1931___ — ............................ 5. 0 1935............... 2. 0 Great B ritain:1 Food and tobacco___________ 12.0 Meat__________________ Coal__________________ 20. 0 Sugar and preserves_______ 27. 0 Hungary : Total retail trade____ 12. 5 Latvia: Food__________________ 16.0 Lithuania: Cement___________________ 59. 5 Salt_______________________ 76. 0 Agricultural machinery____ 80. 0 Sugar_____________________ 84. 4 Netherlands: Groceries_________ 6. 0 Poland: Total retail trade__________ 3. 0 F ood__________ ___________ 10.0 Sweden: Total retail trade__________ 12. 0 14.5 Food______________________ 20. 0 Switzerland: Total retail trade_______10. 0-12. 0 Sugar and macaroni__ >,____ 80. 0 1Data relate to 1942. IM P O R T A N C E IN T ER M S OF PR O D U CTIO N Cooperatives had made considerable progress in producing their own supplies—both in variety of product and in volume of goods produced. In most cases the major part of the production was carried on by the cooperative wholesales, either in their own depart ments or through separate subsidiary organizations. The local co operatives generally produced a small amount also, mostly perish able goods like meat products and bakery goods. Table 7 shows for the latest year for which production figures are available the value of goods produced and their relative importance in terms of wholesale business. Only in the case of Sweden did the wholesale's production account (in value) for as much as half of its total sales. 27 Development and Characteristics T a b l e 7.— Value o f Own Production o f Cooperative Wholesales, by Country [For par values of currency, see Appendix table, p. 278] Goods produced Country Year Austria.............. 1935 Bulgaria............ Czechoslovakia. Denmark.......... Estonia............. Finland............. France............... Germany.......... 1936 1936 1937 1939 1939 1939 1931 Mone tary unit Value Schil 29,718,000 ling. Lev___ 117.433,998 Koruna 1255,991,550 Krone- 60,597,998 Kroon— 8,800,000 Markka 1599,300,000 Franc.. 81,200,085 Beichs- 1155,326,693 mark Goods produced Per cent of total sales Country 42.8 Great Britain.. Hungary........... Iceland.............. Netherlands___ Norway............. Poland............... Rumania______ Sweden.............. 22.1 31.0 29.3 24.2 20.6 6.4 31.1 Year 1939 1939 i939 1938 1939 1938 1935 1939 Mone tary unit Value Pound.. Pengo.. KroneFlorin.. KroneZloty— Lev___ Krona.. 151,376,254 11,352,734 4.257.000 3.424.000 24,400,000 10,000,000 590,469 144,535,346 Per^ cent of total sales 34.3 8.9 15.2 12.3 39.0 10.0 22.3 53.7 i Two organizations. In many countries the wholesales undertook production as part of a definite aim toward cooperative self-sufficiency. This was the case1 in Bulgaria, Czechoslovakia, France, Germany, and Great Britain. In other countries the consumers' cooperatives entered production only when they were unable to obtain goods of satisfactory quality or at a satisfactory price. Outstanding in this class were Denmark,. Sweden, and Switzerland. The policy of this latter group resulted in some spectacular struggles with cartels and other concentrated private industry, but the entrance of the cooperative wholesale into manufacture resulted in drastic price reductions— in Denmark in the prices of rolled oats and twine, in Sweden in the prices of margarine, electric-light bulbs, flour, commercial fertilizer, and rubber footwear, and in Switzerland in the prices of flour, shoes, meat, and chocolate.7 So effective was the Swedish wholesale that eventually it won price reductions merely by a threat to enter production of certain commod ities. In Austria the wholesale's entry into production was occa sioned by the desperate situation at the end of the first World War. In several fields the wholesale participated with other agencies (the Austrian Government, municipalities, trade-unions, etc.) in enterrises to produce needed goods. Some of these enterprises were quidated during the post-war depression, others were continued by the wholesale. The Czech cooperative wholesale, V. D. P., in 1937 was the largest flour-mill operator in the country. The German wholesale in Czech oslovakia produced more canned goods (fish, fruits, vegetables) than its affiliated associations could use; and it exported the surplus to Sweden, Finland, and Germany. The articles produced by the wholesale organizations just before the war are listed in table 8. Undoubtedly some of the productive plant has suffered dining the war, especially in those countries that have served as battlefields or have been deliberately devastated by the Germans. Nevertheless the list indicates the type of commodities that may be available from cooperative sources. E 7 In the case of chocolate, price reductions were obtained by a concerted boycott of the cartel’s products by cooperative associations. 28 Comparative A nalysis T able 8.— Commodities Produced by Cooperative Wholesales, Prior to W ar Austria Belgium France3 Food products (bakery goods, sau sage, macaroni, crackers, noodles, confectionery). Chemical products (soap). Clothing i (underwear, shoes, and other). Textiles.2 Food products (margarine, jam, canned goods, mustard, syrup, chocolate, cornmeal, confec tionery). Chemical products (soap, paint). Clothing (shoes, hats, caps). Tobacco products (cigars). Food products (butter, choco late, canned goods, salt, candy). Chemical products (soap). Clothing (shoes). Twine. Czechoslovakia (2 associations) Denmark Estonia Food products (bakery goods, bak ing powder, butter, cheese, choco late, canned goods, chicory, edible paste products, fish products, flour, jam and preserves, meat products, mustard, pickles, sauer kraut, vanilla, vinegar, fruit wine, confectionery, spices). Chemical products (metal and shoe polish, cosmetics). Textiles (hosiery, ribbon, and other knitgoods). Clothing (trousers, suspenders, un derwear, shoes, sportswear). Elastic goods. Food products (chocolate, flour, rolled oats, margarine, mus tard, spices, confectionery, coffee roasting). Chemical products (soap, paper). Textiles (hosiery, rugs). Clothing (shoes, dresses, etc.). Tobacco products (tobacco, cigars). Farm supplies (harness, twine, rope). Wine. Leather. Bicycles. Flax cultivation and flax proc essing. Finland (2 associations) Pre-Nazi Germany (2 associa tions) Food products (coflee roasting, bakery goods, margarine, pre serves, edible paste products, crackers, flour, fish products, pickles). Chemical products (fertilizer, match es. paper). Clothing. Textiles products (hosiery, knitted underwear). Brushes. Building supplies (lumber, bricks). Food products (flour, edible paste products, meat and fish products, malt coffee, jams, preserves, cocoa, chocolate, cheese). Chemical products (soap, matches, and other). Clothing. Textiles (weaving, dyeing). Tobacco and its products. Printing, stationery* Farming. Food products (mustard). Chemical products (soap, tooth paste, shoe polish, blacking, ayes, lacquers). Household supplies (starch, brooms, brushes, cutlery). Costume jewelry. Rope, cord. Lubricating oil. Bulgaria Iceland Latvia Food products (canned vegetables and fish, cheese, rice, flour, sugar). Electric-power generation. Rock-salt mining. Chemical products (soap). Clothing (shoes, gloves, dresses, etc.). Textiles (woolen goods). Leather. Food products (coffee roasting, cured fish, flour). Chemical products (soap, cos metics, lubricants, mineral colors, polishes). Alcohol, wine* Metal products (nails, wire, chains, tinware, agricultural implements). Building supplies. Mining. Experimental-farm operations (stock raising, gardening, tree nursery, milch cows). Hungary Food jpjoducts (meat, salt). Chemical products (drugs). Lumber. Flax processing. Lithuania * Netherlands Norway Food products (flour, sugar, meat products). Chemical products (soap, oil polishes, lubricants). Food products, (cheese, jams, cooking oils, packaged goods). Chemical products (cosmetics). Clothing. Food products, (margarine, coffee roasting, flour, chocolate). Chemical products (soap). Clothing (shoes). Textiles (woolen goods). Leather. Tobacco products. * Factory closed, 1934. 2 Private business forced discontinuance in 1934. * Also joint owner in several other enterprises. * In most cases production was carried on through subsidiary organizations owned jointly with other cooperatives or with the Government. 29 Development and Characteristics T a b l e 8.— Commodities Produced by Cooperative Wholesales, Prior to W ar— Con. Switzerland * Poland Sweden Food products (soap, crackers, pre serves, flour, canned fish, confec tionery). Chemical products (shoe polish, var nish, cosmetics). Paper and paper bags. Building supplies Cumber). Gunny sacks. Food products (flour, marga rine, bread, vegetable oil, coffee roasting, commeal, meat prod ucts). Chemical products (soap, match es, phosphates). Clothing (galoshes, shpes). Textiles (artificial silk goods). Household supplies (pottery, porcelain ware). Building supplies (cement). Cash registers. Food products (flour, coffee roasting, cornmeal, lard, pud ding powders, spices, yeast). Farming. Printing. Great Britain (2 associations) Great Britain—Continued Great Britain—Continued Food products (margarine, butter, and other milk products, lard, bacon, sausage, cured fish, pickles, poultry, preserves, flour, canned goods, salted and packaged goods, confectionery). Coal. Bicycles. Chemical products (soap, candles, paint, drugs). Clothing (furs, umbrellas, shoes, hats, caps, corsets, underwear, dresses, etc). Textiles and their products (woolen, cotton, and silk cloth, hosiery, knitgoods). Rope. Household. supplies (starch, brushes, cutlery, bedding, fur niture, glassware, tinware, lin oleum). Tobacco and its products. Printing, bookbinding. Engineering and construction. Farming. Yugoslavia Food products (cheese, confec tionery, salt). Chemical products (shoe polish). Lubricating oil. 5 And (jointly with other organizations) cigars, furniture, shoes, poultry, cheese. IMPORTANCE IN TERMS OF IMPORTS AND EXPORTS The Austrian wholesale, GoC, had built up an extensive export and import trade with Russia, through an organization in which (at the Russian end) the Russian Government participated. In Bulgaria, “ Napred” was also an important importer and exporter, and was the sales outlet for the salt produced by the agricultural cooperative syndicate. The Estonian wholesale, E. T. K., accounted for 10 per cent of Estonia’s imports, but in individual commodities its business ran up much higher; 30 percent of the rice, 40 percent of the sugar and petroleum, 50 percent of the agricultural machinery, and 80 per cent of the fertilizer brought into the country were imported by this cooperative organization. Until 1937 it was also an important ex porter, handling 13.5 percent of the butter exported, 23.0 percent of the eggs, and some fish, fruit, and potatoes, but this export business came to an abrupt end in that year, when the Government took over all export business. Although the French wholesale, M. D. G., carried on an exporting and importing business with cooperatives in Belgium, Czechoslovakia, Great Britain, Italy, Poland, Soviet Union, and Switzerland, this had been cut considerably even before the war by the increasing restric tions on international trade in the thirties. Before the rise of Na tional Socialism in Germany, the consumers’ cooperative wholesale there, G. E. G., was a large importer of goods, mostly bought from , cooperative sources. In 1931 it imported goods valued at 11,200,000 reichsmarks, from 22 European and Asiatic countries. The wholesales of England and Scotland had purchasing agents in various places throughout the world and carried on a very large business of import and export through them. The export business of the Hungarian cooperative wholesale, “ Hangya,” was started after the end of the first World War, as a joint enterprise in which the Government was the other partner. 30 Comparative A nalysis Its company, Futura, became the channel for the collection and export of agricultural products raised throughout Hungary, as well as for the distribution of State-controlled goods. Futura’s operations took it into Austria, Czechoslovakia, Italy, Poland, and Switzerland. In Lithuania the wholesale, Lietukis, in 1939 was the only exporter o f (and largest dealer in) cereals in Lithuania and handled some 45 percent of the total national flax exports. The Icelandic wholesale handled over 25 percent of Iceland’s imports and 90 percent of the meat, 80 percent of the wool and 80-90 percent of the agricultural products exported. It had branch offices in Copenhagen, Leith (Scotland), and New York City. The exporting and importing business of the Danish, Finnish, Nor wegian, and Swedish cooperatives was carried on through a joint organization, the Scandinavian Cooperative Wholesale (Nordisk Andelsforburu}). In addition, the Swedish cooperative wholesale, K. F., helped to organize an association for the export sale of Swedish handicraft goods; this association, “ Products from Sweden,” began business in 1935. V. S. K. in Switzerland had, by 1939, become the largest importer of the goods it handled. Cooperatives in W orld W ar I I SITUATION IN OCCUPIED COUNTRIES In the early stages of the war the consumers’ cooperative movement suffered the greatest physical destruction in Czechoslovakia, Poland, and Yugoslavia. To some extent this was the result of dismember ment of the country; the characteristic Nazi hostility toward con sumers’ cooperatives accounted for the rest. In Czechoslovakia, cooperators (especially those of German descent) had for nearly 3 years been subjected to a steadily mounting campaign of intimidation and vilification by the Nazi sympathizers in the country and finally had seen the movement split up into several pieces as the Government was forced to cede territory to Germany, Poland, and Hungary. The plant and business (factories and all) of the German branch of the movement were destroyed. The Czechoslovak structure was drasti cally telescoped and consolidated, and some of the facilities were turned over to private traders. In 1942, four federations were created by decree, in the so-called Protectorate (Moravia and Silesia)—for agri culture, consumers’ , housing, and other associations, respectively— and two auditing unions; ail were placed under the control of four Government departments. All of the members’ rights and authority is exercised by “ trustees,” appointed by the Nazis. In the primary stage of the war, when Polish territory was divided between Russia and Germany, the Russians dissolved all the Polish urban associations in their area but left the agricultural cooperatives. The associations in territory incorporated into the Reich were dissolved. In other German-occupied areas, cooperatives of all types were at first tolerated, but later even fostered, because they were useful. In Yugoslavia part of the movement was lost in the partitioning of the country. In Slovenia the cooperative property and savings deposits were seized by the Germans and Italians. In Serbia, after an initial period of destruction and nazification, the potential value of Development and Characteristics 31 the cooperative network apparently led not only to toleration by the puppet government but expansion by it. A proposed reorganization by the Government, reported in 1943, contemplated a considerable expansion of associations and functions, one of which was the estab lishment of a health cooperative in every community with over 4,000 inhabitants. The Nedic Government reported that these suggestions had been voted upon favorably by the associations. During the period of Russian occupation, the cooperatives of the Baltic States suffered first by losses of property and supplies, then by incorporation into the Russian cooperative system. Later, under the Germans, all three countries were combined into the new Ostland Province, the cooperatives being allowed to continue under strict Nazi control. In the initial period after the German invasion a cooperative paper mill in Estonia and an unspecified productive plant in Lithuania were confiscated and turned over to German businessmen. In western Europe, a much milder policy was followed by the Germans from the start. Although under strict control, the actual operation of the cooperatives does not appear to have been greatly interfered with in Belgium, Denmark, and the Netherlands, at least up to the time of the launching of the Allies, invasion campaign of liberation. In Norway the initial lenient period was followed by confiscation of the wholesale's plant and goods, after the officials re sisted undercover attempts at Nazi domination; the retail associations are still in operation. By far the largest part of the French consumers' cooperative movement was in the northern (occupied) section of the country. When France was invaded the Germans destroyed the cooperatives in Alsace-Lorraine and incorporated their business into the German Labor Front. Late (1943) reports indicate that elsewhere in occupied France, after the initial period of destruction, and in Vichy France the associations were allowed to continue operations. The volume of wholesale cooperative business fell off drastically in 1940 and 1941, but recovered to a considerable extent in 1942, and the number of affiliated associations even increased. SITUATION IN ALLIED OR NEUTRAL TERRITORIES In most of the Allied and neutral countries the cooperatives are operating as before the war, though affected like all business by war time shortages of goods and manpower and by rationing and other regulations. In practically all, membership has expanded and gener ally volume of business as well. The Swedish wholesale has even expanded its productive facilities and is entering new fields. The cooperatives—rural consumers’, workers’ productive, and agricultural—in the Soviet Union are being utilized in the economy of that country to a greater extent than at any time in the past decade. In Spain where the cooperative movement was in disfavor with the Franco Government because of its services to the Loyalists, a new law was enacted in 1942, incorporating the movement into the totali tarian State. SITUATION IN AXIS COUNTRIES By the time of the outbreak of war, in September 1939, the German consumers' cooperative movement was well on its way to dissolution. In Austria, which had ratified the Anschluss with Germany and had been invaded by the Germans, the consumers' cooperatives had been 32 Comparative Analysis “ adjusted to the New Order” and were gradually disappearing. The process of destruction in both countries was complete by the end of 1942. In both countries, however, agricultural cooperatives were re ported to be still in operation as far as they were useful to the Germans. In Bulgaria and (at first) in Rumania the cooperatives'were utilized for the collection and distribution of foodstuffs to the population. Later, in Rumania, they were superseded in this task by a network of State agencies. From the beginning of the Ethiopian campaign the Italian Govern ment encouraged the formation of new Fascist cooperatives in North Africa; the fate of these, in view of the later military events in that region, can be imagined. No data are available regarding recent devel opments in the Fascist cooperative movement on the mainland, where for many years they have been part of the corporative system. Both Rumania and Finland suffered division of the cooperative movement through losses of territory early in the war, but in the case of Finland these were regained after that country became an Axis satellite. In the latter country increases in both membership and (money) sales have occurred, but volume of goods handled has de creased about 10 percent. Of all of the countries of Europe, only the cooperative movement of Hungary could, at the end of 1943, be said actually to have bene fited by the war. An increase in membership and business of Hungar ian cooperatives, and the additional associations gained by territorial acquisitions in Czechoslovakia and Subcarpathian-Ruthenia, com bined to increase an already powerful position. It appears, on the whole, that whatever the Nazi antagonism toward cooperatives, the Germans have not, in most cases, hesitated to make use of them. By this very fact, however, they have preserved the cooperative structure which will, with the exception of a few countries, be more or less intact for post-war, genuinely cooperative use, when membership control and operation are resumed. Concerning this, the International Cooperative Alliance recently commented: * * * We have yet to learn how far the movements have been inwardly affected by the abasement of their organization to the service of a regime whose whole purpose is the annihilation of all that cooperation stands for— its ideals, principles, and practice. It seems almost inevitable that the vitality of the movements will be impaired— in some cases, perhaps, that their idealistic anima tion may be weakened by the effects of totalitarian ideology. Most, if not all of the movements must, we think, pass through a kind of spiritual convalescence. International Aspects o f the Cooperative Movement Before the outbreak of the present war, cooperative associations of one kind or another were in existence in 56 countries throughout the world. In most countries the local associations had federated into one or more central organizations for educational or commercial purposes and, in some, all branches of the movement were coordinated through one national body. These national organizations since 1896 have had an international organization, the International Cooperative Alliance. Largely Development and Characteristics S3 through the sponsorship of the Alliance, another international associa tion was formed to act as a clearing house of information on matters relating to wholesaling. The latter, in turn, helped to start an inter national joint-buying organization which was just getting well under way when the war started. An older wholesale body acted as joint purchasing agent for the Scandinavian countries. The subjects of banking and reinsurance on an international scale had been studied by special committees and some progress had been made, especially in the latter field. The women in the cooperative movement who were organized into national guilds in the various countries, also had their international organization. Probably the most consistent supporters of cooperation in the inter national field have been Austria, Belgium, Bulgaria, Czechoslovakia, the Baltic States (Estonia, Latvia, and Lithuania), France, Great Britain, Hungary, and the Scandinavian countries. These have had membership in practically all the organizations the purpose of which was to further cooperative relations among the countries. The one-hundredth birthday of the Kochdale cooperative move ment, being celebrated in 1944, finds the international activities either curtailed or prevented entirely by the war. The machinery is there, however, and cooperators are making plans for early resumption as soon as peace returns and conditions permit. International Cooperative Alliance M E M B E R SH IP OF A L L IA N C E The International Cooperative Alliance (“ I. C. A .” ) was created in 1896, following authorization by the First International Cooperative Congress, held in London in 1895. The I. C. A .’s membership, at first consisting of individuals (who were not necessarily even members of cooperatives) interested in the idea and willing to assist, gradually included more and more local cooperative associations. In 1902 individual membership was abol ished and beginning in 1910, under another change of rules, only national federations were accepted, their affiliates thus becoming members only indirectly. By 1913, the I. C. A. had in affiliation 55 national cooperative federa tions of 24 countries. Their association membership totaled 3,871; at that time there were 20 million cooperators whose associations were in the I. C. A. family. The war years, 1914-18, were very difficult for the Alliance, but it managed to maintain contact with all of its members, even in the warring countries. The peak I. C. A. membership was reached in 1930 when 117 national federations in 40 countries were affiliated. The local associations in membership with these federations numbered 193,000, and the latters’ individual members totaled 56 million persons. In 1933 only 39 countries were represented in 1. C. A. membership, but the affiliated local associations had an aggregate membership of 107,700,000 persons. Later events reduced the membership of the Alliance, as table 9 indicates. With the ascendancy of the Nazis in the early thirties the German cooperatives were subjected to drastic 34 Comparative A nalysis reorganization,8 then taken over by the Labor Front, and finally wiped out. About the same occurred in Austria after the Anschluss with Germany. In 1935 the Soviet Government dissolved the urban cooperatives in that country, reducing the cooperative membership by 30 million persons. Italy had lost its membership in the Alliance in the early twenties when the Italian cooperative movement was absorbed into the Fascist corporative order, though the associations there were still called “ cooperative.” After the launching of the Nazi offensive, in succession the coopera tive movements in Czechoslovakia, Poland, Norway, Denmark, Netherlands, Belgium, and France were cut off from their inter national organization. Spain had withdrawn from membership at the beginning of 1939; the reason for this action was not reported but it may be noted that its withdrawal occurred shortly after the defeat of the Spanish Republic (which had had the support of the cooperatives) by General Franco. In all of these countries (as well as in Austria) the I. C. A. looks upon the cooperatives as “ victims of aggression” and they are regarded as still in membership though restrained from active participation. Other countries no longer in membership in the Alliance include Portugal, Iran (Persia), and Turkey. In September 1939 the I. C. A. was a federation representing the cooperative movements of the following countries: Europe Belgium British Isles1 Bulgaria Czechoslovakia Denmark Estonia Finland France Hungary Iceland Latvia Lithuania Netherlands Norway Poland E urope — Continued Rumania Soviet Union ( + 6 Republics) Sweden Switzerland Yugoslavia N on -E u rop e Argentina Canada India Japan Korea Palestine Union of South Africa United States iEngland, Wales, Scotland, Northern Ireland, and Eire are all members of the I. O. A . thronghtheir affiliation with the Cooperative Union, Ltd., of the United Kingdom, which is a member of the Alliance. In some countries, several national federations hold membership in the I. C. A .; this usually occurs where each of the different branches pf the movement (consumers’ , credit, agricultural, etc.) has its own national organization. Examples are Bulgaria, Finland, France, Poland, and Yugoslavia. In other countries where the various branches of the movement are federated into a single national body— as in Japan, Lithuania, and the British Isles— only the national organization holds membership. In still other countries, only certain branches of cooperation have, through their central organization, joined the Alliance; among these are Belgium (consumers’), Canada (consumers’ ), Estonia (wholesale association only), Iceland (con sumers’), Korea (credit), Latvia (banks), Norway (consumers’), and Sweden (consumers’). The trend of I. C. A. membership is shown in table 9. 8 The Nazi federation that was created during this reorganization applied for membership in the Alliance but was not admitted. 35 D evelopm ent and Characteristics T a b l e 9 .— M em bership of International Cooperative Alliance, 1 9 1 3 -3 8 Year and type of association 1013 loan 1032 1033 103S 1033 __________________________ ______ _ ___ ________ _________ ____ _ __ _____________________ ___________________________ ________ __________________ __ _ __ _ __ __ _________________________ _________ Cnns1lTnfir8, _ W h o le sa le s. _ _ . _ _ _ Workers’ productive................. .......................... Productive federations______________________ AgrieuH nral T . ... Credit associations and their federations_____ Insurance and other............................................. Number of member countries Number of Theirship Their business associations repre sented G o ld £ 24 40 41 39 ««• 31 26 10 5 14 16 14 3 ,871 193,000 (9 0) 132,494 168,672 35,837 20 ,0 0 0 ,0 0 0 5 6 ,0 0 0 ,0 0 0 9 9 ,6 0 0 ,0 0 0 1 0 7 ,700 ,00 0 6 5 ,6 7 6 ,5 3 3 7 2 ,3 8 4 ,1 6 4 52; 950 ,623 1 ,017 97,061 4 3 ,668 8 7 ,378 772 5 ,1 5 5 ,2 8 6 14 ,0 7 4 ,0 7 6 107,118 0) 0) 0) 3,201,450,352 3,644,886,997 1,811,895,494 934,370,002 715,318,899 9,693,277 7,758,037 95,461,022 43,418,123 5,876,134 1No data. MEMBERSHIP QUALIFICATIONS As indicated in table 9, the largest membership in the Alliance is that of consumers’ organizations, but the I. C. A. admits all types of cooperatives that can qualify. In order to become a member the applicant must show that it conforms to the following four principles: (1) Open membership, (2) democratic control (one member, one vote), (3) distribution of surplus earnings to members in proportion to their patronage, and (4) limited interest on share capital. The other three Rochdale principles (political and religious neutrality, cash trading, and promotion of education in cooperation) are not included as essen tial membership qualifications, although recognized as “ undoubtedly part of the Rochdale system.” 9 ACTIVITIES OF THE ALLIANCE The main purpose of the I. C. A. is to promote the spread of the cooperative movement and to bring about better and closer relation ships among the movements of the various countries and among the various branches of cooperation. During the decade following the first World War the Alliance many times intervened with the governments of the various countries of Europe “ in defense of the democratic interests of cooperators.” It was not until 1932 that it could report that it had “ ceased to be dis tracted from its proper tasks” by such activities. The following years, however, which brought in their train the trend toward total itarianism, entailed even greater problems. Beginning in 1921 the Alliance held an annual international cooperative school at which economists, publicists, and cooperative leaders gave courses to students from nearly a score of countries. Many of the students were themselves officials of national cooperative organizations. I. C. A. committees were formed for the study of certain subjects. Among these were the International Committee for Inter-Coopera tive Relations (the purpose of which was to promote closer relations •The above was decided at the Paris Congress in 1937, on the basis of a 7-year study by a special committee. This committee stated that, in its opinion, “ nothing in the modern developments of industry and commerce or changes in economic method, has diminished the integrity of the seven Rochdale principles.’* 36 Comparative A nalysis between the consumers' and agricultural branches of the movement) and committees on wholesaling, banking, and insurance. Since the early thirties the I. C. A. has also made a series of research studies of modern economic problems of interest to the cooperative movement. Among the other activities of the Alliance have been the promotion of trading relations between the agricultural and consumers' coopera tives; activities looking toward the establishment of an auxiliary committee on workers' productive associations within the Alliance; the publication of a monthly magazine (Review of International Cooperation) in English, French, and German; three news services; and various studies and statistical reports. Under I. C. A. sponsorship, millions of cooperators throughout the world celebrate the first Saturday of each July as “ Cooperative D ay," displaying the Rainbow Flag of the cooperative movement and stag ing pageants and other presentations of cooperative progress. The international cooperative congresses, convened by the Alliance every 3 years on the average, have brought together cooperators from all oxer the world for better acquaintance and understanding of each other and of the problems and experience of the cooperative movement. The fifteenth congress was held in Paris in 1937. The sixteenth, scheduled to be convened in Prague, Czechoslovakia, in 1940, was of course made impossible by the outbreak of war. Cooperative insurance.— The International Cooperative Alliance in 1922 created an Insurance Committee for the study of possibilities of carrying on insurance on an international scale. Studies by the com mittee convinced it that as insurance was already fairly well provided for in each country, the main possibilities lay in the reinsurance, be tween countries, of risks written by the various national organiza tions, the arrangements to be made directly by the insurance organi zations concerned and not through an international agency. Some progress has been made in this respect, and a certain amount of reinsurance of risks has actually been carried on among the insur ance organizations of the various countries. The main activities in this line had been the reinsurance of fire risks among Sweden (the “ Samarbete" association), Norway (“ Samvirke"), Great Britain (Cooperative Insurance Society), and Finland (“ Kansa"). The as sociations of Belgium and Great Britain also had experimented with reinsurance of life, accident, etc., risks, and that of the former country (La Pr6voyance Sociale) also had such contracts with the cooperative insurance organizations of Bulgaria and Hungary, as well as a fifeinsurance branch in France. In 1939 the membership of the I. C. A. Insurance Committee con sisted of the central insurance cooperatives of Belgium, Bulgaria, Czechoslovakia, Denmark, Estonia, Finland, France, Great Britain, Hungary, Latvia, Netherlands, Norway, Palestine, Rumania, and Sweden. Post-war problems.— During the past 2 years the attention of the Alliance and its officials has been given increasingly to the problems of the post-war period, especially in relation to the cooperative move ment. Detailed and painstaking study has been and is being made of the various aspects of relief and rehabilitation of cooperatives in wardevastated countries throughout the world. In November 1943 the central committee of the Alliance called a conference on post-war problems, at which were present representatives from various national 37 Development and Characteristics cooperative movements. A similar conference was called by the Cooperative League of the U. S. A. in January 1944, which approved, among other steps, the formation of an International Cooperative Manufacturing and Trading Association (whose members would be the national bodies). The International Cooperative Alliance and its members believe that the post-war world holds great possibilities for the cooperatives and that they are equipped to play a considerable part in its reconstruc tion. Scandinavian Cooperative W holesale The first attempt at cooperative wholesaling beyond national bor ders was the Scandinavian Cooperative Wholesale (Nordisk Andelsforbund), established in 1918 by the wholesales of Norway, Sweden, and Denmark. The two wholesales of Finland (S. O. K. and O. T. K .) became members iii 1928. This organization was capitalized at 1,225,000 kroner, of which Denmark and Sweden each supplied 350,000 kroner, S. O. K. o f Finland 250,000 kroner, O. T. K. of Finland 200,000 kroner, and! Norway 75,000 kroner. Its function was to pool the orders of its member wholesales for products of common use and buy at the best advantage from cooperatives or other sources. Its operations were successful from the first, and in its 25 years* existence it has failed to make earnings in only one year— 1941. The trend of the business and net earnings of the Nordisk Andelsforbund from 1919 to 1942 is shown in table 10. In 1932 the wholesale purchased a coffee plantation in Java, “ with the possibilities of copra and rubber production.” T a b l e 10.— B usiness and N et Earnings o f Scandinavian Cooperative W holesale Society, 1 9 1 9 -4 2 Year 1919 1921.................................... 1925................................... 1930.................................... 1935 1936.................................... Amount of business Net earnings K ro n er K ro n er 9,647,649 11,385,492 19; 161,174 27,800,000 45,231,452 50,807,317 154,761 206,503 260,912 348,909 335,339 Year 1938................................... 1939................................... 1940................................... 1941................................. 1942................................... Amount of business Net earnings K ro n er K ro n er 66,826,330 66.300.000 15.900.000 14,041,985 i 5,380,022 431,970* 455,000' 108,534 2 55,284 9,438 » Not including business of London Branch— £115,815 in 1941 and £186,096 in 1942. 2 Loss. The war has cut off the London branch from the headquarters at Copenhagen and interfered with the wholesale’s service to its mem bers, reducing its business in 1941 by nearly three-fourths. However, thanks to increased orders from Sweden, its sales in 1942 showed an increase. Almost 90 percent of its business in that year was with Kooperativa Forbundet in Sweden. International Cooperative Wholesale Society The International Cooperative Wholesale Society was organized in 1919, as a medium of exchange of advice and information among the cooperative wholesales of the various countries; no commercial 38 Comparative A n alysis activities were carried on by it. Its headquarters are in Manchester, England. The membership of the I. C. W. S. in 1939 consisted of the whole sales in Belgium, Bulgaria, Czechoslovakia (2 organizations), Den mark, Estonia, Finland (2 organizations), France, Great Britain (3 organizations), Hungary, Latvia, Lithuania, Netherlands, Norway, Palestine, Poland, Soviet. Union, Spain, Sweden, Switzerland, and the United States. Table 11 shows the value of imports and exports of the wholesale associations affiliated to the International Cooperative Wholesale Society. Beginning with 1934, Germany, Ireland, and the Ukraine were no longer shown as in membership. Austria ceased to partici pate in 1938, and Poland and Czechoslovakia in 1939, after the Munich agreement which destroyed their national sovereignty. The detailed data for 1938— the latest year for which statistics are available— show the volume of imports and exports of each of the reporting countries’ The main articles of import were bacon, butter, coffee, lard, rice, sugar, tea, and wheat. T a b l e 11.— Exports and Im ports o f M em bers o f International Cooperative W holesale Society, 1 92 8 -3 8 Member countries Year Total 1028 ________________ _________________ 1080 ____ ____ ____ _ ______________ 1031 ___________________________________________ 1032 _ ___________________________ ________ .. . ________ _____ 1033_________________________ 1034 ____ __ . . ___________ 1035 _ _ _ _ . __ ____ ._ 1936...... ............................................................................ 1037 ____________________________________________ 1038 Belgium _ _ _. _ ... . Biilsraria __ ^ Czeehnsinvalria . __ England _ , Estonia .......... Finland. . . . . . . . . Franna Netherlands. _. _ _ _ Norway__________ ___________________________ P o la n d .............. S n n tla n d . S w e d e n ___ __ S w it z e r la n d .... _ ______ ,, _ ........... _ ^ _ .. ^ 23 23 23 23 23 120 20 *21 ft22. 22 Number reporting 16 17 16 16 14 14 14 14 14 13 Value (in gold £ ) of— Imports 60,611,444 53,144*692 47,039,000 41,180,034 39,281,298 39,977,958 44,046,896 46,553,615 54,482,602 53,392,931 41,275 116,478 456,796 40,104,595 577,240 1,289,231 568,296 233,971 280,304 262,647 4,937,107 3,779,619 745,372 Exports 1,169,960 0) (l) 2,133,490 (0 <0 1,658,006 534,353 1,592,000 1,521,658 1,187 13,585 300,488 24,231 58,854 14,899 14,916 16,398 94,998 48.885 913,259 19,958 » No data. * Germany, Ireland, and Ukraine not included in membership in 1934. * The United States (National Cooperatives, Inc.) became a member in 1936. ft Spain became a member in 1937. International Cooperative Trading A gen cy The International Cooperative Trading Agency10was established in 1937 under the auspices of the International Cooperative Wholesale Society. As stated at that time, the agency’s functions were to act as pur chasing agent of imported articles, for the various national cooperative 10 Originally established as the International Cooperative Agency. The word “ Trading” was inserted later, in order to avoid confusion (in initials) with the International Cooperative Alliance. Development and Characteristics 39 wholesale associations. In addition it was to market in other coun tries the surplus production or stocks of these associations. Among its charter members were the English and Scottish Cooperative Wholesale Societies and the wholesales of Sweden and Finland. Business was to be carried out on a commission basis, surplus earnings being distributed to the member associations on their patronage. Voting also varied on the basis of patronage, but was subject to a fixed maximum for any single organization. By the end of 1937 it was reported that 14 cooperative wholesale associations had affiliated with the new agency. However, these included 6 which already had their own direct trading contacts abroad 11 and would not therefore be likely to make much use of the new association. The membership of the Agency in 1939 consisted of the wholesale organizations in 12 countries (Belgium, Bulgaria, Czechoslovakia, Estonia, Finland (O. T. K .), France, Great Britain (both the English and Scottish associations), Netherlands, Palestine, Poland, Sweden, and Switzerland. The Agency began operations early in 1938. This action was the culmination of 30 years’ effort to establish cooperative trading on an international scale. It represented the first cooperative action to unite the established cooperative wholesaling machinery on a wide terri torial basis, although there had been several previous instances of collaboration in the purchase of imports (as between the English and Scottish wholesales and among those of the Scandinavian countries). Establishment of such an international agency was contemplated in the early thirties but, as even then restrictions on foreign trade were becoming formidable and tariff and other barriers were being erected, the times were not deemed propitious for the success of an agency. The I. C. T. A. was hampered from the start by currency and cus toms restrictions in the various countries. The outbreak of war in 1939 was accompanied by new export and import regulations in most countries, and in certain cases whole branches of trade were taken over as monopolies by the State. For some countries, foreiga commerce ceased altogether. Nevertheless, the Agency’s contracts for 1938 amounted to $763,000, and rose in 1939 to $1,183,000. Even during the first year of the Agency’s existence, 1938, its “ most loyal members,” the wholesale organizations of Austria and Czecho slovakia, were lost and this affected its business sharply. The Spolem association in Poland was the next casualty. However, aside from this the agency had so expanded its contacts and business that its future looked very promising. Through arrangement with coop erative producer organizations it had assured supplies of various dairy products, fruits, and vegetables, and it had become the selling agent for certain productive enterprises run by the wholesales of several countries. It sold condensed milk from the Netherlands, onions from the Netherlands and Hungary, fruit pulp and fresh grapes from Bulgaria, paper from Sweden and Estonia, and cooperative grease and motor oil from the United States. The rapid sweep of invasion through eastern Europe and through the Lowlands in 1939 and 1940 brought the activities of the Agency almost to a standstill, and this situation has continued. The Agency is still 11England, Scotland, Sweden, Denmark, Finland, and Norway. 40 Comparative A nalysis in existence, however, and doing some business. Although relatively inactive, it is keeping its machinery and commercial arrangements intact for the post-war period. International Cooperative Production As yet the only lines in which production has been attempted on an international scale are the manufacture of rubber and electric-light bulbs. Production of bulbs is carried on by two associations. The oldest of these, Kooperativa Lumaforbundet, was organized on the initi ative of K. F. (Cooperative Union and Wholesale of Sweden) in 1931. Joint owners of the factory were K. F. and the wholesales in Denmark, Norway, and Finland; membership, however, was left open to other countries. The factory makes afl kinds of incandescent lamps, disposed of mainly to the constituent wholesales, but it had also built up an extensive export business to cooperative wholesales in other parts of the world. The Luma lamp-research laboratories in Sweden were the largest in the world, apart from those of the private cartel whose monopoly Luma was organized to break. In 1937, another factory was established in Scotland. This factory, known as British Luma, Ltd., is owned by the cooperative wholesales of England, Scotland, and Sweden. Just before the outbreak of the present war, “ Napred” (cooperative wholesale of Bulgaria) and K. F. (Sweden) built jointly a rubber factory near Sofia. No data are available regarding its operations. International Cooperative W om en's Guild When in 1940 the International Cooperative Womens Guild entered its twentieth year, it consisted of 17 affiliated associations situated in Australia, Belgium, Bulgaria, Canada, England, Estonia, Finland, France, Ireland, New Zealand, Norway, Poland (with two organizations), Scotland, Sweden, Switzerland, and the Soviet Union, and a provisional national guild committee in the United States. The Austrian and Czechoslovakian guilds, once members of the International, had dis appeared before the totalitarian legions, but the president of the International (an Austrian woman who had suffered imprisonment in Austria) was in England, sending words of encouragement to the affil iated guilds as she had done ever since her first election as president in 1921. In a New Year’s message of January 1944, she urged women to prepare for more strenuous duties: “ We must fight for a system of international collaboration that will guarantee lasting peace * * * for a mothers’ peace that will safeguard the future of mankind and spare unborn generations the agony and terror of war.” Though the motive thus stated had been a dominant one from the beginning of the women’s organizations, the first international meet ings (of Austrian and Englishwomen cooperators in 1913 and of women from six different national cooperative groups at Basel, Switzerland, in 1921) stressed the need for organizing the “world’s housewives in sup port of cooperative ideals and trading methods.” By the time of the first triennial conference of the I. C. W. G. (at Ghent in 1924), the purposes of the Guild had been formulated: To unite the cooperative women of all lands for (1) the development of the spirit, principles, and Development and Characteristics 41 practice of cooperation, (2) the improvement of the conditions of home life, and (3) the promotion of international peace. Although the I. C. W. G. was neutral in politics, it stimulated interest in political rights for women (especially after the Vienna con ference in 1930, to which details of the different existing legal codes were presented), in problems of the world economic order (particularly at the London conference of 1934), and in peace and disarmament at the Stockholm conference in 1927, the Geneva Disarmament Conference, and the Paris Conference of 1937. At the Paris meeting its resolu tions included statements on the international control oi migration, the rights of colonial and mandated peoples, and the establishment of a new court of international justice. The Guild cooperated with League of Nations committees such as the Mixed Committee on Nutrition and the Committee of Experts which inquired into the legal position of women throughout Europe. It tried to combat the spread of totalitarianism by encouraging increased participation of youth and women in cooperative organizations. Because the co operative movement is built upon the individual household, the I. C. W. G. instituted effective discussion of such domestic problems as the purity and price of foods, public kitchens and nurseries, home laundering, and family allowances. Since the rules of the I. C. W. G. required that national coopera tive guilds affiliated to the International must operate under their own executives elected by the women members themselves, and since the position of women differed in different countries, the sphere of the I. C. W. G.’s work was always greater than its actual membership. In 1933, for example, the two main types of national guilds were (1) self-governing federations of autonomous branches on the British model and (2) guilds of the Central European type, in which the women’s organizations were made up of the women members of the consumers’ cooperatives. In certain other countries the influence of the I. C. W. G. was felt, though national guilds had not yet been established. These included India where women were starting their own clothing cooperatives, Japan where local guilds numbered 100, Greece and Rumania where publicity work was under way, Palestine where women formed produce-marketing associations, Buenos Aires where the first South American women’s guild was inaugurated in 1933, Hungary where the women’s cooperative league extended the domestic and foreign market for embroidered articles, and China where women were becoming active in industrial cooperatives. The methods used by the national guilds for attaining the objec tives named above ranged from women’s service on national com mittees outside as well as within the cooperative movement (as in Great Britain) to the day-to-day, house-to-house canvassing for the promotion of the practice of cooperation carried on by the guilds in many countries. During the early part of World War II, the national guilds made efforts to bring about control of rising prices, the develop ment of equitable systems of rationing, and the improvement of depleted diets; they cared for refugees and injured people; and they prepared propaganda for a peaceful and better world. In 1943, the I. C. W. G. published a Memorandum on Post-War Relief. 588544°—44----- 4 42 Comparative A nalysis T a b l e 12.— Activities o f Affiliates o f International Cooperative W om en's Guild Country Year of for mation Year ol affilia tion to I.C.W.G. Australia............... Austria*2_ 3_________ 1937 1914 1938 1921 Belgium__________ 1923 0) Bulgaria__________ 193 -Canada.................... <» •Czechoslovakia:4*7 9 8 Czech........ ........ 1926 1927 G erm an...____ 1923 * 1930-34 England__________ 1881 1921 1931 1939 Estonia___________ (*) 1940 Finland___________ France..................... 0) 0) * 1938-39 1937 Ireland_____ ______ 1906 0) Netherlands •--------- 71897-1900 1921 New Zealand______ Norway_______ . . . . 1937-38 1910 Boland: Polish................ Ukrainian__ __ Q W 1933 Rumania_________ Scotland---------------- ? 1937-31 1892 0) 0) Sweden_______ ____ 1906 0) Switzerland----------- 1913’ 1921 •Union o. Soviet So cialist Republics. 0) 1921 United States_____ <*) 1941 1938 *1927 0) Special activities Cooperative propaganda for associations and wholesale. Cooperative propaganda; courses of instruction for women and youths; publications; active support of public kitchens, councils, etc.; service on cooperative executive committees; national food council. Improvement of nutrition; improved housekeeping; opposi tion to food taxes; cooperative education of children: support of temperance movement and of disarmament Medical consultation centers; holiday homes and kindergar ten; courses in cooking and sewing; cooperative propaganda; investment of cooperators’ savings in cooperative move ment; disarmament petition. Promotion of regional women's federations; farm women', groups. Cooperative education (foods, health, cooperative produc tion); cooperative propaganda increasing sales: disarma ment petition. Lectures on laundering, dressmaking, etc. cooperative propa ganda; service on executive boards. Promotion of economic and social reforms to improve position of women; reduction of cooperative entrance fees, to permit poor to join; campaigns for healthy homes, mothers' welfare, medical attention for school children, hospitals &nd na tional health insurance; program for world peace. Courses on gardening, domestic economy: education oj women. Reconstruction work. Office of advice and information for women cooperators information bulletin. Campaigns for medicai inspection in schools, feeding of needy children, better housing, and for world peace. Cooperative propaganda, particularly effective for the co operative wholesale. Support of trading activities of cooperatives. Representations to Government, requesting care for needy children, card rationing of food; promotion of temperance and sale of nonalcoholic beverages: propaganda for peace; operation of school. Stimulation of interest in cash trading. Cooperative propaganda and education to help agricultural women market produce and improve housekeeping; edu cational pamphlets. 0). Instruction in physical hygiene, cooking, sewing, convalescent home; service on municipal and Poor Law administrative bodies; promotion o. lower prices, workers' housing, and world peace. Active opposition to credit trading; education in domestic economy and international affairs, promotion of coopera tively produced goods. Inquiry on credit trading; promotion ol use ol cooperative bank, of temperance, and of sale of nonalcoholic* beverages; representation on women's consultative committee to Swiss Food Ministry. Inauguration of kindergartens, educational courses tor wom en, membership funds for women; raising of standard of living; bringing Asiatic and Mohammedan women to co operative meetings and membership; service as engineers department managers, presidents, etc., of ooperative organizations. Federation of 4 regional federations; school for women; farm women’s groups. *No data. 2 The Austrian Guild was disaffiliated "as a result of political changes in Austria" in 1938. 3A provisional National Guild Council in Canada was reported in 1939 to have applied for affiliation. 4The C zechoslovakian National Guilds were reported in 1939 as having dissolved. 8 Affiliation took place in period noted; exact year not reported. 3 The Netherlands Guild ceased membership in the I. C. W . G. in 1935 because of the dissolution of the Dutch Guild. 7 Formed during period noted; exact year not reported. 8Year of first attendance at Congress. 9 Reported in 1939 to have applied for membership. D evelopm ent and Characteristics 43 Other International Activities Baltic union.— Since 1924 the cooperative movements of Estonia, Latvia, and Lithuania have collaborated in a series of joint conferences held at intervals of 1 to 4 years. At these conferences were discussed such questions as educational work, exchange of price information, and extension of cooperation in various lines. As a result of the 1928 meeting, a Baltic Union was formed, to act as center of information and publicity, collector of statistics, and organizer of studies of various matters of cooperative interest. The latest such conference was held in Tallinn in June 1940. Yugoslav-Bulgarian Cooperative Institute.— In 1937 the national consumers’ cooperative organizations of Bulgaria and Yugoslavia formed a nonpolitical institute for the purpose of creating a perma nent basis of cooperative collaboration between the two countries, and o f promoting mutual economic assistance. This organization has probably been a casualty of the war.12 12 Sou rces .—International section is based upon lata from the following publications: Review of Inter national Cooperation (International Cooperative Alliance, London), issues of April 1932, January, March April, July. August, September, and November 1937, January, May, June, September, and October, 1938, January, July, and September 1940, February and July 1941, April, June, and December 1942, NovemberDecember 1943, January and February 1944; People’s Yearbook (Cooperative Wholesale Society, Manches ter, England). 1930, 1933, 1934, 1936 through 1941, 1942, and 1944; International Directory of Cooperative Organizations (International Labor Office), 1939; Cooperative Information (International Labor Office), No. 5, 1928, and No. 1, 1929; Cooperative Consumer (North Kansas City, M o.), July 16,1940; House wives Build a New World (International Cooperative Women’s Guild, London, 1936); Low Prices or High Dividends? (International Cooperative Women’s Guild, London (1927?)); Good Food and How to Get It, an international report on food purity, food values, and the cooperative movement (International Coopera tive Women’s Guild, Lpndon, 1927). Part 2.— Development of Cooperatives in Individual Countries Countries o f Western Europe From its beginning in Rochdale, England, in 1844, the consumers’ cooperative movement spread to the continent of Europe where it took root, with certain modifications to meet local needs or national characteristics or tendencies. Whereas one of the principal tenets of the pioneers in Great Britain was that of political and religious neutrality, the movement in Belgium, France, and the Netherlands was characterized by divisions along both political and religious lines. In all these four countries and in Switzerland the consumers’ cooperatives consisted largely of urban industrial workers, though farmers and persons of other classes were also included. In Luxem burg, on the other hand, cooperation was almost entirely rural, and even the consumers’ cooperatives combined distribution of home and farm supplies with marketing of farmers’ produce. Belgium became famous for its cooperatives’ use of their earnings to support various welfare activities, including the renowned “ People’s Houses,’ which were the gathering place for members and nonmembers alike and often became the center of comnciunity life. Such use of cooperative earnings became known in the cooperative movement throughout the world as the.“ Belgian plan.” The cooperative movements in Great Britain, the Netherlands, and Switzerland grew in an atmosphere of peace, and were subject * only to the vicissitudes entailed by economic and social events. In France, Belgium, and Luxemburg, on the other hand, cooperative development has been twice interrupted, during the past 30 years, by direct enemy invasion and warfare, with all the destruction and loss that this connotes. In the present war, Luxemburg has been forcibly incorporated into Germany. Switzerland, an island of peace in a sea of warfare, has retained its national entity and autonomy, but has been obliged to adopt sweeping social and economic controls. The Netherlands, which escaped invasion in the first World War, was not so fortunate in the present war. In Great Britain and Switzerland the cooperative movement is playing an important part in the national economy, although it must be constantly on the alert against attacks from various sources (mainly private business) intended to weaken it. In the other coun tries, it is believed that the movement still exists, although the Ger mans have made drastic changes and control it closely. 44 British Isles 45 Cooperative Movement in the British Isles The consumers’ cooperative movement in its modern form had its inception in Rochdale, England, in December 1844. From the small beginnings of the well-known Rochdale Pioneers the movement has grown until today it serves some 11,000,000 families. The Coopera tive Wholesale Society is by far the largest industrial enterprise in the British Isles and the Scottish Cooperative Wholesale Society is the largest enterprise in Scotland. It is a well-organized movement that reaches to practically every corner of the country and its various branches are coordinated by a central body, The Cooperative Union, through which educational, propaganda, legal, and political activities are carried on. To some extent the British movement has departed from the traditional Rochdale practice of political neutrality. It is still neutral, in the sense of not allying itself with any existing party. It participates in the political field, however, for it has formed its own party— the Cooperative Party. It had become increasingly evident to British cooperators, over the years, that a never-relaxing vigilance was neces sary as regards legislative and public administrative action, in order to make sure that the cooperative movement should not be discrim inated against by inadvertence or by measures submitted by its enemies. After long discussion, they finally came to the belief that the best means of insuring cooperative safety was through some agency the chief duty of which would be to examine all public measures from this point of view and to work for the election or appointment of cooperators to public office. They, therefore, formed the Cooperative Party which is an organization auxiliary to the Cooperative Union. The retail associations provide not only groceries and merchandise of many kinds, but also a great number of services, such as laundering, burial, etc. Insurance and banking are provided on a national scale. The movement has also gone into production of a wide variety of commodities needed by the members. Like all other business the cooperative movement has suffered through bomb damage, shortages of goods, equipment, and man power, and the restrictions imposed by war conditions. Operating in a democratic country as it does, although in certain instances it has felt it was the victim of discriminatory practices or decisions, it has been able to make its protests felt and, usually, to obtain redress. It has been able, notwithstanding all the difficulties of wartime, to extend both its membership and its business steadily. Thanks to the integration of the movement and the machinery provided for rescuing associations in difficulties, British cooperatives almost never fail and cooperators rarely suffer financial loss. T ypes o f Associations The relative development of the cooperative movement in Great Britain in 1937 (the latest year for which figures covering the whole movement are available) is shown in table 1. These figures are based upon data collected by the Registry of Friendly Societies and relate to associations registered under the Industrial and Provident Societies Acts. The figures are open to the objection that they include some organizations that are not entirely cooperative. This is especially 46 Cooperatives in Individual Countries true of (1) the building associations, which correspond to the savings andLloan associations in the United States and are only semicooperative, and (2) the housing associations, which can be termed cooperative only in the widest sense of the word. Many have been promoted, and are financed (apart from State loans and loans from local authorities) and controlled mainly by public-spirited persons interested in housing; while others are run by employers in the interests of their employees. Almost three-fourths of the societies provided houses for renting, and tenant shareholders represented approximately one-quarter of the total membership.1 This group includes, however, housing provided by retail cooperative associations, to the value of about £3,000,000.2 T able 1.— M em bership and Operations o f Cooperatives Registered Under F rien dly Societies A ct in England, Scotland, and W ales, 1937 [For par values of currency, see Appendix table, p. 278] Type of association Num ber of of asso Members Amount business cia tions Net gain Own pro duction Patronage refunds Consumers* * cooperatives: Retail distribution____ ________ 11,133 18,002,000 £248,273,000 £29,665,000 £43,060,000 £22,953,000' Wholesale distribution_________ 3 1,255 150,596,000 • 3,017,290 49,143,000 >2,786,000 8,021,000 Productive associations *___________ 8,021,000 116 (<) <<> (0 Agricultural associations: 12,164,752 91,582 307,783 265 Supply______ _________________ 47,004 143 45,428 Marketing............................. ........ 5,911,408 899 174,829 13,495 Farming.......................................... 36 722 96,949 >123,136 Service and allotment.................. 153,488 Fishermen’s purchasing and market 77,132 43 2,710 1,387 ing cooperatives................................ >1,089,819 115,345 Housing associations •......................... 356 38,438 Building associations •........................ 977 2,083,939 •136,855,953 29,613,843 8 1 * General supply associations only; does not include 55 in special lines. > English and Scottish Cooperative Wholesales only. * Includes both workers* productives and productive associations of consumers* cooperatives. 4 No data. * Allotment associations only. * Associations providing living accommodations for members; dwellings mainly rented. > Bents received. * Associations of type known in United States as building and loan associations. * Amounts loaned on mortgage during year. As the table indicates, the distributive cooperatives dwarf all the other branches of the movement. Further, British cooperation reveals most of the standard types of associations, with a few out standing exceptions. Insurance, for example, is supplied through one association of nation-wide scope. Credit unions appear to have no prototype in Great Britain, although there are some agricultural credit associations corresponding roughly to the production credit associations of farmers in the United States; and some retail coopera tives make mortgage loans from their surplus funds. The absence of electricity and telephone associations probably is due to the fact that British law bars cooperatives from providing rail transportation, water, or power. The absence of other types of service associations arises from the retail associations, practice of providing services— burial, meals, laundering, etc.— as well as consumer commodities. Agricultural cooperation.— Agricultural cooperatives in Great Britain date only from about 1900 when the British Agricultural Organization Society was formed. The tardy appearance of the agricultural co i Great Britain, Ministry of Labor Gazette (London), January 1939, p. 10. * For par values of currency, see Appendix table, p. 278. 47 British Isles operatives is said to have been due (1) to the fact that ordinarily the British farmer had no difficulty in disposing of his produce and (2) to his “ more than average antipathy” to association. Workers1 productive associations.— This type of association is not particularly strong in Great Britain. Most of these associations are engaged in the manufacture of clothing or footwear, or in the printing trade. They differ widely in the extent of worker control which is the distinguishing feature of this type of association. However, only associations which do have some measure of control of operations and policies by the workers in them are admitted into membership in the Cooperative Productive Federation3 (established in 1882) which is the central organization for marketing the products and protecting the collective interests of the group. In 1935 there were 54 workers’ productive associations in Great Britain, of which 43 were members of the Federation. The chief customer of many of the workers’ productives is the retail cooperative movement. The latter also contributes to the financing of these associations and in some cases has representation on their boards of directors. Indeed, British students of cooperatives have expressed the opinion that the survival of these productive associa tions is due largely to the “ protected market” they enjoy in the retail cooperatives. The value of the output of the workers’ productive associations, disposed of through the Federation in 1940, amounted to over 3% million pounds. As table 2 indicates, the Federation’s membership has remained almost constant, but since the depression its businesshas (with the exception of the year 1938) shown a continuous rise. T a b l e 2 .— Membership and Business o f Cooperative Productive Federation, 1920-40* [For par values of currency, see Appendix table, p. 278] Year 1920.. 1926.. 1930.. 1931. 1933.. 1934.. Number of affili Member ship ated asso ciations 46 42 43 43 44 42 0) 14,480 14,966 15,187 15,801 15,791 Business Year £555,652 2,257,273 2,745,145 2,635,871 2,459,410 2,584,416 1935______________ 1936......................... 1937......................... 1938......................... 1939......................... 1940_____________ Number of affili Member Business ship ated asso ciations 43 44 44 42 42 42 15,162 £2,723,849 15,208 2,831,324 15,221 3,035,943 14,514 2,876,270 3,027,666 14,248 14,646 3,554,931 1 No data. Structure o f the Consumers’ Cooperative M ovem ent The basic or primary units of the consumers’ cooperative movement in Great Britain are the local or retail cooperatives. Upon this founda tion— a network stretching to practically every part of the Kingdom— have been built (through the federation of the local associations) national or regional organizations providing a great variety of services and producing a wide range of commodities. * There is another federation known as the Labor Copartnership Association which is sometimes confused with this Federation but which has for its purpose the extension of profit sharing by industrial firms. This confusion is increased by the fact that workers’ productive associations, which in addition to their worker members also admit to membership retail cooperatives and other associations, are sometimes referred to as “ copartnership associations.” 48 Cooperatives in Individual Countries These federations, which in Great Britain are termed “ federal” as sociations, are of four types: (1) The national wholesale associations which are federations of local associations for the purpose of doing a wholesale business in the goods dealt in by the retail cooperatives. (2) Separate organizations formed by the wholesale associations to specialize in certain fields, such as insurance, tea trade, etc. (3) National federations formed by the local associations to carry on specific activities. These consist of the Cooperative Press, Ltd. (a federation with some 695 member associations), which publishes sev eral national cooperative periodicals, and the Cooperative Printing Society (both in England), and three organizations in Scotland— United Cooperative Baking Society, Paisley Cooperative Manufac turing Society (which makes clothing), and the Scottish Cooperative Laundry. (4) The federations known as “ local federal societies,” formed by groups of retail associations to carry on specialized activities through out a given region. 4 In 1935 there were 44 such federations in Eng land and Wales and 7 in Scotland. Most of these are in the baking, dairying, or laundry trades. At the top of the whole structure is the Cooperative Union, an educational federation that accepts into membership both consumers’ and other types of cooperatives and also the commercial and produc tive federations. T a b l e 3.— Operations o f Cooperatives in Great Britain and Northern Ireland and o f Those Affiliated to Cooperative Union , 1913-41 [For par values of currency, see Appendix table, p. 278] Total: Great Britain and Northern Ireland Year and type of association Num ber of asso Members cia tions Sales Cooperative Union Num ber of Net earn mem Their ber ings asso members cia tions Their sales mi Distributive associations.......... Distributive federations___ . . . Productive associations. .......... Special associations.................. Wholesale associations............. Insurance associations.............. Other associations..................... Total................................. 1,059 8, 773,255 £302,246,329 224 3 197 2,255,055 90 18.759 8,768,737 10,166 2 16 1,276,050 4 3 1,593 185,155,689 32 1 10,463,401 13 (9 (9 1,207 8,803,972 1940............................................... * 1,20018,747,380 1935.. ................................. 0) 7,526,200 1930............................................. , 1,334 6,447,813 1925.. .................... ........... 1,420; 4,960,883 1920............................................... 1,501 j 4,559,311 1915.. ................................. 1,497 j 3,310,724 1913............................... ............... 1,508 3,011,390 0) <9 £890,122 0) (9 <9 <9 1,006 8,636,653 £297,065,247 23 3 191 2,225,096 85 17,396 8,607,594 14 7,302 1,031,913 4 1,593 185,155,689 32 1 10,463,401 13 <9 (9 510,165,261 1,146 8,663,137 504,548,940 502,041,056 (9 351,646,360 (9 340.476,680 30,230,187 295,828,010 ! 23,211,134 404,144,150 26,993, 396 165,034,195 17,003,956 130,035,894 14,260,414 1,132 1,177 1,221! 1,283 1,322 1,285 1,272 495.629.847 353,221,819 333.362.847 8,580,423 7,365,886 6,253,734 4,864,888 4,479,209 3,187,285 2,874,574 <9 1 1 No data. 2 Estimated on basis of Cooperative Union affiliates. 3 Number of affiliated associations. * Includes estimates (on basis of Cooperative Union statistics) for distributive federations and special associations. 4 These correspond to the district wholesale or service federations in the United States. British Isles 49 Table 3 shows the associations in the United Kingdom (Great Britain and Northern Ireland) in 1941, and the associations that are members of the Cooperative Union. For comparative purposes, totals for preceding years are also given. This table shows a steadily decreasing number of associations, a continuously mounting member ship, and sales that have fluctuated somewhat with economic condi tions but on the whole trend upward. Retail Cooperatives and Their Operations Specialization by local cooperatives is unusual in Great Britain where the tendency has been rather for the retail store association to extend its business to cover as many lines of commodities and as many services as the membership desires. Thus, in the group of or ganizations classified as “ distributive” are many which perform func tions outside the purely merchandising field. Among the services provided are burial, optical, dental, and convalescent care, laundering, house decoration,-automobile repair, motor tours, and provision of meals. In the merchandising section, some associations run estab lishments providing a complete line of dry goods, clothing, furniture, and the other commodities found in department stores; others may concentrate on a limited range of day-to-day requirements. Furni ture departments have been stimulated by the entrance of the whole sale associations into the manufacture of furniture. Pharmacies are becoming an increasingly common department of the retail cooper atives. However, throughout the movement as a whole the grocery department has always been and still remains the most important section of cooperative trade. Data compiled by the Cooperative Union show the following percentage distribution of cooperative business in 1942: Percent Groceries and bread. _ Meat________________ Vegetables, fruits, fish Dairy products______ Confectionery________ Drugs_______________ Dry goods___________ 52. 8 8. 2 1. 4 10. 8 1. 2 1. 2 8. 3 Percent Clothing (including tailoring)__ Boots and shoes__ _____________ Furniture and hardware________ Coal___________________________ Other__________________________ 2. 3. 2. 5. 3. 5 1 5 1 0 Total__________ _______ _ 100. 0 Some of the retail cooperatives also run productive departments making certain items (especially perishable goods like bakery prod ucts, dairy products, etc.) which it is more efficient to produce locally than on a national or regional scale. A few of the distributive asso ciations have even gone into farming, although this has been one of the least profitable or satisfactory lines of cooperative activity, and the number of associations operating farms has tended to decrease. One large segment of the cooperative movement in the United States has no counterpart in the country that was the birthplace of consum e d cooperation. Thus, although a few retail associations provide garage service, there are no associations handling petroleum products even though thousands of British cooperators possess automobiles or motorcycles. Carr-Saunders and his associates pointed out this gap, in their analysis of the British cooperative movement in 1938, and remarked that “ Even America has cooperative petrol.” 58 8 Consumers’ Cooperation in Great Britain: An Examination of the British Cooperative Movement, by Carr-Saunders, Florence, Peers, and others. London, George Allen & Unwin, Ltd.. 1938. 50 Cooperatives in Individual Countries Trends in the membership, business, and net earnings of the retail associations in selected years from 1880 to 1943 are shown in table 4. T a b l e 4 .— M em bership and Operations o f Retail Distributive Associations in the United Kingdom , 1880-1943 [For par values of currency, see Appendix table, p. 278] N u m b e r of associa tions Year M em b er s Sales N e t earnings 1880..................................................................................... 1890...................................................................................... 1900..................................................................................... 1910— .................................................................................. 1913-.................................................................................... 1915...................................................................................... 921 1,418 1,464 1,428 1,387 1,375 542,380 1,026,912 1,709,371 2,542,532 2,878,648 3,264,811 £ 2 1 ,0 9 3 ,3 2 4 26,619,566 50,053,567 71,861,383 83,590,374 102,557,779 £ 1 ,9 0 2 ,1 7 4 3 ,7 60,846 7,747,338 10,938,331 12,851,303 14,960,086 1920...................................................................................... 1925...................................................................................... 1930-.................................................................................... 1935...................................................................................... 1936...................................................................................... 1937..................................................................................... 1,379 1,289 1,210 1,118 1,107 1,094 4,504,852 4,910,983 6,402,966 7,483,976 7,807,942 8,084,990 254,158,144 183,584,049 217,318,001 220,429,517 233,844,350 251,393,047 25,458,555 20,479,780 26,938,024 26,746,054 28,391,100 29,815,125 1938...................................................................................... 1939...................................................................................... 1 940 ..................................................................................... 1941...................................................................................... 1942...................................................................................... 1943...................................................................................... 1,085 1,077 1,065 1,059 1,058 8,404,688 8,643,233 8,716,894 8,773,255 8,924,868 9,028,218 263,265,306 272,293,748 298,880,990 302,246,329 319,448,476 331,547,123 31,144,045 32,019,854 0 ) 0 ) 2 28,896,977 2 33,120,928 0) 1 No data. 2 Surplus (after payment of interest on share capital) available for patronage refunds* A veiy large proportion of the total cooperative trade is done by associations of great size, serving extensive districts. In 1941, of 1,059 retail cooperative associations, there were 96 having more than 20,000 members each; 30 of these had over 50,000 members and 6 had over 100,000 members. The 96 associations in that year accounted for 9.1 percent of the total retail membership and 61.6 percent of the cooperative retail business. The membership of the six largest associations in 1942 was as follows: M em bers M em b ers London_____________ 792,355 South Suburban (London)___ 200, 063 Koval Arsenal (London)_____ 318, 033 Liverpool____________________ 135, 878 Birmingham_________________ 238, 869 Leeds_______________________ 128, 766 Of these six, three (as noted) are in London. There is also a fourth association in the London area, the Enfield Highway Cooperative Society. Thus, nearly 1 %million families in the metropolitan region are served by cooperatives. It is estimated that the British cooperative movement handles about 12.0 percent of the national retail trade in food and tobacco and about 20.0 percent of the coal business. In the rationed foods (meat, butter, sugar, etc.) the percentages range from 14.5 percent in the case of meat to 27.0 percent for sugar and preserves. A survey for 1940 indicated that cooperative factories produced 1.6 percent of the total output of all productive works in the United Kingdom in 1935 and 7.1 percent of the output of the food and tobacco industries, 3.4 percent of the furniture, 3.0 percent of the clothing, 6.5 percent of the shoes, 12.0 percent of the soap and candles, 12.5 percent of the margarine, and 16.0 percent of the lams, marmalade, and flour. 51 British Isles As population figures, since the beginning of the war, have been a military secret no recent comparisons of cooperatives in relation to the population can be made. In 1931, the consumers’ cooperative member ship in relation to the total population was as follows: P ercent o f population English counties. Isle of Man_____ Guernsey_______ Jersey__________ W ales._________ Scotland________ Northern Ireland . . 14.8 . . 9.5 1.3 7.3 15. 7 1.4 United Kingdom: 1931_______________________13. 1921................. 9. 1911....................................... 5. 1901..................................... 4. 4 5 8 3 1No associations or members. The geographical distribution of the retail cooperative movement, as regards membership and business, in 1942, is shown below: Percentage distribution M em bers B u sin ess 87. 6 11.6 .8 81. 5 17.5 1.0 Total.................................................................. 100.0 100.0 England and Wales_____________________________ Scotland.............. .......................................................... Northern Ireland_______________________________ Federations in the Consumers’ Cooperative M ovem ent The principal cooperative federations in Great Britain operating on a national scale are the four cooperative wholesales (English, Scottish, Joint English and Scottish, and Irish), the Cooperative Insurance Society, and the Cooperative Union. The wholesale associations since their formation have widened the scope of their activities considerably. Thus, the English and Scottish wholesales not only act as wholesale distributors to the local associa tions; they also manufacture much of the goods they sell, besides pro viding insurance and other services and acting as the investment agencies for the funds of the whole cooperative movement. ENGLISH C O OPERATIVE W H OLESALE SOCIETY This organization was formed in 1864 after two previous attempts at cooperative wholesaling had failed. Most of the local associations in England and Wales are members of it. The association has been financially successful since its formation; and the only setbacks it experienced were encountered during the two depressions of the early 1920’s and 1930’s. However, although money volume of sales has fluctuated somewhat, during the 79 years’ operations a loss was sustained on the operations in only 3 years (1918,1920, and 1921). The wholesale began production very soon after its formation and the productive enterprises have showed consistent earnings. At the end of 1940 the C. W. S. owned 197 factories ana workshops, employing 43,338 workers, which produced a wide variety of com modities (see table 8, p. 29). It was operating 10 building and engi neering plants and 6 printing and bookbinding establishments. 52 Cooperatives in Individual Countries By 1939, the year of the outbreak of the war, the wholesale was producing 35.4 percent of the goods it sold. Since that time, al though both sales and production have risen, owing largely to war conditions, the output of the C. W. S. factories has not expanded as fast as the distributive business, so that by 1942 its own production had fallen to 30.8 percent of total sales. Many of the cooperative factories were reported to be “ engaged largely on the production of Government requirements.” The trend of development of the wholesale since its formation is shown in table 5. Up to 1920 the number of its affiliates increased each year; since that time it has fallen steadily, though gradually, for the most part as a result of amalgamations of the societies into larger units. T a b l e 5.— M em bership and Operations o f English Cooperative W holesale Society, 1 8 6 5 [For par values of currency, see Appendix table, p. 278| Year Number of affili Their mem ated as bers socia Share cap tions ital Wholesale association Business Net gain Own produc tion 1865 ................................... 1870 .................................... 1880........................................ 1890....................................... 1900....................................... 1910........................................ 1915....................................... (i) 0) W604 941 1,078 1,160 1,195 24,005 79,245 361,523 721,316 1,249, C91 1,991,576 2,535,972 £7,182 16,556 14G, 061 434,017 883,791 1,740,619 2,284,758 £120,754 507,217 3,339,681 7,429.073 16,043,889 26,567,833 43,101,747 £1,850 4,248 42,090 126,979 289,141 462,469 1,086,962 £118,598 341,277 2,264,088 6,581,310 12,812,954 1920....................................... 1925______________________ 1930...................... ............... 1931........................................ 1932 . .................................... 1933................................. . 1934........................................ 1,222 1,171 1,091 1,079 1,065 1,052 1,040 3,341,411 3,778,659 4,565,372 4,884,090 5,138,124 5,352,310 5,488,364 4,270,408 6,192,341 8,080,497 8,515,097 9,416,463 10,067,465 10,784,019 105,439,628 76, 585,764 89,288,125 85,313.018 81,498,234 82,769,119 82,120,864 2 64,210 1,053,504 1,396.974 1,344.218 1,692,157 1, 729,223 1,473,838 33.404,466 26,900,865 25,825,426 23,823,002 23,638,705 30,049,108 26,813,807 1935...................................... 1936 ................................... 1937........................................ 1938....................................... 1939....................................... 1940............ .......................... 1941...................................... 1942—.................................... 1943........................................ 1,033 1,025 1,023 1,021 1,009 1,009 1,008 0) 5,983,810 6,155,964 6,379,274 6,581,337 6, 765,194 7,020,544 7,07.8,362 7,439,813 7,544,315 12,009,372 13,017,445 14,147,015 14. 715,179 14,734,826 14,740,954 15,859,540 0) 0) 90,177,672 98,283,975 107,691,527 119,851,542 125,015,316 131,357,439 142,889.444 157,395,338 166,835,000 2,052,498 2,095,481 2,569,412 2,799,095 2,891,485 2,974,722 3,890,388 0) 0) 32,449,932 36,346,873 40,994.814 43,303,528 44,243,924 45,037,707 47,098,301 47.406,257 (0 (9 i No data. The wholesale has, in addition to its distributive and productive business, several other departments. One of these is the C. W. S. Banking Department which handles accounts for individual cooper ators, for practically all of the local cooperative associations, for tradeunions, and for many nonprofit organizations. This department was opened in 1872. Although it has several branches, for the most part the retail associations act as its local agents. Through this depart ment almost all the surplus funds of the movement are mobilized for cooperative development. In 1937 the business of the Banking Department for the year amounted to £770,106,000, and the assets totaled £109,255,000. The wholesale also has a health-insurance section, writing risks under the National Health Insurance Acts, for cooperators and others. British Isles 53 The membership of this section numbered 633,000 in 1942. From the earnings made, the department also provides assistance toward dental care, convalescent care, medical and surgical appliances, and nursing for the members, as well as increases in the usual cash benefits provided under the health-insurance system. Retail activities of wholesale.— In 1934 the member associations authorized the wholesale to form the C. W. S. Retail Society, for the purpose of rehabilitating local associations that found themselves in financial difficulties and of establishing retail branches in places where cooperation either had not taken hold at all or where local associations had been unable to operate successfully. In the latter case, it was provided, no retail branch could be started without the approval of neighboring cooperatives. Two years later a branch was established in Cardiff, Wales, where the local association had been unable to succeed. Between 1936 and 1943, the local membership of the Cardiff branch rose from 9,010 to 20,409. By 1943 the members of six other associations had voted to become branches of the wholesale, and in the 8-year interval the C. W. S. Retail Society had assisted and returned to local control a number of other associations. The Central Board of the Cooperative Union nevertheless felt some concern for the proper safeguarding of local cooperation. Accord ingly, in 1943, a joint standing committee representing the Cooperative UnionaM thew^ Was formed. It will be the duty of this committee to determine, in the light of all the circumstances in individual cases, the best way of meeting the situation, i. e., whether b y amalgamation of the association concerned with another associa tion, by the transfer of its obligations to the wholesale, by internal reorganization, by control by the wholesale or supervision by it, or by incorporation into the C. W. S. Retail Society as one of its branches. The committee's decision will then have to be ratified by the executive boards of both the Cooperative Union and the Cooperative Wholesale Society. In 1939 the C. W. S. board of directors proposed to establish a chain of fixed-price variety stores with a top price of 5 shillings; no patronage refund would be paid. The system would not be started until at least 20 associations had indicated approval, and no store would be opened without the consent of the local association of the district. Upon being put to the vote of the member associations, they decided to allow the establishment of the system under the conditions prescribed but refused authority to form a separate subsidiary organ ization for the purpose or to eliminate the patronage refund. SCOTTISH COOPERATIVE W H OLESALE SOCIETY The Scottish Cooperative Wholesale Society, started 4 years after its English counterpart, has always operated on a smaller scale, but has been as consistently successful. Indeed, in one respect it has outpaced the English wholesale, for it has shown a loss on trading operations in only 1 year (1921). Its development from 1868 to 1943 is summarized in table 6. 54 T Cooperatives in Individual Countries able 6 .— M em bership and Operations o f Scottish Cooperative Wholesale Society, 1869 to 1943 [For par values of currency, see Appendix table, p. 278] Number Capital (in of affili cluding ated as reserves and sociations other funds) Year Business Net gain Own produc tion IRfiS - _____________________ . ___ 1870 __ ____________ __ _ ___ 1880_______________________ 1890........................................................... 1900........................................................... 1910..................................... .................... 1916.......................................................... (i) (i) 161 261 288 274 262 £1,859 12,542 110,259 579,791 1,691,753 3,470,015 5,528,815 £9,697 105,249 845,221 2,475,601 5,463,631 7,738,158 14,499,037 £49 2,418 21,685 76,545 222,366 273,563 501,531 £108,646 1,388,720 2,435,311 34,708,104 1921........................................................... 1926.......................................................... 1930........................................................... 1931.......................................................... 1932.......................................................... 1933.......................................................... 1934.......................................................... 1935.......................................................... 273 260 251 251 245 241 240 238 6,733,753 9,008,221 10,433,879 11,113,064 10,995,204 11,590,726 12,244,400 12,995,916 21,834,058 16,717,922 17,682,449 16,552,348 16,141,552 16,016,360 17,664,855 18,635,116 3237,030 347,371 413,625 471,838 397,647 402,133 450,472 437,857 <9,540,728 3 5,949,289 5,793,827 5,053,045 0) 5,361,493 0) 5,421,240 234 13,870,232 20,580,212 529,329 5,996,484 232 230 227 225 221 0) («) 13, 530,537 13, 207,503 13, 021,494 13, 372,862 14, 597,921 14, 874,868 0) 22, 438,684 27, 350,453 24, 612,711 29, 184,889 32, 149,030 34, 044,052 35, 778,000 447,878 480,688 457,886 773,464 975,707 0) 0) 6, 612,000 7, 852,835 7, 132,330 8, 646,568 9, 816,972 0) 0) 1936........................................................... 1937........................................................... 1938........................................................................ 1939.........................................................— 1940........................................................................ 1941........................................................................ 1942........................................................................ 1943. ...................................................................... 1No data. * Figure relates to year 1915. 3Loss. <Figure relates to year 1920. • Figure relates to year 1925. 6 No data. Membership of affiliated associations given as 1,048,448. ing figures were: 1942, 1,020,444; 1941, 999,093; and 1939, 954,245. For previous years the correspond The Scottish wholesale was somewhat slow in entering the field of production but, once started, has shown almost continuous expan sion, and indeed has been able to produce a greater proportion of the goods sold than has the English wholesale. In 1941 the output of its manufacturing plants constituted 35.7 percent of the total value of goods sold by the wholesale. At the end of 1940 it owned 58 factories employing 9,237 workers. It was operating also 4 building and engi neering establishments, 2 plants making motor-car and wagon bodies, and 2 printing and bookbinding establishments. In order to take the advantages of cooperation to remote corners of Scotland where the people did not wish to carry on cooperative enterprises themselves or where conditions were not very favorable, the wholesale has opened retail branches. In fact, the S. C. W. S. has operated some retail branches since 1910. At the end of 1942 it had 41 retail branches, in addition to 26 retail drug stores, and 5 laundries. One of the earliest of the special services was the funeral department started in 1934; by 1942 this department was operating 33 funeral establishments. EN G L ISH AND SCOTTISH JO IN T C O O PER ATIVE W HO LESALE SO CIETY This organization was formed in 1923 to carry on joint enterprises for the two great wholesales. It has six tea factories in various centers of England and Scotland, one coffee-roasting plant, and a cocoa and British Isles 55 chocolate works, besides operating extensive tea and coffee plantations in Ceylon and India. It maintains purchasing centers in various places in Africa and Asia. In the year ending in September 1941 its business amounted to £8,701,474. IR ISH A G R IC U L T U R A L W H OLESALE SOCIETY This association was formed in 1897 as the purchasing agent for the Irish agricultural cooperative associations. It has had a checkered career, owing primarily to the poverty of the member associations and secondarily to the disturbed political and economic conditions in the country. At the end of 1941 it had 362 member associations, and a business for the year amounting to £751,761. (For statistics o f operations, seep. 59.) C OOPERATIVE IN S U R A N C E SOCIETY Aside from health insurance, provided by a department of the English Cooperative Wholesale Society, insurance for the cooperative movement is written through the Cooperative Insurance Society formed in 1867, which is the joint insurance department of the English and Scottish Wholesales and has agents and offices throughout the United Kingdom. It writes life, pension, annuity, fire, casualty, acci dent, burglary, fidelity, “ house purchase,” employers’ liability, and livestock insurance. One of the more interesting types of insurance offered by the society is the collective life-insurance policy taken out by cooperative associations on the fives of the members. The bene ficiary of a member who dies receives an amount proportioned to the average amount of his patronage of the cooperative during the preced ing 3 years.6 The premium income of the society in 1941 amounted to £10,463,401. A statement submitted by the cooperative movement to the Joint Parliamentary Committee (known as the Beveridge Committee) in 1942 showed that over 255,000 cooperative employees were covered by retirement schemes, and 786 associations (with 3,430,739 members) had taken out the collective insurance just mentioned. Under the latter scheme a total of £11,005,245 had been paid in 1,456,762 cases. TH E COOPERATIVE UN ION The Cooperative Union was established in 1869, under the name of Central Board. It is the national federation of the cooperative move ment in the British Isles, and accepts into membership both consumers’ and other types of cooperatives, whether of the primary or federated type. All the four wholesales just described, the Cooperative Insur ance Society, and the central organization of the workers’ productive associations— the Cooperative Productive Federation—belong to the Cooperative Union. As already shown (table 3), practically the entire body of consumers’ cooperatives of Great Britain is affiliated to the Cooperative Union. In 1941 its member associations accounted for 95 percent of the total number of associations, 98 percent of the individual membership, and• • In certain sections of the United States a similar plan is offered to members of store associations through cooperative insurance (see Monthly Labor Review, March 1944, p. 561). 56 Cooperatives in Individual Countries D9 percent of the cooperative business in the United Kingdom of Great Britain and Ireland. The Cooperative Union formulates policy and speaks the views of the movement. Its duties include legal assistance to the member associations, propaganda, educational work, and defense of the move ment in the economic and legislative fields. It has certain auxiliary Organizations, among which are the following: (1) The National Cooperative Authority, representing the Union, the English and Scottish Wholesales, the Cooperative Press, the Cooperative Productive Federation, and the Cooperative Party. The Authority decides upon cooperative policy in current national issues affecting the movement, arising between congresses. (2) The Joint Parliamentary Committee, the function of which is to examine the possible bearing, on cooperatives, of all proposed legislation, to represent the cooperative movement before Parliament and Government bodies, and to obtain adequate cooperative rep resentation on public committees. (3) The Cooperative Party, described as the “ political committee” of the Cooperative Union. It handles the funds subscribed for politi cal purposes and endeavors to obtain the election of cooperators on both local and national government bodies. (4) The National Educational Council, responsible for advice and guidance in the organization of cooperative education and the prepara tion of correspondence courses and lecture courses at the Cooperative College. Cooperatives and the W ar When the war broke out, the cooperative movement gave im mediate attention to protecting its members as consumers. In order to insure the equitable distribution of available supplies, cooperators and their organizations were vigorous advocates of rationing and, later, of the extension of rationing and of price control. Government wartime measures, including limitations on supplies, on production, atid on sales to consumers, and the control of prices, began with the Prices of Goods Act of 1939 and the first Limitation of Supplies Orders in April 1940. From that time onward, restrictions were increased. Since the outbreak of the war Government regula tions are reported to have been issued at the rate of 2,500 a year. By the beginning of 1942 civilian goods were very scanty as compared with the pre-war situation. Stores handling dry goods and clothing were especially hard hit. The earliest rationing measures were carried on what was called the “ datum” quota principle. Under this system dealers’ quotas were based upon their volume of business in the rationed commodity as of a given date or period. This was an especial hardship for the growing cooperatives, for amounts sold in the basic period were quite insufficient to meet the current needs of the expanded membership. This system was later abandoned— a fact to which the continued growth in cooperative business in spite of restrictions and scarcities is largely attributed. The Government’s plans for the concentration of industry intro duced a new and unforeseen element into the cooperative method of doing business. These plans included the “ telescoping” of industry, and were originally outlined as voluntary arrangements in which each British Isles 57 branch of industry would decide which would be the “ nucleus” firms and which the “ closed” or “ redundant” ones. “ Nucleus” firms were to produce at full capacity. Accordingly, British cooperatives, for probably the first time in their history, were forced to produce for private enterprise or face extinction. Some cooperative factories which were not permitted to produce for civilian consumption are now engaged in making equipment, uniforms, and shoes for the armed forces and civilian defense services. Along with other businesses the cooperatives suffered extensive bombing damage to their shops and other buildings, but prompt aid from other associations and heroic efforts by the associations con cerned enabled them to continue operations in most cases. The evacuations that took place in 1940-41, as a result of enemy bombing of the cities, operated to reduce cooperative business. The reason for this was that the population movement was away from the cities, where the cooperatives were strong, to country districts where they were relatively weak. The result was a loss in registrations at the cooperative stores in 1941. The tendency was reversed in 1942, and cooperative registrations showed an increase despite the continued decline of the civilian population. This increase is attributed “ almost entirely to the resumption of trading membership by cooperators moving back to the towns they left in the previous year.” 7 The position of the movement at the end of 1943 was regarded as generally good and it was expected that, barring unforeseen and extreme changes, this would be maintained in 1944. The cooperative movement, although given greater recognition in this war than in the last, has had to be on the alert constantly for indirect attacks under guise of wartime necessities. Thus, the enact ment of price-control legislation led the private traders to attack the patronage-refund principle of the cooperatives as a price-cutting device, and in some cases they have been successful in impressing this point of view upon Government regulatory bodies. Although certain members of Parliament have expressed the view that patronage refunds should be suspended during the war, apparently no Parlia mentary action toward this end has been taken. On the whole, it is evident that the British movement is playing an important role in the war economy. The strong financial position of the movement and its enormous trading resources, together with the fact that it represents a large section of the buying public, are un doubtedly responsible for the public recognition which it has received. Cooperation in Ireland Agricultural cooperation has always been and still remains by far the most important branch of the movement in Ireland. It developed primarily as a result of the zeal of Sir Horace Plunkett and the organization founded by him in 1894— the Irish Agricultural Organization Society. Although the cooperative idea was slow in gaining acceptance, by 1913, owing to intensive organization work and the gradual spread of the movement, there were 985 associations with a membership of over 100,000. The first World War was a period of great expansion ; People’s Yearbook, 1943, p. 20. 588544*— 44------ 5 58 Cooperatives in Individual Countries and prosperity for the Irish cooperative movement. In 1920 it reached an all-time peak with 1,114 associations, a membership of 157,766, and an annual turnover of £14,604,852. The post-war depression, however, revealed that the movement was dangerously undercapitalized and overexpanded and that unwise amounts of credit on a long-term basis had been extended. The associations themselves were heavily in debt to the Irish Agricultural Organization Society and to the banks. To these troubles were added the political unrest and in some cases open warfare among the various factions. The separation of the northern and southern parts of the country into two parts—Northern Ireland and Irish Free State— in 1922, likewise divided the cooperative movement. Thereafter the Irish Agricultural Organization Society confined its activities to the Irish Free State, and for Northern Ireland the Ulster Agricultural Organization Society was formed. The two central organizations maintained close relations, however. The cooperative associations in southern Ireland were at the time of the treaty of independence almost in extremity. The one exception consisted of the cooperative creameries which, because they had been more adequately capitalized and had enjoyed more efficient manage ment, were in somewhat better condition than the other associations. That the other branches of the movement were salvaged, even in part, was due to measures of credit and reorganization undertaken by the officials of the new Irish Free State. Table 7 shows the development of the associations in membership with the Irish Agricultural Organization Society in 1941 (the latest year for which data are available) and in selected years since 1913. The data for the years 1910 and 1920 relate to Ireland as a whole; those for succeeding years cover Irish Free State (Eire) only. T a b l e 7.— M em bership and Business o f Cooperatives in E ire , 1913 to 1941 IFor par values of currency, see Appendix table, p. 2781 Number oi associations Year and type of association 1941 ....... OrAATOArlAa - ....... Agricultural supply associations _ _ ■jy/fiscAllariAonR trading associations. _ Credit associations: Agricultural Cooperatives under “ Fluke” scheme Total Federations ___ __ _ ___ . _ _ Grand total _ 1040___________________________________________________ 1030 _________________________________________________ 1033 _________________________________________________ 1037 ________________________________________________ 103fi _ ____ ____________________________________ 1935__________________________________________________ 1030 ... ___________ ________________________________ 1023 ___________________ _____________________________ 1020 * ______ _____ _____________ ______________ 1013 a__________________________ _________ 1No data. >Data include Northern Ireland also. Members Amount of business 214 82 20 51,402 17,680 15,771 £8,237,647 750,665 2,474,239 28 44 4,666 4,128 4,588 388 1 93,647 469 11,467,139 751,762 389 94,116 12,218,901 400 410 418 428 435 443 605 96,466 99,326 97,813 99,524 100,810 102,145 101,307 (») 157,766 104,702 11,080,773 9,826,200 9,263,920 8,700,322 8,617,295 7,712,182 9,421,855 7,725,072 14,604,852 3,333,18'. (\ l l 4 985 59 British Isles The latest data available for Ireland that show the distribution of the cooperatives between Northern Ireland and Eire are for the year 1936. In that year 435 of the total of 529 associations that were affiliated to either the Irish or the Ulster Cooperative Organization Society belonged to the former organization, and its affiliates accounted for 100,810 of the total membership of 115,874 and £8,617,295 of the total business of £9,881,295. IRISH AGRICULTURAL WHOLESALE SOCIETY The cooperatives of Eire also have a cooperative wholesale, the Irish Agricultural Wholesale Society, formed in 1897, which handles not only farm supplies but also household supplies and groceries. This association, like the local associations, suffered from the civil war and the depression of the early twenties. It was saved only by the assistance of the English Cooperative Wholesale. Only summary figures, shown in table 8, are available for it. T a b l e 8 .— M em bership and Business o f Irish Agricultural Wholesale, 1 9 1 5 -4 2 [For par values of currency, see Appendix table, p. 278] Affiliated associa tions Year 1016 1090 1925 JQ97 1090 1091 1099 _________ .................... ................. _______________ 1934....................................... 327 625 588 698 470 470 470 468 Distribu tive business £375,379 1,671,116 486,968 643,896 682,426 643,417 330,225 538,665 Year ____________ 1935 1936______________________ 1937 1933 ______ 1939 _ 1940...................................... 1941 _ ______ 1942........................ ............. Affiliated associa tions 469 466 373 373 373 366 362 360 Distribu tive business £343,432 342,662 241,974 648,094 848,712 837,910 751,761 721,806 This wholesale is not entirely a federation of local associations. Its member associations, it is reported, have never capitalized it adequately and in order to obtain sufficient working capital it has had to admit individuals into membership. Its leadership, in spite of handicaps, has been characterized as “ courageous” and “ enterprising.” 8 The organization was able to break up the manufacturers’ combine in the manure and farm-machinery trade and by importing these commodities from the United States forced the prices of fertilizer down by 50 percent. “ By making arrangements to have its own seeds tested, it was able to certify them, and to compel private mer chants to do likewise. The saving to the farmers under these two heads alone would justify the society’s existence.” 8 CONSUMERS’ COOPERATIVES IN IRELAND Consumers’ cooperation is much weaker in Eire than in Northern Ireland. One reason for this is that the latter is more industrial and in the British Isles the consumers’ cooperative movement has always appealed most strongly to industrial workers. In Eire, among the strongest consumers’ cooperatives are two whose members are coal miners and textile workers, respectively. The consumers’ association in Dublin, after repeated losses and reor ganizations, finally went into dissolution in 1939. 8 Cooperation: A Survey of the History. Principles, and Organization of the Cooperative Movement in Great Britain and Ireland, by F. Hall ana W. P. Watkins, p. 190. Manchester, The Cooperative Union. 1936 60 Cooperatives in Individual Countries In Northern Ireland the consumers’ cooperatives, although not numerous (there were only 17 in 1938) were quite large in size. Their combined membership in 1942 was 75,722. One of the associations, that in the city of Belfast, had over 50,000 members and 80 branches. Its business in 1938 amounted to £1,591,739; its patronage refunds in that 1 year amounted to £124,687.9 Cooperative Movement in Belgium Belgium was occupied by the Germans in May 1940, after an 18-day blitzkrieg during which much destruction of property, as well as loss of life, occurred. Data are not available to indicate to what extent •cooperatives suffered in the invasion nor how many of them were lost when certain districts ceded to Belgium under the Treaty of Versailles were reannexed to Germany. Evidently the cooperatives were allowed to continue operation under the German military government, for the allied army of liberation found them practically unharmed and still under cooperative leadership in September 1944. It is known that new organizations were created by the Germans to control agri culture and the collection of farm products, and these may have sup planted the cooperative supply and marketing associations. When Belgium was invaded by the Germans n May 1940, the Belgian cooperators saw their country overrun and the development of their cooperatives checked for the second time in only a little over a quarter of a century. Although suffering greatly during the first World War, the movement, 10 years later, not only had regained its pre-war level but had gone through a long process of consolidation intended to strengthen and expand it. This process was hastened by the stress of conditions during the depression of 1930-34. The struc tural and economic reorganization that began in 1935 was successful in putting the movement on a much firmer basis financially, and rapid progress had begun to be made when war broke out. By that time, the consumers’ cooperatives of all groups were serving about a fourth of the people in Belgium, and were doing about 10 percent of all the retail trade. The cooperative movement in Belgium dates rom 1873, when the first cooperative law was passed. The cooperatives, however, were divided along both religious and political lines. In the distributive coop erative branch of the movement, the only “ neutral” group consisted of the associations of public employees. The others were affiliated with the Clerical, Social-Democratic, or Christian-Democratic Parties. 9 S o u rc e s — The report on the British Isles is based upon data from the following publications: Great Britain, Ministry of Labor Gazette, January and February 1939 and January 1940; Building Societies— Statistical Summary, 1929-39 (Great Britain, Registry of Friendly Societies); Cooperative Review (Coopera tive Union, Manchester), issues of November and December 1942, January, June, July, August, October and November 1943, and January 1944; Wheatsheaf—Agricultural edition (Cooperative Wholesale Society), issues of June and August 1943 and January 1944; Peoples Yearbook (English and Scottish Cooperative Wholesale Societies) years 1922, 1927, 1929, and 1932 through 1943; Proceedings of congresses of the Coopera tive Union, years 1881,1891,1901,1911,1914,1916, and 1938; Annual reports of Irish Agricultural Organization Society for years 1931, 1938, and 1942; International Directory of Cooperative Organizations (International Labor Office), 1939; Cooperative Information (International Labor Office), No. 7-8, 1943; Consumers' Cooperation in Great Britain—An Examination of the British Cooperative Movement, by Carr-Saunders, Florence, Peers, and others (London, George Allen & Unwin, Ltd., 1938); Cooperation—A survey of the History, Principles, and Organization of the Cooperative Movement in Great Britain and Ireland, Dy Hall and Watkins (Manchester, Cooperative Union, Ltd., 1935); Consular reports, March 21,1932, and Novem ber 16, 1936; New York Times, June 27, 1939; Cooperative Builder (Superior, Wis.), October 7, 1939; Con sumers’ Cooperation (New York), October 1943; and Economist (London), July 1, 1944. Belgium 61 Among the workers' productive associations also, a large proportion of the associations had Social-Democratic affiliations. Of the agricul tural associations, the most important group consisted of associations belonging to the Belgian Peasants' League (Belgische Boerenbond), a conservative and entirely Catholic organization, in the administration of which priests of the church played a predominant part. Throughout the 70 years' growth of cooperation in Be’gium, not only have these divisions persisted, but apparently not even friendly relationships have been attained among the groups. Several times the Social-Democratic associations made gestures in the direction of unity or at least joint action. Thus, at their 1937 congress, these workingclass associations adopted a resolution favoring relations with the agri cultural cooperatives for the protection of the cooperat ve movement as a whole, against threatened harmful legislation; this appears to have been without result. The Boerenbond and the central federation of the Christian-Democratic associations worked together to some extent, united by their dislike of the “ socialist" cooperatives, and creating associations to compete with the latter. The one recorded instance in which all branches acted together occurred in 1933 when an unusually bitter attack was launched against the cooperative movement. Only with difficulty was distributive cooperation able to take root in Belgium. It had to contend not only with the antagonism of the private dealers, whose opposition dated from the establishment of the very first cooperative, but also with the ignorance and inertia of the exploited workers. All branches of the cooperative movement in Belgium were inter ested in the moral well-being of their members, but concern for their political and economic emancipation appears to have been particu larly characteristic of the working-class cooperatives of the SocialDemocratic group. Not only did the latter support the trade-union movement in its fight for better conditions for the workers, but they worked incessantly for the members' cultural and social welfare. Indeed, many of the Belgian Social-Democratic associations bear names which reveal their preoccupation with social aims, as “ Forward," “ Progress," “ Social Foresight," etc. The people's houses {maisons du peuple), created as community centers and supported by the coop eratives out of their earnings, became famous throughout the world. T ypes o f Associations and Their Activities The Belgian cooperatives have taken a variety of forms, including two very uncommon types— the “ Nations" and the cooperative pharmacies. The official statistics divi e the cooperatives into the two broad •classes— agricultural and nonagricultural associations. The latter include the distributive associations, the cooperative pharmacies (to some of which the sick funds were affiliated), the supply and marketing associations, credit and housing-loan associations, as well as two types of workers' productive associations— those running cooperative work shops and the “ Nations," already mentioned. The latter (found mainly at Antwerp) were dock workers' associations, each of which tended to concentrate on longshore work for vessels of a given nation, 62 Cooperatives in Individual Countries hence the name “ Nation.” Some of these associations are reported to date back as far as the thirteenth century. The agricultural group included associations purchasing farm and home supplies, the cooperative dairies, and a group of credit associa tions of the Raiffeisen type. Between 1908 and 1922 the number of retail distributive cooperative associations decreased (table 9), owing to the amalgamation of small associations into larger ones, but the membership increased by over 50 percent and the amount of business done increased over fivefold. All other types of associations increased their membership and business but the greatest growth in business done was that of the credit associations. T a b l b 9. — Number, M em bership , and Business o f Nonagricultural Cooperatives in Belgium in Specified Years, by T ype o f Association fFor par values of currency, see Appendix table, p. 278] Type of association Num ber Mem of bers asso cia tions Num ber Amount of of Mem business asso bers cia tions 1908 Amount of business 1922 F ra n c s Number of asso ciations 1925 1929 1934 1938 F ra n c s All types............................. 945 1324,700 1959,094,825 1,483 1517,122 15,327,495,810 2,056 2,474 3,168 3,482 Consumers' distributive.. Pharmacies........................ Credit.................................. Housing-loan...................... Insurance............................ Workers' productive........ “ Nations’*.......................... Industrial productive Supply and marketing... Miscellaneous.................... 394 250,106 72,129,649 1.336.235 100 6 45 24,000 836,121,596 4,552,632 24 4,229 2,686,740 66 10,897 2,012,541 26 2,325 29 890 3.266.235 84 5,305 14, 716,359 82 6,686 12,120, 446 189 21,162 10,152, 392 464.942.000 353 386,708 6,288,326 10 671 83 33,192 4,231,861,521 31 10.403.000 4,328 61 12,897 10.874.000 12, 570, 963 8,502 39 955 36 37.991.000 252 12,227 50.934.000 464.787.000 217 17,456 411 40,186 27.844.000 386 12 129 107 54 43 37 433 292 563 377 362 360 40 15 16 157 221 203 128 127 125 61 67 72 51 53 57 42 39 43 505 655 697 350 412 454 791 1,213 1,431 1 Data relate only to associations that reported on this point. 3 Enterprises run jointly by private profit businesses; not usually considered as part of the cooperative movement. In the absence of comprehensive figures for later years, table 10, compiled from various sources, shows for the distributive, workers' roductive, and agricultural cooperatives the available data for numer of associations, membership, ‘and business. For the agricultural associations, the figures shown cover all types. The information for the distributive and workers' associations excludes some associations not affiliated to any central organizations but which were in total probably nowhere near so important in either membership or business as the groups shown. There was also a group of associations belonging to the Liberal Party, but they are described as “ negligible.” No data whatever were available for the “ Nations,” the urban credit associations, pharmacies, supply and marketing associations, or the “ miscellaneous” group. E 63 B dgm m T a b l e 10.— Number, M em bership , and Business o f Belgian Cooperatives in Specified Years [For par values of currency, see Appendix table, p. 278] Number of associa tions Members 103 54 49 19 2,692 428,260 282,425 145,835 14,500 273,245 1,160,609,175 812,747,805 347,861,370 51.257,348 996,047,000 2,814 706,005 2,207,913,523 80 43 37 23 2,625 504.568 346.568 158,000 5,742 259,659 998,203,384 728,709,299 269,494,085 50,790,033 500,682,000 ___________________________ 2,728 769,969 1,549,675,417 Consumers’ distributive cooperatives............................................ Social-Democratic_______________________________________ Christian-Democratic................................................................. Public employees (neutral)........ ............................................. Workers’ productive associations: Social-Democratic................ Agricultural associations: Catholic and other *............................ 96 42 >20 34 22 2,625 585,023 349,559 75,000 160,464 5,589 259,659 1,047,217,618 657,694,618 80,000,000 309,523,000 55,121,212 1500,000,000 2,743 850,271 1,602,338,830 Year and type or affiliation of association Amount of business tm F ra n cs Consumers’ distributive cooperatives........................................ . Social-Democratic _ ___________ _ Public employees (neutral).............................................. . Workers’ productive associations: Social-Democratic................ Agricultural associations: Catholic and other *_.......................... Total__ _ 1985 Consumers’ distributive cooperatives............................................ Social-Democratic . .................. Public employees (neutral)3..................................................... Workers’ productive associations: Social-Democratic................ Agricultural associations: Catholic and other *............................ Total__________________ 1987 Total____ _ i Estimated. * Data relate to 1929. __________________ * Data relate to 1936. * Data relate to 1934. Development o f Distributive Cooperatives To a considerable extent the history of consumers’ cooperation in Belgium is that of the Social-Democratic associations, for they con stituted two-thirds of the entire movement. The other third con sisted of associations affiliated with the Liberal and Clerical Parties and the neutral group of associations belonging to the public (civilservice) employees. The Social-Democratic associations drew their membership from the working class, and their progress was connected with that of the trade-union movement and the Social-Democratic Party. In 1912 the cooperative associations supported the general strike called by that Party, in the movement to attain general manhood suffrage, and year after year they contributed to the trade-union funds. The labor organizations, on their side, strongly supported the cooperatives. EARLY GROWTH The first legal action authorizing the formation of cooperatives was the law of Majr 18, 1873. By 1875 there were already 38 urban co operative associations. Exact figures are lacking to show the growth of membership and business from year to year. However, by 1908 the nearly 400 distributive associations had over 250,000 members and an annual business exceeding 72,000,000 francs.10 In 1900 they had formed a wholesale association, Federation of Belgian Cooperatives. 10 For par values of currency, see Appendix table, p. 278. 64 Cooperatives in Individual Countries DEVELOPMENT DURING AND AFTER WORLD W AR I At the time when the first World War broke out the consumers’ distributive movement was gaining ground every year and had taken steps toward a program of consolidation for stability. The Belgian distributive cooperatives suffered greatly during World War I. In the mass disorganization and unemployment that followed the German invasion and the consequent stoppage of in d u s t r y , the associations refunded to their members the greater part of their capital. Many associations had their premises destroyed by fire or bombardment, others were deliberately demolished or looted. The remaining associations operated as long as they could, striving to supply the people and to keep down prices. That their efforts were understood and appreciated was indicated by the fact that new members flocked to the cooperatives. One association alone recruited over 1,300 new members in the first year of the war; another gained over 5,000 new members during the war, and a third 12,000. During the last 2 years of the war most of the associations were unable to transact business because their stocks were requisitioned or destroyed by the Germans. They endeavored, however, to keep the organizations intact for post-war activity and employees were kept on the pay roll even though sales were diminishing to the vanishing point. At the end of the war Victor Serwy (one of the outstanding Belgian cooperative leaders) described the position of the consumers, coopera tives as follows: “ In our societies there are no longer any groceries or provisions, fabrics, clothing or boots— not an article of general use. Complete emptiness.” At the time he wrote this (end of 1918). neither railroads nor postal service were yet in operation and the full extent of damage was not known. The policy of amalgamation, which had been decided upon before the war, began to be carried into effect even before the Armistice, and this was hastened after 1918. As a result of this merging process the 205 small associations which had been affiliated to the Belgian Co operative Union 11 in 1912 were reduced by 1922 to 71, many of which were of district coverage. By 1926-27 the number of affiliates had fallen to 55. Early in the twenties the movement also began to consider the consolidation of the productive facilities that the wholesale and numerous retail associations had undertaken. In 1924 a central productive association, the General Cooperative Society, was formed, to take over most of the factories already started and to branch out into new fields. The production of perishable commodities, such as bakery and meat products, and the provision of personal service, such as shoe repair, was, however, left to local initiative. Throughout the 1920,s, while the number of associations was grow ing less, both membership and business continued to expand. A change, however, had been gradually taking place in the business activities. Traditionally, the workingmen’s associations in Belgium started bakeries rather than stores. Before the first World War, bread baking was still the most important line of cooperative activity of the Social-Democratic associations. Every association, however small, had its bakery. By 1930, owing to amalgamation of associa 11 Originally a department of the wholesale association, it was made an autonomous organization shortly after the end of World War I. 65 Belgium tions, there were only 65 cooperative bakeries in Belgium, and the trade in bakery goods represented only about a fourth of the coopera tive business of the Social-Democratic associations. In 1937 it was reported that the sales volume in bakery products was also exceeded by that in clothing, shoes, and beer. By June 1927, the Social-Democratic cooperatives were serving members in 1,231 of the 2,200 communes in Belgium. The 55 large associations affiliated to the Belgian Cooperative Union were running 918 branches and 338 “ maisons du peuple.’ ' The cooperative wholesale (Federation of Belgian Cooperatives) was also steadily increasing its volume of bus ness. Its own produc tive activity was still small, as was also the volume produced by the productive association (General Cooperative Society). A summary of the operations of the Social-Democratic associations affiliated to the Belgian Cooperative Union, up to the onset of the depression, is shown in table 11. T able 11.— Development o f Cooperatives Affiliated to Belgian Cooperative Union , 1912 to 1928-29 .[For par values of currency, see Appendix table, p. 278j Year Distributive associations: 1912.................................................................. 1920................................................................. 1922.................................................................. 1923.................................................................. 1924.................................................................. 1926-27............................................................ Associa tions 205 54 71 76 54 55 Mem bers 170,748 151,629 169,086 245,706 270,189 298,119 Savings de posits F ra n cs Amount of business Patronage refunds F ra n cs F rancs (i) v) v) v*/ 191,156,898 223,604,164 47,513,587 0) 0) 257,172,069 416,820,351 677,143,921 0) 0) 755,364,402 772,156,324 12,551,892 21,637.959 N et gain 1927-28.......................................................... 1928-29............................................................ Workers' productive associations: 1920 .. . _____ 1922_____________ 1924______________________ ... . 1926-27_________________________________ 1927-28______ ____ . 60 3 286,598 56 300,031 15 26 19 25 24 1,077 2,182 3,472 5,968 (l) 24,459,817 27,098,487 0) (ij 15,086,527 18,452,728 * 20,000,000 !, 522 527,430 0) 1 No data. * 40,000 nonpurchasing members were removed from rolls during the year. * Approximate. As table 11 indicates, the Belgian Cooperative Union also accepted into membership workers’ productive associations. In 1926 a variety of lines was represented in these associations; they were found in the printing and publishing, brewing, construction, and tanning indus tries, as well as in the manufacture of glass, cigars, shoes, and enameled ware. By 1938, however, it was reported that about half of them were in the printing trade. Social and W elfare Activities o f D istributive Cooperatives The accepted Rochdale practice is that the net earnings of co operative associations shall be returned to the members in proportion to their patronage of the association. Sometimes, however, the members voluntarily forego these pecuniary returns and vote to use the funds in other ways. The workingmen’s branch of the Belgian consumers’ cooperative movement has always been a conspicuous 66 Cooperatives in Individual Countries example of this, using a large part of the net cooperative earnings to provide various social benefits for the whole membership or even for the whole community. One of the outstanding associations in Belgium as regards socialwelfare activities was “ Le Vooruit” at Ghent. This association, one of the oldest in Belgium and well known to cooperators all over the world, had just completed a new social-welfare building, costing over $400,000, when the first World War broke out. The building con tained not only a supply store and several restaurants on different floors, but also a theater, a motion-picture hall, and various meeting rooms. Among the welfare activities of the association were sickness and maternity benefits and old-age pensions for members and em ployees, and a disablement fund for employees which also paid bene fits to the families of deceased employees. The social spirit of the cooperators throughout Belgium was also manifested in the so-called ‘ ‘people’s houses” {maisons du peuple 12) which were at once cultural, social, and recreational centers. Cooperators, trade-unionists, and people of the community made use of these centers. By 1930 there were 400 of these “ people’s houses.” In 1936 a chair of cooperation, endowed by the Social-Democratic associations, was established at the University of Brussels. Work oj uLa Prevoyance Sociale.” — One insurance association served the whole of the workingmen’s cooperative movement. This asso ciation, formed in 1907, took seriously its name, “ La Prevoyance Sociale” (i. e., “ social foresight” ) and its insurance work was only one small part of its varied activities. Part of its earnings were returned in patronage refunds on premiums paid by insured cooperative asso ciations and the rest was used for various social purposes. In 1925 it purchased a 29-hectare 13 property, with accommodations for 65 children, and about 30 convalescent adults. Four years later it purchased a seaside place— also for children needing special care for tuberculosis— at which 60 children were accepted at a time for a 3-month stay, free of charge. The sum of 1,600,000 francs was spent on these two homes. At these places the association maintained laboratories for preventive medicine. It also collaborated with the Red Cross in its work. In 1928 the association took part in the for mation and financing of 5 associations for the building or purchase of homes for workers. In December 1934, it purchased another property, consisting of about 35 acres of park, orchards, and woods, which it used for young people and children needing treatment. Shortly afterward it under took the construction of a 152-bed sanitarium for adult male tubercular patients. By 1937 this association was the largest insurance organization (as regards number of policyholders) in Belgium; 1 in every 11 persons in the country was insured in it. By that time it had abandoned its requirement of membership in the Social-Democratic Party and had opened its membership to all comers. This association by 1937 owned seven properties, valued at 36,000,000 francs, and operated four medical advisory centers open to members and the general public.*1 One of the large retail associations at Brussels was also known as “ Maison du Peuple.1 11 Hectare*52.471 acres. 13 67 Belgium La Pr6voyance had reinsurance contracts with central cooperative insurance organizations in Bulgaria, Hungary, and Great Britain. It had also established a life-insurance branch in France. In 1938 the association took the initiative in the establishment of the National Institute of Social History at Brussels and undertook to finance it to the extent of 250,000 francs a year. The purpose of the institute was to collect and preserve records of the social and economic history of Belgium, and establish contacts with similar organizations in other countries. The accompanying statement shows the expansion of La Pr6voyance Sociale. Up to 1933 the association wrote fire and life insurance only; in that year it added accident insurance. P re m iu m income (francs ) 1922....................................................... 1 9 2 6 ............ 1927. ....................................... 1928. .......................................... 1931 .............................................. 1932 ......... 1936........................................... 3,790,000 14,977,609 16,582,117 20,377,736 39,616,323 35,050,000 51,874,000 Structural and Other Changes Necessitated b y the D epression In spite of the depression the sales of the local associations continued to increase through 1929-30. The next 4 years, however, showed a continuous shrinkage of business, though not in the two main lines of business— bakery products and groceries. This decline in turnover reflected the unemployment and drastically reduced earning power of the members. The savings of the members which had been deposited with the associations declined by more than 40,000,000 francs from 1932 to 1933. At the same time, however, cooperative membership was increasing, possibly reflecting the workers’ necessity to stretch their money as far as possible. One of the large district associations, the Cooperative Union of the Centre, failed during this period and was taken over by a special “ management” association. A further blow was the failure of the Belgian Labor Bank in March 1934. The bank was neither cooperative nor affiliated to the labor movement but was a joint-stock enterprise formed by one local associ ation with the idea of financing workers’ productive enterprises. Its funds were mostly invested in these factories and it flourished as long as they were prosperous. When, during the depression, they closed one by one, the bank’s funds were thus frozen. The general bank crisis and a campaign against the bank by the press hastened the end. Having been organized by a cooperative association, the bank was associated in the public mind with the cooperative movement. The bank’s failure, of course, further reduced the purchasing power of the workers (largely cooperators) who, together with many cooperative associations, were its depositors. With trade-union assistance, the Belgian Cooperative Union was able to obtain a credit of 150,000,000 francs (guaranteeing the deposits of the cooperative associations at the bank) from the Government. It was apparent that drastic measures were needed if the movement was to be saved. A great many of the local associations had, as noted, been consolidated into district associations, the largest of which 68 Cooperatives in Individual Countries (at Li6ge) had over 80,000 members. These large associations, com prising only one-fifth of the total number of associations, had fourfifths of the savings deposits, nine-tenths of the share capital, and seven-eighths of the total business of the workingmen's cooperative associations. The other associations were small organizations, ranging in membership down to only 15 persons. The practices of many of these left much to be desired, and, n,s noted, even one of the large associations had had to be taken over for reorganization. In June 1934, at a special meeting of delegates convened by the Cooperative Union, a National Council of the union was established, having sections dealing with various phases of the problem (finance, wholesaling, production, administration, accounting and audit, and propaganda). With the intention of raising the efficiency of the associations, reducing overhead expense, and standardizing practices, the Council was invested with considerable powers of discipline over the local associations, having the right to summon before it the man agement of any association, to make recommendations for the improve ment of methods and procedure and, in the event of the recommenda tions being rejected by the management, to take the matter to a special meeting of the local membership concerned. In the case of member ship rejection of any of the Council's recommendations that had been arrived at unanimously, the Council was given authority to expel the local association from the Cooperative Union. Among the duties with which the National Council was charged were those of making sure that all the cooperative business went to the wholesale and the general productive society, of establishing a uniform rate of patronage refund, of merging associations where necessary, mapping out their trading areas, and introducing uniform, improved commercial and financial practice. A further centralization was effected in 1934 and 1935 when the congress decided to amalgamate the wholesale society (Federation of Belgian Cooperatives), the Belgian Cooperative Union, and the cen tral productive association under the name of the last of these (Soci6t6 G6n6rale Cooperative). The combined organization was to take over the functions of all, namely wholesaling, production, and educational work. At the same time a new association, subsidiary to the General Cooperative Society, was formed under the name, “ Coop-D6p6ts," to act as a savings bank for all the associations in the Sodal-Democratic branch of the consumers' movement; it was provided with paid-up capital to the amount of 2,000,000 francs. The insurance association, La Pr6voyance Sociale, also became a subsidiary of the General Co operative Society. Inadequate capital had always been one of the hindrances to co operative development in Belgium. (In 1920 the average share capital per member was only 25 francs.) Another was the tendency to tie up what resources there were in fixed assets— buildings, plant, etc. The enthusiasm for “ people's houses" had led in some cases to the invest ment of unduly large proportions of the associations' capital in these buildings. One of the powers given to Coop-D6p6ts was the right to prevent any association from making investments in fixed assets which Coop-D6p6ts deemed unwise. The central body was given the right of examination and audit of all associations' books and accounts. It was also made responsible for the administration of the collective liability of the cooperative movement for the Government credit. Belgium 69 Although sales fell off in 1937, the financial condition of the associ ations improved considerably and the amount of share capital was steadily increasing; the average per member had increased to 90 francs. At the same time that the movement was rearranging its internal affairs, it was also under bitter attack from the business and traders' groups. Undoubtedly, the difficult economic conditions were the motivating influence behind these attacks.14 The chief complaint was the entirely unfounded one that the cooperative associations were the recipients of special exemptions as regards taxation. The consumers' cooperatives (at that time embracing more than 2,000,000 consumers) paid all types of taxes except on their patronage refunds. The asso ciations contended, and had been upheld by the High Court of Appeal of Belgium in 1920, that these represented not profits in the same sense as profits made by the private dealers but (since the customers were members and co-owners) were, in the language of the trial court, “ only the reimbursement to the interested party of the overcharge o f price consented to at the moment of purchase." The circumstance that made it extremely difficult for the cooperative movement to ob tain public recognition of this cooperative characteristic was that there were many pseudo-cooperatives started by private business which were taking advantage of the court's ruling, to evade taxation. This campaign resulted in bringing together (for the first time of which record was found) all the branches of the consumers' coopera tive movement— the workingmen's cooperatives, the league of civilservice associations, and the Christian-Democratic associations— to counter the attack. In 1935, in what was described as “ the wind of demagogy" that was passing over the country, many legislative bills were introduced, one of which would have imposed crippling taxes upon the associations and another would have limited the membership of cooperative asso ciations to families with incomes of less than 24,000 francs ($816) a year Both of these measures were inspired by the private retail dealers, but the cooperatives, with the aid of the trade-unions, were able to defeat them. The 1936 Congress of the Social-Democratic associations directed the General Cooperative Society to study the cooperative law, with the idea of recommending changes that would prevent the incorporation of pseudo-cooperatives under its terms, and approved a campaign to enlighten the public as to the cooperatives' true position in payment of taxes. Trend o f Development o f Retail and Central Associations The operations of the Social-Democratic associations and their central organizations during the depression and through 1938 are shown in tables 12 and 13 and the statement on page 71. It should be borne in mind that the Central Cooperative Union and the Federa tion of Belgian Cooperatives (the wholesale) became departments o f the General Cooperative Society under the reorganization plan adopted in 1934. The merger of the union was effected in 1935 but several years elapsed before the wholesale association's business was finally taken over. MThe 1930 census showed 1 retail enterprise for every 3 6 persons and in some localities the average was aa high as 1 in every 26. Altogether there were 80,000 grocery stores—or 1 for every 100 persons. In the 6 years, 1932-37, 30*000retail traders went out of business, but just as many more were formed in spite of the depres sion. Many, if not most, were operating on a shoestring and it was mainly from them that the opposi tion to cooperatives arose. 70 Cooperatives in Individual Countries Table 12 covers the operations of the local associations (distributive and productive) affiliated with the Cooperative Union. T a b l e 12.— Operations o f Cooperatives Affiliated to Belgian Cooperative Union9 1 9 2 9 -3 0 to 1 9 3 7 -3 8 [For par values of currency, see Appendix table, p. 278j Asso cia Members tions Year Distributive associa tions: 1929-30........................ 1930-31........................ 1931-32........................ 1932-33........................ 1933-34........................ 1934-35........................ 1936-37............... . 1937-38........................ Workers’ p r o d u c tiv e associations: 1929-30 _____________ 1 9 3 1 - 3 2 _____________ 1932-33______________ 1933-34______ 1______ 1934-35______________ 1930-37 _____ 1937-33 _____ 54 54 354 51 43 '43 42 40 282,425 288,276 298,779 306,685 290,866 346,568 349,559 «305,197 19 19 22 20 23 22 22 (i) (i) 3,750 3,275 5,742 5,589 5,900 Savings deposits Share capital - F rancs Fra n cs C) 0) 0 (0 589,400,000 548,528,748 295,402,551 197,106,243 0) 0) (0 22,987,261 23,423,187 28,423,285 30,874,110 31,094,134 (i) (i) 11,036,571 9,813,449 10,004,504 9,905,675 9,222,910 Amount of business Patronage refunds F ra n c s F ra n c s 812,747,805 *31,192,593 723,000,000 28,000,000 631,958,267 26,000,000 598,550,273 25,104,241 545,130,529 23,628,969 728,709,299 26,747,727 657,694,618 21,592,539 663,073,337 23,020,727 51,257,348 41,000,000 43,934,583 39,127,654 50,790,033 55,121,212 53. 722,352 Allocated to social welfare F ra n c s 0) 14,600.000 10,998,065 10,829,891 10,461,076 17,526,505 11,852,450 10,788,091 N et earnings (i) 0) 786,026 276,707 482,506 1,153,620 1,068,515 iN o data. 2Net earnings. * 1930-31. <1933-34. * About 46,000 nonpurchasing members were struck from roster in this year. As table 12 indicates, notwithstanding the troubles encountered by the cooperatives, sizable sums were returned in patronage refunds and spent for social purposes, every year. During the depression period, 1929-30 through 1933-34, a total of nearly 134,000,000 francs was paid out in returns on patronage and nearly 47,000,000 francs was allocated for social-welfare activities. The trend of business of the wholesale is shown in table 13. T a b l e 13.— Business o f Cooperative Belgian Wholesale (Federation des Cooperatives Beiges), 19 01 -3 6 [For par values of currency, see Appendix table, p. 278J Amount of business Year ion 1908 ioia 1919 1090 ______________ _____________________ — , ____________ ........ .................................. , ___________ 1091 1099 1093 109d 109R ________ ___ _______ ...... _____________ F ra n c s 769,360 % 995,617 11,245,682 15,869,276 55,510,869 65,405,071 72,403,234 100,380,818 124,343,476 141,913,153 Year 1926_________________________ 1927_________________________ 1928_________________________ 1929_________________________ 1930_________________________ 1931_________________________ 1932_________________________ 1933_________________________ 19361 __________________________ Amount of business F ra n c s 185,896,397 205,982,233 220,537,533 231,360,649 222,08a 488 190,175,539 183,000,000 186,655,531 146,800,000 <Last year of independent operation. As already noted, with the exception of certain perishable goods, the manufacture of which was retamed by the local associations, the productive activity was more and more centralized in the General 71 Belgium Cooperative Society. By 1927 it had 16 factories. By the time of the general reorganization of 1935, combining wholesale, productive, financial, and educational functions in the General Cooperative Society, it was producing a fairly large variety of articles (see table 8, p. 28). The association found, however, that the volume of sales of some of these items was not sufficient for profitable operation. In 1937, there fore, several of the plants which had been operating at a loss were closed down, including the manufacture of soap (1 plant only), mineral water, and hosiery. Exact figures regarding the business of the General Cooperative Society are very scanty. Those available are shown in the accompany ing statement. Through 1936 the figures shown represent sales of its own products. From 1937 onward the data include the wholesale business taken over from the Federation of Belgian Cooperatives. B u siness (francs ) 192619271929193019311937 1938 1940___ 27. 28. 30. 31. 32. _________ _________ 21, 27, 36, 33, 27, 1 168, 2 164, 2 138, 175, 718, 840, 760, 000, 962, 156, 737, 449 846 814 842 000 034 000 000 1Includes wholesale business: goods produced totaled 27,000,000 francs. * Includes wholesale business. Consumers9 Cooperatives Just P rior to Outbreak o f W a r Notwithstanding various political crises, the Belgian cooperatives in 1938 were able to maintain their position, registering increases in business, earnings, and share capital. The 40 associations in the Social-Democratic group were serving cooperators in 1,247 of the 2,671 communes in Belgium. They were operating 1,129 stores, 60 bakeries, and 375 “ maisons du peuple.” Their sales in 1938 amounted to 663,073,337 francs, distributed as follows: F ra n cs Groceries and provisions____________________________ 249, 054, 649 Bakery products---------- ------------------------------------------- 176, 305, 035 Clothing-____________________________________ _____ 59,847,667 “ Maisons du peuple” ------------------ --------- ------------------ 22, 369,138 Theaters and motion pictures_______________________ 10, 752, 505 Furniture, household supplies, meat, coal, e tc_______ 144, 744, 343 The business of the General Cooperative Society fell off slightly from 1937 to 1938. Among the other national associations affil ated to the General Cooperative Society were the National Association for Cooperative Management, whicn takes over and operates local associations that get into financial difficulties, until they are on their feet again; the Centrale de Cinema, operating the motion-picture sections of the maisons du peuple; the Maisons des Mutualistes, the central organi zation of the sick funds, with nearly 100 drugstores; and the Central Organization for the Sale of Radio Apparatus. The civil-service employees7 cooperatives, dating from about 1880 and federated into La Societe Cooperative Federate de Belgique 72 Cooperatives in Individual Countries (formed in 1890), had a combined membership of about 160,000 and an annual business of over 300,000,000 francs.16 The business done by their wholesale (formed early in the 1920’s after several unsuccess ful attempts) amounted to about 38,000,000 francs. Very little printed material is available regarding the Catholic or ChristianDemocratic associations, but the latter are reported to have had a membership of about 75,000 and annual sales of some 80,000,000 francs. The Christian-Democratic associations had a central whole sale organization, “ Bien fitre,” supplying groceries and bakery goods. The Liberal group was reported to be very small. Altogether, it appears that the Belgian consumers’ distributive associations, before the outbreak of the present war, represented a total of over 580,000 cooperators. Counting their families, the asso ciations were serving about a fourth of the total population. The combined sales (well over a billion francs yearly) represented about 10 percent of the retail trade of Belgium. Cooperatives and the W ar War broke out in September 1939 and by the middle of the month mobilization of troops had begun in Belgium. Some of the coopera tive employees were among the first to be called up, and the General Cooperative Society immediately urged on all associations the forma tion of a fund from which it recommended family allowances to be paid to their families, amounting to 5 francs a day for the wife and 2.50 francs for each child; this was to be in addition to the State grant. Belgium was invaded on May 10, 1940, since which time details regarding the cooperative movement are lacking. It is known that the business of the General Cooperative Society in 1940 decl ned to 138,737,000 francs, a drop of 15.5 percent as compared with 1938. Local associations continued to operate and, according to the Coopera tive News (Manchester, England) of September 20, 1944, the allied army of liberation found the consumers’ cooperative movement practically intact and still under cooperative management. Various new organizations had been created by the Germans to control agricul ture and the collection of the farm produce. How far these may have superseded and eliminated the agricultural cooperatives is not known.14*1 8 18 Whereas the Social-Democratic associations served all comers, the civil-service associations dealt only with members. 18 Sources .—1 The report on Belgium is based upon data from the following publications: Annuaire statis* tique de la Belgique (Belgium, Office central de Statistique, Brussels), 1920,1922, 1926,1931,1932,1935, and 1937; La Cooperation Soeialiste beige, 1924 (Office coopSratif beige, Brussels); La Cooperation Socialiste beige, 1926-27—Resultats du recensement op6r6 par les Soins de L’ Office cooperatif beige (Brussels); Bulletin Mensuel du Parti Ouvrier beige (Brussels), July 7,1922; La Cooperation beige (Brussels), issues of October 15,1921, July 1,1922, February 1, July 7, and August 1,1923, December 15,1924, June 15,1925, and June 15, 1926; International Cooperative Bulletin (International Cooperative Alliance, London), issues of January 1911, September 1912, April 1913, August 1914, March and August 1915, February 1916, August, October, and December 1918, January 1919, September and October 1920, and November 1923; Review of International Cooperation (International Cooperative Alliance, London), issues of January and August 1924, Feb* ruary and May 1928, February and October 1929, March and December 1931, October and December 1933, June, July, and December 1934, January and July 1935, November and December 1936, June, October, and November 1937, January, April, and August 1938, February, April, and November 1939, and January 1940; People’s Yearbooks (English Cooperative Wholesale Society, Manchester), 1929,1930,1933,1934,1935,1936, 1938,1940,1941; Cooperative Information (International Labor Office), No. 5,1935, No. 13, 1937, and No. 1, 1940; International Directory of Cooperative Organizations (International Labor Office), 1939, and Report from United States consul at Brussels, June 15, 1934. France 73 Cooperative Movement in France From its beginning the French cooperative movement was definitely a working-class movement and reflected the struggles and ideological divisions among the workers and the trade-unions. The social thinkers of the times also put their mark upon the movement and helped to steer it in one direction or another. The Socialist and other Parties also tried to capture the movement and direct it for their own ends. In 1912 a fusionist movement brought these groups to gether, resulting in the formation of a national federation— Federation Nationale des Cooperatives de Consommation—which adopted a policy of political and religious neutrality from which it never devi ated, although it many times declared its position for or against legislative and other developments affecting the cooperative move ment. Amalgamation of small, weak associations, begun before the first World War and continued for a decade thereafter, strengthened the movement decidedly.. The regional or “ development” associa tions thus formed were by 1928 doing 47 percent of all the business of Federation affiliates; by 1936 their proportion had risen to 69 percent. In 1934 the consumers7 cooperatives were doing about 6 percent of the retail trade in perishable groceries in France. Although urban in origin, the consumers7 cooperative movement had attracted (largely through the regional associations) an increasingly large number of members in rural areas. T ypes o f Associations Most of the usual types of cooperatives were found in France. That country, birthplace of workers7 productives, was also one of the very few countries in which these associations were important. Some of the workers7 productives, as for instance the association of the workers in precision instruments in Paris, had attained real import ance. Many of the buildings for the Paris Exhibition in 1936 were erected by workers7 productive associations. France also had the distinction of having a law embodying cooperative standards for such associations, to prevent the tendency shown by this type of associa tion in France and elsewhere to become closed corporations hiring (and profiting by) the labor of nonmember workers. The consumers7 cooperative movement, as exemplified by the affiliates of the National Federation, were for the most part associa tions dealing in groceries, though some also had clothing and general merchandise departments. Some of the regional associations also had restaurants, meat markets, and even pharmacies. On the other hand, associations dealing only in bread were common, and there were nearly a thousand the only function of which was to run a bakery. A few breweries also were operated. Insurance in the consumers7 co operative branch was furnished by a single association. Several dis tributive associations operated vacation homes for children, at the seaside and in the country, and one operated vacation hotels for adults in resort localities. Among the workers7 productive associations preventive care for children, in a pretuberculosis sanitarium, was furnished by a special association. Family allowances were paid by 588544*— 44-----6 74 Cooperatives in Individual Countries some distributive and productive cooperatives in France long before the Government introduced its general compulsory system in 1934. Credit cooperatives were little developed in France among the urban groups that constituted the greatest part of the distributive cooperatives. The urban “ people’s banks” —less than 100 in num ber—provided credit mainly for tradesmen and small craftsmen. Such credit facilities as were available in the consumers’ cooperative movement were those provided through the savings departments of the large regional associations and the Cooperative Bank of France. In both cases, however, from the viewpoint of the individual coopera tor, these were agencies of thrift rather than credit, as the funds were used mainly for the development of cooperative enterprises and facili ties rather than in loans to individuals. The agricultural credit associations were only partially cooperative and depended for their initiation and funds largely upon Government credit and advances. Among the agricultural cooperatives there was considerable variety. There were not only thousands of mutual-insurance associations, but also purchasing associations, electricity associations, marketing organ izations, and agricultural processing associations of many kinds. Among the last group were dairies, distilleries, wine-making associa tions, cider plants, sugar refineries, starch factories, associations making olive oil, flour mills, and bakeries. The agricultural cooperative movement was federated into the Fdddration Nationale de la Mutuality et de la Cooperation Agricole, formed in 1910. It had four sections dealing, respectively, with pro duction and marketing, insurance and mutual aid, credit, and other agricultural associations, and had subsidiary commercial federations in these various fields. In 1937, the latest year for which data for all types of associations are available, the number and membership were as shown below: Associations M em bers All types__________________________________ 90, 433 Distributive________________________ ______ Housing- ......................................................... Workers’ productives______________________ Credit, urban_____________________________ Credit, rural______________________________ Agricultural: Mutual insurance_____________________ Marketing, purchasing, and other........ - 1 1, 200 437 648 97 10, 550 2, 671, 000 2 33, 000 2 31, 227 65,807 586, 372 50, 461 27, 040 2, 293, 838 2, 829, 361 *Data relate only to associations affiliated with central federation. Relations with the Government Credit facilities.— Subsidies or credits to various types of small enterprises appear to have been a feature of French Governments of all shades of liberalism or conservatism. Large sums were earmarked each year for the use of small businessmen in all lines of industry. Especially before 1900, the workers’ productive associations received certain subsidies. Later the Government funds appropriated for them were in the form of long-term loans. These associations proved to be good risks and it was reported that losses on loans to them were negligible. The Government was also one of the best France 75 customers of these associations, and in some cases (as in associations contracting for public works) the only one. In general, where practically identical bids were made by a private contractor and a workers' productive association, the contract would be awarded to the cooperative. From the beginning, agricultural cooperatives received outright subsidies as well as loans. The funds loaned by their credit associa tions consisted to a great extent of Government advances. The consumers' cooperatives received much less help than the above types. During and just after the first World War, funds were appro priated to enable them to undertake certain tasks desired done by the Government. It was reported in 1920 that the Government had granted 10,000,000 francs17 to be used for the reconstruction of cooperatives in devastated areas and 2,000,000 francs for the co operative movement in general. Only a fractional part of the sums so granted failed to be repaid, so that in the long run they were loans only, not subsidies. Thereafter, Government credit was nearly always available to consumers' cooperatives, though the total was small in comparison to credit granted in other directions. The consumers' cooperative movement, the motto of which is “ self-help," was divided as to the degree to which such assistance was helpful and the point at which it began to sap self-reliance. The general manager of the consumers' cooperative wholesale pointed out that the consumers' cooperatives had fully equaled the record of the agricultural cooperatives as regards improvement of quality, stand ardization of product, etc., “ without either credits or fiscal privileges from public authorities." He added that “ the agricultural co operative movement in France has, perhaps, asked too much from the State, and received too much from it, and not enough from the farmers. The restrictive character of agricultural cooperative legislation has been the price of the encouragement the [agricultural] movement has received from the Government. It would have done much better with less money and more independence.' Other governmental action in aid oj cooperatives.— The interest of the various administrations was also manifested in other than finan cial ways. In 1918 the Government created by decree a Superior Council of Cooperation, charged with studying and advising the Ministry of Labor and Social Welfare on all matters relating to the development of the cooperative movement. It consisted of the Minister as chairman, and representatives of the French Parliament and other Government agencies, as well as of the various types of cooperatives. This council was continued by all succeeding Govern ments until the invasion in 1940. In September 1920 a chair of cooperation was established in the College of France. Charles Gide, noted cooperative leader, was ap pointed to this place and occupied it until 1930, when he retired. E a rly Development o f Consumers’ Cooperative M ovem ent The revolutionary year of 1848 marked the real beginning of the cooperative movement in France, although there had been a few scattered attempts prior to that time. In the early periods of the 17 For par values of currency, see Appendix table, p. 278. 76 Cooperatives in Individual Countries movement workers' productive associations, whose purpose was to free the workers from employer control by making them masters of' their own businesses, were the predominant form. Gradually they were outdistanced by the consumers' cooperatives. NATIONAL FEDERATION As early as 1895 a schism had occurred. Certain Socialist-influenced associations formed their own federation, and 5 years later withdrew from the French Cooperative Union that had been formed in 1885. In 1912 the two factions—Socialist and conservative— amalgamated again and formed the Federation Nationale des Cooperatives de Consommation,18 which (until the invasion of France in 1940) continued to be the keystone and central educational body of the French consumers' cooperative movement. The “ Pact of Unity" signed at that time termed the Federation “ an organization for the emancipation of the workers" and adopted as one of the essential principles of its member associations that they should “ set aside funds for social purposes and for the carrying out of the cooperative program." The Federation proclaimed its independence of any political or religious party and thereafter became in fact a federation for the con sumers' cooperatives throughout France. The members of the Feder ation consisted of 17 regional federations, composed in turn of the local associations in their districts. Its development was interrupted to some extent by the first World War, but by 1928 its affiliates numbered 1,450 out of a total of 3,513; and their members accounted for 1% million families and an annual business of over 2% billion francs. The Federation's interests were many and varied. Through its relations with the Parliamentary “ Cooperative Group" (composed of Deputies in Parliament who were interested in the cooperative movement), it kept in touch with legislative developments and voiced the views of the cooperators. One of its achievements was a general reduction in food taxes. Its newspaper and periodicals were circu lated throughout France. In 1913 the National Federation opened a school of cooperation (later changed to school of apprenticeship) for the training of cooper ative managers. This institution had to suspend operations during the war but began again in January 1919. The Federation was also responsible for the introduction in the educational institutions, at all levels, of courses in cooperation. Its technical office gave advice to cooperatives on many questions. One of the sections of this office concerned itself with problems of social hygiene, food preparation and consumption, and infant hy giene. By 1919 the section had established an office in Paris from which it was supplying local cooperative secretaries with data on all of these subjects. W orld W ar and P ost-W a r Development The consumers' cooperative movement grew considerably during the first World War. in the struggle to distribute provisions to the « The two wholesales connected with these federations amalgamated at the same time. France 77 people, the Government of France, the city of Paris, and other com munities made use of the facilities of the cooperatives. In Paris a special cooperative organization, the Union of Parisian Cooperative Societies, was formed. It sold coal, controlled the sale of milk and its byproducts, and distributed potatoes to persons in receipt of charitable aid of various kinds. Later, at the requestof theMinistry of Munitions, it undertook the operation of restaurants for war workers. At the end of 1916 it was also operating in Paris 26 stores selling margarine, veal, and certain frozen meats, and 15 such stores in the suburban towns around the city. All of these activities did much to publicize the cooperative move ment, so that at the end of the war Charles Gide could say with truth: “ There is now hardly a Frenchman who has not had the opportunity of becoming acquainted with cooperation, and who does not cherish grateful remembrances of its activities.” Shortly after the signing of the Armistice the cooperative movement of Alsace-Lorraine petitioned for membership and became a part of the French cooperative movement. The latter was thereby augmented by 22 associations with 63,800 members and a yearly business of about 34% million francs. By the end of 1919 there were in operation in France some 4,000 consumers’ cooperative associations, not counting over 1,000 (in invaded districts) that had not yet been reestablished. Notable progress had been made toward unification and concentration of the movement, as well as toward improved efficiency. A special type of cooperative was active during this post-war period, namely associations for the reconstruction of devastated areas. The first such association was organized in 1919. Four years later there were 2,262 reconstruction cooperatives with a membership of 162,000. It was estimated that these associations handled about 27 percent of all the repair work and 58 percent of all the construction work carried out in the devastated areas. In some regions their proportions ranged as high as 76 percent After a period of inflation in the early and middle twenties the French franc was stabilized. One of the first effects was relatively widespread unemployment, but within a year industry had been able to absorb practically all these unemployed. The cooperative movement shared in the upsurge of economic activity, and during the 2-year period from 1925 to 1927 cooperative business increased by more than 50 percent. The national cooperative congress of 1913 had adopted a resolution favoring the concentration of cooperative forces into regional associa tions which would undertake to extend the cooperative movement into new areas through the opening of branch stores and which would also absorb existing associations wishing to become part of an organization larger and more stable than themselves. By 1918 the movement toward amalgamation was well under way and several “ development associations” (as they were called) had been established, absorbing all the smaller associations within an entire district or even Department. The Union of Parisian Cooperative Societies, which as noted, had evolved to meet a war emergency, changed its name to Cooperative Union of Paris, absorbed the other local associations, and by 1919 had become a “ development society” for the whole metropolitan district. In its network by 1920 were 300 branches—grocery stores, meat markets, restaurants, cafes, holiday homes, and a pharmacy. Its 78 Cooperatives in Individual Countries membership of 55,000 and their families accounted for between 5 and 6 percent of the population of Paris. At the end of 1924 there were 46 regional associations of this type, with a combined membership of 565,000, some 2,600 stores, and an annual business of about 600,000,000 francs. These associations accounted for about a fourth of the combined turnover of the coopera tives. The largest of the development societies, the Union of Coopera tors of Lorraine, at Nancy, with a membership of 157,500, in 1937 operated 801 stores and had a business amounting to 347,659,000 francs. The Paris association did a business of 196,165,000 francs in that year. The development of the distributive cooperatives, of those affiliated to the National Federation, and of the regional associations is shown in table 14. T a b l e 14.— Operations of Distributive Cooperatives in France, 1 9 1 3 -3 8 !For par values of currency, see Appendix table, p. 2781 Total associations All associations affiliated to National Federation Regional (“ development” ) associations Yea: Num Members ber Business F ra n cs 1913___ 1918.... 1922___ 1928___ Num Members ber Business F ra n cs 3,261 865,022 317,572,890 894 254,251 108,001,827 23,140 1,313,427 636.699,319 21,944 742,924 433,830,200 4,300 2,329,869 1,747, 223,293 1,937 1.338. 708 1,116,670,256 3.513 2. 285,221 3, 552,883,386 l. 459 1,444,044 2.373, 549,431 1930___ 3,296 2,288.838 3,831,186,712 0) 0) C1) 1,120 1,659,956 3,800,966,363 1933___ 2,908 2.491.000 1936___ <2,875 2.671.000 0) 0) 0) *1,000 2,500,000 3,500,000,000 1938___ 0) 0) 1 i No data. ’ As of July 1919. Data relate to 1934. Num ber Members Num ber of stores Business F ra n c s (") 47 52 0) (0 (0 504,559 2,317 423,980,792 677.374 1.181 l, 107.359,937 51 1,248,560,357 720,106 0) 40 *1,033,051 34,937 31,579,000,000 39 1,096,277 5,077 1.615.000. 000 38 l, 147,993 5,030 2.220.000. 000 < As of Jan. 1,1935. •Approximate. W elfare W ork Concern for the welfare of the children has been a continuing char acteristic of the consumers’ cooperative movement and, as noted, cooperative associations were among the first to adopt the familyallowance system. During the first World War period, refuges for orphan children were established. The early efforts were scattered and were .generally carried on by individual associations. In 1922 coordination was effected in the Paris area through the formation of a special associa tion, called “ L ’Enfance Cooperative.” Its special function was the development of vacation colonies, homes, or camps. In 1927 the association widened its membership to accept all National Federa tion affiliates throughout France. Its first activity was the opening of a sanitarium for the treatment of children threatened with tuberculosis. Then followed a series of vacation camps. By the end of 1932 it was operating 4 summer camps as well as the year-round sanitarium. Altogether, the camps had accommodations for 1,050 children and the sanitarium for 100. The costs of operating these camps were met from a bond issue sub scribed by the cooperative associations and their members, by sub France 79 scriptions of affiliated associations, and by fees paid by the children's parents (if they were able to pay). The accommodations have also oeen used in recent years to shelter Spanish refugee children and children evacuated from other areas of political and military conflict. In 1938 the association had in membership 62 cooperative associations. L'Enfance Cooperative and its sanitarium were approved as public utilities by the Ministry of Public Health and their services were increasingly utilized by the public health authorities, insurance com panies, and others. Another specialized association, H6tels Co-op, ran several hotels for adults at the seashore and in the country. In spite of the de pression they were reported in 1933 to be in a “ satisfactory" condition, with a promising future. No later information is available for them. At least three of the development associations carried on certain welfare activities for the members or their children. The Union of the Somme spent about 600,000 francs annually for the upkeep of its holiday home which provided free vacations for some 1,600 young people each year. Its estate of 50 hectares, with accommodations for 500 children at a time, cost the association 4,000,000 francs for its purchase and equipment. The Cooperative Union of Paris operated a medical, surgical, and dental clinic, a mutual-benefit fund paying sickness, death, and maternity benefits to members in proportion to purchases at the association's stores, and five vacation homes for members. The regional association at Limoges joined with the municipal authorities in turning a prison just outside the city into a holiday home with facilities for over 300 children. The association later acquired a manor house which it used as a summer home but was planning to convert into a sanitarium for preventive care against tuberculosis. These three associations each year enabled from 6,000 to 7,000 children to spend their vacation under ideal conditions. The consumers' cooperatives also established a National Committee of Leisure to coordinate and promote the recreational and social welfare work in the cooperative movement. French Cooperative Wholesale Society An early attempt at cooperative wholesaling, in 1886, failed. The Cooperative Wholesale Society (Magasin de Oros, “ M. D. G ."), created in 1906, was moderately successful almost from the first. During its first decade, its business increased steadily year by year, with the exception of 1914-15 when war conditions caused a 34percent decrease. For the next few years its expansion was rapid. By the end of 1919 it had established its own banking department through which the resources of cooperators were channeled into cooperative develop ment, and it was operating three shoe factories. Its main business was in groceries but it had a substantial trade in wines also. In 1924, in the pinch of the post-war depression, some of the large associations affiliated with the wholesale entered into a purchasing contract with it. They bound themselves thereafter to make an their purchases through the wholesale. This had the advantage, especially in regard to the wholesale's productive activities, of ena bling the M. D. G. to plan for a fairly known market. Several years 80 Cooperatives in Individual Countries later it began the retailing of the products of its shoe factories, and by 1934 had 33 retail outlets. It also gradually expanded its production until it operated 11 plants manufacturing chocolate, butter, soap, salt, canned goods, and clothing. In 1930 the trade-mark “ Co-op” was adopted and registered. Its use was restricted to goods manu factured by the wholesale or those whose manufacture it controlled. The shoe department proved to be one of the wholesale’s less uccessful ventures. It was the first to feel the effects of the depression beginning in 1929, and during the next few years considerable losses in the retail outlets were incurred. By 1936 the shoe factories’ financial position had improved and they were again operating “ in the black,” but the retail outlets were still losing money. The wholesale joined with the agricultural associations in the forma tion of a cooperative for the marketing of farm produce. It also was part owner in several private enterprises It owned about a fourth of the stock of a company producing fats and oils used in the manu facture of soap and other industrial products, and a controlling interest in a wine company, a salt works, and a company engaged in the processing of ground nuts. The character of the M. D. G. had changed gradually over the years. At first a wholesale organization, with branch warehouses in various parts of France, after the growth of the large development associations it turned these warehouses over to their management. Thereafter, its functions were mainly those of joint purchasing agent of the member associations, exporter, importer, and manufacturer. The society had built up a substantial import and export business with cooperatives in other countries (Russia, Switzerland, Belgium, Great Britain, Italy, Poland, and Czechoslovakia), but the tariff barriers and increasing restrictions on international trade during the thirties decreased this business considerably. The trend of development of the wholesale is shown in table 15. T able 15.— Operations oj French Cooperative Wholesale Society, 1 9 0 6 -7 to 1942 [For par values of currency, see Appendix table, p. 278] Year 1906-4)7_________________________ 1913-14.............................................. 1916................................. . ................ 1920................................................... 1923................................................... 1926................................................... 1929................................................. 1932_________________________ 1935.................................................... 1936.................................................... 1937.................................................... 1938.................................................... 1939.................................................... 1941.................................................... 1942.................................................... iN o data. 8Data are for 1919-20. Number of member associa tions Amount o. business F ra n c* 141 425 428 1,591 1.664 1,480 1,425 1,877.181 13,720,489 19.906.028 165,930,376 268,800, 543 457,071,448 711,679.961 1,238 1,330 1,235 0) 840 (9 891 827,000,000 761,597,181 863,104,260 1,066,021,394 1, 209,466,132 1,276,899,000 1,004,284,000 1,234,284,000 Share capital Net earnings Value of own production F ra n c. 47,025 119,625 131,650 3,889,825 9,315, 576 10. 701.450 0) 0) 15,852,075 17,872,075 23,063,375 23,680,000 24,147,900 0) 28,045,700 F ra n c s (i) 43,415 <9 (9 1,030,000 1,621,244 (9 0) (9 4,835,298 7,702,453 8,195,654 (9 (9 7,959, 729 F ra n c s 926,716 1,417,476 14,085,177 22,140.185 23,591,845 38,087.229 50,390,293 48,232,905 54, 287,610 62,441,343 65,582,590 81,200,085 (9 54,061,977 France 81 Cooperatives D uring the P re-W a r Decade The French consumers’ cooperative movement, being primarily a working-class movement, was peculiarly sensitive to declines in employment with the resultant waning purchasing power. It there fore was among the first to feel the results of the spreading business stagnation in the thirties, although it held its own remarkably well during the first few years of the depression. Its troubles were soon accentuated by other difficulties. As the depression deepened, the movement was the object of increasingattacks from the private merchants. Although this was no new development (intermittent attacks had been leveled against it from the same source since as early as 1893), the current attack was so bitter that the International Cooperative Alliance termed it “ a campaign of calumny.” Sweeping charges of complete tax exemption of cooperatives were made by the merchants. To these the coopera tives pointed out that they paid all the taxes levied upon business, with the following exceptions: (1) Associations which dealt only with members did not pay the profits tax, for they had no profits in the accepted sense; (2) no tax was paid on patronage refunds; and (3) no tax was paid on earnings spent for general welfare work. As a result of the influence of the merchants, the French Parliament in 1933 levied a special tax on turnover and canceled the previous exemption on social-welfare expenditures. Another complicating factor for the cooperatives was the difficulty in which the Cooperative Bank found itself. This bank, which had begun as a department of the wholesale, became an independent organization in 1922. During the next 10 years the number of its accounts rose from 37,000 to over 99,000 and its volume of business from 1,480,000,000 to 27,704,000,000 francs. During the last 2 years of this period the development was especially rapid, owing partly to the closing down of the savings departments of several large associations whose members then transferred their accounts to the central bank. It suddenly suspended operations in 1933. Examination indicated that its loans to cooperatives were sound, but its managing director had without authorization made loans outside the movement and even to private business. A large proportion of these latter trans actions proved to be bad and involved the bank in such difficulties that it was forced to close. The cooperative associations of the Na tional Federation, however, guaranteed all the debts of the bank and undertook to pay off all its obligations within a period of 15 years. In 1935 a genera] reorganization, designed to strengthen and unify cooperative effort, was voted by the congress of the National Federa tion. A general auditing union, the General Society of Control of French Cooperative Societies, was formed. It was given authority to supervise the financial and commercial activities of all the develop ment associations, those having purchasing contracts with the whole sale, and those having savings departments. A national committee of 50, appointed by the regional federations in proportion to their importance, was created. It was to administer the Control Asso ciation. An administrative council of 18 members was appointed to coordinate the activities of the federation and wholesale, superseding the former administrative council. 82 Cooperatives in Individual Countries It was provided that thereafter the wholesale would accept into membership only cooperatives affiliated with the National Federa tion. Federation members that were not members of the wholesale must join it before the end of 1939. The functions of the defunct Cooperative Bank were taken over by a federal association that had been formed in 1932 by the large associations under the name, National Society for Development and Solidarity. Its activities were mainly those of auditing, though it had some credit functions. It was selected to carry out the liquidation of the bank, and in July 1934 changed its title to Central Society of the French Cooperative Societies. In the reorganization of 1935 its bylaws were changed and it assumed some of the credit activities of the former bank, though under strict limitations. Its operations were to be confined to cooperative associations only. The year 1936 was marked by sudden rises in prices, sit-down strikes, and other evidences of unrest, and devaluation of the currency. Also the private merchants were still active in seeking Government protection and action. These merchants, who accounted for about 65 percent of the total private trade of France even then, were trying to obtain the passage of a law forbidding the opening of new chain or “ multiple” stores—a measure which would have prevented the further expansion of cooperative associations operating branches. This measure was opposed by the cooperative movement and failed to pass. It was observed at the time that the large cooperative associations were “ better equipped technically than the most advanced types of private store, and the cooperative movement as an instrument of economic progress * * * greatly embarrasses the old-fashioned forms of private trade.” During this period collaboration between the consumers’ coopera tives and the agricultural cooperative movement was developing in a most encouraging manner and several joint associations were formed under the terms of a special law authorizing such associations. At the cooperative congress of 1936 the proposal was made that the National Federation should become a member of the Popular Front. This was overwhelmingly rejected by the congress, which reaffirmed its independence of an political parties. The year 1937, also, was characterized by a feeling of insecurity which prevented the country’ s sharing in the general recovery of world trade in that year. Nevertheless the consumers’ cooperative movement not only maintained its position but even achieved some advance. The cooperators were finally successful in obtaining the passage of a law which they had been advocating for many years, limiting the use of the word “ cooperative” to organizations which met specified cooperative standards. After the franc was devalued to about three-fourths of its former rate, industry recovered somewhat in 1938, although hindered by the unfavorable world situation. The cooperative wholesale reduced its prices to the lowest level possible, thereby reducing its net earnings. Notwithstanding this action it was able from the surplus of that year to pay 4,841,912 francs toward the liquidation of the Cooperative Bank’s liabilities, and to return 251,455 francs in patronage refunds to its member associations. In 1938 the Government issued a decree establishing the Central Cooperative Credit Bank and transferring to it from the Ministry France 83 of Labor the duty of administering the State funds available for loans to consumers7cooperatives and workers7productive associations. The bank was constituted as a federation of cooperative associations, and given the privilege of making loans for periods as long as 15 years, as well as short-term loans (as formerly). By a later decree the informal purchasing groups that had sprung up among public employees, as well as among workers in factories and other industrial establishments, especially after 1934, were required (in order to continue operation) to become consumers7 cooperative associations. The consumers7 cooperatives immediately approached these groups with a view of inducing them to join existing cooperatives or, failing that, of assisting them in establishing new associations. A Government committee, composed of representatives of co operatives and of the various Ministries, was established in the same year to study the cooperative movement and devise means of establishing a permanent link among the credit, consumers7, agri cultural, and workers7 productive associations. The 17 regional federations, which were the members of the National Federation and which in the reorganization of 1935 had been reduced to 13, were joined in 1939 by a new national group— “ F6d6cop6rail,” federation of the cooperative associations run by railway workers. In 1937 this organization had in membership 150 associations with 100,000 members. Effect o f the W ar on Cooperatives During the years 1935-38 the consumers7 cooperative movement gradually attamed recognition in the system of planned economy that was slowly being put into force in France. The cooperative movement was recognized, under the Meat Marketing Act, as the representative of consumers, and was also given representation on a number of public bodies. Beginning in 1939 the cooperatives began to suffer increasingly from the wartime economic regulations and difficulty of obtaining supplies because of the scarcity of certain essential commodities. Nevertheless, the movement was holding its own and even increasing its productive output. Even as late as the beginning of May 1940, the managing director of the Cooperative Wholesale Society told the annual meeting of delegates that the wholesaled business since the beginning of the year had been increasing at the rate of about 20 percent over 1939, partly as a result of rising prices and partly as a result of intensive cooperative efforts. He stated that he “ faced the future with great confidence77 for the development of the cooperative movement. Less than a month later, the German armies had cut off from the rest of the country the whole northern (industrial) section of France, which contained all of the large development associations and ninetenths of the entire cooperative movement. Some associations had their premises destroyed by bombardment. The wholesale associa tion lost its footwear factories at Amiens and Lillers. A policy of “ regroupment, unification, and purification of the co operative movement77 was immediately started by the Germans. The National Federation and tbe Cooperative Wholesale Society were merged into one organization, all associations in a single town or city 84 Cooperatives in Individual Countries were required to consolidate, and some of the veteran cooperative leaders were “ permitted to retire.” In Alsace-Lorraine all of the cooperatives were incorporated into the German Labor Front and lost their identity. In unoccupied France, cooperatives like other organizations were subjected to the measures inaugurated by the Vichy Government with a view to reorganizing French economic life along corporative lines. The law of December 2, 1940, reorganizing agriculture, was described as “ a compromise between the old organization inherited from republi can France and the new conceptions of autocratic government.” Somewhat later a National Committee of Commerce was created on which the consum ed cooperatives were represented as one of the four forms of distribution, the others being the chain stores, wholesalers, and other retailers. Evidently the associations in occupied France, as well as Vichy France, were allowed to continue operations. In June 1943 a coop erative congress was held in Paris that brought together, for the first time since the invasion, delegates from cooperatives throughout France (except Alsace-Lorraine). The reports there submitted indicated that business had improved, after an initial fall, but production had declined (see table 15), and that under the circumstances “ the situa tion of the cooperative movement is generally satisfactory.” W orkers’ Productive Associations France has the distinction of being the birthplace of workers’ produc tive associations 19 and is one of the few countries in which this form of cooperation has attained any great development. Certain students of the workers’ productives in France 20 attribute their development to the tardy rise of large-scale industrial enterpr ses and the fact that France has remained to a great extent a land of small enterprisers among whom the workers’ productives with small capital resources could hold their own. Of no little importance also was the encourage ment by the successive French governments, in the form of loans and of contracts for business. The first association was formed in 1831 but did not even get into operation. Between 1848 and 1852 nearly 200 associations were formed, but disappeared during the period of the Empire. In 1865, a few again were started with varying degrees of success. T H E N A TIO N AL P R O D U C TIV E FE D ERATION In 1884 the workers’ productives, in an attempt to strengthen their movement, which was at rather low ebb, formed a central body, the Chambre Consultative des Associations Ouvridres de Production. Of the 51 associations then in existence, only 22 (mostly in Paris) joined it. However, it was favored by legislation of 1888, under which the public authorities were empowered to give preference to workers’ 19The workers' productive associations of France are oi two kinds—those which own their own businesses with plant, equipment, etc., and those which make collective contracts to carry on certain types of work in establishments owned by others. This latter type of association, called the “ commandite, is found in a number of industries, especially the printing industry No statistical data are available for the commandites the tables here given all relate to the workshop-owning associations. (For a description of the methods of operation of the commandites, see Monthly Labor Review. February 1926, pp 208-211 and August 1929, pp 115. 116.) 20 Jean Qaumont (Histoire G6n£rale de la Cooperation en France) and David Japoss (Labor Movement in Post-War France). France 85 productives over private contractors, on Government contracts. Five years later it started its own bank and again was aided by Government encouragement and a deposit of 150,000 francs. In 1904 it established an orphanage for children of deceased cooperators and auxiliary workers. In 1907 it founded a legal bureau and a department o ac countancy; also a benefit association to prov de death, old-age, and unemployment benefits. Family allowances were also inaugurated by the Chambre in 1923, and in 1927 it opened a home for aged mem bers. The Chambre’s family allowance fund was reorganized after the establishment of a general system of family allowances in France in 1934; and membership was opened to consumers’ cooperative associations as well as to workers’ productives. In 1930 the Chambre had in affiliation 340 associations with 23,000 members. By 1937 the number of affiliates had risen to 475 and their combined membership to 31,227. Their business in that year amounted to 372,768,000 francs. The affiliates of the federation represented 73.3 percent of the total workers’ productive associations and 41.9 percent of the total reported business. The annual congress of 1937 changed the name of the Chambre Consultative to one more descriptive of the actual situation— Con federation Generate des Co6p6ratives Ouvri&res de Production de France et des Colonies. A report rendered at this meeting stated that in 1937 the orphanage was sheltering 178 children— 7 more than in the preceding year. Its two vacation homes were still in ‘ ‘satis factory” operation. The secretary-treasurer of the central organiza tion also stated: “ W e think that the difficult period that our associa tions have just gone through is at an end and the next periods will be better.” SITUATION P R IO R TO W A R The workers’ productive associations, being so largely dependent upon the Government for both credit and contracts, were strongly affected by the changes in public policy resulting from the rapid changes in the political complexion of the Government. Certain advantages in taxation enjoyed since 1927 were withdrawn in 1934 and the associations became liable to taxes on turnover as well as on industrial and commercial profits (except sums used for welfare purposes). In 1935 a decree was issued, in the drafting of which the Chambre participated, defining standards for genuinely cooperative “ workers’ productive associations” and making illegal any false use of the term. A decree of 1931 had provided for certain preferences to workers’ productives in connection with public works, and up to 1936 State credit was available. This credit was withdrawn in 1936 and 1937 but was reintroduced in 1938. In 1939, out of a special appropria tion of a billion francs for public works (adopted as a measure to cushion the effects of war dislocations), 50 million francs were ear marked for contracts for workers’ productive associations. Of 648 associations in existence at the end of 1937, 4 were in agri culture, 8 were in extractive industries (quarrying, etc.), 6 in food manufacture, 71 in the printing trade, 5 in textile industries, 21 in the clothing industries, 103 in woodworking industries, 22 were making leather products (shoes, gloves, etc.), 51 were in metallurgical trades, 39 in the stone, clay, and glass industries, 271 in construction or public 86 Cooperatives in Individual Countries works, 25 in transportation, and 22 in other trades (chemicals, paper, jewelry, liberal professions, etc.). In addition to their members, these associations employed 7,305 “ auxiliary” workers. The associations were situated mainly in the Department of the Seine (including the metropolitan district of Paris)— with over a third of all the associations— and in the highly industrial districts, such as the Department of Nord, and the cities of Marseilles, Lyons, Toulouse, Limoges, and Rennes. T able 16.— M em bership and Operations oj W orkers9Productive Associations in France, 1893-1938 iFor par values o1currency, see Appendix table, p. 278 Membership 'T XV Okfal taJ number of Number of associa associa tion? Members tions reporting Year Amount of business Number of associa tions reporting Amount F ra n c* 18(13____ . . . _________ ifinn______________________________ 1007____________________________ _ _____ 1010________________________ 1013___________________________ _______ 1020____________________________________ 80 294 358 498 476 529 1023_____ ___________ 1030_________________________ 1033_________________________________ _ 1030__________________ ________________ 1 0 3 7 . _ _ _ _ 531 584 506 642 648 (*) 155 331 485 466 463 (») 10,793 15,838 19,520 19,097 19,973 424 356 434 418 462 21,322 17,108 19,086 21,419 16,530 0) 445 379 (i) 0) 60,358,700 0 ) 71,309,000 199,524,800 c42 323 847 884 450 155,026,200 386,772,000 377,783,491 329,000,666 890,068, 251 297 Confederation Gen6rale 1884. _ 1802 _ _ . ... '1007 _. ________ ______________________ 1021 1030 . . . . . _____________ _________ 1037___ _ _________________________ 1038 ________________________________ 22 40 200 345 340 475 478 (i) (i) (i) (i) (!) 375 340 475 478 20,000 23,000 31,227 32,872 a 340 475 478 8 8 210,000,000 372.768.000 596.400.000 JNo data. A report of the administrative council of the Confederation in May 1940 (just before France was invaded), summarized in the organiza tion’s official journal, L’ Association Ouvrifere, listed the names of 102 associations that had gone out o f existence since the outbreak of hos tilities. No information regarding the workers’ productive associa tions has been received since the invasion. LA FAMIL1ST&RE AT GUISE Perhaps the most famous of all the French workers’ productive asso ciations was that known as La Familist&re, at Guise. This organiza tion was founded in 1879 by M. Godin, and engaged in the production of stoves. Its workers were divided into four classes according to their length of service and stage of initiation: At first they were merely employees with a right to a pension and insurance against sickness and accident; next they received a share in the earnings, to the extent of one share each year; the next step increased their snare in the earn ings 50 percent over what they had received in the second class; and Netherlands 87 finally they became full members. The profit sharing was paid in stock, not in cash, and upon the withdrawal of a member, his stock had to be sold back to the association. Before the first World War this association, with its six foundries, was the most important metal-casting works in Europe. The association sustained heavy losses during the war. The city of Guise was practically destroyed and the Familist&re suffered not only from the bombardment but by having most of its plant and machinery either ruined or carried off by the Germans. It started operation again in August 1919. The association was able to weather all the vicissitudes of the next decade and in 1931 was described as “ among the most flourishing” of the French workers' productive associations. Its plants and workers' houses together formed a garden city For the 2,500 worker-owners the association had provided sickness and old-age insurance and vari ous kinds of social-welfare measures. From a turnover of 7,921,618 francs in 1919-20, when it was revived, its business expanded to 48,844,530 francs in 1924-25 and 72,412,738 francs in 1929-30. It was still in successful operation, in 1937, when the workers' productives were commemorating the centenary of the death of Fourier whose teachings had inspired the founding of La FamilistSre, but no data are available as to its fate under German occupation.21 Cooperative Movement in the Netherlands In many of the central and southeastern countries of Europe, the cooperative movement developed in an atmosphere of turbulence. Cooperators had to contend with a succession of wars with their re sultant destruction of life and property and shifting of territory and population, with recurring depressions, and with periodic political and economic upheavals. In the Netherlands, on the contrary, when the country was invaded by the Germans in May 1940, there had been a hundred years of peace under the constitutional rule of a single royal family. The country, depending on its overseas trade, had of course felt severely the post-war depression of the early twenties and the wide spread unemployment and trade stagnation during the depression beginning in 1930. Its international trade was drastically curtailed by the restrictions on imports and exports imposed by the countries with which it traded ana by their early abandonment of the gold standard, to which the Netherlands continued to adhere until 1936. ;1S o u rces.— T h e report on France is based upon data from the following publications: Bulletin du Mini ster du Travail (Paris), issues of April-May-June 1922, January-February-March 1924, October-NovemberDecember 1924, April-May-June 1932, July-August-September 1935, July August-September 1937, and October-November-December 1938; L’lnformation Sociale (Paris), October 15, 1931: Annuaire Statistique de la France, 1938; L’ Association Ouvriere (Paris), issues of M ay 5, August 25, and November 25.1937,and May 10, 1940; Annuaire de la Cooperation (Federation Nationale des Cooperatives de Consommation de France). 1920 and 1926-27; International Cooperative Bulletin (International Cooperative Alliance, London) issues of May 1917, January. May, September, and December 1918, January, September. November, and December 1919, February,April-May.June, August,September,and October-November 1920, February and June 1921, February. April, and May, 1925, September and December 1927, and May and December 1928; Review of International Cooperation (International Cooperative Alliance. London), issues of October 1919, October 1921. February, April, June, and November 1933, June and November 1934, April and July 1935. March, April, and July 1936, April and May 1937, February, May. September, and October 1938, June ana October 1939, January, February, and November-December 1940, March. April.and September 1941, Feb ruary 1943. and June 1944; Peoples Yearbook (English Cooperative Wholesale Society. Manchester) 1937, 1939 1940. and 1941; International Directory of Cooperative Organisations (International Labor Office, Montreal), 1939; Cooperative Information (International Labor Office, Montreal), No. 2, 1935 and No. 3. 1939: Labor Movement in Post-War France, by David J Saposs (New York Columbia University Press. 1931) and Consular reports of April 13,1921 and April 12,1938. 88 Cooperatives in Individual Countries Nevertheless, until the late thirties the Dutch had the advantages of a free, democratic country in which the standard of living was high, conditions generally good, and illiteracy almost nonexistent. One of the most highly educated peoples in the world, the Dutch were inherently conservative and consequently rather slow to take up cooperative activities. Although the first cooperative (a farmers’ association) was formed as early as 1837, the general law authorizing cooperatives was not passed until 1876, and then largely as a result of the efforts of a single enthusiast who, with a small group of adher ents, was successful in getting the measure through Parliament. The development of cooperatives took place very gradually, especially in the field of consumers’ cooperatives, being retarded at first largely by public Imowledge of the financial losses sustained by the members of a few of the early associations. The rate of progress was also slowed by religious and political differences which (as in the Dutch tradeunion movement) kept apart, in small separate groups, cooperators who might otherwise have been banded into strong, stable organiza tions. Thus, the Catholics, who had their own political party and trade-unions, also formed separate cooperative associations admitting only those professing that faith. There were several Protestant political parties, and a Christian (Protestant) labor-union group, as well as Protestant cooperatives. During and preceding the first World War there was also a group of cooperatives connected with the Social-Democratic Party, but they later merged with the con sumers’ cooperatives that were neutral as regards both politics and religion. Although cooperative growth was slow, it was practically con tinuous and by the middle thirties the Dutch farmers had through their cooperatives achieved a success rivaled only by that of the agri cultural cooperatives of Denmark. In 1938 cooperative dairies handled 76.7 percent of the total milk production and made 82.0 per cent of the butter and 76.5 percent of the cheese. In the same year 34.0 percent of the egg output was sold through the cooperative egg marketing associations; 90 percent of the potato flour produced in the Netherlands and 60 percent of the beet sugar were made by co operatives. Through cooperative insurance associations, the farmers insured their houses and farm buildings against fire, their cattle against loss, and their crops against hail. Their output of fruit, flowers, and vegetables was sold through special auctioneering asso ciations; and their grain was threshed by machines from the coopera tive threshing associations. Each of the various types of associations had its own central organization. The consumers’ cooperatives were found mainly in the cities, among the industrial workers, and although their penetration in their special field was not so great nor so spectacular as in the case of the farmers’ associations, they were serving about 15 percent of the entire popula tion (the percentage was considerably higher on the basis of the cities alone) and accounted for about 6 percent of the retail grocery business in the Netherlands. This growth was achieved entirely on the basis of self-help. In the Netherlands there was neither the Government favor (low-rate loans, preferential contracts, etc.) found in some of the other countries nor Government attempts to control the administration of coopera tives. In isolated instances it appeared that certain measures 89 Netherlands discriminated against the cooperative movement but usually the movement was able eventually to obtain representation and have the situation remedied. Under the system of controlled capitalism and general regimentation that had gradually resulted from Government measures designed to aid recovery in the difficult decade preceding the outbreak of the present war, the cooperatives— especially the central associations whose operations entered into international trade—lost some of their freedom of commercial action as did all other businesses. Aside from losses of life and property, the greatest immediate effect of the German invasion of the Netherlands upon the cooperatives was the drastic reduction of business. Although no direct word has been received since late in 1942, it appears that the movement has been allowed to continue but with pyramided taxation and with a new system of central control over the agricultural cooperatives. The framework should therefore be intact for post-war expansion. T ypes o f Local Cooperatives In table 17 is shown the development (as indicated by number of associations) of the various types of cooperatives, from 1910 through 1936. Such figures are not very satisfactory as an indication of growth, for a contraction in number may really be an indication of strengthened operation. This has been the case in the consumers7 cooperative movement where small associations have merged to form stronger ones, and the combined membership has shown an almost uninterrupted increase. Unfortunately, the Netherlands has pub lished no figures showing membership and business of all the types of cooperatives. T 17.— N um ber o f Cooperative Associations in the Netherlands in Specified Years, able by T yp e T y p e o f association All t y p e s _ _ _ _ _ ___ __ _. C o n s u m e r s ’ d is t r ib u t iv e a s s o c ia t io n s . H ou sin g associations__________________________ I n s u r a n c e a s s o c ia tio n s ___ _ __. C redit associations: A g ric u ltu ra l . _ _ __ _ _ ___ O th er.................................................. ....... ........... P urchase, sale, and p rod u ctiv e associations: A gricu ltu ral- . . ................................................ .. W ork ers’ p ro d u c tiv e ______________________ O th e r in d u s t r ia l.. _. . C om m ercia l_______________________________ O th e r................................ ..................................... M is c e lla n e o u s - _ _ 1910 1914 1923 1926 1929 1933 2,320 2,894 3,032 3,088 3,131 3,210 3,252 223 201 42 240 269 47 413 178 84 489 153 56 429 143 57 413 145 65 424 138 73 536 715 834 786 107 807 97 807 79 808 71 1,163 0) 0) 0) 0) 155 1,362 0) 0) 1,153 0) 2 94 1,196 27 107 113 25 29 1,327 26 92 88 36 29 1,418 21 76 103 39 44 1,435 17 76 103 46 61 8261 0) 0) 276 1936 1N o data; m a y be in clu d ed in m iscellaneous. ; “ M id d le-class” associations. CREDIT ASSOCIATIONS Most of the credit cooperatives in the Netherlands are those of the farmers, and these agricultural credit cooperatives in turn are mostly of the Raiffeisen type which also do purchasing of farm supplies and processing and marketing of farm produce. No data are available for the whole group of credit associations. The magnitude of the Raiffeisen associations7 operations is shown in 588544°— 44------7 90 Cooperatives in Individual Countries table 18. The paralyzing effect of the great depression is shown in the reduction of their loan business from nearly 58 million florins in 1929 to about 19 million in 1934 (the latest year for which data are available). The Raiffeisen associations have their own federation to which 729 associations, with 158,718 members, were affiliated in 1936. T a b l e 18.— M em bership and Operations o f Raiffeisen Credit Associations in the N ether lands, 191 2 -3 4 [F o r p ar values o f cu rrency, see A p p e n d ix table, p . 278] Y ea r N um ber o f asso ciations N um ber of m em bers (“ ac cou nts” ) L oans m ade in year 836 928 1,115 1,228 1,247 1,283 1,294 1,296 1,295 99,152 126,630 216,573 306,650 368,756 472,531 511,322 509,815 524,142 12,725,000 12,022,000 28,268,000 49,216,000 48,041,000 57,933,000 46,972,000 18,896,000 18,803,000 F lo r in s 1912........................................ 1914........................................ 1918........................................ 1921........................................ 1926........................................ 1929....................................... 1931........................................ 1933....................................... 1934..................................... consum ers’ L oans o u t standing e n d o f year F lo r in s 25,145,000 33,127,000 53,000,000 119,087,000 160,316,000 209,114,000 227,675,000 215,092,000 206,220,000 D e p osits N et earnings F lo r in s F lo r in s 33,779,000 34,954,000 135,728,000 191,508,000 198,056,000 240,791,000 217,561,000 153,118,000 174,024,000 179,000 258,000 435,000 1,286,000 1,803,000 1,908,000 2,253,000 2,026,000 1,932,000 c o o p e r a t iv e s The consumers’ cooperatives of the Netherlands have consisted mainly of bakeries, fuel associations, kitchens doing central cooking of meals for urban dwellers, and store associations selling groceries and provisions and household supplies. Figures are not available for recent years, showing the various types of consumers’ cooperatives. In 1917, of 552 distributive co operatives, 343 were cooperative stores, 142 were cooperative bakeries, 10 were cooperative butcheries, and 57 were cooperative fuel associa tions. As is evident from these figures, the bakeries in the Nether lands, as in Belgium, have formed an important part of the distributive cooperative movement. However, unlike the situation in Belgium, where the sale of bakery goods has been decreasing in relation to that of groceries, the Catholic federation reported that among its associa tions bakery sales were outstripping those of groceries. Cooperative housing associations,— Cooperative housing associations have been found in the Netherlands since early in the twentieth cen tury. These associations erected their own buildings and generally retained title to them, the members occupying the dwellings on a rental basis. The expansion of these associations was halted during the first World War by scarcities of materials and by the high cost of labor and land, and their number decreased from 282 in 1915 to 178 in 1923. Part of the decrease was attributed also to the policy of the local and national governments of subsidizing private builders, so that the need for cooperative effort was not so great. For 1936 only 138 of these associations were reported. Welfare, health, etc,—Although the Dutch cooperatives did not undertake welfare work extensively, as the Belgian associations did, a few organizations have been outstanding in this respect. One of the oldest cooperatives in the Netherlands, “ De Volharding” (“ Persever ance” ) at the Hague, about 1890, established a sick-benefit depart 91 Netherlands ment and later a medical-care department. Although opposed by the medical profession and for several years boycotted by the hospitals, this association was very successful. By 1923 its medical department had a membership of 50,000 and a staff of 30 doctors in addition to nurses and pharmacists. In 1939 it established its own hospital. By 1940 the membership of the sick fund had grown to 82,000. The association had 21,000 members in the store department, making it the second largest consumers’ distributive cooperative in the country. Early in 1940 the national wholesale association “ De Handelskamer” helped to start a new association, “ Copharma,” to act as wholesale purchaser of supplies for the pharmacies of the sick-benefit societies, many of which were operated in connection with consumers’ coopera tives. The International Cooperative Alliance stated that the sick funds (with about 4,000,000 members) had needed the wholesale as a protection against the boycotts of the medical profession and the monopoly prices of the highly cartelized drug industry. Development o f Consum ers' Cooperative M ovem ent C EN TRAL EDU CATION AL ORGAN IZATIONS The first educational federation, the Dutch Cooperative Union, was started as a department of “ Eigen Hulp,” an association of public employees, but became an independent association in 1890. It was politically neutral. Because one of its bylaw provisions specifically excluded from membership “ workingmen’s cooperatives,” the associa tions of the latter class therefore formed their own federation— the Union of Workingmen’s Cooperatives— in 1907; it was SocialDemocratic in affiliation. This latter federation in its early years required its member associations to turn over some of their earnings to the Party and to the trade-union movement. In 1920 the neutral Dutch Cooperative Union and the Union of Dutch Workingmen’s Cooperatives merged, forming the Central Union of Dutch Distributive Cooperatives (Centrale Bond van Nederlandsche Verbruikscodperaties). Political and religious neutrality was one of the principles of the new organization. A number of the retail associations refused to join the new federa tion; these included the two largest associations in the Netherlands. The accompanying statement shows such data as are available for the two federations that amalgamated to form the Central Union of Dutch Distributive Cooperatives: Social-Democratic federation: associations m em bers 19 43 1 0 ,3 8 5 38, 754 1900___________________________ 32 97 1910 __________________________________________________________ 1911 ___ 122 19 15______ 151 1920____________________________________________________________ 150 3 2 ,5 7 4 65, 035 8 7 ,0 5 7 9 9 ,7 8 3 1 6 1,09 6 1908___________________________________________________ 1918____________________________________________ Dutch Cooperative Union: Central Union of Dutch Distributive Cooperatives: 1 9 22 . 1924 1925 1926 __________________________________________ ______________________________________________ ___________ ________ ........ 141 137 132 135 1 3 7,26 4 127, 150 121,241 1 7 8 ,7 0 4 The Central Cooperative Union has been active in the formation of various auxiliary enterprises, including the Cooperative Savings Bank, 92 Cooperatives in Individual Countries the General Pension System for Cooperative Employees, and the G. J. D. C. Goedhart Foundation, which is the center of educational work in the consumers’ cooperative movement. Catholic federation,— In 1912 the Catholic trade-unions had taken the lead in the formation of a Catholic federation of cooperatives. This federation admitted to affiliation only local associations whose membership was restricted to Roman Catholics, and one of its require ments was that a portion of the local associations’ earnings be devoted to assisting Catholic benevolent institutions. The following statement shows the development of the federation from 1915 through 1926: N u m b er o f associations 1 9 1 8 ...................... 1920__________ 1922___________________________ 1 9 2 5 ........................................................ 1926_______________________________________ 192 238 Their m em bers 2 5 ,7 0 5 3 0 ,0 0 0 96 81 85 18, 549 24, 385 J8, 257 As the above figures indicate, the Catholic associations were small, averaging less than 250 members per association in any of these years. There w^ere, however, several large associations. The largest one, “ Ons Dagelijks Brood” (“ Our Daily Bread” ), had by 1936 attained a membership of 6,122. Joint action.— Although federated along religious and political lines, the various branches of the cooperative movement had amicable relations and occasionally joined forces for particular ends. In 1917 the neutral, Catholic, and Social-Democratic federations formed a central cooperative committee to defend the interests of the cooperatives and to obtain representation on the various public regulatory bodies. That committee remained in existence during the first World War and for several years afterward; a similar body w as formed again in 1934. In the endeavor to extend and strengthen the consumers’ coopera tive movement in the rural areas and small towns, in 1931 the Central Cooperative Union and the wholesale formed the Cooperative Society for Financing and Control (“ Cofib6” ). The purpose of this organiza tion was to give technical aid to, and even finance, local associations that got into difficulties. A few years later another association, “ Fibeco,” was formed by joint action of two cooperative federations (De Handelskamer and the Catholic cooperative federation) and the Catholic trade-unions, for the purpose of financing new associations. LOCAL COOPERATIVES Consumers’ cooperation was of especially slow development in the Netherlands. A cooperative official, explaining the slow pace of cooperative growth commented as follows: The Dutch distrust innovation, and are always slow to recognize the necessity of a new line of action; but when once undertaken the work will be carried through, because for perseverance our nation cannot be easily surpassed. * * * Even the name, “ Cooperation,” being a word of a foreign tongue, seemed to make the Dutch afraid. So in the beginning there were failures and many a workingmen's society lost money and credit instead of giving golden fruits. It took some time before the more successful societies of civil servants and military officers made a better impression on the workingmen.238 8 Q . J. D . C . G oedh art, in International C oop era tive B ulletin (L o n d o n ), D ecem b er 1924, p . 363. Netherlands 93 "When the first World War broke out, although Holland was not invaded it was immediately and deeply affected. The consumers’ cooperatives went through a period of vicissitude from which, how ever, they emerged with an increased membership and a stronger organization. The cooperatives were finally able to obtain represen tation on Government wartime bodies to regulate prices, distribution, imports and exports, etc. Under a regulation adopted after the end of the war, the associations were required to contribute to the funds of the chambers of commerce composed of private retail dealers. The war had taught the cooperatives the necessity of building up their working capital instead of paying all of the earnings out in patron age refunds. Generally, also, the associations in this period began to create reserves for the payment of pensions to employees and benefits of various kinds (sick, death, maternity, etc.) to the members. The division along religious and political lines had resulted in many small associations. In Amsterdam alone there were 9 separate retail cooperatives. In the post-war depression when the cooperatives reflected the unemployment and low purchasing power of their mem bers, many associations failed and others were in financial difficulties. It was in this period that the federations began to urge the merger of small associations into larger organizations. As the depression continued, the Government imposed greater measures of control of industry, as well as export and import quotas. Heavier taxation for purposes of relief followed. It was reported that many of the unemployed who had some capital opened small retail businesses. This naturally worsened the condi tion of the other small merchants who, however, directed their dis pleasure toward the cooperatives and urged the Government to forbid the opening of new cooperative stores. That the independent mer chants were still doing 81 percent of the total retail grocery trade was indicated by the results of an official survey, made in 1929; the cooperatives accounted for about 6 percent. In order to protect the interests of the cooperative movement as a whole, the National Cooperative Council was formed in 1934. Its charter members were the cooperative wholesale, the Central Union, the Catholic Federation, the dairy federation, the LandbouwComit£ (largest wholesale association of the agricultural supply co operatives), and several other central agricultural organizations— representing altogether over 1,300 local associations. ,Another departure was the formation of an organization by the consumers’ and the agricultural branches of the movement, to operate a chain of green-grocery stores throughout the Netherlands. The Netherlands held to the gold standard for some time after other countries had departed from it. This made competition by its in dustries on the international market difficult, and the domestic market also was stagnant. The country went off the gold standard in September 1936, and the currency was depreciated by 20 percent. Although this made some improvement, the number of unemployed remained large and purchasing power low, and 1936 was still a year of depression. A temporary recovery took place during the first half of 1937 but fell off in the latter half. In the attempt to accelerate the progress of the cooperative movement, the various central organizations of the consumers’ cooperative movement embarked upon a 5-year plan of 94 Cooperatives in Individual Countries publicity and education. In that year, over the opposition of the cooperative movement, a law was enacted giving the Minister of Trade and Industry authority over the opening of new businesses. Under the law, organizers of new enterprises were required to furnish “ satisfactory evidence of the business knowledge, professional skill, and credit worthiness” of those who were to run them. The bill, as first introduced, provided that examination of these qualifications should be in the hands of the local chambers of commerce. The co operatives, however, were successful in having it amended so as to give special committees this function and to allow the cooperatives representation on these committees. Table 19 gives such data as are available from various sources, showing the extent of consumers’ distributive cooperation in the Netherlands up to the outbreak of the present war, and the relative importance, in the total, of the associations federated in the various central organizations. T a b l e 19.— M em bership and Business o f Distributive Cooperatives in the Netherlands, 1925-39 [For par values of currency, see Appendix table, p. 278] D is trib u tive cooperatives— all t y p e s » A ssociations affiliated to— C entral U nion C ath olic F ederation Year N um ber 536 496 415 425 408 409 / 3 406 1935............. \ 4 357 / 3 419 1936.............. \ 4 357 1037 * 348 1038 4 351 1925............. urn 1020 1930............. 1932............. 1934............. 1939.............. 4 351 T h e ir m em bers (*) (2) 279,242 289,251 309,371 315.356 320,907 303,085 325,368 301,973 297,445 298,887 304,804 T h e ir business N um ber T h eir m em bers 132 135 130 131 <2) 141 121,241 178,704 185,395 189,970 (3) 216,125 F lo rin s (2) (2) (2) (2) T h eir business N um ber T h e ir m em bers Florin s (2) 66,551,162 64,775,816 ) 139 64.010.000 63,735,779 138 62.770.000 136 66.569.000 131 68.213.000 70,769,000 (2) | T h e ir business (2) (2) 81 85 (2) (2) 105 118 (2) 34,262 38,526 Flo rin s 7,170,000 (2) ( 2) 11,771,000 (2) (2) 219,787 (2) 119 38,864 11,002,000 218,656 42,008,023 121 38,501 10,971,000 216,025 41,062,100 119 120 39,028 39,863 11,889,806 12,445,547 (2) 216,062 (2) (2) 44,982,400 (2) (2) 8 (2) 18,257 18,549 (2) (2) P rotes tant F edera tion : N um b er o f associa tions (2) (2) (2) W 7 11 10 (2> * 11 8 i Includes bakeries, cooperative kitchens, etc. 8 No data. 8 Including fuel associations. * N o t including fuel associations. * With 3,794 members and a business in 1937 amounting to 936,000 florins. D E V ELO PM EN T OF TH E COOPERATIVE W H O LE SA LE The cooperative wholesale was started in 1882 as a purchasing agency for the various branches of the “ Eigen Hulp” association and later became the wholesale department of the Dutch Cooperative Union. During the latter period, associations desiring the wholesale service had to join the union and endorse formally the principle of religious and polit'ca1 neutrality which was basic with the union. Although the purchasing department had made a start in the field of production as early as 1900, when it bought a soap factory in Delft, the purchasing service operated largely as an agency and did not Netherlands 95 become a full-fledged wholesale until 1909. In 1914 it became a separate organization, “ De Handelskamer,” and was joined by most of the neutral associations as well as by various Catholic, Socialist, and independent associations which were not willing to endorse the neutrality principle. The wholesale confined its efforts to the com mercial field and took no stand whatevt regarding political or re ligious matters. Of 284 associations affiliated with De Handelskamer at the begin ning of 1918, 119 were affiliated with the Dutch Cooperative Union, 36 with the Social-Democratic federation, 32 with the Catholic federation, and 97 were not members of any central organization. Even as early as the period of the first World War, De Handelskamer had its own packing plant where goods were put up under its own trade-mark, “ Haka” ; also a chemical laboratory for food analysis, a plant for making wooden shoes, and an experimental bakery. A meat-packing plant was maintained from 1914 until 1918, when it was discontinued because of Government restrictions. The whole sale very early started an auditing department, in the attempt to improve the accounting practices of its member associations and to insure their financial stability. Its relations with its employees had been regulated by collective agreement since before 1919. In 1918 the Government desired to use the services of De Handel skamer and its associations in order to fight the rising prices. With a loan from the authorities, the wholesale built a clothing factory, with branches in 6 cities. The new enterprise was immediately successful, but when peace was concluded and the post-war slump came, the wholesale was left with a large supply of goods made at high prices which it could not sell, as well as the Government loan to repay. The factories were closed in 1923, but at a loss that brought De Handel skamer to the verge of bankruptcy. The local associations, however, rallied to its assistance with new capital, and succeeded in saving it. During the depression of the early twenties the business of the whole sale and the number and membership of its affiliates declined. By 1926, however, its sales were on the upgrade and so continued through 1929. After a slight decline in 1931 they rose above the 1929 level in 1932, and this in spite of the fact that over 300,000 workers were out of jobs (about 70,000 of these were cooperators), that their economic con dition was reported to be below the average for Europe, and that in the period 1927-32 the index of wholesale prices had fallen 35 percent (from 149 to 97). In 1932, 12 of De Handelskamer’s affiliates went into liquidation, but 13 new associations joined, including “ De Volharding” with 17,000 members. Thus, the number of associations rose from 287 to 288, and the combined individual membership served by the wholesale increased from 162,702 in 1931 to 189,381 at the end of 1932. In 1934, when the number of unemployed exceeded 400,000, the wholesale reduced its prices on a number of commodities of general necessity in order to help its member associations supply their needy worker members. Notwithstanding this, its sales volume rose by about 4 percent as compared with the preceding year. By this time, 30.5 percent of De Handelskamer’s sales consisted of its own manu factures— clothing, cheese, perfumes, cosmetics and toiletries, jams, cooking oils, and a variety of foods packed under its own label. In 96 Cooperatives in Individual Countries 1934, also, “ Vooruitgang” (“ Progress” ), the largest association in the Netherlands, joined the wholesale, bringing in 51,280 members. In 1932, on its fiftieth anniversary, De Handelskamer had moved into a new headquarters building in Rotterdam. This move apparently stimulated new interest and loyalty among the member associations, for notwithstanding the depression, which was very severe, the mem bership increased during the next few years and sales rose steadily through 1937. A decline took place in 1938 (largely attributable to a fall in wholesale prices), but the sales reached an all-time high in 1939. Data are not available for De Handelskamer’s membership for 1939, but in 1938, 292 of the 351 consumers’ cooperatives in the Netherlands were members of the wholesale, and their combined membership (258,896) accounted for slightly over 86 percent of all the 298,887 consumers’ cooperative members in the country. The development of the wholesale over the 50-year period, 18901940, is shown in table 20. T a b l e 20.— M em bership and Operations o f Netherlands Cooperative Wholesale, D e H an delskamer, 1890-1940 fFor par values of currency, see Appendix table, p. 278] O perations o f D e H andelskam er Y ear N um ber of T h eir m em affiliated bership associations 94,300 111, 124 192,401 287 288 288 151,808 147,137 148,198 162,702 189,381 199,042 11,304,306 13,885,748 18,283,115 17,427,458 18,447,923 21,691,984 2 468,716 445,529 574,000 850,000 999,000 1,434,000 289 290 298 295 292 254,736 258,090 262,516 261,350 258,896 22,414,770 25,128,900 25,681,810 28,118,700 27,893,093 30,140,000 27,792,000 2,062,000 2,701,000 16 41 92 138 159 385 1924..................................................... 1926..................................................... 1929..................................................... 1931..................................................... 1932.................................................... 1933..................................................... 377 310 1934..................................................... 1935..................................................... 1936..................................................... 1937..................................................... 1938..................................................... 1939..................................................... 1940.................................................... 0) 0 V alue o f ow n p rod u ction Florins 500,000 928,000 3,217,000 4,935,055 6,236,096 14,612,665 1890..................................................... 1900..................................................... 1909-10...........................................1914..................................................... 1915..................................................... 1920..................................................... 0) A m ount of business 7,000 17,000 (l) 0 0 Florins 0 0) 107,000 96,000 195,000 N e t earnings F lo rin s 0) 0 41,000 39,000 59,000 15,000 0) 126,000 108,094 0 561,078 566,000 578,000 402,618 512,788 0 3,158,000 3,424,000 0 0 441,192 262,813 723,797 0 0 i No data. JData relate to 1925. Cooperatives and the W ar The Netherlands, after having been assured that the country’s neutrality would be respected, was invaded by German forces in May 1940. During the battle period there was much destruction both from the war and from looting, cooperative as well as other property being affected, Rotterdam— the headquarters of Vooruitgang, of De Handelskamer, and of the Landbouw-Comit6— bore the brunt of the German attack. The greatest cooperative loss was that suffered by Vooruitgang, whose headquarters building and several branches were completely demolished. So great was the destruction of life and Netherlands 97 property in some parts of the city, and so great the resulting disloca tion of life there, that the membership of the association fell from 48,637 to 24,212. The buildings of De Handelskamer “ escaped serious harm.” Apparently, after the military and civil overlordship was imposed, the cooperative associations were allowed to continue operations, under the “ mild” policy which the Germans first adopted. Diffi culties of obtaining supplies, stringent rationing, and lack of transport facilities drastically reduced cooperative sales, however. New taxes, imposed on gross surplus and raising the rate from 11% to 31% percent, reduced earnings to almost nothing. This resulted in a change of cooperative price and dividend policy; some associations reduced prices to the lowest possible level consistent with safety, and others paid fixed patronage returns which were included with expenses of operation. The cooperatives continued their educational and training courses, and in 1941 even created a chair of cooperation at the University of Amsterdam.24 In 1942 De Handelskamer purchased an estate to which it proposed to transfer all of its training activities. German rule became harsher in 1942 and new measures were imposed upon the populace. Among those affecting the cooperative movement was one that dissolved the National Cooperative Council— repre senting all branches of cooperation—that had been formed in 1934. A new Cooperative Council of the Netherlands, covering only agri cultural cooperatives, was formed to which all these associations were required to affiliate. The Council was placed under the control of the Department of Agriculture and Fisheries. It was given the authority to liquidate any agricultural cooperative that failed to affiliate within 4 months, any that was not large enough to permit “ a useful performance of economic activities,” or any that failed to meet its obligations. This move, as the International Cooperative Alliance pointed out, “ means the isolation of the consumers’ move ment and thus undoes a good deal of the progress made in recent years in the direction of cooperative unity.” 25 24 B ut m an y educational institutions closed later in 1641 rather than accept N a zi con trol o f their educa tional policies. It is n o t k n o w n w hether A m sterdam U niversity was one o f these. 28 S o u rces .—1T he report on the N etherlands is based u p on data from the follow ing pu blication s: Jaarcijfers voor N ederland (N etherlands Centraal B ureau voor de Statistiek), 1922, 1923-24, 1827, and 1936; M aandschrift (N etherlands Centraal B ureau vo o r de Statistiek), issues o f N o ve m b e r 1922. June and Septem ber 1926. A ugust 1928, J u ly 1930, M a y 1936, M a y 1936, A pril 1937, J u ly 1938, and Septem ber 1940; H e t C oop eratieve N iew s (C entral C ooperative U nion, T h e H agu e), N o v e m b e r 16, 1924; International C ooperative B ulletin (International C ooperative A lliance, L o n d o n ), issues o f July 1911, June 1912, June 1913, M a rch , July, and D ecem ber 1916, June-July 1918, M a rch and A p ril-M a y 1620, M a y-J u n e 1922, N o v e m b e r and D ecem b er 1923, D ecem b er 1924, and June 1925; R e v ie w o f International C ooperation (International C o o p e r ative A lliance, L o n d o n ), issues o f July 1929, Septem ber 1931, D ecem ber 1932, J u ly 1933, F ebruary 1934, June 1935, July 1937, January, Ju ly, and O ctober 1938, A ugu st 1939, February and June 1940, Septem ber 1941, and Septem ber and D ece m b e r 1942; P e o p le ’s Y earbook (E nglish C ooperative W holesale S ociety, M an ch ester), 1929, 1933,1935 throu gh 1939, and 1941; C ooperative Inform ation (International L a b o r O ffice), N o . 12,1929, N o . 6, 1934, N o . 1, 1937, N o . 2,1940, and N o . 7, 1942; International D ire c to r y o f C ooperative O rganizations (International L a b o r O ffice), 1939; Irish E con om ist (D u b lin ), O ctob er 1923; C ooperative M o v e m e n t in the N eth erlands D u rin g the W ar P eriod (R e p o rt from U . S. T ra d e C om m issioner at T h e H ague, M a y 1919 (u n p u b lis h e d )); R eports from U . S. consul at R otterd a m , D ecem b er 17, 1923, and N o .52, O ctober 30, 1834; and H ollan d and the W ar, b y G . N . C lark (O xford P am ph lets o n W o rld A ffairs, N o . 43, O xford, E n glan d , 1941). 98 Cooperatives in Individual Countries Cooperative Movement in Luxemburg Although the population of Luxemburg was only about one-third agricultural, apparently the entire cooperative movement was rural. The consumers’ cooperatives, which constituted about half of the total number of associations, combined the functions of providing supplies for farmers’ households and their productive operations with the marketing of their produce. There were also specialized marketing cooperatives handling particular commodities, such as livestock, grapes, or dairy products. Each of these branches of the movement had its own federation, as did also the Raiffeisen credit associations. The consumers’ cooperatives were banded into the General Feder ation of Agricultural Cooperative Associations {Federation des Associ ations agricoles du Grand-Duche de Luxembourg) formed in 1909, but its membership included other types of cooperatives as well. This organization supplied its affiliates with household and farm supplies, advised on marketing and accounting problems and on legal matters. Its business in 1937 amounted to 28,716,000 francs.26 The status of the cooperative movement in 1937 is shown in table 21. T ab u s 21.— Num ber, M em bership , and Am ount o f Sales o f Cooperative Associations in Luxemburg, 1937 [F or par values o f cu rren cy, see A p p e n d ix table (B e lg iu m ), p. 278] N u m b e r of— Type T o ta l a m ou nt o f business of associations A ssociations M em bers F ra n cs R u ra l credit associations_________________________________ Onnsum firs’ su p p ly and sale association s Specialized m arketing associations: D a ir y _________________________________________________ V in egrn w ers' F r u it and v e g e ta b le grow ers’ _ _ ........... _ liv e s t o c k and m e a t m a rk etin g A gricu ltu ral and ru ra l in su ra n ce (liv esto ck ) 1 N o data. 71 408 8,576 19,588 268 57 44 98 66 11,819 1,742 C) 3,100 1,876 (0 5,697,000 57,000 2 7,000 * P rem iu m incom e. In 1930 the Government established a High Council for Agricultural Cooperation and Mutual Aid, to consist of not more than 15 members appointed for 4-year terms. Its duties were to promote and advise cooperatives, give technical assistance, and distribute any Govern ment subsidies that might be provided. After the beginning of the depression subsidies were granted to marketing cooperatives in order to assist them in selling their produce. Other decrees regulated the sale of milk. Luxemburg was invaded by the Germans on May 10, 1940, and was annexed to the Reich on August 30, 1942. The opposition of the people was expressed through their withholding of their crops and livestock from the invaders and through a general strike. No data are available regarding the fate of cooperatives either then or later.27 26 F or par values o f cu rren cy, see A p p e n d ix table (B e lg iu m ), p . 278. 27 S o u r c e s — T h e report o n L u x em b u rg is based u p on data from the fo llow in g p u blication s: C ooperative O rganizations T h ro u gh o u t the W o rld — N um erical D a ta (International L a b o r O ffice), 1939; C ooperative In form a tion (International L a b or O ffice), N o s. 4 and 14, 1929 and N o . 3, 1930; International D ire c to r y o f C oop era tive Organizations (International L a b o r O ffice), 1939; E uropean C onference o n R u ra l L ife— L uxem b u rg (L eague o f N ations, G en eva), 1939; N o te Statistique— E xtrait de L ’ A nnu aire Official 1930 (G ran d D u c h y de L u xem bou rg, Office de S tatistiqu e). Switzerland 99 Cooperative Movement in Switzerland Grazing and forest associations were known in the Swiss mountain valleys as early as the fifteenth century. The Swiss Confederation itself sprang from the Mark-Genossenschaften, the village self-help organizations which the Alpine peasants established in order to supply their needs and cultivate the land in common. The Swiss debt to the Rochdale Pioneers is, therefore, less than that of some other peoples. The first cooperative association of the present Swiss organization was founded as a consumers’ society at Zurich in 1851. Within the next 25 years, an association of the Rochdale pattern was formed in the town of Schwanden, a farmers’ organization was formed near Winterthur, and others were organized at Basel, Geneva, and elsewhere. All types of associations expanded during World War I, suffered in the long period of crisis and depression following that war, and recovered during the late 1920’s. The depression of the early thirties was accompanied and followed by restrictive Federal measures aimed at control of both foreign and domestic trade and by special acts directed against cooperatives and other large businesses. Nevertheless, the cooperatives continued their steady increase of membership and sales. By 1940 there were nearly 12,000 cooperatives in a population of 4,000,000 people. The largest group of associations consisted of agricultural cooperatives which included 2,900 dairy associations handling 90 percent of Swiss milk production, almost 700 Raiffeisen credit cooperatives, and nearly 700 associations pur chasing farm supplies. Consumers’ distributive cooperatives numbered about 900 of the nearly 12,000 Swiss cooperatives in 1940. The associations together handled from 10 to 12 percent of the country’s retail trade and served about one-fourth of the population. In the field of production, the cooperative associations owned and operated the largest flour mill, the largest meat-packing establishment, and the largest bakery in the nation. The Basel cooperative was one of the larger associations on the continent, with 62,295 members and annual sales of over 63 million francs.28 Other large organizations were those at Zurich (28,826 members), Geneva (23,449 members), Bern (17,496 members), and Luzern (12,790 members). In the same year, when the Swiss Cooperative Union and Whole sale, V. S. K., celebrated its fiftieth birthday, its 545 member societies were scattered throughout more than 1,000 of Switzerland’s 3,000 local government areas and in all the four language regions of the nation— the French, the German, the Italian, and the Romansh. Eighty percent of all cooperative stores in Switzerland were then carrying on business with V. S. K. In spite of the effects of war in the countries surrounding the Swiss “ neutral island,” the federation’s turnover amounted to 247 million francs and its annual patronage refunds— calculated as usual in proportion to purchases— amounted to 18 or 19 million francs. Among the outstanding characteristics and accomplishments of the Swiss cooperative movement may be mentioned its uncompromising spirit of independence and its refusal to accept assistance from the* * F o r par values o f cu rrency, see A p p e n d ix table, p . 278. 100 Cooperatives in Individual Countries State; its elimination of competition between associations; its policy of financing cooperative enterprise upon a basis of “ indivisible coopera tive capital,” built up from earnings, etc., rather than from share capital; the high degree of loyalty of local associations toward V. S. K .; and the early prominence of cooperative leaders in national affairs (presidents of four cooperative unions were elected to the National Assembly as early as 1911). T ypes o f Cooperatives The Swiss cooperative movement was one of the most varied and inclusive in Europe. It included, in addition to the usual retail as sociations, agricultural consumers’ , dairy, machinery, cattle-breeding, and pasture associations; restaurants and guest houses; transportation by water; electricity- and gas-supply, credit, shoe-manufacturing, bakery, sick-benefit, and burial associations. The main periods of growth of the movement were the decades of industrialization of the nation, beginning with 1890 and ending after World War I in 1920, as table 22 indicates. T a b l e 22 .— Num ber o f Cooperatives in Switzerland, 1 8 9 0 -1 94 0 , by T yp e T y p e of association 1890 1900 1910 1920 A ll typ es................................................ '1, 551 3, 719 7,113 11,084 517 96 243 C onsum ers’ .......................................... C redit (R aiffeisen )............................ ! 2 3 150 33 151 Sickness and death fu n ds................ i 68 21 184 W ater s u p p ly ^ .................................. 331 144 1 9 E lectricity and gas............................ B u i l d i n g ................ .............................. 6 14 39 A gricultural: 845 1,459 2,086 Cheese and d a ir y ....................... C a ttle raising............................... 27 475 981 P urchasin g................................... 84 496 355 225 M a ch in ery _______________ ____ 48 123 388 786 1,993 M iscellaneou s...................................... 1925 11,284 1930 1935 1937 1939 1940 i 11,766 'l l , 680 ill, 723 11, 629 jll, 599 806 291 614 390 382 179 853 391 579 409 380 233 866 533 545 436 351 260 872 632 456 433 314 258 878 657 422 432 300 251 2,651 1,500 761 397 3,113 2, 731 1, 521 763 445 2,979 2,806 1, 527 730 443 3, 269 2,874 1, 439 698 439 3,265 2,911 1,493 701 • 457 3,221 ,894 i 685 390 435 290 246 2,924 1, 509 696 457 3,103 898 688 385 436 287 244 2,924 1, 515 694 454 3,074 COOPERATIVE CREDIT Raiffeisen associations.— As early as 1903 the agricultural societies of Switzerland had begun to form Raiffeisen credit banks. By 1928 the credit associations had 292 cooperative banks in German-speaking areas, 140 in French-speaking areas, and 3 in Italian-speaking regions. Ten years later, confidence in the banks as savings institutions and their higher mortgage and current account loans combined to make the 1941 report outstanding, as jnay be seen from table 23. Credit cooperation has never developed widely in Switzerland, but by the end of the twenties there were three central cooperative bank ing and credit institutions— the Central Cooperative Bank (founded in 1927), the Union of Swiss Raiffeisen Associations (1902), and the Swiss People’s Bank (1869). 101 Switzerland T a b l e 2 3 .— Development o f Raiffeisen Banks in Switzerland, 190 3 -4 1 [F or par values o f cu rrency, see A p p e n d ix table, p. 278] Y ea r N um ber N um ber M em ber of o f de ship b an k s positors T u rn over F r a n cs F r a n cs 1,740 11,507 16,784 27,678 37.482 0) ( l) 0) 66,149 6,037,708 50,220,170 197,354,686 327.678,019 441,661,841 0) 0) 0) 0) 1,765,817 27,444,311 65,864,025 136.394,928 195,951,649 2 389,978,000 675,600 12,832,340 30,237,433 62,800,063 90,116,019 218,127,000 10,581 474,881 1,125,163 3,079,157 5,447,649 14,164,000 2 450.129,000 2 486,304,000 263,883,666 283,320,000 17,472,000 18, 705,000 1903................................ 1 9 1 3 .............................. 1918................................ 1923 .............................. 1927................................ 1937— .......................... 1939 ....................... 1940................................ 1 9 4 1 ............................. 25 166 224 332 435 0) (i) 672 704 2,323 29,549 48,238 77,030 106,027 0) 217,000 225,000 237,000 T o ta l assets D ep osits R eserves F r a n cs F ra n cs 1 N o data. 2 Aggregate w orking capital. Central Cooperative Bank.— The wholesale, V .S.K ., had outgrown its own banking department created in 1911 to serve cooperative and in dustrial associations and individuals, and when, in 1927, the Swiss TradeUnion Federation was contemplating the establishment of an inde pendent bank, the Union of Swiss Distributive Associations voted unanimously for joint action in the project. The Central Cooperative Bank, thus formed, began operations with a subscribed share capital of 3,672,000 francs, of which 3,532,000 francs (about $674,000) were fully paid up. Of this paid-up capital, V. S. K. provided 2,000,000 francs. Share capital almost trebled during 1928, reaching 10,459,000 francs at the end of the year. The bank’s growth in subsequent years may be judged from its statements in 1935 and 1939: 19S5 1939 (fra n cs ) ( fra n cs ) Turnover ........................................ 1, 233, 000, 000 Deposits_______________________ 53, 734, 000 Paid-up capital________________ 10, 500, 000 1, 150, 000 Reserves_______________________ 2, 707, 246, 000 ______________ 10, 799, 000 1, 450, 000 By 1942 the problem of these associations had become that of ex panding their business sufficiently to employ their expanding capital. B U ILD IN G AN D HOUSING ASSOCIATIONS Switzerland faced a severe housing shortage after World War I. Private capital withdrew from such building during the war and its place was taken after the war largely by capital from cooperatives and public-utility groups acting with or without the aid of State and commune. The growth of cooperative housing coincided with the growth of cities during the period 1910-20. The associations increased rapidly in number through 1931, after which they declined. Ten thousand persons were members of housing cooperatives in 1933. The work of the building and housing societies naturally centered in the cities where it sometimes received the aid of the municipalities. After 1925 the State ceased giving aid except when the groups of houses were being built for larger families. At Basel, the building associations could obtain funds from the powerful Cooperative Association of Basel. Indeed, the latter built the suburban community of Freidorf, consisting of 150 detached houses and store and school, to accommodate cooperative employees. 102 Cooperatives in Individual Countries Among cooperative building projects in which the municipality assisted the cooperatives, the following were outstanding: At Zurich between 1910 and 1930 the city spent 50,000,000 francs to help con struct 2,044 houses containing 8,589 homes. By 1941 one-ninth of Zurich’s 93,000 flats were cooperatively owned and their rents were 100 to 200 francs lower than rents for similar privately built apart ments. Dwellings (except single houses) built with the aid of the cooperative society in Zurich wTere rented, not sold. At Lausanne the cooperative housing association with the aid of the city had erected, before 1935, 26 individual houses, 8 two-family houses, and 3 apart ment houses containing 60 dwelling units. At Bern, the munici pality’s participation in the cooperative housing projects amounted to 8,700,000 francs before 1935. At Bienne, the city lent the cooperatives funds on second mortgages at 5 percent. Cooperative housing in cluded 213 houses built since 1925 at a cost of 4,000,000 Swiss francs. At Geneva, where a cooperative building association was founded in June 1919, both Federal and Cantonal grants were received. Fiftytwo family dwellings, erected at a cost of 1,225,000 francs, were almost completed in December 1921. LIFE IN SU RAN CE Life insurance was provided by the Swiss Mutual Insurance Society founded as a result of a resolution adopted at the congress of the Swiss consumers’ cooperatives in 1918. From the begmning both cooperative and trade-union groups supported the insurance associa tion, and both acted as agents for it. On its twenty-second anniversary in December 1941, the Swiss Mutual Insurance Society announced that since its founding it had paid out 15,433,000 francs to its insured. The Society’s guaranty fund that year reached 18,790,000 francs. 1937 1984 (fran cs) ( fra n cs) Amount of insurance outstanding___ 42, 759, 000 Premium income__________________ i 1,731,000 978, 000 Claims paid________________________ Total assets_____ ________ _____ ____ 16, 078, 000 Paid-up capital_____________________ 350, 000 680,000 Reserves.......................................... ........ 38, 873, 000 1,561,000 611, 000 13, 580, 000 250, 000 530,000 1931 (fr a n cs) 6, 448, 000 372,000 98, 000 2, 139, 000 50, 000 224,000 E L EC TR IC ITY COOPERATIVES In 1937, the number of organized electricity cooperatives in Switzer land was 300 and their membership 85,000, or an average of 283 per association. By 1940 the number of associations had dropped to 287. M ost of these associations were rather small enterprises. Some of them were merely distributors of power purchased at wholesale, others owned their own generating facilities. Near Basel, where many industries— silk weaving, wood carving, pottery making—were carried on in the homes, one large electric cooperative was operating success fully in the early 1930’s. The association bought its energy at low rates because it had three possible sources of supply and its rates were at the level of operating expenses. This association, however, was unusual. 103 Switzerland Structure o f the Consum ers5 Cooperative M ovem ent Swiss distributive cooperatives were federated into three main central organizations: (1) The Cooperative Union and Wholesale of Swiss , Consumers’ Cooperatives (Verband schweiz. Konsumvereine, known as “ V. S. K .” ), formed in 1890; (2) Union of Swiss Cooperative Associations, “ Concordia” (Verband der Genossenschaften “ Konkor dia” ), formed in 1908; and (3) Union of East Switzerland Cooperative Agricultural Associations (Verband ostschweiz. landwirtschajtl. Uenossenschaften, known as “ V. O. L. G .” ), formed in 1886. The relative strength of these three federations in 1937 is shown in table 24. T able 24.— Mem bers and Business o f Swiss Federations o f Cooperatives, 1937 [F or par values o f cu rrency, see A p p e n d ix table, p. 278] C ooperative U nion and W holesale (V . S. K .) Item N u m b er o f affiliated associations.............................................. N u m b er o f in d ivid u a l m em bers............................................... 540 413,715 Federations— A m ou n t of sales_____ _________________________________ P aid-u p ca p ita l_______________________________________ T ota l sales o f m em b er a ssocia tion s....................................... . 200,488,233 1,676,000 299,252,000 U n ion o f E ast Sw itzerland C ooperative A gricultural Associations (V . O . L . G .) F ra n cs 326 24,104 F ra n cs J 47,864,000 2,650,000 2 39,137,000 U nion o f Swiss C ooperatives ( “ C on cordia” ) 47 4,842 F r a n cs 3.340.000 48,000 6.574.000 i Inclu din g goods m arketed. 2 1936, including goods m arketed. “ Concordia” Union.—The Concordia was a Christian-Socialist fed eration, the membership of which consisted of Roman Catholic distributive associations, mainly in eastern Switzerland. As indicated in the preceding table, this federation was the smallest of the three, accounting for only about 5 percent of the total affiliated associations. T ab le 25.— Sales o f Concordia Union o f Switzerland and its Affiliated Associations [F or par values o f cu rren cy, see A p p e n d ix table, p . 278] A ffiliated associations Y ea r N um ber o f stores Sales P atronage refunds F r a n cs F ra n cs Sales o f the Federation F r a n cs 1910-11....................................................................................... 1915-16....................................................................................... 1919-20....................................................................................... 1924-25....................................................................................... 1929-30....................................................................................... 40 60 144 192 133 2,319,000 2,893,000 9,475,000 10,890,000 8,764,000 147,000 135,000 324,000 466,000 508,000 730,000 2,022,000 7,466,000 6,231,000 4,289,000 1933-34.......... J.......................................................................... 1935-36....................................................................................... 1937-38....................................................................................... 1939-40...................................................................................... 140 139 114 114 7,155,000 6,723,000 6,077,000 6,925,000 447,000 421,000 374,000 414,000 3,373,000 3,356,000 2,989,000 3,816,000 104 Cooperatives in Individual Countries V . 0. L. G. federation.— The V. O. L. G. federation was a combina tion distributive and marketing federation for its affiliated “ agricul tural consumers’ associations.” Of 438 stores operated by V. O. L. G. affiliates in 1935, 229 carried in stock all foodstuffs, household goods, brushes, twines, basketry, glass, china, office supplies, drapery, and footwear. In 1930, 61 associations owned agricultural equipment for the use of their members; 48 associations operated feed mills, 4 oper ated distilleries, and 7, bakeries; 15 had cider presses and 8 had flour mills. V. O. L. G.’s business in consumer goods then amounted to 18,533,000 francs, and its business in farm supplies totaled 14,890,000 francs; agricultural products marketed totaled 4,188,000 francs. The Cantons of Aargau and Zurich contained a complete network of agricultural associations and there V. O. L. G. supplied 40 to 53 percent of the population’s agricultural requirements. In the Cantons of Thurgau and Grisons the agricultural unions were also strong and in 7 others they were fairly well scattered. Farmers made up nearly 80 percent of the membership. The local organizations were usually small; only 44 had a turnover above 200,000 francs and 85 had less than 100,000 francs. In 1935, 229 out of 314 affiliates were consumers’ associations and 139 were engaged in marketing produce. Of these, 130 had subsidiary enterprises, including fruit-juice extractors, mills, bakeries, distilleries, and butcheries. Swiss Cooperative Union and Wholesale, V. S. K .—By far the largest of the three federations was V. S. K., with headquarters at Basel. Its membership included over 60 percent of the total number of distribu tive associations, and their sales accounted for nearly 87 percent of the total cooperative business. V. S. K. itself carried on a wide variety of merchandising, productive, and educational and service activities. Intercooperative relations.— In the course of the years, some over lapping of function between the consumers’ cooperatives and the agri cultural cooperatives had developed. Generally these matters were settled amicably by negotiations between the associations concerned. Thus, in the city of Geneva, where the consumers’ cooperative had been processing and distributing dairy products and milk, an associa tion was formed (representing both the cooperative association and the milk producers) wThich operated the stores and the milk routes and distributed the earnings between the two groups. In 1933 an agreement between V. O. L. G. and V. S. K. provided for joint purchases by the two federations wherever possible, elimina tion of competition between them, and an understanding that each would purchase as much of its supplies as possible from the other (agricultural products from V. O. L. G., and manufactured products and consumer goods from V. S. K.). Relations among all the branches of cooperation in Switzerland were coordinated through the Committee for Intercooperative Relations. Development o f Consumers’ Cooperative M ovem ent As noted, Swiss consumers’ cooperation in its modern form dates from 1851, with the formation of an association at Zurich. Growth wras fairly rapid, being contemporaneous with the urbanization of Swiss life and the development of new forms of retail trade. Expansion occurred in all branches of the cooperative movement in Switzerland during the first World War, but during the post-wrar crisis 105 Switzerland years between 1920 and 1925 both membership and sales declined. By 1927 the nation was so well organized cooperatively that a coop erative speaker asserted no further growth could be expected. The movement continued to expand, nevertheless, and in the 5-year period from 1930 to 1934 both membership and sales rose markedly, while average purchases per member increased by nearly 50 percent. In this period Swiss retail trade included the newer forms of trade, such as the large department store, the modern specialty shop, auto mobile (or “ rolling” ) stores, etc., operating side by side with the peddler, the market, and the old-time fair. Although small retailers still controlled over 77 percent of the total shops in Switzerland, they were increasingly alarmed by the spread of cooperatives operating many branch stores (and accounting for over 12 percent of the total) as well as by the large-scale joint-stock and partnership companies which together accounted for about 10 percent of all the stores. Or ganizing into trade associations, the private dealers began to agitate for restrictive legislation and in 1933 were successful in obtiaining passage of a law limiting the opening of branch stores; in 1937 they obtained a law levying special taxes upon chain-store organizations and cooperatives. Although the cooperatives succeeded in obtaining representation on the bodies which passed upon applications for the opening of new branch stores, the Government interpreted the “ purchase obligation” clause in V. S. K .’s bylaws (adopted in 1935) as making all of its affiliated associations branches of the wholesale. They were there fore forbidden to open new premises or to alter or extend their present ones without express permission. During this period, also, the operations of cooperatives and their federations were curtailed by a series of Government regulations estab lishing foreign-trade quotas and controlling prices. Notwithstanding these difficulties the consumers’ cooperatives continued to increase both membership and sales steadily from year to year. T a b l e 2 6 .— Operations o f M em bers o f Swiss Union o f Consumers’ Associations, V . S. K ., 18 97 -1 942 [For par values of currency, see Appendix table, p. 278] Year Number of asso ciations Mem bers Number of stores Sales Net earn ings Patronage refunds Value of property Francs Francs Francs Francs 1897............................. 1900............................ 1905............................. 1910............................. 1920............................ 1925............................. 71 116 204 328 493 521 53,365 83,549 141,349 213,018 363,420 352,172 279 21,798,000 2,318,000 1,696.000 419 32,725,000 3,204,000 2,392,000 671 54,436,000 4,953,000 4.054,000 1,008 101,000,000 8,567,000 6,997,000 1,824 325,857,000 16,550,000 12,997,000 2,010 276,367,000 15,944,000 13,303,000 1,318,000 1,916,000 4,149,000 8,262.000 19,628,000 21,894,000 1930............................. 1933............................. 1934............................. 1935............................. 1936............................ 1937............................. 523 533 534 535 541 540 362,953 389,451 397,142 402,339 407,737 413,715 2,232 2,404 2,416 2,423 2,436 2,452 296,513,000 284,787,000 279,538,000 274,200,000 283,178,000 299,252,000 21,177,000 17,640,000 20,900,000 17,659,000 20,598,000 17,601,000 20,098,000 17,273,000 20,504,000 17,711,000 21,043,000 18,640,000 31.755,000 38,960,000 40,223.000 41,104,000 42,150,000 43,168.000 1938............................. 1939............................. 1940............................. 1941............................. 1942.......................... 543 545 546 0) 546 421,100 427,166 430,315 443,000 461,000 2,454 2,469 2,472 0) 2,498 307,069,000 326,440,000 350,191,000 373,200,000 406,100,000 22,065,000 23,228,000 23,892.000 0) 26,470,000 44,904,000 47,149,000 48,965.000 1No data. 588544°— 44------ 8 19,471,000 20,463,000 21,560,000 22,500,000 23,800,000 8 106 Cooperatives in Individual Countries V . S. K .— A Four-Language Cooperative Federation Although .V. S. K. had begun as an agency for collecting statistics and formulating economic policy, it early added a wholesale distrib utive department which soon outstripped other functions. By 1939, Y. S. K. was the largest customer for Swiss-made goods and Swiss agricultural products and the nation’s largest-scale importer of the goods it handled. V. S. K. handled 80 percent of all the macaroni and sugar consumed in Switzerland. To some extent it had attained this position through use of such measures as exclusive purchasing agreements made with some of its affiliates and (after 1935) the inclusion in its bylaws of a “ purchase obligation” for member associations covering certain staple commodi ties. Direct purchases abroad enabled it to buy to better advantage the foreign goods it needed. The development of its business activities is indicated in table 27.V . T a b l e 2 7 .— Growth o f Swiss Cooperative Wholesale, V . S. K ., 18 95 -1 942 fFor par values of currency, see Appendix table, p. 278] Year Affiliated associations Total sales Net earn ings Reserves “ Social" capi tal F rancs F ra n cs Francs F ra n cs 1895................................................ 1905................................................ 1915................................................ 1925................................................ 1935................................................ 1936................................................ 55 204 407 521 535 541 1,134,955 9,143,129 50,193,162 125,251,195 177,148,267 188,476,063 1937............................................... 1938................................................ 1939.............................................. . 1940................................................ 1941............................................... 1942................................................ 540 543 545 546 (0 546 200,488,233 207,029,695 227,869,001 247,083, 976 244,236,000 263,690,000 9,109 87,141 479,383 635,342 746, 719 722,140 655,685 578,326 583,222 579,218 0) 0) 16,250 57,000 748,200 1,592,600 1,673,800 1,675,600 1,675,800 1,675,200 1.677,000 1,680,200 0) 0) 3,600 180,000 1,600,000 4,200,000 9,000,000 9,500,000 10,000,000 10, 500,000 11,000,000 11,500,000 0) (0 lNo data. P R O D U CT IVE A C T IV IT IE S V. S. K .’s interest in the use of production as a controlling influence on prices began before the first World War, when the refusal by the cooperative bakeries of Zurich and other towns to agree to a price increase set by the Swiss Master Bakers' Association brought about a boycott of the cooperatives by the syndicate of Swiss mill owners. In consequence V. S. K. purchased in 1912 one of its first productive enterprises— the municipal flour mill at Zurich— and organized the Flour Mill Association of the Swiss Distributive Associations. Flour rices immediately fell 3 francs (58 cents) per 100 kilograms and the our cartel dissolved. By 1935, the cooperative milling association had a turnover of 8,528,923 francs. It not only operated the largest mill in the entire country but it had built up a fund of 2,000,000 francs to finance expansion. Inability to obtain adequate supplies, at equitable prices, and contests over price levels were the motivating influence leading to other productive ventures by Y. S. K. A long boycott of coopera tives by shoe manufacturers was broken when V. S. K. began con struction of its own factory in 1911. This enterprise, originally a department of V. S. K., was reorganized as an independent federation § 107 Sudtzerland in 1925, its operations being controlled by the 125 local associations which became its members. By 1938 this enterprise— the Swiss Shoe Cooperative (Schuh-Coop)— had annual sales amounting to 8,368,000 francs, of which 1,670,000 francs represented its own manu factures. After the beginning of World War II the private interests again attempted to prevent shoe supplies from reaching cooperatives, but with what success is not reported. Although some local associations operated their own butcheries, the meat output was not sufficient to supply the whole consumers’ cooperative movement. In 1914, therefore, V. S. K. purchased a substantial interest in the largest meat-packing enterprise in Switzer land, with the understanding that the federation would discourage further cooperative meat production. The arrangement proved to be satisfactory and profitable to both parties. The so-called “ chocolate war” was an open fight by the coopera tives against monopoly. V. S. K. inaugurated a boycott against the chocolate trust, in which it was joined by all but 11 of its affiliated associations and by V. O. L. G. The boycott ended when the cartel abandoned its quantity-discount practice to which V. S. K. was opposed. V. S. K. by 1937 was operating several farms and a coffee-roasting plant. It was also financially interested in a cigar factory, a garden truck association, a wholesale furniture association, the National Union of Cheese Manufacturers at Bern, the National Poultry Federation, and other similar enterprises. (See table 8, p. 29.) Nev ertheless, only about 11 percent of V. S. K .’s total sales were of goods of its own production. Among the obstacles to the development of cooperative production were the competition of strong privately owned companies, the demands of the cooperative employees (said usually to be greater in the case of cooperative than of private em ployers), V. S. K .’s policy of dealing only with member associations, and the lack of international connections, especially for technical innovations. The membership and business of some of the productive enterprises for the year 1937 may be seen from table 28. T a b l e 2 8 .— Swiss Consumers’ Productive Enterprises, 1937 [For par values of currency, see Appendix table, p. 278] Item Number of member associations............ Number of individual members_______ Coopera Coopera tive Dairy tive flour Leman Society of mills of Coopera Swiss dis Swiss dis tive Flour tributive tributive Mills associa associa tions tions 20 F ra n cs 220 291,061 F rancs Amount of sales......................................... 4,986,000 12,099,000 783.000 22,000 Share capital paid up............................... 52,000 200.000 Reserves_____________________________ 49 F ra n cs 2,004,000 146,000 98,000 Coopera tive shoe factory Coopera Cigar tive furni ture asso factory ciation 1 125 F ra n cs 8.368.000 1.196.000 1.200.000 F ra n cs 1,409,000 110,000 2,000 F ra n cs 281,000 57,000 1 Figure relates to 1938. In the midst of the chocolate war, V. S. K. had begun widespread use of the label “ CO-OP” which then and later was an influential factor in increasing its sales and in unifying the cooperatives as pur 108 Cooperatives in Individual Countries chasers. V. S. K.'s avowed object in all these struggles had been to safeguard the consumer's interests by assuring him a fair price. A similar policy actuated the union in the early establishment of a laboratory for testing the quality of goods. Long before the Swiss Government brought in its Federal foodstuffs legislation, the union had a chemical laboratory of its own, directed (after 1918) by a wellknown Swiss scientist. Sw iss Cooperatives and the State The Swiss consumers' cooperative movement was essentially non political, although, as individuals, cooperative officials served on Government committees and sat as members of the Swiss Parliament. Y. S. K., however, had confined its contact with Government to its own specific problems and had never formulated any concrete program of legislative or political action. Until the emergencies preceding and arising from World War II, Swiss cooperatives were little touched by national legislation. They literally did not exist in law until the Commercial Code went into force in 1883. Even that code made no mention of federations. It left the legal definition of “ cooperative" so elastic that the Swiss could develop “ an unparalleled abundance of cooperative types and forms," and so loose that even profit-seeking organizations could and did use the cooperative form. Not till the completion of the revised Commercial Code in 1937 was the cooperative association mentioned separately from commercial companies and clearly defined as an organization for self-help. Before the end of the 5-year period (1937-1942) provided for the cooperatives' transition to the 1937 law, the Swiss cooperatives had to submit to new taxation and other forms of emergency State control already mentioned. With the Government's war policy of control of imports, consump tion (rationing) and prices, and war taxes, V. S. K., collaborated wholeheartedly. It met severe rationing well by laying in large sup plies. Under a law of 1940, it had paid a tax on turnover and a 3-percent tax on all cooperative refunds in excess of 5 percent of sales. When the wartime rise in prices continued in 1943, V. S. K. advocated that the State take over the increase for the more important foodstuffs and lay a special tax to cover the cost. ‘ It had defended the consumer against “ unjust" taxation and had succeeded in having eggs, fruits, and vegetables placed on the tax-exempt list, and the tax on the main foodstuffs and soap kept down to 2 percent. In 1941, the Government had imposed the full weight of the original 1933 decree relating to the opening of new or branch stores, and pro hibited all expansion except by special license. By midsummer 1943. the cooperatives faced a proposed Federal decision to broaden and continue the licensing system after the war in a way which would actually mean “ a fundamental reorganization of large sections" of the Swiss economy. Since the Director of the Federal Office for Industry, Trade, and Labor had announced this new policy to the Swiss retail traders, without consulting any cooperative opinion, cooperatives believed that the Federal Council planned to create “ a privileged position for these [the private traders] groups, a kind of monopoly for the defense of their business interests against an in Scandinavian Countries 109 convenient competition.” Cooperative speakers stressed the co operative refusal to ask for State help in the past and their own representative character, coming as they did from “ all sections of the population, workers, farmers, artisans, teachers, people of all political and religious creeds, who set aside their individual opinions and interests to serve the common interest through cooperative action.” 29 Scandinavian Countries The Scandinavian countries have been noted for the wide acceptance of the cooperative idea, especially among the farmers. Consumers' cooperatives, however, were not far behind. In Finland, from 30 to 40 percent of the nation's retail trade was done by cooperatives. Unlike the situation in many other countries, where the national cooperative wholesale of the consumers' cooperatives entered pro duction as part of a definite policy of self-sufficiency, in the Scandi navian countries cooperative production was rarely undertaken where supplies were obtainable from private sources at equitable rates. Even in accordance with this conservative policy, the devel opment of cooperative production nevertheless had become a sub stantial part of the wholesale's business in each country. The con tests between the Swedish cooperative wholesale, K. F., and the cartels controlling certain commodities of wide consumer use resulted in drastic price reductions benefiting not only cooperators but Swedish consumers in general. In addition to their domestic operations the Scandinavian cooper ative movements have been cooperating among themselves for the past 25 years, through the Scandinavian Cooperative Wholesale (Nordisk Andelsforbund, known as “ N. A. F .” ), formed in 1918 on the initiative of K. F. Its headquarters office is in Copenhagen and its members are the national cooperative wholesale associations of Sweden, Denmark, and Norway, and the two wholesales of Finland.30 The business of N. A. F., which acted as joint purchaser for its mem bers, has naturally been affected seriously by the war, especially as Denmark and Norway have been under enemy occupation, and Fin land has been cooperating with the Nazis. Nevertheless, during 1942 it was able to make purchases for all of its members. As would be expected, trade with Sweden furnished the lion's share of N. A. F.'s business in 1942. The distribution was as follows: Sweden 87.9 percent, Denmark 7.3 percent, Finland (both wholesales combined) 3.9 percent, and Norway 0.8 percent.3 9 39 Sources .— The report on Switzerland is based upon data from the following publications: Annuaire Statistique de la Suisse (Bureau Federal de Statistique, Bern) 1939, 1940; Rapports et Comptes sur l’acti- vite des organes de 1’Union (Union suisse des Cooperatives de Consummation, Basel) 1940,1941; International Directory of Cooperative Organizations (International Labor Office), 1939; International Cooperative Bul letin (international Cooperative Alliance, London), issues of April, October, and November 1911, March and October 1912, January and February-March 1914, December 1918, January and December 1919, JulyAugust and November-Decerober 1921, November 1925, and May 1927; Review of International Cooper ation (International Cooperative Alliance, London), issues of June and November 1928, May and December 1932, April 1934, August and September 1935, March and November 1936, April 1937, March, May, August and October 1939, February and June 1940, November 1942, August 1943, January 1944; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1929, 1930, 1934, 1937, 1938, 1941; Annals of Collective Economy (Geneva), January-April 1941; Report of the Inquiry on Cooperative Enterprise in Europe in 1937 (Washington, 1937); La Cooperation—Journal populaire suisse (Basel), issues of April 18 and June 20,1942, and August 14,1943. so For additional information on N . A. F. and its operations, see p. 37. 110 Cooperatives in Individual Countries Cooperative Movement in Denmark When in 1940 the German Nazis invaded Denmark the cooperative organizations were left practically untouched. That the Danish co operative movement was not liquidated as in other invaded countries was undoubtedly due in part to the characteristics which placed it among the foremost in the world— its powerful agricultural coopera tives and their successful experience in the export trade. About 90 percent of the population living on Denmark’s 206,000 farms belonged to one or more cooperative associations. Practically every phase of the farmer’s economy was organized cooperative^. He obtained his farm and household supplies from the cooperative store, his produce was marketed through cooperative associations. Personal insurance as well as protection for crops, buildings, and live stock were available through cooperative insurance associations. Cooperative dairies handled approximately 95 percent of all Danish milk, and about one-third of the butter exports throughout the world came from Danish cooperatives. In 1935, the cooperative associa tions of that country handled the following proportions of the totals of various Danish goods exported: Eggs, 25.1 percent; cattle, 39.1 per cent; butter, 47.1 percent; and bacon, 84 percent. The consumers’ cooperatives, though not so well known, were also important in the nation’s economy. Almost 10 percent of the popula tion of Denmark were members of distributive cooperatives and, counting the families, about a third of the Danish people were being served by them. The cooperative associations accounted for about 17 percent of the total retail trade. The cooperatives, being such a large force in the economic life of the country, were able to exert considerable influence upon prices. On several occasions they even entered upon the production of com modities the price of which they considered unreasonable. Thus, when a rolled-oats company kept its prices artificially high, the coop eratives began manufacturing this commodity and brought prices down by 26 percent. A somewhat similar effect upon the price of twine was exerted by development of a cooperative industry manufacturing 20 percent of the national output of such twine. Ordinarily, however, the cooperative movement did not undertake production when it was well treated by private producers. Danish cooperative success was attained without either the protec tion or the restraint exercised by a cooperative statute. No body of actual law for cooperative associations, except for credit organiza tions, existed in Denmark. For the two generations before the Social Democrats first took over the Government in 1924, the farmers had held the majority in the lower house of the Danish Parliament. They were responsible for progressive legislation which provided a democratic credit system, greatly enlarging the number of individual landowners, and which developed education and social insurance. For the cooperatives, however, the farmers introduced no special legislation. In the early years, almost all cooperatives were unin corporated organizations witii unlimited liability, operating simply under the provisions of the common law and controlled by the mem bers, each of whom had one vote only. Cooperatives which sold only to members were not required to obtain licenses and were not taxed on earnings; with this exception, cooperative associations carried on business under the general statutes regulating all Danish trade. 111 Denmark T ypes o f Cooperatives and Their Activities Cooperatives played a part in many lines of enterprise in Denmark. The greatest variety occurred in the associations serving the farmers. Farm products were marketed either directly or after being processed, and the sale of these commodities was carried on in foreign as well as domestic trade. Necessaries for farm and household were supplied through cooperative channels, as were also insurance of many kinds, credit, electric power, and even hospital care. Nearly all types of cooperatives had their own federation. The consumers’ cooperatives, although not so varied in kind, were almost equally well developed, and there was also a small group of workers’ productive organizations. The relative development of the Danish cooperative movement in 1937 is indicated in table 29. It should be noted that the membership given in the case of the agricultural cooperatives contains a great deal of duplication and the figures should not be totaled. Probably in no country in the world was the individual farmer a member of more types of associations than was the case in Denmark. T a b l e 2 9 . — M em bership and Operations o f Danish Cooperatives in 1937, by T yp e [For par values of currency, see Appendix table, p. 278] Type of association N u m b e r of associations M em b er s B usiness Local associations K ro n er Consumers’ associations.............................. . Bakeries ................ ............................. Breweries and dairies *........................... Restaurants i.................. ......................... Store associations...... ............................ . Workers’ productive associations................ Fishermen’s............................................. Craftsmen’s.............................................. Other 1................................................... Housing associations3*7 8 .................................... Insurance associations............................ ....... Electricity associations3................................ Rural credit associations3............................. Other agricultural associations: Productive, processing and marketing. Purchasing................................................ 368, 495,006 15,100,006 19,700,006 4 ,9 9 5 ,0 0 6 328,700,000 29,747,000 10,204,006 5,543,000 14,000,000 < 8 ,8 7 0 ,0 0 6 *14,334,006 1,963 36 2 33 1,882 76 36 18 22 17 7 283 100 391,100 (?) <*) 25,000 366,100 21,356 «152 ,1 0 0 ,0 0 6 2,299 1,476 476,262 93,275 1,050,000,000 133,600,006 (1 2) (2) (2) (2) 12,980 658,795 (2) (2) Federations Consumers’ associations: Cooperative Wholesale (F.D.B.)_„ Bakery supplies 1............................... Coal supply......................................... Agricultural associations: Marketing of agricultural products. Manufactures...................................... Purchasing of— Agricultural supplies.................. Coal............................................... Central banks............................................ Sanitarium................................................. K ro n er 1 1 2 4 2 5 1 2 1 71,841 7 36 7174 206,800,006 15,095,000 8,000,006 7 960 71,775 ✓ 7 3,025 7 1,030 8 1,333 71,077 222,335,000 13,300,000 1 Data relate only to associations affiliated to central federation. 3 No data. 3 Data relate only to associations affiliated to central federation. * Income from rents. Value of dwellings constructed in 1937 was 6,847,000 kroner. 3 Premium income. 8Total turnover. 7Number of member associations. 8Number of member associations, 1 bank only. 156,005,006 9 ,6 0 0 ,0 0 6 500,006 112 Cooperatives in Individual Countries H O U SIN G ASSO CIATIO N S Cooperative housing associations have played a small but im portant part in the provision of living quarters in Denmark. Even as early as 1919 the local associations were sufficiently numerous to form their own central organization. The Danish Union of Workers’ Cooperative Building and Housing Associations was formed when housing cooperatives were beginning construction on a considerable scale in Austria and Switzerland, but the period of greatest Danish activity came after 1933. An act of that year, designed to replace dwellings of pre-war construction, authorized the Government to grant loans up to 95 percent of the building costs to municipalities and cooperative housing organiza tions and up to 70 percent of the cost to private builders. As a result of this law the number of dwellings constructed nearly doubled in 1933-34. After 1938 the municipality of Elsinore took advantage of a new Danish law which provided for nonprofit projects to provide housing for large families. One cooperative association undertook the con struction of 102 apartments, leaving direct technical supervision to the State and the municipality. Capital was obtained from credit associations and the State, but only 5 percent was required from the families and this amount might be guaranteed by the municipality in the case of families of more than two children. The Union of Workers’ Cooperative Building and Housing As sociations was a member of the Cooperative Union (Det Kooperative Fsellesforbund) and, as in the case of other associations affiliated to that Union, its members were mainly industrial workers. In 1937 the housing federation had 17 member associations and they in turn had 12,980 individual members. The largest building cooperative was the Workers’ Mutual Building Society which then had 5,000 members and 4,200 apartments to its credit. That organization financed its construction as follows: 40 percent of the capital necessary for an apartment was obtained on a first mortgage from a credit asso ciation, 15 percent from an association taking second mortgages, 10 percent from the members (who were the tenants), and the remainder (up to 90 percent) from the State under the law of 1933. After the mortgages were paid off, rents were reduced to the level necessary for adequate maintenance. The next largest cooperative building association— the Workingmen’s Society— operated 3,000 apartments' in the mid-thirties and used methods similar to those of the Mutual. The part share of the cooperatives in the provision of Danish housing after 1933 is shown below. D w ellings constructed by— Co&pP u b lic P frn te eratives authorities builders 1,042 1933______ 1934________________________________ 575 1935_^_________________________ 249 1936 ____________________________ 340 1937 ____________________________ 299 1938 ____________________________ 482 254 1, 197 254 266 836 770 15,079 21,403 22,436 17,540 17,403 13,369 E L E C T R IC IT Y COO PER ATIVES The Danish electric-power business was largely in the hands of the public, through operation either by political subdivisions of the State 113 Denmark or by cooperative associations. The development of rural electrifica tion had begun before World War I and was greatly accelerated by the shortage of fuel oils during that war. Farmers combined in coopera tives and prospective consumers took shares. Many of the coopera tives at first owned both generating plants and lines. When towns and municipalities began electrification later, some of them “ whole saled” power and the farmer cooperatives maintained the lines and operative functions. Occasionally the town and the cooperative in the surrounding area became partners in generating power. In the mid-1930’s Danish rural electricity cooperatives numbered 283 and served a large part of the nation’s agricultural area. Their annual sales of power were about 100,000,000 kilowatt-hours, which amounted to from 20 to 25 percent of the total power sales of the country. Later reports indicated that the rate of expansion of the cooperatives was not keeping pace with that of the municipal com panies. C O O PER AT IVE SO C IETIES’ SA N IT A R IU M In 1904, several dairy associations organized the Danish Coopera tive Societies’ Sanitarium (Andelsforeningernes Sanatorieforening). The sum of $50,000 was raised by subscription by cooperatives and their members and a hospital and sanatorium was built. At the end of the depression of the 1920’s more than 1,000 cooperative associations were members of the sanatorium association. Its growth in member ship and income since 1930 is indicated below: Affiliated associations 1928—......................... - ..........- .......... 1,072 1931— ___________________ 1934......................................... 1937........................................ 1939________________________ T heir m em bers Gross income of sanitarium (kroner) 188,838 500,000 1,074 190,880 600,000 1,077 193,810 100,000 (>)194,307 500,000 (•)359,496 500,000 i No data. C E N T R A L F E D E R A TIO N OF D A N ISH C O O PER ATIVES Coordination of the branches of the Danish cooperative movement was effected through the Central Federation of Danish Cooperatives (De samvirkende danske Andelsselskaber) formed in 1917. To it in 1937 were affiliated the following federations and central organizations: Union and Wholesale of Danish Distributive Societies (F. D. B .).1 Association for the Purchase of Goods for the Cooperative Societies of Ringkobing. Association of Cooperative Dairy Societies. Association of Cooperative Butter Export Societies. Association of Cooperative Bacon Factories. Danish Cooperative Egg Export Society. Federation of Danish Cooperative Cattle Export Societies. Danish Seed Supply and Seed Growers’ Association. Jutland Cooperative Society for Feed Purchase. Islands Cooperative Society for Feed Purchase. Funen Cooperative Society for Feed Purchase. Danish Cooperative Fertilizer Supply Societj^. Danish Cooperative Coal Supply Society. Danish Cooperative Cement Factory. Association of Danish Cooperative Agricultural Insurance Societies. Cooperative Bank of Denmark. Danish Union of Cooperative Credit Societies. Danish Cooperative Societies’ Sanitarium. 1 F. D . B. participated also on an international scale through membership in the Scandinavian Cooper ative Wholesale Society (see p. 37). 114 Cooperatives in Individual Countries Development o f Consumers’ Cooperatives Through 1939 Consumers’ cooperatives made their first appearance in Denmark in 1851. In 1871 the first attempt at centralized purchasing was made under a plan developed by Pastor Hans Christian Sonne, and a wholesale association was formed which was later absorbed into the Union and Wholesale of Danish Distributive Associations (.Faellesforeningen for Danmarks Brugsforeninger, known as “ F. D. B .” ) formed in 1896. For many years almost the whole of the consumers’ cooperative movement of Denmark was in the rural areas, and there were almost no consumers’ cooperatives. The wholesale was accordingly composed mainly of farmers’ cooperatives, which in 1929 were obtaining 83 per cent of their supplies from it. In 1934 this proportion had risen to 89 percent and by 1937 to 91 percent. Meanwhile in the urban centers a small trade-union cooperative move ment had developed, consisting of associations operating bakeries, res taurants, and stores, providing dwelling accommodations, etc. Each of these types of associations had its own federation and all in turn were affiliated to the Cooperative Union (Dei Kooperative Faellesforbund) formed in 1922. This trade-union group also had its own bank and insurance organizations. The depression of the early 1930’s drew members to the urban consumers’ cooperatives, as the following figures indicate. That they still constituted a very small part of the total distributive movement of Denmark, even in 1934, is shown by the fact that the 36 distributive associations accounted for only 60,860 of the total membership of 319,100 and 22% million of the total business of 171% million kroner in that year. U rban cooperatives 1931____ 1932. ............... 1933. ............... 1934__________ 30 32 32 36 M em bership 42, 230 52,200 55,400 60, 860 Turnover (kroner) 14, 922, 100 15,925,700 18,803, 500 22, 501, 100 Though the Danish consumers’ cooperative associations did not receive as much attention outside Denmark as did the agricultural associations, they had become almost as widely organized. In 1934 the existing 1,883 consumers’ cooperatives with their 319,100 members represented almost 10 percent of the country’s population— a propor tion exceeded only in Great Britain, Finland, and Switzerland with about 16,14, and io percent respectively. Including family members, however, one-third of the Danish people were in some way associated with the consumers’ cooperatives, which were doing about 10 percent o f the retail trade of Denmark at that time. The large district associations found in France and Belgium were not a feature of the cooperative movement in Denmark, where the law prevented the formation of branches outside the headquarters locality. (This provision had also checked the growth of chain-store organiza tions operating in a number of towns or cities.) The Copenhagen cooperative, with its 100 retail outlets (all within the city limits), 31,000 members, and annual business of over 13 million kroner, was a marked exception to the rule. Only 13 other Danish cooperatives had more than 2 stores at the end of 1937 and more than 90 percent of all associations had only 1 place of business. 115 Denmark The average cooperative was nevertheless considerably larger than the average private business 3 and when in the early thirties the difficult world conditions began to be reflected in depression in Den mark, attacks upon the cooperative movement by the private merchants (who were still doing some 90 percent of the total trade) became increasingly bitter. However, as the cooperative associations represented such a well-established and conservative element of Danish economy, the attacks had little or no effect. The foreign economic situation was more serious, for Denmark’s whole business system was geared to its foreign trade. The Govern ment attempted in various ways to overcome the effects of restriction of markets and the resulting accumulation of surpluses of export commodities. Among these were destruction of cattle, reduction of taxes, abandonment of the gold standard, negotiation of trade agree ments with England, and imposition of import and export quotas. Although cooperative leaders recognized that Denmark was departing from its traditional free-trade policy only under the compulsion of events, they opposed quotas based upon trade of previous years be cause the membership and business of the cooperatives was growing. Nevertheless, in the absence of a complete change in the entire Danish economy, the fact remained that public policy was determined largely by the farmers and partially by the cooperatives. Total turnover of consumers’ associations even rose during the depression (table 30) and costs of operation fell— from 10.1 percent in 1932 to 8.9 percent in 1936. Patronage refunds averaged 7 percent in the latter year. In 1938, the consumers’ associations reported an improving financial position, for of their working capital their own net worth (shares, reserves, and funds) represented 53.3 percent and 46.7 percent was loan capital (members’ deposits, sums owing for goods, credits, etc.). In the Copenhagen consumers’ cooperative, net worth constituted 74.6 of the working funds. In the one year 1936, the net surplus of the consumers’ associations amounted to 23,500,000 kroner, from which were paid patronage refunds amounting to 19,200,000 kroner. T able 3 0 .— M em bership and Business o f Consumers’ Distributive Cooperatives in Denmark, 1930-41 [For par values of currency, see Appendix table, page 278] Year 103ft 1931........................ 1932 ...................... 1933 ................... 1934 ...................... Num ber of associ Members ations Amount of business Year Num ber of Members associ ations K ro n e r 1,823 1,825 1,852 1,866 1,883 331,550 331,000 315,500 317,600 319,100 147.500.000 134.700.000 138.100.000 155,000,000 171.500.000 Amount of business K ro n er 1935....................... i 1,891 1936....................... 1,898 1,882 1937....................... 1938 ...................... 1,891 1939....................... 1,901 1941....................... 1,933 i 424,355 437,625 1366,100 i 376,000 i 392,000 419,200 1313,200,000 338.000. 000 328.700.000 342.000. 000 361.500.000 <*> i Membership of 1 group not reported. * No data. * In 1938 the average business per cooperative association was 184,000 kroner. Among the private dealers 61 percent had an annual business of less than 25,000 kroner, 5 percent a business of 100,000-200,000 kroner, and 2 percent a business of more than 200,000 kroner. 116 Cooperatives in Individual Countries Federations o f the Consumers9 Cooperative M ovem ent Among the consumers’ cooperatives there were three groups of associations federated respectively in the Danish Cooperative Union and Wholesale (“ F. D. B .” ), the Cooperative Union of industrial workers, and the Ringkobing association (.Ringkobing Amts Vareindkohsforening). The industrial group had no wholesale of its own and some of its members were affiliated with F.D.B., which included practically all of the consumers’ cooperatives in Denmark. The Ringkobing was a small regional joint-buying organization, the mem bership of which in 1937 included 70 local associations with 10,000 members and a total annual business of about 3,600,000 kroner. C O O P E R A T IV E U N IO N A N D W H O L E S A L E SO CIETY The F. D. B. from the date of its formation in 1896 had a steady and consistent growth, even during depression years. By 1916, more than 1,500 cooperative associations with 240,000 members had joined the wholesale. Its annual sales in that year amounted to 87,686,567 kroner and its production to nearly 18,656,716 kroner. By 1927, turnover had risen to more than 133,000,000 kroner and the value of production to 36,869,238 kroner. The whole sale then had branch warehouses in 15 towns and factories in 6. Beyond its regular business of production and sales, it maintained a seed-testing bureau, organized bookkeeping classes, supported the Middlefart Cooperative College, and published a journal which reached 140,000 subscribers. Ten years later, these miscellaneous services had been widely extended to include (1) a central laboratory which carried out analyses and experiments, to the number of 2,872 in 1937 alone; (2) an architects’ office which not only dealt with the wholesale’s extensive building program (representing a value of 2,450,000 kroner), but also advised consumers’ societies. T able 31. — M em bership and Business o f Cooperative Union and Wholesale Society of Denmark, F . D . J&., 1 9 2 0 -3 9 {For par values of currency, see Appendix table, p. 278] Wholesale (F. D. B.) Member associations Year Number Member ship 1920........................ 1922...................... 1924....................... 1920........................ 1928........................ 1,792 1,805 1,804 1,802 1,784 335,104 337,535 337,500 323,500 321,500 1930........................ 1931........................ 1932........................ 1933........................ 1934........................ 1,791 1,796 1,819 1,833 1,853 321,500 821,500 306,500 307,600 309,100 1935........................ 1936........................ 1937........................ 1938........................ 1939........................ 1,869 1,856 1,855 1,864 1,870 344,000 367,500 366,100 376,000 392,000 Amount of business K ro n er JNo data. 0) (5) 0) 0) 0) 0) 0) (!) 0) 0) 0) 303,800,000 327,000,000 340,000,000 359,000,000 Amount of business K ro n er Value of own produc tion K ro n er Net earn ings Patron age re fund (as percent of sales) K ro n er 203,355,621 123,410,344 169,585,367 136,868,832 134,368,629 41,882,214 29,735,463 46,186,675 38,932,259 38,079,154 5,061,457 6,233,070 11,642,057 6,642,929 8,701,963 3.0 5.0 6.0 5.0 5.0 143,534,129 181,512,764 135,158,025 151,900,000 168,000,000 39,645,475 36.783,474 38,477,258 42,900,000 47,500,000 10,786,099 (') 8,862,857 7.0 6.0 7.0 7.0 7.0 184,200,000 195,800,000 206,800, GOO 198,100,000 216,200,000 51,165,000 55,800,000 60,600,000 59,700,000 65,100,000 11,181,211 0) (l) 10,918,000 80) 6.5 (l) 0) 0) 0) Denmark 117 The wholesale society’s productive policy was friendly to private manufacturers. It entered the field only when private interests did not serve it well. When tobacco merchants, for example, attempted a boycott, the cooperative wholesale began the processing of tobacco. By the year 1937, the wholesale’s largest productive works was the margarine factory at Viborg, Jutland, and the coffee-roasting plant at Kolding was next largest. That year F. D. B. purchased 4,600,000 kilograms of coffee beans, or 17.3 percent of all Danish coffee imports. (For products of F. D. B .’s 20 productive works, see table 8, p. 28.) The wholesale and the Danish agricultural associations worked out so satisfactory a system of collaboration for grass seed that F. D. B .’s turnover of this commodity was greater in proportion to the national consumption than that of any other article which F. D. B. supplied. Agreements begun in 1906 and amended in 1913 and 1926, defined the productive and distributive activities of each ultimately established a method of collaboration between x __ and consumers which, according to a report of the International Cooperative Alliance, might well serve as a model. Cooperation Under the N azis When the Germans invaded Denmark in 1940, the nation’s retail establishments numbered 78,207 and their turnover amounted to 2,959,600,000 kroner. Cooperatives were doing 17 percent of this retail business. In fact, the Danish cooperative associations formed so integral a part of the national economic life that, when the Germans occupied the country, the cooperative machinery and services appear to have been maintained practically intact. According to a report from the International Cooperative Alliance, the Danish Government collaborated with the invaders at the begin ning. Sugar, tea, and coffee rationing, which had already begun, was continued more drastically, but the most severe effect of the German occupation was felt by the producers and consumers of vegetable oils, cereals, dairy products, and meats— the products in which the coop eratives had been most active. Lack of raw materials caused F. D. B. to cease operation of its margarine factory temporarily in April 1940. Under a Government order of May, only large, low-income families could obtain margarine. A decree for the compulsory delivery of cereals was issued in the summer of 1940. Although the allocation for livestock was cut by two-fifths and 50 percent of the pigs and poultry were to be slaughtered, so much cereal was carried off to Germany and used by the German army of occupation that by mid summer the country was relying on the year’s bad harvest. Bread rations were consequently greatly reduced. The price of bread in Copenhagen rose from 90 ore per loaf in the summer to 145 ore in the autumn and Parliament had to approve a grant of 16,500,000 kroner to maintain prices at 121 ore. At the end of October 1940, the number of cattle in the country had been so greatly reduced that milk production was not expected to exceed 60 percent of the customary total. The Germans took the butter which would, in normal times, have been exported to England (15,800 tons in May 1940 alone); Danish butter exports fell to 5,400 tons by September. The German Reich Office for the Milk Industry arranged with the Danish Butter Executive Committee to increase 118 Cooperatives in Individual Countries the price of butter to 450 kronen per 100 kilograms, thus doubling the price of the preceding year. In the first quarter of 1941, prices were raised still further and export was stimulated. However, the price of German coal imported into Denmark was increased also, and eventually domestic milk deliveries suffered most unfavorably. Be fore the year 1941 ended, Germany’s share in Danish foreign trade reached 80 percent. In 1941, the International Cooperative Alliance reported that German policy had already reduced supplies to a critical point. By the end of 1942, a reduction of more than 12 percent in the Danish cooperatives’ productive works had taken place. In October 1943, the I. C. A. commented upon “ the depletion of all livestock, general economic impoverishment” and deficiencies. Until 1940 cooperatives had been taxed only on that part of their earnings that had been derived from business with nonmembers. The Extraordinary Income and Property Taxation Law of 1940-42 subjected the total net earnings of cooperatives to both a property tax and a progressive income tax. During the first year of the German occupation, Danish coopera tive membership increased from 348,000 to 394,000 and in 1941-42 trade as well as membership of the Copenhagen Consumers’ Coopera tive grew. The Wholesale Association, F. D. B., entered the general publishing field in 1940 by founding a legally independent publishing association, “ Det Danske Forlag.” Though freedom was sufficient to permit the new society to publish a book on “ Fundamental Prin ciples of the Consumers’ Movement,” the cooperative publishers met opposition from the private interests in the trade. At the Parliamen tary elections, the Danes cast the largest vote in their history; the Nazis lost 3,000 votes, and the four large democratic parties gained 365,000 more votes than they had in 1939. Other indications of the survival of democratic institutions— cooperative or not— are lacking.4 Cooperative Movement in Finland In cooperation, Finland was one of the most highly organized coun tries of Europe. The Finnish cooperative movement developed widely and rapidly because the Finnish people were accustomed from early times to fishermen’s, trappers’, and other guilds which required con formity to a common principle and the distribution of rewards in proportion to the members’ participation. Though farmers and labor ers had established separate, independent cooperatives in the nine teenth century, 1899, the year of the formation of the Central Union of Finnish Cooperative Associations, Pellervo-Seura, by Prof. Hannes Gebhard, lecturer in agriculture at the University of Helsinki, marked the beginning of the modern Finnish cooperative movement. Finland had then been an autonomous duchy of Russia for 90 years. 4 S o u rces .—1The report on Denmark is based upon data from the following publications: Statistisk Aarbog (Statistiske Departement, Copenhagen), 1930,1933,1935, 1937, 1938, 1940, 1941; International Directory of Cooperative Organizations (International Labor Office), 1933, 1936,1939; Review of International Coopera tion (International Cooperative Alliance, London), issues of September 1928, February 1930, March 1935, January and May 1936, February, June, and August 1937, January and September 1938, January, May, and July 1939, January and March 1940, March 1941, June, September, and December 1942, October 1943; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1934, 1935, 1938, 1939, 1941; Quarterly Journal of Economics, vol. 27, November 1912; Report of the Inquiry on Cooperative Enter prise in Europe in 1937 (Washington, 1937); Denmark, A Social Laboratory, by Peter Manniche, (Oxford University Press, 1939); Democracy in Denmark, by J. Goldmark and A. H. H. Hoilman, (Washington, D. C., 1936); Denmark, the Cooperative Way, by Frederic C. Howe (New York, 1936); The Cooperator (New York, N. Y .), April 19, 1943. Finland 119 Through the work of Pellervo and Prof. Gebhard, information on cooperatives was spread, model rules and expert advisers were pro vided to help in establishing cooperatives, and a law legalizing coopera tive associations was passed by the Government at Helsinki in 1901. With this support, the consumer movement quickly reached out from industrial to rural areas, where Gebhard found the same conditions which had influenced Raiffeisen to develop rural banking in Germany. In Finland a central organization to provide rural credit was formed prior to the local associations, and this policy of growth from the center out, of one nation-wide organization in each field, was adopted and carried out except in the case of consumers’ cooperatives and in Swedish regions where schisms caused duplications. The activities undertaken by the consumers’ cooperatives were many and varied, and the cooperative movement greatly increased the efficiency of the whole economic structure of this northern agri cultural nation. After 1920, cooperatives assisted Finland’s hundreds of thousands of former tenants, small landowners, and settlers to revise their economy. Through their participation in cooperatives a large part of the population received the advantages of modem technical processes, of an organized system of credit, and of wholesale buying and selling. Large-scale output and distribution reduced the middleman’s expenses and enabled the farmers to receive for their produce 70 to 75 percent of the prices paid by the consumers in the cooperative dairies. In addition to providing these economic advan tages, the cooperative associations (particularly their central unions) raised the standard of professional skill among their members and helped educate the Finnish people in the principles of business manage ment, collaboration, and self-government. During the years of peace the consumers’ cooperative movement grew in both size and economic stability and by the onset of the second World War was supplying half of the population and doing about a third of the entire retail trade of the nation. Losses incurred in the war with Russia were great, but in spite of them the movement continued to grow. Data on developments since Finland threw in her lot with Germany in 1941 indicate that membership has continued to grow, but scarcities of goods have cut down cooperative sales. T ypes o f Cooperatives The following cooperative central unions were in existence before Finland became independent of Russia in the spring of 1918: Y e a r in which founded “ Labor” Central Agricultural Supply Cooperative Association (Swedish). Central Bank of Cooperative Agricultural Credit Associations, O. K. O—. Finnish Cooperative Wholesale Association, S. O. K _____________________ “ Hankkija” , Agricultural Cooperative Wholesale Society________________ “ Valio” , Federation of Finnish Cooperative Dairies_____________________ General Union of Consumers’ Cooperative Associations, Y. O. L_________ Central Union of Finnish Distributive Associations, K. K _______________ Cooperative Wholesale of the Central Union of Finnish Distributive Asso ciations, O. T. K ___________________ ________ _____________________. . . Central Livestock Cooperative Association______________________________ “ Unity,” Cooperative Butter Export Association (Swedish)______________ 1897 1902 1904 1905 1905 1908 1916 1917 1918 1918 120 Cooperatives in Individual Countries With the achievement of Finnish independence6 and the Land Act of 1918 (which gradually increased the number of landowners), the consumers' and agricultural cooperative movements took on new vigor. The Swedish Cooperative Union in Finland was established in 1919. The Central Cooperative Egg Export Association (“ Muna” ) the Forest Owners' Central Organization, and the Union of Coopera tive Associations in Aland, were formed in 1921 and a number of insurance associations within the decade of the 1920’s. Table 32 provides detail on the growth of cooperative associations in the early twentieth century and illustrates clearly the great increase in rural organization. T abxe 32.— Num ber o f Cooperative Associations in Finland, in Specified Years, 1 9 0 5 -3 3 Type of association ATI typ e s _ _. __ Crmsr^mp^rx, C redit Telephotift _ _ . _ . _ . 1905 .. . . _ 1910 1914 1918 1919 1920 1921 1922 592 1,929 2,300 2,991 3,120 3,281 3,422 3,634 5,460 166 140 512 416 517 512 689 708 737 713 91 45 770 728 112 58 788 775 120 72 790 949 127 87 545 1,401 335 l 250 225 4 7 362 191 85 436 235 127 494 295 172 494 303 181 71 504 320 188 77 515 333 185 79 541 2»39 202 89 50 363 473 633 485 524 545 580 696 400 110 195 7 5 1,516 Elentrinity A g n m lfia ra h D a ir y _ ____ M ach in ery T n rf Egg m arketin g ....... C attle m a rk e tin g . Forestry M isfififlanemis * 1933 >Including sawmill and flour mill. * Miscellaneous for 1906, 1910, 1914, 1918 includes chiefly agricultural associations; tor 1933 it includes 1,216 agricultural associations. The leading form of cooperative in Finland consisted of the consum ers' groups, which included 16.6 percent of the population and accounted for 30-40 percent of the retail trade of the country. Coop erative dairies and milk-marketing associations, with 77,155 members and 20,395 collaborating nonmembers, ranked next in size; egg marketing organizations and the cooperative slaughterhouses were also important. Among the successful types of rural cooperatives were the more than 1,100 credit associations with a membership of 152,500. Many consumers' cooperatives also had savings and credit depart ments. Other forms of cooperation developed in Finland were insur ance cooperatives (one group of consumer associations, S. O. K., was served by three insurance organizations and another, K. K., by two) and housing cooperatives which began to grow before World War II. The variety of the Finnish cooperatives in 1937 is indicated in the statement below: N um ber M em bers Ail ty p e s .______________ _______ _______ 5,330 868,373 Consumers’ _____ Housing________ Credit, rural____ Insurance______ Forestry________ Electricity, rural Agricultural____ 539 562, 300 100 1,800 1, 179 147, 500 392 0) 4 2,800 183 11,400 2,933 142,573 1No data. * The Constitution was adopted July 17, 1919, and peace was finally made with Russia by the treaty of Tartu in 1920. Finland 121 Cooperative housing.— Though the need for cooperative housing was great, this branch of the cooperative movement developed slowly in Finland. In 1910 almost 70 percent of the population of Helsinki lived in the one-room flats which constituted 74 percent of all housing in the city. Rents were controlled during World War I and prac tically no building was done. In 1919 about 50 percent of the popula tion still occupied one-room flats and some 96,000 out of a total of 157,000 families lived in one- or two-room dwellings. The first cooperatively owned apartment house (with 250 rooms) was erected in Helsinki in 1919. The following year 1,300 rooms were cooperatively built, in 1924 some 5,400, and in 1926 about 10,000. To finance construction, each apartment owner paid 50 percent of the cost, the cost per room being about 30,000 markkaa.6 By 1926 it was reported that every member of the Helsinki bricklayers’ union owned a cooperative apartment of 2 or 3 rooms. The cooperative housing, however, apparently did not meet the need, for it was reported in the late 1930’s that the building that was being done was mainly for the better-paid classes and the poorer workers were still paying as much as 25 to 30 percent of their wages in rent. After negotiations of some length, the “ progressive” cooperative associations (including the wholesale, O. T. K., the Elanto association of Helsinki, and the cooperative insurance company, Kansa), the Housing Reform Associations, and other groups founded a cooperative, the Central Housing Association (“ Haka” ), in the autumn of 1938. Haka undertook the construction of buildings, and founded the ten ants’ associations. Under Finnish law these associations were usually limited companies. The associations sold shares, generally at the rate of about 310 markkaa per square meter of the floor area (as con trasted with the 1,000 markkaa charged by private housing companies), and the sum so accumulated constituted the capital of the association. After the shareholders paid 15 percent of the cost, the remainder was advanced by reliable financial institutions and the city of Helsinki which granted second mortgages from a special fund. Development o f Consumers’ Cooperatives Though the consum ed cooperatives did not actually begin as an organized movement in Finland until the opening of the twentieth century, a distributive association was founded in Viipuri (Viborg) in 1878 and others appeared elsewhere in the 1880’s and 1890’s. Uniformity among early cooperatives was promoted in 1904 when Vaino Tanner (later Prime Minister of Finland and always a sup porter of cooperatives) and the Pellervo Association assisted in the formation of the Finnish Cooperative Wholesale Association (Suomen Osuuskauppojen Keskuskuntay known as “ S. O. K .” ). Four years later the need for a special organization to carry on educational work caused the founding of the General Union of Consumers’ Co operative Associations (Yleinen Osuuskauppojen Liittoy known as “ Y. O. L .” ). Under the policy immediately adopted by the central body,, local cooperatives were urged to discourage credit sales and to build up capital by requiring membership investment of 10 to 25 markkaa (19-48 c^nts) per person.* * For par values of currency, see Appendix table, p. 278. 588544°— 44------ 9 122 Cooperatives in Individual Countries The incentive to cooperative expansion resulting from the work of S. O. K. and Y. O. L. coincided with the resurgence of national ambitions. The systematic restriction of Finnish autonomy that had begun with the Russian manifesto of 1899 was ended temporarily by the assassination of the Russian General-Governor of Finland in 1904 and the disturbances of 1905 in Russia. The Finnish Diet was restored and the Finns established a form of representative govern ment extremely democratic for that day. Another period of Russian repression followed. Between 1906 and 1910 consumers7 cooperative membership declined (table 33), but in the 4-year period between 1914 and 1918 consumers7associations developed quickly, the member ship rising from 97,000 to 255,000 and sales from 71 million markkaa to 482 million markkaa. At the end of 1919 Finland’s officially registered cooperative associations totaled 3,135, or 1 cooperative for every 1,200 inhabitants; and there was 1 cooperator for every 7 inhabitants. T a b l e 33.— M em bership and Operations o f Finnish Distributive Cooperatives, in Speci fied Years, 1 90 2 -2 3 [For par values of currency, see Appendix table, p. 278] Year 1902......................................................................... 1906.......................................................................... 1910......................................................................... 1914.......................................................................... 1918............. ............................................................. 1922 ...... .................................................................. 1923.......................................................................... Member ship Number of stores 6,000 60,000 37.000 97.000 266,000 342,000 352,000 34 274 452 415 585 601 596 Amount of sales Amount of share capital and reserves M arkkaa M arkkaa 1,200,000 22,000,000 47.000. 000 71.000. 000 482,000,000 1,800,000,000 1,945,000,000 800,000 3.400.000 6.800.000 47,900,000 112,200,000 131,600,000 Finnish industries, particularly paper pulp and textiles, were then reaching large-scale size and the changes in Finnish economy and thought had split the Finnish cooperative movement. Between 1870 and 1915, while the nation’s population grew from 1,769,000 to 3,301,000, the town population quadrupled. Within the membership of S. O. K. and Y. O. L. in which both agricultural and urban groups were included, differences developed over cooperative principles, attitude toward labor, and the so-called “ socialistic innovations.” A number of urban associations withdrew in 1916 and 1917 and estab lished their own Central Union of Finnish Distributive Associations (Kulutusosuuskuntien Keskusliitto, known as “ K. K .” ), and their own wholesale, the Cooperative Wholesale of the Central Union of Finnish Distributive Associations (<Osuustukkukauppa, known as “ O. T. K .” ). This division had scarcely occurred when the Finnish revolution began, with a strike in which cooperative employees took part, and cooperative warehouses were plundered. S. O. K. was declared the property of the State, and a member of one of the new consumers’ cooperatives became its commissioner. The fighting ended in the spring of 1918 with the complete establishment of Finland’s independ ence. Both the new and the old consumers’ cooperatives suffered from the revolution but ultimately the Finns founded a compromise democratic government, moderate views prevailed, and the entire cooperative movement survived. 123 Finland A second division within the consumer movement took place 3 years after the first, when the Swedish cooperatives in Finland— some 229 associations situated mainly in Wasa—withdrew from Pellervo. In spite of these separations, the growth of the original federation, Y. O. L., of the original wholesale, S. O. K., and of their affiliated associations did not suffer perceptibly. Three years after the ‘ ^pro gressive” associations withdrew from Y. O. L., the latter’s affiliated associations had increased by 81 and the number of shops and mem bers showed a similar increase. At the end of World War I these “ neutral” associations had 200 gasoline stations throughout Finland. Associations Before schism: 1915__________ - ............... ................ 431 1916____________________ .................486 Y. O. L., after schism: 1918__________ _________ ................ 524 1919____________________ _________567 Stores M em bers 980 1, 257 110, 800 1, 302 173, 564 181, 700 1, 610 201, 307 The growth in the membership and sales of the member associations of both of the central federations continued until 1929, the sales of K. K. affiliates doubling between 1920 and 1925. By 1930, 423 con sumers’ cooperative associations belonged to the neutral Y. O. L., and 112 to the progressive K. K. Their total membership then numbered 467,480 in a population of 3,667,067, and their total sales aggregated 2,988,984,233 markkaa. The value of the combined sales of the two wholesales was 1,679,566,779 markkaa. In the depression year of 1932, when 2.5 percent of the Finnish population was unemployed, cooperative sales fell 20 percent as compared with 1928. No co operatives went bankrupt, however, and cooperative purchasing loy alty increased, as is customary in depressions, S. O. K .’s sales rising 3 percent. In 1931, associations affiliated to S. O. K. purchased from it 79 percent of the articles they sold. Consumers’ Cooperatives P rior to Outbreak o f W orld W ar I I DEVELO PM EN T OF LOCAL ASSOCIATIONS A characteristic of Finnish consumers’ cooperatives was the variety of goods and services offered by them. Many of the Y. O. L. rural associations were general-purpose associations, their stores providing as many as 5,000 different articles, including household and hardware utensils, groceries, cloth, shoes, ready-made clothes, feed, fertilizer, poultry, bicycles, gasoline, etc. They also purchased eggs, grain, butter, meat, etc., from the members for sale in the cooperative stores and on the open market. The associations of the progressive K. K. group often had both rural and urban members and handled thousands of different items. The affiliates of both Y. O. L. and K. K. operated savings departments, cafes and restaurants. The local associations also engaged extensively in production, mainly of bakery goods and beverages. In 1935 the value of the total production of Y. O. L. and K. K. affiliates was almost 300,000,000 markkaa. In 1938 the enterprises operated by affiliates of Y. O. L. numbered some 140 and were mainly bakeries. Their total output was valued at 64,000,000 markkaa and in 1939 at 71,300,000 markkaa, an increase of 11.4 percent. The annual output of the enterprises operated by K. K. associations—-more urban than those of Y. O. L.— had then reached a value of 404,000,000 markkaa. 124 Cooperatives in Individual Countries By 1938 some 550 consumers’ cooperatives were in operation in Finland. Their membership had increased 25 percent in the past 5 or 6 years and their retail stores handled about 30 percent of the retail trade of the nation. Their chains of modern, well-equipped stores, more than 6,000 in number and efficient and attractive in character, covered the country and served 606,000 members, representing 50 percent of Finland’s population. Distributive sales totaled 5,137 million markkaa in 1938 and total capital 745 million markkaa (table 34). The movement ran 361 restaurants in 1939, often distinctive for their attractiveness and good cuisine. More than 300 productive units, working in or with these cooperatives, manufactured goods valued at 444 million markkaa in 1938. T a b l e 34.— M em bership and Operations o f Cooperative Commercial Associations, in Specified Years, 1 9 0 5 -3 9 [For par values of currency, see Appendix table, p. 278] Year ions 1910 Stores Number of Cafes Pro associations and Number duc res of mem tive tau works bers Regis rants tered Active , , T___ _________________ 210 695 980 1920.................................... 2,422 1925.................................... 3,084 1930____________________ 3,908 40 126 178 4,930 *5,281 5,625 6,031 6,059 235 258 285 328 361 1935.................................... 1936.................................... 1937.................................... 1938.................................... 1939.................................... Amount of sales Own capital Net earn ings 1,000 markkaa 1,000 m arkkaa 1,000 m arkkaa 138 227 249 171 525 553 801 802 796 155 405 413 623 582 534 26,360 79,021 110,864 330,887 387,477 466,911 10,811 43,589 89,158 1,450,145 2,381,885 3,985,809 540 3,381 8,136 64,599 203,334 388,182 277 294 322 314 319 779 779 785 790 791 532 534 539 542 545 517,529 537,106 562,279 605,988 640,810 3,319,963 3,761,984 4,671,760 5,137,656 5,465,952 474,089 512,040 561,397 630,133 654,066 354 1,267 3,612 30,381 40,476 53,813 72,326 86,742 117,425 115,044 119,880 The “ Elanto” association at Helsinki.—The largest distributive coop erative in Finland and one of the largest in northern Europe, was the “ Elanto” (“ Livelihood” ) of Helsinki. It was started with the aid of Pellervo in 1905 when an official inquiry exposed very unsanitary con ditions in the bakery trade. The original activity undertaken was a bakery which delivered its first load of bread in 1907 and was rebuilt on a scale sufficient to supply half of Helsinki in 1925. The associa tion added milk products to its activities in 1911, groceries in 1914, meats in 1917, a savings department in 1919, and drug stores and factories making chemical and drug products in 1920. By 1923 Elanto was operating, besides these, a leather factory, a brewery for light beer, a jam factory, saddlers’, mechanical, and knitting mills, a soap works, two farms, and 136 retail stores. Membership was then 29,659, value of production 86.8 million markkaa, and the amount of sales 167.7 million markkaa. The Elanto association emphasized high quality and low prices and did not hesitate to go into production when necessary to secure these. Other characteristics of the association were its cash policy, the efficiency of its stores and restaurants, its fixed 2-percent patron age refund, its policy of transferring 30 percent of earnings to reserves, the large amount of these reserves, its enlightened labor policy, its progressive democratic administration, and the influence of its policy upon business competitors. Its financial position was very strong, for its business was financed largely by its own funds. 125 Finland By the mid-1930’s, Elanto had begun the use of traveling shops and added a flour mill, a mineral-water plant, a laundry, a steampower plant, and restaurants and cafes. By 1940 Elanto was operating 394 branches and 18 restaurants. In the first year of the war, Elanto was responsible for feeding the majority of the population of Helsinki. Its development is shown below: Mm- T u r n o ve r ( markkaa) bers . 7,207 .19, 161 .23, 612 .28, 405 .31, 865 .42, 329 49, 736 . (9 53, 218 70, 000 1915 1918 1919. 1920 1925. 1930. 1935. 1936 1937. 1940. O w n fu n d s ( m arkkaa ) 49,175,067 2, 039, 378 33, 935,084 0) 57, 804,464 0) 17, 945,958 487, 306 28, 918,062 4, 713, 990 309, 545,039 61, 861, 111 271, 916,547 58, 861, 111 342, 000, 000 0) 401, 000,000 0) 502, 000,000 103, 000, 000 * No data. DEVELO PM EN T OF CEN TRAL FEDERATIONS The trend of membership and operations of the associations affiliated with each of the central federations, Y. O. L. and K. K., is indicated in table 35. Y. O. L. associations in 1939 still greatly outnumbered those in K. K. The latter, however, were by far the larger associations, their average membership being 3 times as large as that of Y. O. L. associations and their average business being over twice as large. T able 35.— M em bership and Operations o f Affiliates o f Finnish Federations, Y . O. L . and K . K ., in Specified Years9 1914r-43 [F or par values o f cu rrency, see A p pen d ix table, p. 278] Affiliates of Y . O. L. (“ neutral” ) Year 1914................................................... 1918................................................... 1920................................................... 1925................................................... 1928................................................... 1930................................................... 1932................................................... 1935................................................... 1936................................................... 1937................................................... 1938................................................... 1939................................................... 1940................................................... 1942................................................... Number Member ship of of associa tions associations 415 524 489 446 419 423 416 0) 414 417 417 418 368 0) 97,000 173,564 181,214 188,300 206,414 225,748 232,058 0) 260,000 280,000 299,315 317,652 295,124 360,000 Total sales Total net surplus M a rk k a a M arkkaa M a rk k a a (i) Q) 71,000,000 368,000,000 964,016,663 1,319,200,000 1,824,684.822 1,741,000,000 1,538,339,814 1,984,569,156 2,252,766,207 2,823,000,000 3.034,400,000 3,208,379,000 3,555,823,352 4,400,000,000 (i (l) (i) v) (1) 125,754,429 v) v) (l) 56,025,000 69,371,000 (0 0) Own produc tion (i) (n (i) (i) (») (') 49,718,759 60,967,382 78,102,235 64,000,000 71,300,000 95,524,488 0) Affiliates of K . K . (“ progressive” ) M a rk k a a 1918................................................... 1920................................................... 1925................................................... 1928................................................... 1930................................................... 1932................................................... 1935................................................... 1936................................................... 1937................................................... 1938___________________ ________ 1939____________________________ 1940____________________________ 1942____________________________ 1943____________________________ No data. 87 106 113 112 112 110 115 118 122 125 127 119 0) 0 95,216 143,896 198,845 225,537 241,732 248,551 265,169 275,000 282,600 306,673 323,100 317,758 358,279 363,267 146,856,915 525,846,302 1,063,670,676 1,358,200,000 1,247,984,233 1,064,808,177 1,335,493,881 1,503,000,000 1,860,000,000 2,103,253,477 2,256,900,000 0) 3,295,000,000 3,919,000,000 M arkkaa 6,178,818 10,456,999 18,931,377 31,600,000 0) 18,800,000 24,300,000 0) 46,000,000 (i) V/ (1/ v) « M a rk k a a (0 h 0) 0) 231,661,505 246,349,890 0) 0) 380,458,522 404,000,000 0) oj (0 126 Cooperatives in Individual Countries COOPERATIVE IN SURANCE Although the cooperative law of 1901 did not permit cooperative associations to carry on insurance business, the cooperatives formed separate insurance organizations which were operated on cooperative principles. In the last years before the outbreak of World War II the Finnish insurance organizations were suffering from a decline in the interest rate and a consequent increase in premium rates. In 1936 the total value of new policies failed to reach the level of 1935 by 26 percent. Attached to the neutral Y. O. L. cooperative group were the following insurance organizations: Cooperative Life Insurance Association, Pohja, founded 1923, with 84,683 members in 1937 and the amount insured totaling 1,232,121,000 markkaa. In 1936 Pohja’s investments amounted to 140,000,000 of which 51,000,000 markkaa were in cooperative associations and their enterprises. Fire, Motor Cars and Accidents Insurance Association, Vara, founded 1910, with 631 member associations in 1937 and 28,013 persons insured against fire and 10,488 against accidents. Staff Insurance Fund of Consumers* Cooperative Associations, Elonvara, founded 1919, with 337 member associations in 1937 and 5,855 persons insured. A recent law required that the employer be responsible for the first 200 markkaa compensation paid for accidents. In 1936 Elonvara paid old-age pensions to 18 people, invalidity pensions to 27 persons, and sickness and maternity pensions to 98 persons. In the workers* sickness department pensions were paid to 246 persons. Attached to the progressive K. K. cooperative group were the following organizations: Mutual Life Insurance Company, Kansa, founded 1923, with 262,945 members in 1937 and the amount insured totaling 1,154,915,000 markkaa. Kansa issued collective insurance policies through 53 cooperative associations in 1936. Burial insurance policies were taken out for their members by 108 cooperative associations. Mutual Fire and Accidents Insurance Company, Kansa, founded 1919, with 104,576 persons insured in 1937 and the amount insured totaling 3,205,319,000 markkaa. DEVELO PM EN T OF COOPERATIVE W H OLESALES In the schism in 1916-17 which resulted in the formation of K. K. and its affiliated wholesale, O. T. K., more than half of the local associations retained their membership in the original wholesale, S. O. K. In 1938, the year before the outbreak of the second World War, the progressive wholesale had edged slightly ahead as regards the combined membership of the affiliated associations. The neutral wholesale still led as regards number of affiliates and total sales, but O. T. K .’s business was growing at a faster rate than that of the neutral organization (table 36). Cooperative wholesale production.—Finnish central cooperative organizations did not produce as extensively as those in some neigh boring countries. In addition to the split in the cooperative move ment already mentioned, other reasons for this were lack of capital, the large amounts of production by retail cooperatives, and inexperi ence in industrial life. In 1928 when the value of O. T. K .’s production was 64.8 million markkaa, that total formed only 8 percent of the wholesale’s turnover. For the same year the value of S. O. K .’s production also amounted to 8 percent of its turnover. By 1938 the proportion of own produc tion to annual turnover had increased to some 20 percent for both 127 Finland T a b le 36.— M em bership , and Operations o f Finnish Cooperative Wholesales* S. O. 1C and O, T. 1C, in Specified Years, 1905*43 [For par values of currency, see Appendix table, p. 278J S. O. K. (“neutral” ) Year Number Number of associ of mem ations bers 1910 1915 1920...................... 1925...................... 1930...................... 1933...................... 1935...................... 1936...................... 1937..................... 1938..................... 1939..................... 1940..................... 1941..................... 1942..................... 1943...................... 0) (i) 341 500 0) 423 418 417 0 0) 417 0) 0) 0) 0) (9 (i 0 (9 228,781 237,399 252,360 (9 (9 (9 (9 (9 <9 (9 300,000 Amount of sales Amount of capital Net earnings Own production M arkkaa M arkkaa M arkkaa M arkkaa 1,004,025 13,610,079 35,098,522 323,699,443 700,548,578 1,008,586,919 914,571,571 1,101,210,376 1,211,799,821 1,520,074,340 1,562,819,150 1,646,000,000 1,649,555,434 1,754,564,000 1,770,000,000 2,153,000,000 127,400 1,146,300 3,856,800 19,579,200 53,003,024 120,672,917 156,717,512 176,053,489 188,429,710 199,877,836 215,911,228 (l) (i) (i) (i) (0 (i) 0) 1,456,781 4,337,573 10,561,768 17,227,619 0) 0) 27,134,000 35,037,000 to (i) (i) (i) 0 >20,339,090 0 123,586,581 183,585,602 212,010,977 259,800,000 315,868,850 308,133,363 356,000,000 400,231,535 0 344,200,000 450,000,000 O. T . K . (“ progressive” ) 1915 1920 1925 1930 1933..................... 1935...................... 1936..................... 1937 1938..................... 1939..................... 1940..................... 1941..................... 1942........... ........ 0) 110 112 112 109 0 (9 (9 0) 127 0 (9 (9 1No data. (9 (9 (9 242,301 (9 (9 (9 (9 306,673 323,081 (9 (9 M arkkaa »14,375,207 98,837,754 656,176,161 670,979,860 604,970,281 776,745,679 871,952,137 1,094,751,028 1,195,930,015 1,257,000,000 1,397,615,000 1,613,321,000 1,612,000,000 M arkkaa 8 3,450,750 8,819,750 40,783,000 91,858,044 117,309,675 138,435,875 150,459,875 165,757,500 182,625,750 201,300,000 0 0) 0) 8For year 1918. M arkkaa (i) 3,105,923 8,839,390 8,195,494 0 0 0 26,300,000 27,100,000 0 to 0 M arkkaa 82,035,578 103,917,420 155,000,000 228,853,923 243,300,000 0 0 239,600,000 8 For year 1921. wholesales. The productive works of the two organizations in the mid-1930’s were as follows: S . 0 . K . — At Helsinki: Hosiery, chemical factories, chicory, coffee roasting, bakeries. At Vaajakoski: Match, paper, margarine, preserving factories, saw mill, brushworks. At Viborg: Biscuit and macaroni factories. At Jamsa: Brickworks. At Oulu: Flour mill. 0 . T . K . — At Helsinki: Fertilizer, technochemical, margarine, underwear, tailoring factories, coffee roasting. At Jaaski: Rye-flour mill. At Tampere: Match factory. At Merikarvia: Herring pickling plant. Cooperatives and the State Though the Finnish cooperative movement could not exert unified political pressure because of the schism in 1916-17, Finnish coopera tive interests were close to every Finnish Government. In 1919 the President of Finland was a former chairman of the board of directors of Elanto of Helsinki, the largest consumers’ cooperative in Finland, and his Minister of State was Elanto’s current chairman. At the time of another crisis, the outbreak of World War II, cooperative leaders were still serving in important Government capacities. The Minister of Finance held the presidency of the International Coopera tive Alliance; a recent prime minister had been a prominent coop erator; and the head of S. O. K. and Y. O. L. had also been commercial 128 Cooperatives in Individual Countries head of the State’ s Central Food Committee. Though the division between the two consumer groups was not clear cut, as a rule it was the “ progressive” group that was recognized by the State as representative of the consumers’ general interests and its officials who were invited to serve on customs and other committees. Finnish Government favors to the cooperatives included actual subsidies, especially in the field of agricultural cooperation. Rural credit associations received funds for auditing and Hankkija received them for seed experimentation. Subsidies were given for cooperative education. In the early 1930’s S. O. K., the “ neutral” wholesale, received about 79,365 markkaa annually for this purpose and Pellervo about 436,508 markkaa. Government loans to the credit associations were also made and the Government owned about 23,809,524 markkaa of the share capital of the Central Bank in the mid-1930’s. Legally, the position of the Finnish cooperatives rested upon the Cooperative Law of 1901, as revised in 1918 and 1927, and the law of 1895 relating to joint-stock companies. The cooperative law forbade cooperatives to carry on insurance business and certain forms of banking, it limited the member’s liability to the amount of his share holdings, it provided special regulations for the admini stration of loan business and for democratic administration, and on the whole it allowed the associations great freedom of action. Cooperative associations were obliged to pay taxes to the State, the municipality, and the Church, though both State and munici pality were known to grant reductions. Cooperatives designed to supply their members with commodities or to promote members’ productive activities were required to pay income tax on only half their net earnings (under certain lenient conditions). Regulations such as these incited private traders to attack the cooperatives as recipients of special privilege. In the autumn of 1935 it was reported that a bill had been prepared by a special committee, for submission to the Finnish Parliament, which would place the cooperative move ment on the same basis as all other business. The fate of this meas ure is not known. Consum ers’ Cooperatives in W orld W ar I I Less than 3 months after the outbreak of the war in September 1939, hostilities began between Russia and Finland. The Finnish consumers’ cooperatives entered the war with their financial condition greatly strengthened, as has been indicated above. Progress continued in 1939. Among the gains made by the K. K. associations should be included 16,000 new members, 38 new stores and cafes, and in total sales, the amount of 153,646,523 markkaa which meant an 7.3-percent increase over the previous year. In 1939, the membership in the Y. O. L. associations increased from 299,315 to 317,652, total trade to 3,208,379,000 markkaa, making a gain of 5.7 percent, and the number of retail units increased by 105 to a total of 3,612. Of the latter, 3,208 were ordinary stores, 215 small shops, and 189 cafes and restaurants. The wholesales also made appreciable gains in business and resources. The peace treaty was signed at Moscow on March 12, 1940. Under the Protocol of April 29, 1940, Finland ceded about 14,000 of its 148,0Q0 square miles of territory to Russia and received into its reduced Finland 129 area 450,000 inhabitants from the ceded lands. Since the ceded lands lay in the southeastern section near and above Leningrad and since the port of Viipuri was included, the cooperative movement suffered con siderably. The losses to Russia in 1940 comprised about one-tenth of the consumer movement— 8 associations with 32,000 members, 269 stores and restaurants, and 21 productive works representing an annual turnover of 237 million markkaa, 450 distributive and produc tive enterprises serving 43,000 members, whose purchases totaled 395 million markkaa annually, and the largest mill in the country (situated at Viipuri), a bakery, meat cannery, a new rye mill (at Jaaski), an office building, and warehouses. Though these properties were again under Finnish administration in 1942, the value of S. O. K .’s productive works decreased 21 percent as compared with the previous year and that of O. T. K .’s by 17.4 percent. In spite of these losses, the membership of associations affiliated to Y. O. L. increased about 4 percent during 1940 and the aggregate trade of all affiliates (amounting to 3,555,823,352 markkaa) showed a growth of 10.8 percent. Business in the cafes and restaurants grew 43.5 percent over 1939 and own production of the affiliated associations 39 percent. The main problem was to obtain essential raw materials and a continuous supply of commodities. By December 1940 the average cost of living had increased 35 percent (over August 1938-July 1939) and wages were rising very slowly. In 1941 the cost of living climbed 18 percent over 1940. Many adults could not afford sufficient food to maintain health, and children were ill. The cooperative movement requested the Government to control prices and stop speculative trad ing. In midsummer 1941 the International Cooperative Alliance reported the food situation was as bad in Finland as in Spain. The cost of living continued to rise in 1942 and the sales tax was also raised. Finland joined Germany and went to war against Russia on June 26, 1941. Their troops reoccupied the ceded territory, which was rein corporated into Finland by vote of the Finnish Parliament on Novem ber 29, 1941. Since that time Finnisli cooperatives have continued their successful operation. During 1942 Finnish dependence on cooperatives was so great that approximately 720,000 families, repre senting more than half of the total population, were organized into consumers’ cooperatives. Because of a reduction in the volume of foreign and domestic supplies, however, the volume (though not the money value) of the total cooperative retail trade was less than in 1939.7 7 Sources .— The report on Finland is based upon data from the following publications: Suomen Tilastollinen Vuosikirja, Tilastollisen Pa&toimiston Julkaisema (Helsinki)*1932,1939,1940,1941; The Finland Year book 1939-40 (Helsinki, 1939); Finland of 1940-41 (New York, 1940); Neutral Cooperative Movement in Fin land; Its Tasks and Place in the Community (Helsinki, 1933); A Quarter of a Century of Cooperation in Finland (Helsinki, Government Printing Office, 1024); Agricultural Cooperation in Finland (Helsinki, Pellervo-Seura, 1936); Cooperation in Finland, by Hannes Gebhard (London, 1916); Cooperative Societies Throughout the World—Numerical Data (International Labor Office, 1939); International Directory of Cooperative Organizations (International Labor Office) 1933,1939; Cooperative Information (International Labor Office). No. 12, 1932, No 8,1936, No. 9,1938, No. 5,1941; European Conference on Rural Life, 1939, Cooperative Action in Rural Life (League of Nations Publications, 1939); International Cooperative Bulle tin (International Cooperative Alliance, London), issues of July 1917, October 1918, June, July, and Novem ber 1919, February, July, October-November 1920, January and February 1921, September 1922, March 1923; Review of International Cooperation (International Cooperative Alliance, London), issues of March 1928, February 1930, January 1934, January and July 1935, July 1937, March and July 1938, April, May. and June 1939, February, November-December 1940, June 1941, December 1942, February 1943;.People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1929,1932,1933,1934,1935,1936,1937,1938, 1939, 1940, 1941; Report of the Inquiry on Cooperative Enterprise in Europe in 1937 (Washington, 1937); New International Yearbook (New York and London, 1943); New York Times (New York City), September 2,1936; and certain confidential sources. 130 Cooperatives in Individual Countries Cooperative M ovement in Norway Norwegian cooperative associations fall mainly into two large groups— the consumers’ cooperative store associations, and the agri cultural marketing associations, some of which also purchase farm supplies for their members (table 37). There are also very small numbers of housing associations and fishermen’s associations. The combined membership of the various types of associations before the war formed slightly over 20 percent of the population. T able 37.— M em bership and Business o f Cooperative Associations in N orw ay, b y T yp e o f Association [For par values of currency, see Appendix table, p. 278] Type of association All types................................................................................................. Consumers’ cooperatives: Federated in N . K . L.i Independent 2 __ TTnnsing associations i . .. . . . . Agricultural cooperatives: 2 General supply associations........................................... .............. Marketing associations __ ...... _1Tr_ Fishermen’s associations:4 Marketing associations Purchasing assentations .............. Number of Number of associa members tions Amount of business K ro n er 3,895 584,579 666 424 10 196,234 00 1,600 210,020,700 00 504,050 1,763 1,026 63,870 318*423 17,135,000 122,400,000 4 2 150 4,302 60,000 21,215,900 371,335,650 i Data relate to 1941. * Data relate to 1937. * No data. 4 Data relate to 1934. Consum ers9 Cooperatives The first consumers’ cooperative association in Norway is believed to have been started in Stavanger in 1864. The association was short lived but served to introduce the cooperative idea. A little later other associations were formed and by the end of the sixties had be come fairly numerous. The economic crisis of 1880 wiped out most of these associations and it was not until 10 years later that any revival of cooperative interest took place. Most of this was attribut able to the energy of Ole Delhi, a lawyer who had become acquainted with the cooperative movement on a trip to England. Notwithstand ing the physical difficulties of travel in the isolated and mountainous districts of Norway, he traveled about, organizing associations, calling meetings for exchange of experience, and finally, in 1906, organized the Consumers’ Cooperative Union of Norway (Norges Kooperative Landsjforening) known familiarly as “ N. K. L .” By 1907 this new organization had 19 member associations with 6,300 members. In that same year a cooperative wholesale department was formed in the Union, to supply them with goods. By the time of the outbreak of the first World War the Union had in membership 149 associations with 32,000 members. Because of the Government’s system of allotment of goods, based upon previous consumption, the expanding N. K. L. suffered more than private business and had to refuse admission to new associations. However, during even this difficult period both N. K. L. and its member asso- 131 N orw ay ciations continued to grow and the Union emerged from the war with annual sales four times as large as those of 1914. The post-war economic inflation and crisis was followed by a long period of deflation and depression, ending in 1929. That year marked also the first full year of the stabilized currency, and large increases in sales and production were registered by both local associations and the wholesale. However, this period of prosperity lasted only until late in the summer of 1930, when falling prices, lowered business activity, increased unemployment, and resultant decreased purchas ing power began to be noticeable. In 1931, a widespread labor dispute in Norway further reduced the incomes and buying power of the worker cooperators, but a lockout that paralyzed all the private tobacco factories for several months resulted in more than doubled business for N. K. L.’s tobacco factory. In spite of adverse circumstances the consumers’ cooperative movement not only was able to hold its own but to show advances from year to year throughout the depression. Each year in the period 1932-36 the sales of both retail and wholesale associations reached new high levels, and an unusually sharp rise took place in 1937 when economic recovery was reached throughout Norway. In 1936 the members of the local associations affiliated to N. K. L. were drawn from various occupational groups in the following pro portions: P e rc e n t Wage earners in industry, handicrafts, fishing, merchant marine, trans portation, etc________________________________________________________ Farmers_____________________________________________ Farm laborers and forestry workers_______________________________________ Independent craftsmen_________________________________________________ Salaried employees____________________________________________________ Self- employed, business and professional people__________________________ Total___________________________________________________________ 49. 2 26. 3 6.2 3. 2 11. 6 3.5 100.0 The ultimate need of the movement— production of its own sup plies— was recognized from the start. In 1911, at the end of N. K. L.’s first 5 years of existence the first step in that direction was taken, with the purchase of a margarine factory at Bergen. In the same year the union purchased its headquarters building at Oslo and opened a savings department, to receive deposits from members. In 1921 an insurance association, “ Samvirke,” was started, to write fire and other insurance (except life); and in 1930 a life-insurance association was formed under the same name. In 1928 an auditing service was undertaken, which according to report, resulted in “a distinct improvement in the activity and economy” of the member associations. Some time previously an architectural department was started for the planning of the buildings of both the Union and the local associations. In 1936, after a long contest, the Union finally obtained Government permission to open a Cooperative Bank at Oslo and did so in the same year. By 1940 N. K. L. was operating three margarine factories, 3 coffeeroasting plants, and one factory each making tobacco products, soap, shoes, flour, chocolate, woolen goods, and leather. Altogether, about 40 percent of its annual business consisted of the sale of goods made in its own productive departments. It had branch ware houses in nine cities and, jointly with the Swedish Cooperative Whole 132 Cooperatives in Individual Countries sale (K. F.), it operated an electric-light-bulb factory (a branch of K. F .’s big factory, “ Luma” ). T a b l e 38.— M em bership and Business o f Norwegian Cooperative W holesale Association, N . K . L ,, and Affiliated Associations, 191 4 -4 1 fF or par values o f cu rrency, see A p p e n d ix table, p . 278] Cooperative wholesale, N . K . L. Number of mem ber asso ciations Their members 1914................................................... 1919................................................... 1924................................................... 1929................................................... 1930................................................... 1931................................................1 9 3 2 -............................................... 1933................................................... 149 295 432 440 425 434 447 460 32,000 70,984 100,836 104,685 110,076 116,147 122,231 124.703 10,019,600 71,215,200 134.327,400 2 104,598,000 110,385,500 103.454,600 105,151,400 109,444,100 3,097,000 12,063,342 31.580,162 29,222,777 30,568,034 30,000,466 30,710,598 33,135,650 7,033,768 8,269,612 11,500,000 12.922,804 13,944,865 15,329,385 1934................................................... 1935................................................... 1936-.— .......................................... 1937................................................... 1938..............- ................................... 1939................................................... 1940................................................... 1941................................................... 479 497 549 585 585 608 630 666 130,245 138,557 148.748 160,107 169,175 181,050 189,403 196,234 117,391,400 129,769,600 145,108,400 3 168,250,000 183,330,500 195,819,000 4 218,400,000 210,020,700 36,297,100 41,393,*675 46,520,538 54,105,406 56,619,229 62,600,000 59,443,000 53,162,000 15,850,000 19,652,143 0) 24,000,000 0) 24,400,000 0) (0 Year Their sales K ro n er Sales Value of manufactures K ro n er K ro n er 0) * N o data. * N e t earnings, 5,664,500 kroner; patronage refunds, 2,976,500 kroner. * N e t earnings, 8,500,000 kroner; patronage refunds, 5,000,000 kroner. 4 N e t earnings, 10,428,000 k roner; patronage refunds, 4,900,000 kroner. In 1939 N. K. L. and the Agricultural Cooperative Wholesale Society (N. N. F.) signed an agreement designed to prevent over lapping and competition between the two organizations. Under the agreement N. K. L. agreed to discontinue handling certain farm sup plies and to obtain from N. N. F. any of these needed by its affiliates. Cooperatives and the State The Norwegian commercial law forbids the opening of branches in another community than that in which the parent organization is situated. The consumers’ cooperative movement therefore has never had to compete with that concentration of private business known as the chain store. This restriction on branches, of course, applies to the cooperative movement as well and has prevented the development of large associations covering a whole district, such for instance as were found in France (the “ development” societies). However, Norwegian cooperative associations did have the privilege of establishing branches within the home community. Except for a short time, under a law passed in 1933, cooperative associations paid no income tax on their business with members, any margin being recognized as simply an overcharge rather than a “ profit” as in private business. They were, however, taxed on the net margin resulting from their trade with nonmembers. During the early years of the consumers’ cooperative movement some Government credit was extended to it, but as the movement grew it became self-sufficient. Agricultural cooperatives have also received some Government loans. N orw ay 133 Although the cooperators are of many shades of political opinion, the consumers’ cooperative movement itself has always maintained strict political neutrality. Cooperatives and the W ar With the outbreak of the present war a wave of buying sent sales in the consumers’ cooperatives soaring. For months before the actual invasion of Norway the indiscriminate destruction of Norwegian shipping had somewhat dislocated trade and made difficult the obtaining of supplies from abroad. N. K. L., however, had been foresighted and had been carrying up to 5 times its usual inventories. When war broke out, N. K. L. pointed out to its member associa tions that the cooperatives were capable of exerting a decisive in fluence on the price level. In 1940 their membership constituted about 6.7 percent of the population of Norway. Taking into account their families, the consumers’ cooperative movement was serving nearly 27 percent of the population at that time. The importance of the movement was recognized by the Government which from the outset of the war gave it representation on both local and national price-control committees for the various branches of trade. When Norway was invaded, in April 1940, the cooperative ware houses in the harbor of Narvik were destroyed and N. K. L.’s mar garine factory there was damaged. Other associations in the zone of hostilities also suffered damage. The physical configuration of the country has been both an asset and a disadvantage to the cooperative movement. The cooperative associations are scattered throughout Norway, from the Polar Sea to the extreme south. In peacetime the difficulties of communication and transport through the mountains to isolated sections hampered to some extent the spread of the movement. These difficulties, however, were also responsible for the fact that the local associations undertook, to a degree unusual in the consumers’ cooperative movement, the production of some of their necessaries— notably perishables, such as bakery and meat products. The productive departments of these local enterprises also included manufacture of cheese and margarine, coffee roasting, tanning of leather, laundering, and even tailoring and dressmaking establish ments. In 1938 the local associations were operating over 200 pro ductive plants of various kinds. Although the expansion of N. K. L .’s productive facilities was limited to the extent that the local facilities were developed, this fact became an advantage under wartime con ditions. When Norway was invaded and whole regions were cut off from communication with the rest of the country, the local associa tions were still able to obtain supplies from their own bakeries and factories. Notwithstanding all the wartime obstacles, both the wholesale and retail branches of the movement increased their membership in 1941, though both showed some decline in money volume of sales. Re peated efforts by the Germans to take actual control of the movement, while ostensibly leaving it in the hands of the cooperators, were firmly resisted by the cooperative officials. Specifically the Germans de manded that N. K. L.’s board of directors vote to allow the Nasjonal 134 Cooperatives in Individual Countries Samling (the Norwegian Nazi Party) to appoint two “ controlling representatives” on the board. Finally, in the summer of 1942 the Germans arrested and sent to a concentration camp the president and the secretary of N. K. L. They were later released “ under surveil lance,” but on August 10,1942, the offices and warehouses of N. K. L. were closed by the Germans, who seized the entire stock of goods. No later data are available. However, despite the fact that the National Union of Consumers’ Cooperatives is thus prevented from further commercial activity, it is regarded as probable that the local (retail) associations continue to operate in most parts of Norway.8 Cooperative Movement in Sweden The Swedish cooperative movement was largely practical and eco nomic, its foremost aim being to provide foodstuffs and other neces saries for its members in the best and cheapest way. In 1941, how ever, nearly 2 years after the outbreak of World War II, Swedish co operative policy stressed the Swedish conception of life, its essential democracy, and its dependence upon the “ responsible and spiritually fully developed person.” Swedish cooperatives developed simultaneously with Sweden’s industrialization, with increase in agricultural products for sale, and the advent of a modern banking system and large-scale enterprise. In the mid-1930’s the consumers’ distributive movement was reported to be “ the only large-scale organization in the distributive trade in Sweden.” The average yearly business per cooperative association was over 9 times as large as that of private retailers. More than a third of Sweden’s population was served by consumers’ cooperatives in 1943, and these associations accounted for about 12 percent of the total retail trade and about 20 percent of the retail business in food. Swedish cooperatives were outstanding for their use of production to break up monopoly control of important articles of general consump tion, and thus lower prices. American observers sent abroad in 1937 to study cooperatives in Europe reported that this policy had “ con tributed materially to the building of a sound national economy,” enlarging purchasing power and increasing business and employment, especially among low-income groups. Although Swedish cooperatives were strongly federated, they also emphasized effective local autonomy and democratic control. At the fortieth congress of the Swedish cooperative federation, Kooperativa Forbundet (“ K. F .” ) in 1939, the Swedish Prime Minister congrat ulated the cooperatives upon being able to “ foster democracy along with progress, in a sphere in which people were least inclmed to recognize that democracy would work.” * * S ou rces.— T h e report on Norway is based upon data from the following publications: Statistisk Arboks for Norge, 1936,1937,1938, and 1940 (Statistiske Ccntralbyr&, Oslo); Sociale Meddelelscr, No. 8,1923 (Norway Departmentet for sociale saker); Kooperat0ren (Oslo), July 1922, August 1923, January 1924, and January 1926; Kooperatbren (Stockholm), September 1921 and January 1922; Konsumentbladet (Stockholm), July 1925; Cooperative Review (Manchester, England), February 1939; Review of International Cooperation (International Cooperative Alliance, London), November-December 1921, September 1925, August 1926, January and February 1937, July 1938, April 1940, January and February 1941, and December 1942; People’s Yearbooks (English and Scottish Cooperative Wholesales) for 1933, 1934,1937, 1938, and 1941; Cooperative Information (International Labor Office), Nos. 33 and 38, 1926, No. 4,1929, Nos. 2 and 7,1930, No. 5,1931, Nos. 3 and 5, 1932, No. 3, 1933, No. 1, 1938, No. 6, 1941, Nos. 7 and 9, 1942, and No. 1, 1943; International Directory of Cooperative Organizations (International Labor Office), 1939; Cooperative Societies Through out the World—Numerical Data (International Labor Office), 1939; Consular Report, Stavanger, Septem ber 8, 1928; Report of President's Cooperative Inquiry Commission, 1937 (Washington, 1937); CoopwAtive Consumer, June 1, 1942; and Cooperative League News Service, April 16 and October 8,1942. 135 Sweden Farmers' cooperatives were equally well developed, and almost without exception Swedish farmers were members of marketing and other cooperatives. Cooperative dairies marketed 80 percent of the nation's total milk output, 86 percent of the butter, and 50 percent of the cheese output. Cooperatives also handled 30 percent of the eggs. Fertilizer, machinery, and various farm supplies were purchased through cooperative organizations. Coordination between the consumers' and farmers' cooperatives, to prevent overlapping of functions, was accomplished through the Joint Committee of Cooperative Organization established in 1936. T ypes o f Cooperatives and Their Activities Cooperatives in Sweden have undertaken a wide diversity of activi ties. The distributive cooperatives were concentrated largely on food distribution, other consumer activities being generally undertaken by specialized associations. Some operated cafes and restaurants, others carried on housing activities, and still others had as their function the distribution of electricity. Insurance against death, fire, accident, etc., was provided through two central associations. The agricultural cooperatives were equally varied. Sweden was also one of the countries in which longshoremen were organized cooperatively. T a b l e 39.— Num ber o f Cooperatives in Sweden, b y T yp e , 1916 , 1926 , and 1936 1916 Type of association All types----------------------------- 1926 7,264 12,605 ConSt1TnArs>association s 4,344 Distributive___________ 1,324 62 Restaurants and cafes— Housing_______________ 660 Other building................. 1,921 Electricity distributives. 117 Central unions................. 2 Miscellaneous.................. 358 Agricultural associations: S u p p ly p u rch asin g 1,327 Machine purchasing___ 139 Peat _ ___ ___ 59 DAiry 621 Slaughterhouses________ 30 1936 20,411 8,566 1,583 78 1,511 2,823 1,570 24 977 14,484 1,438 84 2,979 3,805 1,887 30 4,261 1,551 297 90 699 38 1,662 422 83 862 64 Type of association Agricultural associations— Continued. E g g m a rk e tin g C a ttle bread in g _ __ _ Distillery.......................... C e n tra l unions_ _ Miscellaneous_________ Workers’ productive and labor associations: Workers’ productive___ Longshoremen’s_______ P r in tin g 1916 1926 67 143 91 35 156 102 327 94 38 244 263 534 112 54 520 75 19 30 163 28 79 197 38 108 48 80 105 184 191 817 1936 Credit associations: U rb a n __ R u r a l . __ _____ _ _ COOPERATIVE CREDIT ASSOCIATIONS The greatest development of cooperative credit in Sweden has dated from 1930 when the Swedish Federation of Cooperative Kural Credit Banks (Svenska Jordbrukskreditkassan) was formed as part of a reorganization of the rural credit system. Between that year and 1936 the number of rural credit cooperatives rose from 187 to 789. Data for the rural credit cooperatives are shown in table 40; similar data for the urban cooperatives are not available. 136 Cooperatives in Individual Countries T a b l e 40 . — M em bership , Loans, and Capital o f Rural Credit Cooperatives in Sweden, in Specified Years, 1916-41 [F or par values o f currency, see A p pe n d ix table, p . 278] Number of associa Member ship tions Year 1916................................................... 1920.................................................. 1925................................................... 1930................................................... 1934.................................................. 1935................................................... 57 120 137 187 699 771 1,654 4,187 7,643 14,081 59,267 73,071 1936................................................... 1937.................................................... 1939................................................... 1940.................................................... 1941.................................................... 789 785 84,148 <*) 0) 0) 8 108,700 111, 100 Loans Deposits Own capital K ron or K ronor K ron or 100,000 3,700,000 8,800,000 15,300,000 43, 500,000 56,800,000 2,000,000 3,600,000 7,400,000 17,900,000 23,000,000 (l) (l) (9 72,600,000 88,800,000 120,300,000 115,100,000 114, 200,000 31,900,000 0) 0) (0 0) 8 0) 2,800,000 3,700,000 4,400,000 6,300,000 7,100,000 7,300,000 * No data. E liE C TR IC ITY COOPERATIVES As Sweden lacks coal resources, its electrification program has been based upon utilization of its abundant waterpower. In 1909 the Swedish Government created the Waterpower Administration, under the Royal Board of Waterfalls. Under the system thus created, rates were severely competitive, and the State intervened only when necessary to protect the consumer from exorbitant rates or poor service; by generating power and selling it wholesale to cities, towns, and cooperatives, the State became an effective competitor, able to push rates down. By 1937, about 65 percent of all Swedish farms had been electrified. Approximately one-half of the rural distributive facilities were owned cooperatively, and the State supplied power to one-third of the rural electrification systems. Cooperatives were encouraged and assisted by the Government Waterpower Administration. It drew up the cooperatives’ bylaws, designed their distribution systems, inspected their lines, provided account books, and helped to audit their accounts. COOPERATIVE HOUSING Though some Swedish cooperative housing associations were organized in Stockholm and Goteborg when industrialization devel oped in the last half of the nineteenth century, and 100 such associa tions were registered by 1897, the period of growth which has given Sweden distinction in cooperative housing began in World War I. Wild speculation in real estate and a great increase in rents in 1917 caused the organization of tenants’ unions, which combined in a national association in 1922. The Stockholm associations completed their first construction in 1919 with money raised by lottery. The Stockholm Tenants’ Saving and Building Society was organized in 1923. About 65 percent of the association’s members consisted of manual workers and their families; the remainder were office employees and people engaged in private enterprises. In 1926 the various local housing associations federated into the National Federation of Tenants’ Savings Banks and Housing Societies (H yresgdsternas Sparkasse- och Byggnadsjdreningars R w sforbund, 137 Sweden known as “ H. S. B .” ). By 1939 this federation had 69 affiliated associations with 18,500 members. The national union’s annual building program, measured by the number of units built and the value of its real estate, is indicated by the figures below. By 1937, cooperative dwellings constituted about 10 percent of all housing in Sweden. H. S. B. alone had constructed buildings containing about 17,000 dwelling units and valued at 212, 000,000 Swedish kronor (130,000,000 kronor represented buildings in Stockholm). As each building was completed, it was turned over to a local association formed among the occupants for the express purpose of managing the apartment house, collecting rents, etc. N u m b e r of dwelling units constructed Real-estate value (in kronor) 149 1924......... ............................................................ 1925. ________ . . . _______ ________________ 519 1,155 1926. ................. 1927........................ 1,237 1928....................... 923 1929................................ 1,238 1, 782, 900 6,754,000 15,043,585 16,475,000 10,618,000 15,326,000 1930......... ........................................................... 1 9 3 1 .. ____ __________________ ___________ 1932_______ _____ ______________ _____ _____ 1 9 3 3 .. ............ .................................................. 1 9 3 4 .. ___________________ _____ _________ 1935______________________________________ 14,460,600 16,244,800 20,644,200 13,006,000 11, 117, 000 19, 188, 000 1,002 1,207 1,512 1,010 951 1, 591 Construction was usually financed through bank credit (up to 60 percent of costs), through H. S. B. Savings Bank credit (up to 90 and 95 percent of costs), and by deposits of the associations’ members. Little State or municipal credit was used by housing cooperatives. The housing provided fell generally into four types differing in style, financing, and nature of ultimate ownership and management. All four types had good technical equipment and design, sunny sites, and convenient lay-out. The best-class group included the majority of modem city apartments, each unit varying in size from one to five rooms. In these, the membership contribution amounted to 10 per cent of the total value of the apartment—a sum usually varying with the size of the apartment from $190 to $1,180. Houses of the second type were built less expensively on less valuable lands and consisted of smaller groups of rooms. The advance membership contribution in the second group was 5 percent of the total value—from $80 to $400. The other two types were not managed cooperatively by the re sidents. Those of the third type consisted of houses constructed in Stockholm by private contractors with municipal aid. They were taken over by H. S. B. and were managed by foundations created for the purpose. No membership deposits were required but occupants could be admitted only after consultation with the city authority re garding economic status. In the 1930’s the Riksdag made a generous appropriation for aiding this type of housing. The fourth type of housing, being intended only for large families, was financed partially by municipalities, with the State contributing 30 to 50 percent of the rent according to the size of the family. The Federation, H. S. B., had its own city-planning division, its own architects, its own purchasing department, and its own factories. 588544°— 44------10 138 Cooperatives in Individual Countries It advised the member associations in construction of the buildings, operated a savings bank, and aided in financing. In order to provide materials for construction at reasonable costs, H. S. B. purchased a factory for making parquet flooring, and plants for mixing mortar and stucco finish, for making shutters, trusses and girders, washing powders and cleaning and polishing materials, and an extensive plant for constructing houses for export. In addition to these enter prises, H. S. B. developed a summer vacation colony at Arsta, a sys tem of house insurance in cooperation with Folket, and nurseries and playgrounds in some of the apartment-house developments. By their operations, the Swedish cooperative housing projects es tablished higher standards in building designs and equipment and reduced the price of housing. The result was the stimulation of private agencies in a way beneficial to all Sweden. COOPERATIVE INSURANCE Swedish cooperatives entered the field of fire insurance in 1908, in order to forestall the formation of a private syndicate to regulate fire insurance premiums; they entered the field of life insurance in 1914 because of the bad state of working-class insurance. In both cases, K. F. subscribed the guaranteed capital. The fire-insurance associa tion, Samarbete, eventually added accident, automobile, burglary, and liability insurance. The two insurance associations operated with the same management, under the supervision of K. F.’s administrative council, and the president of the insurance associations was a member of the board of directors of K. F. T a b l e 4 1 .— Growth o f Cooperative Insurance Associations in Sweden, 1908—42 [For par values of currency, see Appendix table, p. 278] Samarbete Folket Year Number Premium of policies income ion* _ _ . . _ 1914.......................................................... 1930.......................................................... 1934........................................... ............. 1935.......................................................... 1938.......................................................... 1942.......................................................... K ro n o r 6,238 0) (0 0) 266,985 0) 0) 34,012 0) 5,710,000 6,600,000 6,597,178 10.350.000 12.570.000 Surplus Number Premium of policies income K ron or (i) 0) 847,016 1,124,495 0) 1,439,389 0) K ro n o r li, 141 0) 0) 206,373 0) 258,000 310,611 6,460,000 8,140,000 8,831,012 10,470,000 12,350,000 Surplus K ro n o r 0) 944,660 830,156 0) 168,425 0) i No data. B y 1938 the life-insurance association, Folket, held the ninth place among 16 Swedish companies with regard to premium income. Samarbete occupied fifth position in fire insurance, fourth in automobile insurance, and first place in collective accident insurance. By that time, the two associations had about 473,000 policyholders. Early in the century, the insurance cooperatives loaned much of their funds to the consumers* cooperatives. After the latter built up large funds of their own, both Folket and Samarbete invested more and more money in housing enterprises; in 1938 they had 60,848,000 kronor thus invested. 139 Sweden Development o f Consumers’ Cooperatives Impulse for the development of Swedish consumers' cooperatives came early, from the example of the Rochdale Pioneers in England, but the movement was not particularly successful at first. Added impetus was given with the formation of the Cooperative Union and Wholesale, K. F., in 1899. The practices of open membership and the payment of patronage refunds to nonmembers, credited toward purchase of the membership shares, did much to expand the movement. By the outbreak of the first World War, more than 100,000 persons were members of Swedish consumers' cooperatives. The movement early adopted practices looking toward increasing the financial stability of the associations. Among these were cash trading, financing the movement through the medium of savings departments in the local associations, a systematic policy of concentra tion through mergers of small local associations, and specialization in foodstuffs. Until the formation of the great Stockholm cooperative, K. F. S., in 1916, Stockholm had 16 cooperatives, only two being of particular strength. Between 1916 and 1926, K. F. S. became a powerful co operative, increasing its membership from 4,461 to 34,799. By 1939 this association was operating 453 stores. In 1923 the 1,174 Swedish cooperatives operated a total of about 2,000 stores. By 1935 the number of associations had been reduced to about 850 and stores had risen to some 4,000. By 1939 the correspond ing numbers were 807 and 5,363, and in i940 they were 787 and 5,472. Less than a fourth of the associations operated only one store. After the outbreak of World War II, local consumer associations increased their members at a pace equaled only in 1916 and in 1932. Member ship reached 765,700 by the end of 1942. More than 72 percent of the associations registered in 1941 had at least 1,000 members. During the same year 130 new stores were opened. During the decade of the 1930’s, Swedish cooperatives were serving about a third of all Swedish families. They were doing about 10 to 12 percent of the nation's total retail trade and 15 to 20 percent of the total trade in foods and provisions. An official survey of Swedish retail trade reported in 1937 gave the following proportions of business done by the various retailers: P ercent In d iv id u a l retailers______________________ 83. 3 D ep a rtm en t stores_______: _____________ 2. 4 Chain stores____________________________ 1. 4 M a il-ord er h ouses______________________ . 9 O ne-price stores------------------------------------1. 0 C oop era tiv e stores_______________________ 11. 0 The yearly turnover of the individual retail cooperative far exceeded that of the private retail establishments, the average for the latter being 51,000 kronor in 1930, when the average for the cooperatives was 470,000 kronor. A comparison of prices made by the Swedish Government indicated that cooperative prices were 5 percent lower than private retail prices “ leaving out of account the dividend refund given by cooperatives.” This difference prevailed before 1939 and increased to the advantage of the cooperatives during the early part of World War II. 140 Cooperatives in Individual Countries With the exception of a slump in sales in 1925, consumers’ cooper atives’ sales mounted steadily until the outbreak of World War II (table 42). In spite of the trade restrictions caused by rationing and shortages of goods, sales even then continued to increase, approaching a value of 700,000,000 kronor in 1940 and exceeding it in 1941. In 1942 the volume of trade reached 731,000,000 kronor; rising costs of operation had decreased net surplus somewhat, but the average divi dend was 3.6 percent; share capital increased 4,000,000 kronor, and members’ savings 3,000,000 kronor. T a b l e 42 .— Growth o f Swedish Consumers* Cooperative Enterprises, in Membership, Sales, Capital, and Earnings, 1 9 1 0 -4 2 1 [For par values of currency, see Appendix table, p. 278] Year Num ber of Num associ Mem ber of ations bership stores report ing Amount of business Net earnings Patronage refunds Share capital Interest paid on share capital Reserves K ro n o r K ro n o r K ro n o r 1910.... 542 1915.... 770 1920.... 1,016 1925.... 921 1930.... 789 K ro n o r K ro n o r K ro n o r 85,358 121,643 240,467 316,490 420,004 645 983 1,700 2,220 3,058 28,709,648 59,959,149 264,545,408 259,106,379 319,736,196 2,325,331 8,003,479 11,277,629 15,817,135 2,179,231 7,587,093 7,835,006 11,234,052 1,733,812 3,672,986 13,969,140 21,421,489 32, 546, 596 137,066 545,388 1,032,559 1,611,035 539,207 279,551 4,425,666 1,590,272 2,203,852 1933.... 1934.... 1935.... 1936.... 1937___ 693 686 674 680 717 482,112 497,986 513,564 548,384 605,010 3,507 3,610 3,753 4,041 4,524 321,259,017 342,887,638 376, 224,464 413, 219,414 484,148,081 15,448, 426 16,579,174 17,772,468 19,311,851 21,872,310 11,022,098 11,951,407 12,737,883 14,106,986 16,075,800 37,744,032 39,525, 761 41,171,328 44, 264,828 48,896,097 1,869,102 1,968,314 2,039,879 2,134,313 2,328,559 2,091, 502 2,321,425 2, 509,876 2,698,824 3,027,374 1938___ 1939___ 1940.... 1941___ 1942___ 736 738 711 682 676 645,160 682,521 700,000 736,508 765, 700 4,886 5,218 5,301 5,431 5,620 538,453,584 596,677,296 673,200,000 720,800,000 731,000,000 23,873,968 25,110,876 (3) 26,960,000 26,380,000 17, 248,521 18,609,823 (3) 52,595,798 55, 527,946 58, 230,000 (3) (3) 2,428,295 2,466,578 00 (3) (3) 3,429,964 3,633,998 (3) (3 3) (?) 0) i Data do not include cooperatives in Friesland which numbered 62, with sales of 13,648,654 kronor, in 1939. 3 No data. The retail associations were substantial producers of goods— notably “ soft bread” and meat products. In the 15-year period from 1924 to 1939, the volume of production by these local associations rose from 13,792,348 to 58,564,802 kronor. That the membership of the Swedish cooperatives has been drawn from all classes of the population is indicated by the distribution given below. As it shows, industrial workers and farmers consti tuted the largest groups of cooperators. Percentage distribution o f m em bers 19SS 19S9 ms In dustrial w ork ers----------------------------------------------------------- 29. 2 F arm w ork ers___________________________________________ 4. 7 C raft w ork ers___________________________________________ 5. 1 O ther w ork ers___________________________________________ 20. 2 E m p loy ees (clerks, low er ranks o f p u b lic em ployees) 9. 1 F arm ers_________________________________________________ 15. 0 C raftsm en (sm all w ork sh op m a sters)__________________ 3. 1 P u b lic officials___________________________________________ 2. 6 C o rp o ra tio n s -____ , _____________________________________ .9 Sm all trad esm en ________________________________________ _______ P rofessional m e n ________________________________________ _______ M iscella n eou s____________________ 10. 1 Total 100. 0 28. 2 4. 2 6. 8 15. 0 9. 3 14. 5 2. 3 2. 5 .9 4. 2 2. 5 10. 6 2 6 .7 3. 9 6 .3 15. 9 9 .2 1 4 .0 100.0 100. 0 2. 1 2.6 .8 4 .9 1 .7 1 1 .9 141 Sweden Cooperative Union and Wholesale, Kooperativa Forbundet The Swedish cooperative Union and Wholesale Society, K. F., began its existence in 1899 as an information and propaganda center. It became a central buying agency in 1904. Boycotts of this new enterprise, which were organized by retailers early in the twentieth century, led K. F. to start independent purchasing, production, and the banking of savings deposits. Some of the early ambitions for K. F. were abandoned—for instance, that of serving as a center not only for consumers’ cooperatives but also for other branches of the movement. In 1939, K. F. had as affiliates only the consumers’ associations and certain insurance organizations. K . F .’ S COMMERCIAL ACTIVITIES In 1930 the average turnover of Sweden’s 10,000 wholesale trading enterprises was a little less than 500,000 kronor each. For the same year, K. F .’s wholesale turnover was almost 144,000,000 kronor. The figures on K. F .’s wholesaling, given below, show its growth between 1929 and 1941 and indicate the accelerated expansion in the year of the outbreak of World War II. K ro n o r K ro n o r 1929. 1930. 1931. 1932. 1933. 141, 143, 148, 149, 152, 320, 618, 036, 454, 483, 000 000 000 000 000 1934. 1935. 1936. 1937. 1938. 165, 177, 192, 217, 229, 115, 656, 778, 213, 855, K ro n o r 000 1939. 000 1940. 000 1941. 000 000 269, 350, 000 279, 070, 000 270, 930, 000 Retail trade.— K. F. developed retail trade on a large scale. Skocentral, a subsidiary, had more than 30 shoe stores in 1938. These served as exhibit centers for both wholesaling and retailing and for sampling public demand. In 1935, K. F. bought a controlling inter est in the large Stockholm department store founded by Paul U. Bergstrom and known as P. U. B. During the first and second years of World War II, this store—then the largest owned by cooperatives in Stockholm— increased business 19.8 percent, its sales totaling 27.600.000 kronor in 1940. In 1941, P. U. B .’s sales reached 28.930.000 kronor, an enormous expansion over the 9,450,000 kronor of trade in 1935, the last year under private management. Production.— K. F. carried on a successful program oi production of which the expansion has been in quantity rather than in variety of goods, as may be seen from table 43. Cardinal principles in this program were (1) concentration on one objective at a time, (2) sound and independent financing, and (3) large-scale production of goods for the use of members, but only when necessary to influence the price and quality of goods. This policy apparently satisfied various interests, for Government officials and industrialists stated to American in quirers in the mid-1930’s that the cooperative movement’s check on monopoly prices had made it unnecessary for the Government to develop anti-monopoly legislation. K. F .’s production began after a margarine cartel, which had fixed prices, attempted to boycott cooperatives in 1909. This new cooper ative margarine enterprise played so important a part in national economy that K. F. added soap manufacturing in 1910. On March 29, 1922, the cartel composed of the seven largest margarine manu facturers suddenly ceased the joint issuance of price quotations, an 142 Cooperatives in Individual Countries event declared to be of “ tremendous significance” to the cooperatives. Between 1924 and 1938 the cooperative factory's production doubled. K. F. bought a vegetable oil plant in 1932. Up to 1940, K. F. supplied more than one-quarter of Sweden's margarine and was reported the same year to have the largest storage plant for edible oil products in Europe. Government regulations forbidding the home consumption of margarine went into effect May 26, 1940, and lack of raw materials caused the closing of the factory from May to October 1940. K. F. began flour milling because a private flour-mill organization gained control of flour prices after the State ceased regulation of the grain market in 1920. In 1922, K. F. bought the Tre Kronor (Three Crowns) flour mill on the isle of Kvarnholmen in Stockholm harbor and later acquired the island itself with its good dock facilities. The Swedish Millers' Ring which then controlled 90 percent of the flour (produced in Sweden yielded for the first time in its history, and owered prices on March 18, 1925. In 1925-26 and 1928, price conditions caused K. F. to start the pro duction of superphosphate fertilizer and of rubber shoes and galoshes. In accordance with its policy, K. F. began to produce, in the 1930's, cash registers, crisp bread, porcelain, and artificial silk, each filling some special local need. After pursuing for years a policy of entering those industries in which cartel combinations had resulted in the exploitation of consumers, K. F. was eventually able to win certain price reductions by threat alone. Thus, a threat to enter the linoleum industry brought an offer from the trust to lower prices 15 percent, and an agreement to that effect was reported in 1940. The most unusual industrial enterprise undertaken by the Coopera tive Union was the electrie-light-bulb factory, Luma, which was built in order to break the monopoly of an international electric-bulb cartel. In 1931 the enterprise was taken over by an international cooperative organization (Kooperativa Lumaforbundet), which included the cooperative wholesales of Sweden, Denmark, Norway, and Fin land. Prices set by the international cartel dropped 40 percent after the opening of the Luma plant. T able 4 3 .— Value o f Goods Produced by Cooperative Union and Wholesale Society, K . F .9 1 9 2 4 -3 9 [For par values of currency, see Appendix table, p. 278] Product manufactured 1924 * K ron or 1934 1935 1936 1939 24,440,457 K ron or K ro n o r K ro n o r 80,471,748 89,891,184 120,859,531 144,535,346 _ _ __ 11,924,395 Flnnr . __ ____ 9,074,126 Margarine_________________ _____________ 520,960 Chemical technical supplies___ _________ Rubber galoshes_________________________ Shoes_______ _____ ______________________ Pottery and porcelain___________________ Crisp bread_____________________________ Cement_____ ____ ____ _________________ Vegetable oil____________________________ Cash registers___________________________ Artificial silk _ _ _ Coffee (roasting) Other production______ _________________ 2,920,976 26,130,548 15,384, 787 878,902 10,082,217 2,266,381 29,136,643 15,853,011 930,458 11,571,586 2,703,684 30,673,291 15,564,307 1,453,260 12,667,729 3,501,186 All products _ _ 2,407,920 161,000 22,432,596 727,397 K ro n o r 2,579,843 3,015,130 34,206,002 20,493,471 2,153,055 11,095,896 3,436,695 3,199,365 3,952,160 25,453,732 1,481,487 180,740 35,695,340 1,546,631 36,932,984 2,148,461 14,692,391 2,650,266 17,642,104 9,275,153 Exports— After K. F. had acquired experience in purchasing on the world market in connection with various productive undertakings already mentioned, it circularized the owners of small enterprises and handicraftsmen to suggest the formation of a special export organiza- Stoeden 143 tion. As an inducement K. F. offered to guarantee a capital of 500,000 kronor. The desired export association, Produkter fran Sverige (Products from Sweden), took form in 1935. OTHER K . F. ACTIVITIES In order to improve cooperative building standards, the architect’s office of the Cooperative Union and Wholesale Society was established in 1924. By 1935 this office had a chief and 10 architects and a civil engineer with assistants. Affiliated associations were not required to use the services of these specialists, but many did so. Systematic consumer cooperative auditing began with the appoint ment of a consulting auditor in 1917. By 1932 Swedish consumers’ cooperatives had developed 18 auditing districts, each with a district committee and district auditor, and all affiliated to the central union’s joint auditing system and subject to its supervision. Though par ticipation in the auditing system was at first voluntary, about 1932 membership in the auditing department became obligatory for all affiliated associations. In 1922, K. F. participated in the organization of an association, known as S. H. F., to assist and manage associations in financial difficulties. Cooperatives in W orld W ar I I The first years of World War II caused no change in the internal structure and organization of the cooperatives. They, like all private economic organizations, were still controlled by a 1911 law, and regulations for wartime rationing and control were applied on a commodity basis to cooperatives and private business alike. The private traders’ movement for the organization of all trade and occupations into corporations, which began throughout Europe in the 1920’s, increased greatly in vigor in Sweden after the outbreak of World War II. Though K. F. had already been compelled to join private traders’ organizations for fodder stuffs, fresh fruits, cereals, and fats, in 1939-40 the cooperatives repeated their declaration that they could serve the consumer best by creating competition between the large-scale “ cartelized” and the cooperative enterprises. They therefore opposed all private traders’ plans for corporative groups formed to fix quotas or prices or to control imports. At the same time they insisted upon their desire to collaborate with the Government in attaining the objects for which the traders’ associations were working. As the war crisis continued, cooperators served on Government committees which were endeavoring to stabilize prices and prevent inflation. The Cooperative Wholesale, K. F., was “ always asked to criticize and report on proposed Government schemes before they are [were] put into operation.” During the discussion of the retail sales tax (which covered 50 percent of the purchases of an average family and became effective January 1, 1941), the chairman of K. F .’s executive board presented to Parliament the cooperative movement’s objection to such a tax. When the Government took steps to check rising prices and inflation— the cost-of-living index (1914=100) stood at 169 on July 1,1939, and at 239 on January 1,1943— the cooperative movement accepted the program unconditionally. In order to aid in the fight against inflation, K. F. also decided to withdraw money set free by the depletion of stocks and use it to establish a post-war “ Fund for Peace Supplies.” 144 Cooperatives in Individual Countries Before the blockade which began with World War II, K. F. had purchased goods abroad in such quantities that special ships had to be chartered to carry them to Sweden, and the value of accumulated stocks stood at 60,000,000 kronor by the end of 1939. An American observer reported that Swedish cooperatives bought $12,000,000 worth of strategic materials on the world market in 1939, and that, under Government controls, one-half of these reserves were shared with private retailers. Cooperative exports were also turned over to the Government. The blockade eventually cut Sweden off from its former markets and sources of raw materials to such an extent that the volume of exports in 1941 was only about half of the 1939 volume and imports dropped to about one-third. As shortages developed, cooperative policy was based on the needs of the nation rather than those of the cooperators. To meet the need for wool, K. F. made an agreement with the Swedish textile industry which laid the basis for the national planning of the whole Swedish artificial-wool industry. Production of such wool at K. F .’s Nordisk Silkecellulosa factory trebled. B y 1942 the value of Silkecellulosa’s output was 17,220,000 ronor, a sum which meant a tenfold increase since 1938. Another factory, Cellul, was built in 1942-43 jointly by K. F. and private textile firms. In April 1942 K. F. bought 149,729 of the 150,000 shares of a large paper industry, including also large tracts of forest lands and some water power. In order to assist in the war emergency, K. F. established a new charcoal factory, a fish-marketing association (Svensk Andelsfisk) in which consumers and producers collaborated, and the first Swedish fish-oil producing plant, and it began production of synthetic rubber by a newly developed process which used only Swedish raw materials. Though K. F .’s sales rose during 1940, a drop caused by shortages of goods followed in 1941. Actually the decrease in trade was greater than the figures show, for the wholesale price index gave an average increase of 11.9 percent. In 1942, K. F./s financial position appeared to be “ extremely strong” ; own capital represented about one-half of total capital resources. Net surplus had risen from 4,490,000 kronor in 1941 to 4,770,000 kronor. The combined balance sheet total for K. F. and its subsidiaries had increased from 301,400,000 kronor to 337,800,000 kronor.9 Value of production reached 185,320,000 kronor in that year.• • Sources.—The report on Sweden is based upon data from the following publications: Statistisk Arsbok for Sverige (Statistiska Centralbyr&n, Stockholm) 1939, 1941, 1942; Kooperativ Verksamhet 1 Sverige. (Sveriges Officiella Statistik, Stockholm), 1908-10, 1914-16, 1920-22, 1926, 1926, 1930, 1933, 1934, 1935, 1936, 1937,1938,1939; Sweden, A Wartime Survey (American-Swedish News Exchange, Inc., New York, N . Y .) 1943; The Sweden Year-book (Stockholm, Sweden), 1938; Swedish Cooperative Wholesale Society’s Archi tect’s Office (Kooperativa Forbundets Bokfdrlag) 1935; Swedish Consumers in Cooperation, by Anders Hedberg (Kooperativa Forbundet, Stockholm, 1937); Cooperative Housing in Sweden (Royal Swedish Com mission, New York World’s Fair) 1939; Cooperation in Sweden, by Axel Gjores (Cooperative Union, L td ., Manchester, England) 1927; Social Problems and Policies in Sweden (Annals of American Academy of Political and Social Science, Philadelphia, Vol. 197, 1938); Sweden, the Middle Way, by Marquis Childs (Yale University Press, New Haven) 1936; Cooperative Organizations and Post-War Relief (International Labor Office, Montreal, 1943); International Directory of Cooperative Organizations (International Labor Office), 1939; Cooperative Information (International Labor Office), No. 5,10,1935; No. 2, 6, 7,1938; No. 1, 1940; No. 3, 5,1941; International Labor Review, International Labor Office, Montreal, March 1943; Inter national Cooperative Bulletin (International Cooperative Alliance, London), issues of May-June 1922, January 1924, June 1925; Review of International Cooperation (International Cooperative Alliance, London), issues of February and March 1928, September 1933, November 1936, August and September 1939, March and November 1941, March, June, July, and October 1942, January, February, May, June, November, and December 1943; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England}, 1937, 1940,1941; Report of the Inquiry on Cooperative Enterprise in Europe in 1937 (Washington, 1937); Cooper ative Builder (Superior, Wis.), issue of July 8,1943; The Cooperative Consumer (North Kansas City, Mo.) issue of January 30, 1943; The Cooperator (New York, N . Y .), December 1939; and certain confidential sources. Iceland 145 Cooperative Movement in Iceland When, in 1942, Icelanders celebrated the sixtieth anniversary of the first Icelandic cooperative association, the cooperative movement was the strongest economic and social force in the country and its member ship represented almost three-quarters of Iceland’s total population of 120,000. Since 1886 when the control of the country’s entire economic life was still a monopoly of Danish merchants, cooperative influence had been powerful in the modernization of this northern island. Agriculture, historically the mainstay of the population, was mechanized, the land under cultivation doubled, the fishing industry enlarged, and more than half of the population had become urbanized in the last two or three decades before 1940. Dairies, fishing stations, docks, greenhouses, abbatoirs, and refrigerating plants were built. Extent o f Cooperative Development By 1943 the distribution of practically all Iceland’s farm products at home and abroad, was carried on by the cooperatives. The Union and Wholesale Association of the Icelandic Cooperative Associations (,Saraband Islenskra Samvinnufelaga, known as “ S. I. S.” ) was the largest single business enterprise in Iceland and its monthly magazine, Samvinnan, was Iceland’s most widely circulated periodical. It operated a woolen mill, a tannery, and clothing, shoe, glove, and soap factories. It had branch offices in Copenhagen, Leith (Scotland), and, after 1940, in New York City. S. I. S. imported most of Iceland’s farm machinery and handled more than 25 percent of Iceland’s total imports. Of goods exported, it controlled all of the frozen mutton, 90 percent of all meat products, 80 percent of the wool, and 80-90 percent of the agricultural products. Although Icelandic legislation covered cooperative housing associa tions, and although cooperative building in Reykjavik (particularly workers’ cooperative apartments) had been successful, the main co operatives in 1940 were 44 selling and purchasing associations with a membership of 13,018 and 2 consumers’ associations with 3,671 mem bers. Of the consumers’ cooperatives, the Eyfirdinga Association at Akureyri (which had been revolutionized by an Icelandic student of Danish cooperative methods) was not only the oldest and strongest organization but it was also the largest retail enterprise in Iceland. Its diversified services supplied a large part of the town’s 5,090 in habitants and a rural population of the same size; its productive works included a dairy, margarine and soap factories, a bakery, sausage and chemical works, and salting and freezing plants for mutton and fish. The selling and purchasing cooperatives bought most of the goods their members required and, through their ownership of slaughter houses, refrigerating plants, fishing stations, fish-meal and cod-liveroil factories, and dairies, they processed a large part of the produce which they sold for their members. 146 Cooperatives in Individual Countries Effects o f the W ar Iceland’s strategic position during World War II caused a shifting of the annual export of some 2,500 tons of lamb, 600 tons of wool, and unclipped sheepskins and fish, and of the Cooperative Union and Wholesale’s purchases of goods (valued at 4,462,011 kroner 10*in 1938) from the Scandinavian countries, Germany, Italy, and Great Britain, first to Great Britain and then to the United States. A newly ap pointed Trade Commssion handled exports, and food rationing and excess-profits taxes were introduced. Prices and wages were first “ pegged” (a representative of the federation of cooperatives was one of the five members of the Price Regulation Committee) and later “ controlled” by a Juridical Committee. Though the price index had risen 125 points (April 1939=100) by the autumn of 1942 and some of the cooperatives paid substantial excess-profits taxes, the cooperative movement carried on business as usual and even expanded. Cooperative membership, total trade, and own production in creased. In 1941, Icelandic produce made up almost half of the business of S. I. S. and more than a third of the affiliated associations’ total sales. Between the end of 1938 and the end of 1941, the value of real estate, machinery, and stocks owned by S. I. S. and its affiliated associations rose from 1,031,238 kroner and 6,501,286 kroner to 1,145,689 kroner and 7,929,179 kroner, respectively. S. 1. S. capital increased from 992,882 to 1,783,430 kroner, and reserves from 1,617,044 to 3,014,824 kroner in the same period of time. It should be borne in mind, however, that part of the increase in values was caused by rising prices and that in 1940 and 1941 loan capital represented more than two-thirds of the federation’s capital and almost two-thirds of that of the associations. Developm ent o f Cooperatives, 1 9 2 1 -4 2 The trend of cooperative development, as epitomized in S. 1. S. and its affiliated associations, is shown in table 44. The table reveals a continuous growth in membership, and an expansion in sales broken only by the depression years of the early thirties.11 10 For par values of currency, see Appendix table, p. 278. , 11 Sources.— T h e report on Iceland is based upon data from the following publications: Arbok Hagstofu Islands, 1930 (Reykjavik, 1931); International Directory of Cooperative Organizations (International Labor Office), 1929, 1933, 1936, 1939; Cooperative Information (International Labor Office), No. 12, 1939; Review of International Cooperation (International Cooperative Alliance, London), issues of July, Novem ber, and December 1942; People’s Yearbook (English Cooperative Wholesale Society, Manchester, Eng land), 1934,1938,1940; Monthly Labor Review, February 1921; American Scandinavian Review (American Scandinavian Foundation, New York), March 1939; Cooperatve League News Service (Cooperative League of the TJSA, New York), April 6, 1944; Cooperative Builder (Superior, Wis.), November 25, 1940. 147 Iceland T a b l e 44 .— Operations o f Union and Wholesale Association o f Iceland and its Affiliates, 1 9 2 1 -4 2 [For par values of currency, see Appendix table, p 278.] Union and Wholesale Association, S. f. S. Affiliated associations Year Num* ber 1921. 1923 1925. 1927. 1929. 1931. 1934. 39 38 38 38 39 37 39 1935. 1937. 1938. 1939. 1940. 1941. 1942. 39 42 46 47 48 48 (0 Their mem bers 8 0) 7,062 7,676 7,759 8,054 8,684 10,805 15,298 16,287 17,358 18,594 20,189 Their business Net surplus K ro n er K ro n er 8 0) 12,986,992 18,299,826 14,661,655 (0 g (n fl) 0) 9,652,000 28,084.000 8 30,625,735 989,805 2 36,117,000 0) 2 44,054,000 0) 71,160,339 2,129,120 109,000,000 (0 Amount of business Net surplus Own production K ro n er K ro n er K ro n er 9.066.000 9.472.000 11,822,000 11.923.000 15.965.000 8 6,418,000 25.600.000 22,170,754 28.038.000 35.497.000 54,395,176 69,000,000 1.970.000 2.775.000 625,200 833,800 1,047,739 0) 4.257.000 5.657.000 0) >9,000,000 * No data. 2 Agricultural associations not included. * Estimated. Baltic States The cooperative movements in the Baltic States—Lithuania, Esto nia, and Latvia— began late in the nineteenth century when these regions formed part of Russia. The movements felt the effects of the Russian revolutions of 1905 and 1917 and survived to collaborate closely with other forces working for the independence of the three peoples. After independence was achieved and each State carried out land reforms which greatly enlarged the number of free but penni less landholders, enthusiastic cooperative expansion occurred. The type of cooperative organization which developed in the newly independent nations naturally reflected the needs of the populations. Agricultural and industrial opportunities amounting to revolution came at the same time. Russian marketing and financial facilities had to be replaced. Credit and loan associations early became strong and remained so until 1939. The traditional consumers’ cooperative was comparatively rare because of the small urban, population. A compromise type of cooperative, sometimes described as a “ trading” association, provided the agriculturalists with consumer goods, agri cultural supplies, and it also purchased agricultural products. Dairy cooperatives built up strength as the quality of cattle, milk, butter, and poultry was improved. Other types of cooperatives characteris tic of the three Baltic States were the “ peat and litter,” the potato or alcohol distillery, insurance, fishermen’s, and agricultural improvement associations. The years of inflation in the 1920’s followed by the difficult years of the thirties led to frequent Parliamentary and other changes and finally to measures resulting in the introduction of the corporative State. Lithuania established a more or less conservative single-party dictatorship in 1926 which was continued in power in 1932 and 1938. Estonia began a similar system in 1933 and Latvia in 1934. 148 Cooperatives in Individual Countries In all three countries, the first Governments had been friendly to the cooperative movement and Government and cooperative leader ship had in some cases been identical. After the establishment of the corporative State, the cooperatives were assigned to places in the appropriate corporative group and Government control of the central cooperative organization became complete. Cooperatives received export monopolies, they entered Government subsidized joint-stock companies and appear to have participated in many ways in the Government system of export, import, and domestic economic control. Figures available indicate a large expansion of “ cooperative” business under these conditions. Before the present war the cooperative movement in the three countries had attained a position of considerable influence. In Lithu ania the consumers' cooperatives were serving at least a third of the people and in Estonia the cooperative wholesale was the largest com mercial enterprise in the country. In both of these countries the movement had friendly encouragement from the public authorities. In Latvia, however, where the central federation had expanded into foreign as well as domestic trade, the corporative government engi neered a “ voluntary" liquidation of this and another central organiza tion and forced the members of both to affiliate with a State-dominated wholesale organization. Successive occupation of the countries by the Russians and then the Germans resulted in loss of autonomy of the cooperative movement in all three countries, increased control by the occupation authorities, and losses of property by confiscation. Reports indicate, however, that as late as the end of 1942 the cooperatives were still in operation in Estonia. No data are available for the other two countries. Cooperative Movement in Estonia When in June 1920 the Estonian people adopted a democratic con stitution which placed much power in the Assembly, sweeping economic changes were already under way. Land legislation of the previous year had nationalized 96.6 percent of the acreage of the large estates which formerly made up 58 percent of the nation's area. From the nationalized land 83,514 new independent holdings were created before 1936, more than 56,000 of which lay outside of towns. Even before Estonia became ndependent, its agricultural development had been more advanced than was the case in Russia and small landholders had begun to profit from the example of Danish agricultural cooperation. The Estonian cooperative movement was closely associated with the movement for national independence. After independence, cooperatives which had begun under the Russian regime were re organized, some of them with considerable Governmental support. Although the customary credit and insurance cooperatives appeared, agricultural associations predominated. A central agricultural feder ation, founded in 1911, encouraged production for export and a whole sale, started in 1917, promoted production and sale. By 1927 the central dairy organization was exporting 59 percent of the national butter export and the wholesale was handling from 65 to 95 percent of the fertilizers coming to the Estonian market. Ten years later the wholesale handled one-third of the total Estonian dairy-products out put and butter alone made up 19.9 percent of the total value of all 149 Estonia national exports. About one-half of the population was said to be included in the cooperative system. In the early thirties changes in governmental forms began to appear and by 1937 a definite trend toward the corporative state. Never theless the cooperative movement, which pursued a policy of political neutrality, had friendly encouragement from the public authorities, and cooperatives were given export monopolies in certain agricultural products (butter, meats, eggs). After the outbreak of World War II, when the country was occupied first by the Russians and then by the Germans, the forces of occupa tion utilized the services of the cooperatives, depriving them at the same time of their autonomy. In spite of all the handicaps the move ment was reported to have increased in size and business throughout 1942. Later data are not available. T ypes o f Associations Almost 75 percent of Estonia’s population was agricultural and as would be expected, therefore, by far the greater part of the coopera tives were those serving farmers, needs. Among the agricultural cooperatives the dairies were the most important, but other marketing, credit, and insurance associations were also important. Among the more unusual forms of agricultural associations were the peat co operatives producing both peat for fuel and peat used for barnyard litter, and the associations distilling alcohol from potatoes. Consumers’ cooperatives included the distributive associations, urban credit organizations, and housing. Table 45 shows the number of cooperatives and status of each type in Estonia in 1937. T able 45.—N um ber, M em bers, and Business o f Cooperative A ssociations in Estonia , 1937 T y p e o f association C onsum ers’ distributive associations (urban an d ru ral). H ousing, and hnilding and loan associations C redit associations, m ral . W ork ers’ productive associations.................................................. Fish erm en’s associations. ..................................... ........ ................... Agricultural associations: M ark etin g.......................................... E lectricity associations...................................- .................................. Insurance association s......................................................................... N u m b e r of associations T h eir m em bers 183 10 242 16 28 1,286 24 168 46,278 300 105,443 234 (*) 36,962 272 30,831 T o ta l b u sin ess 1 37,893,000 687,000 (2) 22,483,000 6,000 *55,643,000 i A m o u n ts given in Sw iss gold francs; for par value, see A p p en d ix table, p . 278. 1 N o data. * A m o u n t of insurance outstanding. Credit and loan cooperatives.—The first Estonian cooperative—a “ savings society” —was founded in Tartu in 1902. During World War I all capital deposited in Russian banks was lost. After Estonia became independent, the peasants’ new freedom and the land reforms created a large demand for credit, and savings cooperatives were widely promoted. A law of 1920 eliminated the difference between savings and mutual credit associations and authorized cooperative banks to carry on all banking functions. Loans were granted against personal bond and to some extent on mortgages but only for the promotion of production. 150 Cooperatives in Individual Countries The number of credit cooperatives grew from 102 with 27,000 members in 1922 to 202 with 65,000 members in 1929. By 1931 co operative banks appeared to play as large a part as the joint-stock banks in the national economy. Whereas the total deposits and loans of the joint-stock banks amounted to 37,700,000 kroons and 67,000,000 kroons respectively, the deposits and loans of only 182 out of the 230 existing cooperative banks were 34,100,000 kroons and 43,000,000 kroons, respectively. In 1936 the cooperative bank ing institutions had a combined balance of 72,200,000 kroons. Credit cooperatives were affiliated to E. T. K. and by 1939 that central and its affiliates were reported to account for 52 percent of the total Estonian deposits and 48 percent of the loans made. The Central Bank of Rural Cooperative Credit Cooperatives (Eesti Rahvapank) was founded in 1920. By 1928 the bank served as the central institution financing the entire cooperative movement, all the cooperative central organizations being included in its mem bership. It acted also as the agent of the Estonian Treasury in distributing considerable amounts of Government credit to fisher men and farmers. Cooperative insurance.—Local cooperative insurance funds origi nated in Estonia in the second half of the nineteenth century because of a Russian regulation requiring insurance of farm buildings. The Central Federation of Mutual Insurance Associations was formed in 1923 and at the end of the years 1928, 1931, and 1934 the affiliated insurance associations numbered 231, 291, and 280, respectively. Their members, however, dropped from 56,370 to 30,831 between 1934 and 1938. At the opening of the latter jear the Federation's amount of insurance outstanding aggregated 218,082,000 kroons; premium income totaled 592,000 kroons. For the affiliated local associations (each operating in its own locality only) the respective figures were 66,321,000 kroons and 179,000 kroons. According to a report of 1939, Estonian insurance cooperatives accounted for 65 percent of the total number of policies, 48 percent of the total amount, and 40 percent of the insurance premiums in Estonia. Electricity cooperatives.—When Estonia developed electric power and made progress in laying high-tension electric trunk lines, co operative associations of electricity consumers were organized. In 1937 those in operation were reported to be engaged mainly in run ning transformer plants. Developm ent o f Consumers’ Cooperatives The Estonian consumers' cooperative movement began in 1902 in South Estonia when Estonia was a province of Russia. In spite of the lack of a satisfactory basis in Russian law, after 1906-07 this kind of cooperative enterprise continued to develop until World War I. During that war many of the associations were compelled to cease operations and Estonian material losses were severe, but the movement achieved federation and formed the Estonian Cooperative Wholesale (Eesti Tarvitajateuhisuste Keskuhisus)f popularly known as “ E. T. K .", in 1917. After Estonia attained independence, con sumers' cooperatives were founded so rapidly that the members Estonia 151 numbered almost 100,000 by 1921. The members were mainly in rural areas. After the end of the war, E. T. K. broadened its activities to in clude the handling of fertilizers, agricultural machinery, building materials, and the sale of produce—flax, linseed, grain, and potatoes. Stores were opened along the whole coast line to supply the fishermen and purchase fish. Processing and production were started, with three fish-preserving and one coffee-roasting plant and the prepara tion of fruit wines. In the mid-1920’s the principal commodities handled were agricultural products, food, drygoods, and some leather, chemicals, and household supplies. During the depression of the 1920’s, liquidations and mergers of associations reduced the number of cooperatives affiliated to E. T. K. year by year. In 1929 associations numbered 242 and membership had fallen to 56,648, as may be seen in table 46. In 1934 the number of associations and members dropped to an all-time low— 180 and 34,206 respectively. The farmers suffered so badly from the depres sion that many cooperative associations lost a large part of their shares and reserves and were saved mainly through the exertions o f E . T. K. In 1933 a new constitution (with the President being given almost dictatorial powers) replaced the precarious Parliamentary shiftings characteristic of the first Estonian democratic system. Abandon ment of the gold standard, in the same year, and a good harvest com bined to start an economic revival, in which the cooperative movement shared. Both membership and the retail and wholesale trade of the cooperatives began a slow climb (table 46) which was continued even under a new change of constitution in 1937, inaugurating a partial corporative state, with the creation of a second chamber in the na tional Parliament, representative of corporations and vocational groups. In the mid-1930’s the retail cooperatives operated 533 stores and did about 15 percent of the total Estonian retail trade. By 1939 the proportion of the retail trade cooperatively handled had risen to 24 percent. In 1934 E. T. K. handled 10 percent of the total national import trade, 50 percent of the agricultural machinery imported, 50 percent of the cattle foods and salt, 40 percent of the sugar and petroleum, 30 percent of the rice, and 80 percent of the fertilizer. It marketed 23 percent of the eggs exported, also some quantities of fruit, fish, and potatoes, and (on a commission basis) 13.5 percent of the butter exported. This whole export trade, however, was cut off by the Government establishment of a “ special central organization” for the purpose in 1937. Though E. T. K. maintained branches in Tartu and some 10 other outlying regions and provided its affiliated associations with an average of 60 percent of their goods, E. T. K .’s greatest progress was made in the development of production. By 1937 goods produced in its own plants made up about 20 percent of its total turnover. The enterprises included the coffee-roasting and fish-curing establishments mentioned above, a tobacco factory begun in 1933 which by 1937 supplied 50 percent of the market demand, a metal works making chains, wire, tinware, and nails sufficient to furnish 50 percent of the local demand, a flour mill, an engineering works which produced 152 Cooperatives in Individual Countries agricultural implements, bicycles, and building supplies, and a chemical factory supplying soaps, cosmetics, lubricants, mineral colors, and polishes. T 46.—M em bership , Sales, and Production o f Cooperative W holesale A ssociation , E . T , K ., and A ffiliated Consum ers’ Cooperatives, in Specified Years, 1917-42 able A ffiliated consum ers’ associations Year 1917 _____ _____ N um ber N um ber of m em bers 55 8,830 A m o u n t of sales Rubles ________ 8,416,214 K roons 1919 1921 1923 1925 __________________________ _________________ ___________________________ W holesale, E . T . K . A m o u n t ol sales V a lu e of ow n production Rubles K ro o n s 1,862,497 K roons __________________________ 1927..........................- ....................................... 156 250 263 277 267 65,195 99,312 89,197 78,214 69,064 817,475 11,352,761 20,381,460 27,763, 250 27,903,540 384,185 8,856,559 12,133,733 14,359,899 14,034,919 1929................................................................... 1931................................................................... 1932................................................................... 1933................................................................... 1934................................................................... 242 218 203 184 180 56,648 60,000 60,000 34,795,000 22,347,000 17,929,000 20,021,000 22,821,000 20,977,362 15,180,000 11,688,000 12,687,000 15,399,000 0 0 0 26,249,000 35,000,000 45,000,000 45,500,000 50,000,000 18,948,000 24,384,000 29,000,000 30, 354,471 36,300,000 4,130,000 4 ,970,000 6,0 8 0 .0 0 0 7 ,600,000 8,8 0 0 .0 0 0 1935................................................................... 1936................................................................... 1937................................................................... 1938................................................................... 1939................................................................... 1942................................................................... 0 0 0) 34,206 183 35,343 192 183 208 47,000 45,868 53.900 0) 0) 0 92,715 1,632,000 3,072.000 G erm an marks G erm an m arks 4 1 ,400,000 8 ,0 0 0 ,0 0 0 1No data. E. T. K. acquired in 1932 a large new site in Tallinn on which head offices, stores, and part of the factories and workshops were central ized; this property was administered by a subsidiary company. Other property included mines, an estate used for farming, gardening, and stock raising, and the largest tree nursery and some of the best milking herds in Estonia. In 1936 E. T. K .’s affiliated associations were 180 consumers’ , 178 dairy, 203 banking, 211 insurance, 180 agricultural-machine-using, 133 fuel and litter, 96 land-improvement, and a few fishermen’s, cattlebreeding, and house-building cooperatives. Activities carried on for these affiliates and itself included propaganda, the editing of the main cooperative journal of Estonia, a publishing works, the transport and insurance of goods, work in auditing, and the operation of a “ hospital” department which nursed or took over insolvent cooperatives. E. T. K. also supported its own cooperative college which in 1938 trained more than 600 students. By 1938 E. T. K. had become the largest commercial and industrial enterprise in Estonia. In the meantime a partial reorganization of the cooperative structure, which had begun under the new government and con stitution of 1933, was carried forward by the later corporative government. Central federations were created, under sponsorship of the Government, for the dairy, slaughtering, and poultry associa tions in the agricultural cooperative movement. In 1937 these were given monopolies on the export of butter, meat, and eggs. Estonia 153 Apparently on the initiative of the cooperatives, the Government created a Chamber of Cooperation at the end of 1935. The 60 mem bers of the Chamber were to be elected by the cooperatives for 4-year terms and the task of the Chamber was to watch and assist in all branches of cooperation. After a law of 1937, the Chamber comprised sections for cooperative banking, commerce, insurance, industry, and “ cooperative utilization," each with its own assembly. The Chamber employed 16 controlling instructors and published a monthly magazine. According to a Government publication the Chamber's activities were advice and training of cooperative personnel, control of bookkeeping, the “ elucidation of cond tions and requirements" of cooperatives, and “ the formulation of the attitude of the cooperative movement with regard to laws concerning cooperation." Membership in the Chamber was compulsory for all cooperatives, as was also the payment of affiliation fees “ according to turnover." Estonian Cooperatives in W orld W ar I I In June 1940 when the Russian forces marched into Estonia and. incorporated that nation into the Soviet Union, the cooperative movement was completing a very satisfactory decade of development. A network of 208 consumers' cooperatives with 600 stores and an annual turnover of 50,000,000 kroons had been spread over the country. The Russians at once nationalized all private business and requi sitioned cooperative experts to organize this new form of State trading. Though the external organization of the cooperative system was not touched, the director of E. T. K. was arrested and taken to Russia and new cooperative leaders were installed. E. T. K. became directly subject to the Central Union of Consumers' Associations in Soviet Russia (Centrosojus). Both the cooperatives and the new State system of trade operated under control of the People's Com missariat. Many of the nationalized private businesses, however, had to be administered by the cooperatives. The consequent economic disorganization, the shift to the Russian currency, and Soviet priorities of purchase rights all combined to diminish supplies. Even before the Germans advanced into Estonia in 1941 and the Russians retreated, taking with them motors, horses, ships, trains, and goods, Estonian stores were nearly empty. One estimate placed the damage done to the cooperatives by the Russian occupation at 112,000,000 kroons. The Germans, in their turn, relied on the cooperatives for services of distribution, and they too denied the associations any democratic independence. A German order of September 16, 1942, forbade the associations to hold their annual meetings and transferred all power to executives appointed by the civil authorities. In December 1942 a new central cooperative organization for Estonia was created and all cooperatives were required to register in it within 10 days, on penalty of liquidation. The largest cooperative paper mill was confiscated and transferred to the German Ostland-Faser Co. . In spite of all these handicaps and invasions of cooperative rights, the Estonian cooperative structure appeared to have survived both the Russian and German occupations and to be in a firm financial 588544°— 44------ 11 154 Cooperatives in Individual Countries position. The number of cooperative associations had increased, and for 1942 E. T. K .’s annual sales totaled 41,400,000 German marks, the value of own production 8,000,000 marks,' and its net earnings for the year reached 500,000 German marks. Most of the earnings were allocated to reserves.1 Cooperative Movement in Latvia Though some cooperative organization began in Latvia as early as the 1860’s, it was not until 1907 that the Cooperative Central Union and Wholesale Association, Konzums, was established to carry on wholesale and educational activities. When World War I began a few years later, Latvia’s population was 2,500,000 and when it ended, 1,596,131. At the time of the formation of independent Latvia, in 1920, not only the Latvian business structure but the farmers’ build ings and fields had been destroyed. The cooperative movement, however, entered the new era with en ergy. To coordinate the activities of the different types of cooperative associations, a Council of Cooperative Congresses was established in 1920 and various central cooperative federations soon appeared. As Latvia was predominantly agricultural, farmers’ cooperatives of various types formed by far the greatest section of the cooperative movement. Even the consumers’ cooperatives were largely rural and the cooperative wholesale, Konzums, was both a distributive and a marketing organization. Hastened by the world-wide depression of the early thirties, the Latvian Government assumed a largely corporative and dictatorial form in 1934. It forced the liquidation of the federation of workers’ cooperatives and Konzums, and decreed that their affiliates become members of a new Wholesale that was not cooperative but a Stateowned stock company. In the period, 1934-39, the whole Latvian cooperative movement was transformed through forced amalgama tions and State control. The Russians took possession of Latvia on June 17, 1940, and their treatment of Latvians and Latvian cooperatives appears to have fol lowed the same course as in the case of Estonia (see p. 153). When the Germans conquered the Baltic States in March 1941, Latvia and the other two countries, in addition to White Ruthenia, were constituted as the Ostland District of the Reich. The property previously nationalized by the Russians was confiscated by the Germans in August 1941. The farmers’ marketing cooperatives were reestab lished by the Germans and were used as producers and collectors of produce for the conquerers. T yp es o f Associations and Their A ctivities The cooperative movement in Latvia had the usual standard types. One form of agricultural cooperation— associations marketing grain t Sources .—1The report on Estonia is based upon data from the following publications: The Estonian Yearbook, 1929 (Tallinn); Estonia, Population, Cultural, and Economic Life. ([Riigi statistiska Keskbiiroo], Tallinn, 1937); International Directory of Cooperative Organizations (International Labor Office). 1929, 1933, 1936,1939* Cooperative Societies Throughout the World—Numerical Data (International Labor Office. 1939); International Cooperative Bulletin (International Cooperative Alliance, London), December 1922; and March 1926; Review of International Cooperation (International Cooperative Alliance, London), June 1928, January 1929, April 1931, July 1933, July 1935, September 1936, June 1938, February and August 1939, October 1943, and February 1944; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1929, 1934, 1936, 1937, 1938, 1939,1940,1941. 155 Latvia and other agricultural products— disappeared early in the 1930's when by successive measures the Government formed State monop olies of both domestic and foreign trade in grain, bread, seed, and potatoes. The number of cooperatives of each type in 1937 is shown in the accompanying statement: N u m b e r of associations All types_________________________________________________ 2, 196 Consumers, cooperatives_________________ Credit associations_______________________ Savings and loan associations_____________ Insurance associations____________________ Agricultural associations: Dairies______________________________ Agricultural machinery______________ Distilleries___________________________ Peat_______________________________ _ Marketing of grain and other products Fishermen’s associations_____________ 184 503 477 450 258 228 24 54 0) 18 1No longer any associations of this type; all such marketing a Government monopoly. Cooperative insurance—In the period before World War I when cooperative credit organizations were beginning to^ ameliorate dis tressing rural conditions, cooperative insurance associations were also being formed to cover fire and other risks. The Central Federation of Mutual Insurance Associations (Savstarpejas apdrosinasanas centroid savieniba) was established in Latvia in 1922. By the end of 1929 there were in Latvian towns 32 insurance cooperatives with 19,742 members and in rural areas 392 cooperatives with 73,495 members. At the beginning of 1939 nine years later, 606 organizations were affiliated to the Central Federation, and of these 469 were insur ance cooperative associations. After the new Government took control in 1934, model rules for the insurance union were drawn up and approved on December 16, 1937. The insurance organizations were little changed, however, “ because a Government representative [was] at the head of the Union.” Although the number of insurance cooperatives decreased between 1935 and 1938, membership rose from 114,579 to 125,839, and both insurance outstanding and reserves increased. T able 47.— M em bership and Operations o f Cooperative Insurance Associations in L a tvia ?!9 3 4 -3 8 [For par values of currency, see Appendix table, p. 278] Year ___________ 103K _ 103fi __________ 1937_____________________________ __________ 1938....................................................................... Number of associations 454 456 454 450 Membership 114,579 118,279 122,445 125,839 Insurance outstanding Reserves Lats Lats 579,487,932 644,071,354 671,338,067 4,195,751 4,572,601 4,909,328 According to a published report of the former Latvian Finance Minister, cooperative insurance organizations did well in 1938. More than 120 new associations were founded, mainly in the eastern part of the country where cooperatives had not been strong. The assets of the Central Federation increased 22 percent, reaching a total 156 Cooperatives in Individual Countries of 1,600,000 lats, and shares and reserves rose 26 percent to a total of 1.256.000 lats. At the same time, premium income amounted to 1.300.000 lats, showing an increase of 39 percent. From these opera tions the Central Federation returned a dividend of 63,747 lats to premium payers and derived a net surplus of 71,677 lats. Cooperative fisheries.—A Latvian Union of Fishermen’s Cooperative Associations was formed in 1919. By 1934 this Union included 47 associations with 5,000 members. A new union, the Central Federa tion of Fishermen’s Cooperative Associations, was established under the new Government in 1937 and was granted a monopoly of the whole sale trade in fish in Riga on October 15, 1939. At the beginning of 1939, fishermen’s cooperatives numbered 18 and their members 1,101. The aggregate output of canned fish was valued at 1,209,900 lats in 1938, a sum which indicated an increase of 40.5 percent over the output of 1937. On January 1, 1939, the total .balance of the Central Federation amounted to 273,794 lats, of which shares and reserves made up 43 percent. Development o f Consumers' (Trading) Cooperatives When 69 delegates representing some 37,000 cooperators gathered at Riga early in 1922 for the first cooperative congress of distributive associations, the country was in process of being rebuilt, and cooper ative development was retarded by the instability of the currency, lack of capital, low consumer purchasing power, and inexperienced leadership. Delegates also charged that the tax laws bore more heavily upon the cooperatives than was the case under the Czar’s rule. Under such conditions Latvian cooperatives developed as generalpurpose rather than as specialized types, and the membership was as diversified as the trading activities. In 1926 the variety of occupa tions represented among the 77,803 members of the 314 consumers’ cooperative associations then existing resembled somewhat the occupational distribution of the population in 1930, as shown below. Percent of population P ercent of cooperative m em bers 59. 05 Agricultural land proprietors___ 39. 0 Freeholders and leaseholders__ 4. 6 5. 46 Intellectual workers___________ 28. 2 15. 20 Wage-earning laborers________ 9. 8 6. 41 Artisans______________________ 10. 2 4. 49 Industrial workers____________ .7 .6 9. 39 Traders_______________________ Others________________________ 6. 7 Total................... ..............100.00 Total................................... 100.0 Agriculture___________________ Professions (education, public administration)_____________ Manufacturing industry_______ Trade and commerce__________ Commerce and transportation. Others________________________ From 1926 to 1930 consumers’ cooperative membership averaged about 63,000 persons. By 1931 the depression had begun and mem bership had fallen to 46,930. The unemployment and distress of the people, the frequent bankruptcies, and general insecurity in Latvian business were reflected in declines in business and sizable deficits in 1931 and 1932 (table 48). The Central Union and Wholesale, Konzums, formed in 1907, was the principal organization of its type in Latvia. One of its avowed aims was to assist the agricultural interests and another was to organ Latvia 157 ize the production and purchase of goods handled by the affiliated as sociations. Konzums thus dealt not only in the traditional consumer oods but also in fertilizers and seeds and, in the 1920’s, it exported aeon and butter. In 1928 when its affiliated associations numbered 402 and their membership was 80,000, Konzums’ turnover reached 49,903,570 lats, almost twice the figure for 1924. Goods purchased by the affiliated cooperatives accounted for 87 percent of the turnover of 1928. In that year its exports of meat, butter, and linseed were valued at 6,139,949 lats and its imports of agricultural machinery, manufactured goods, fodder, manure, and provisions at 7,482,688 lats. Though the meat-export department suffered severely in 1928, all other depart ments were thriving. The position of this organization in the national economy may be seen from its importation of 50 percent of the feeding stuffs, 34 percent of the artificial manure, and 29 percent of the agri cultural machinery imported by the entire country. The productive enterprises of Konzums consisted of a flax mill, a bone mill, a sawmill, a salt plant, and two electric-powered slaughterhouses. In 1934 Konzums’ enterprises included also a fat-refining plant and a pharma ceutical laboratory. When the world-wide economic collapse of the early 1930’s arrived, Konzums’ affiliated associations included 206 consumers’ , 57 agri cultural, 54 dairy, and 20 other associations. In 1931 turnover de creased 50 percent to 22,400,000 lats. The balance sheet showed heavy investments in real estate, large debts owed by customers, and a low percentage of own resources. As Konzums’ main creditors were the State Bank and the Ministry of Finance, the latter appointed a State Administrator to oversee its operations. f Cooperatives Under State Dom ination In 1934 the Prime Minister of Latvia requested the Parliament to change the constitution. Upon its refusal to do so, an armed “ putsch” occurred, and a new government was formed under the Prime Minis ter, which disregarded the numerous political parties (at one time numbering 44). In 1935 and 1936 four chambers of a corporative character were formed. Activities of the cooperative movement were placed under 3 new laws, the Cooperative Societies and Associations Act, the Cooperative Fund Act, and the Government Security Fund Act. This legislation was said to give the cooperatives “ better opportunities for outside work than formerly” and not to interfere with the use of Rochdale principles. The Government reserved the right to make some ad justments in the cooperatives, and all decisions of boards and meetings were to be approved by the Government. Up to 1938 (report of December) it had appointed members to 10 cooperative boards out of a reported total of 2,000 cooperatives. Actually however, the Government was adapting the cooperative movement to the new ideology. Some cooperative association prem ises were searched, some associations were closed. The cooperative law of June 17, 1937, brought the entire movement into line with the new policies by compelling all associations to submit new sets of rules before being licensed and by obliging a)1 to join their respective unions and submit to partial Government auditing. Danger from the liqui 158 Cooperatives in Individual Countries dation of cooperatives was eased by a law requiring that all uncon cluded liquidations be handed over to the Latvian Credit Bank and by allowing a sum of 10,000,000 lats to be used to repay the losses of cooperative members. In 1935 only 1.3 percent of Latvia^ 29,576 retail sale establish ments were cooperative, except in the food business in which the pro portion of cooperative ownership was 4.7 percent and of turnover 16 percent. As may be seen in table 48, an increase in earnings began in 1934 and in amount of business, and patronage refunds in 1935. Although the consumers7 cooperative membership had fallen to 27,047 (an all-time low) by 1937, sales that year reached 38,193,134 lats, thus topping the largest previous total by almost 7,000,000 lats. In 1937, too, interest and patronage refunds were larger than ever before. Share capital amounting to 914,383 lats exceeded by 56,039 lats that in any earlier year and total own capital had never been greater except in 1932. This progress was continued in 1938. T able 48.— Trend o f Development o f Consumers’ Cooperatives in Latvia, 1 9 2 6 -3 8 [For par values of currency, see Appendix table, p. 278] Own capital Num ber of associ ations Num ber of stores 1926-30 (av erage)____ 1928............. 1929............... 1930............... 1931............... 1932............... 308 302 301 295 300 290 451 434 444 468 476 459 598,289 597,903 634,928 722,555 786,534 858,344 2,837,054 2,679,921 3,240,365 3,775,940 3,925,819 4,092,359 9,528,629 9,404,142 9,947,045 10,608,374 9,950,036 8,725,197 27,236,892 26,547,434 31,501,290 28,322,312 25,165,305 18,335,571 163,363 223,578 286,610 113,836 179,814 1158,767 1933............... 1934.............. 1936............... 1936.............. 1937............... 1938............... 249 234 192 194 187 184 402 828,193 812,842 388 375 735,303 393 798,816 914,383 399 428 1,051,616 3,917,161 3,905,575 3,521,011 3,702,860 3,966,672 4,401,899 6,069,378 5,611,519 4,464,241 4,481,410 5,026,210 5,929,515 19,776,008 19,293,851 22,159,423 28,978,534 38,193,134 58,900,000 114,972 186,283 321,930 435,295 759,077 0 Year Share capital Lats Outside capital Sales Earnings Inter est Patron age re fund L a ts L a ts Total Lats Lats L a ts L ats 27,471 28,718 31,129 31,961 27,720 21,482 86,599 95,301 113,671 111,710 57,788 33,021 25,376 65,413 32,356 62,094 36,060 84,528 41,464 121,539 68,472 219,709 0 , « i Deficit. * No data. In January 1937, under pressure from the Government, Konzums and a workers7 cooperative federation, Union of Cooperative Distrib utive Associations, voted for their own “ voluntary77 liquidation and the transfer of their assets and liabilities to a new organization— a joint stock company, formed by the Government. By this act the Government amalgamated two organizations which had been rivals within the Latvian cooperative movement since 1920. This rivalry reflected differences between “ bourgeois77 consumers and “ radical77 workers7 groups which began as early as the Russian Revolution of 1905, subsided under the Bolshevist domination, and reappeared in independent Latvia. The Union of Cooperative Distributive Asso ciations, though neutral in politics, was founded to safeguard the interests of the workers. Among Konzums7 affiliated associations, on the other hand, there were purely agricultural cooperatives, savings and loan, and dairy cooperatives as well as consumers7 cooperatives which supplied both household and agricultural needs. The workers7 organization was a small federation which had only 34 affiliated associations at the time of its dissolution. 159 Latvia T able 49.— Num ber and M em bers o f Certain T ypes o f Cooperative Associations in Latvia, 1 9 2 6 -3 8 , by T ype Year Total Consumers, Credit associa tions of specified Num Mem Num Mem bers ber bers tires ber Insurance Num ber Mem bers Dairies Num Mem ber bers 1926-30 (average)____________ 1928............................................ 1929............................................... 1930.............................................. 1931.............................................. 1932............................................... 1,742 1,772 1,773 1,780 1,784 1,751 308 302 301 295 300 290 63,304 54,475 53,376 50,320 46,930 44,229 578 588 592 605 623 628 172,098 172,824 181,124 195,353 205,835 208,540 408 417 425 430 438 440 83,506 86,797 93,315 99,233 95,858 99,437 448 465 455 450 423 393 21,462 21,766 23,611 25,017 24,971 24,423 1933............................................... 1934............................................... 1935.............................................. 1936............................................... 1937............................................... 1938............................................... 1,692 1,654 1,592 1,550 1,441 1,395 249 234 192 194 187 184 36,792 32,568 28,358 27,580 27,047 27,577 634 626 618 606 532 503 208,170 204,680 202,234 205,495 202,696 205,964 447 454 456 456 454 450 103,891 109,394 114,579 118,279 122,445 125,839 362 340 326 294 268 258 22,721 20,790 19,628 19,145 18,541 18,538 On August 4, 1937, cooperative delegates received “ in subdued silence” the Government terms: Amalgamation of small associations; and all local associations affiliated to the two defunct unions to become automatically members of the new company, Centrala Savieniba Turlba, to which was given a monoply of certain articles of import. The chief shareholders in Turlba were the Government banks; the affiliated associations held only 1,000,000 lats out of Turiba’s 7,000,000 lats of share capital. Turlba, in turn, was a stockholder in the various joint stock companies established by the new Government. Between 1936 and 1938 the Latvian Government established joint stock com panies in a great many fields of economic activity— the fuel trade; the heavy industries; production of brick, Ume, beer and soft drinks, oils and liquid fuels, timber, and peat; and export of various commod ities. In 1938 Turlba, then in its second year, owned shares amount ing to 2,118,000 lats in 15 such joint stock companies, of which the greater part of the share capital was held by Government banks and other organizations. Under this plan of State control, by 1939 (when the results of an official study were published) the Latvian cooperative movement was reported to have “ changed beyond recognition.” The legal position and to a certain degree the organization of the cooperative system had been altered, as has been mentioned above. The total number of cooperatives listed in the Government statistical annual had dropped from 1,654 in 1934 to 1,395 in 1938 and membership in consumers’ associations had decreased from 32,568 to 27,577 (see table 49), Membership in credit and insurance cooperatives, however, had grown about 1,000 and 15,000, respectively. According to a report published by the Latvian Legation in Washington, consumers’ cooperative sales had increased from 19,293,951 lats in 1934 to 58,900,000 lats in 1938, the increase between 1937 and 1938 being given as 20,700,000 lats, that is, 54 percent. Improvements in the consumers’ cooperative position described by the same report included also a growth of 16 percent in the number of stores, of 30 percent in aggregate balances, of 49 percent in the number of employees, and of 44 percent in the aggregate share and reserve capital. How much freedom was ac corded to the cooperatives in the management of their activities is not apparent from the reports available. 160 Cooperatives in Individual Countries At the end of 1938 the Central Union and Wholesale, Turlba, had in affiliation 209 consumer associations, 171 dairy, and 34 miscellaneous associations. Total sales had risen from 56,000,000 lats in 1937 to 80,000,000 lats in 1938. Turlba began the year 1939 with a balance of some 18,000,000 lats, of which shares and reserves made up more than half. Net surplus, which had been 480,457 lats in 1937, in creased to 1,008,337 lats after the payment of patronage refunds of 300.000 lats and 650,000 lats, respectively, in 1937 and 1938.3 Cooperative Movement in Lithuania The organization of thrift and loan and peasants' trading coopera tive associations began in Lithuania in the 1870's and 1880's, and some real progress in cooperation occurred about 1904. Toward the end of the nineteenth century the westernizing of the medieval Lithu anian land system began under the leadership of intellectuals. How ever, the Lithuanian peasant farmers had been serfs until freed by legislation passed by the Russian Government during the period 1862-65, and as long as Lithuania remained under Russian domination the people lived practically as they had in the Middle Ages. From 1915 to 1918 during World War I the Germans occupied Lithuania and the country lost much of its assets— 47 percent of its cattle, 38 percent of its norses, and 44 percent of its pigs. Some 57.000 buildings were destroyed. In the same period of time, 90 percent of the cooperative organizations in existence before the war disappeared. The Lithuanian State was revived in 1918 and its in dependence recognized in 1920. The population of some 2,000,000 was then predominantly rural and remained so as late as 1936. The newly created Government at once began agrarian reforms. It abolished the common pasture lands and peasants' “ servitudes," it consolidated the peasants' strip and plot holdings, and cut up the large estates for the benefit of the landless peasants. A network of cooperatives for the supply of credit, consumption goods, and the purchase and marketing of agricultural supplies was extended through private and Government efforts. Government leaders were the real organizers of whole parts of the cooperative .movement and some enterprises were subsidized or partially owned by the Government from the early years of independence, tnough it was stated as late as 1936 that the State hoped to convert these into genuine cooperatives. Cooperative accounts were audited by Govern ment officials. Consumers' cooperatives with less than 50,000 lits capital were exempted from the payment of the trade tax and their federations with a capital exceeding 50,000 lits from the profits' tax. In addition, the State maintained, at the agricultural college at Dotnuva, a lecturer on agricultural cooperation. Cooperative delegates were specially provided for in the Chamber of Commerce, Industry, and Trade created in July 1936.8 8 S ou rces .—The report on Latvia is based upon data from the following publications: Valsts Statistiskft Parvalde, Latvijas Statistikas Qada OrSmata (Riga), 1939; International Directory of Cooperative Organi zations (International Labor Office), 1929,1933,1936,1939; European Conference on Rural Life, 1939: Latvia (League of Nations Publications, 1939); International Cooperative Bulletin (International Cooperative Alliance, London), May-June 1922; Review of International Cooperation (International Cooperative Alliance, London), March 1928, August and December 1929; November 1931; February 1934; December 1936; June, July, and December 1938; People’s Yearbook (English Cooperative Wholesale Society, Man chester, England), 1934,1940; The Cooperative Systems of Scandinavia and Baltic States (U. S. Bureau of Foreign and Domestic Commerce, Special Circular No. 372, Washington, D . O., September 15, 1936); and New International Yearbook (Funk & Wagnalls Co., New York), 1943. 161 Lithuania By the beginning of World War II the cooperative movement was a powerful factor m the economy of Lithuania, and its cooperative wholesale the largest business enterprise there. About a third of the people were served by the consumers, cooperatives. T ypes o f Associations The characteristic types of cooperatives which developed in Lithu ania were the trading (village and urban consumers’ cooperatives which both purchased and sold goods), the credit, the dairy, the agricultural improvement, and miscellaneous associations including workers’ productive, building, and insurance cooperatives. From table 50, which presents the numbers of cooperative organizations existing in 1923, 1928, 1933 and in the last years before World War II, it is apparent that credit and “ other marketing” cooperatives had the most consistent growth of all. The Central Committee of Lithuanian Cooperative Associations served as a common center for issuing publications, for organizing propaganda and education, and as an advisory committee for afl forms of cooperation. This council was reorganized in 1937T able 50.— Num ber o f Cooperatives in Lithuania in Specified Years, 1923 to 1939, by T yp e Type of association 1923 1928 1933 1937 1938 1939 All types 717 1,559 1,405 1,257 1,288 1,332 OoTHSUTnArs’ assnHfttinns Credit ATld fiavings j^ssonifttions ,, Building associations..._________ _____________ . . . __ Insurance associations_________________________ - __ _ Publishing associations______________________________ Tifvb^r ass^eifttinns __ _ _ ........... PrnHnof.ivA fi«nf>i'nt.inns Agricultural associations: Dairy ___________ . . . . . . . . . . . . . . . . . . . . . . . . . ______ Other marketing_______ . . . __ ___ . . . ____ . . . . ___ 422 222 409 496 5 1 11 9 32 105 509 4 1 5 7 5 57 407 4 1 2 4 4 1251 398 *275 401 2 2 228 224 386 186 8 16 322 195 136 15 101 224 204 204 12 133 1 409 430 Bee culture__________ . . . . . . . . . __ _________ ___ _ Machinery loan___________ ___ ____ ______ _____ Potato-alcohol distilleries________________________ 45 28 i “ Commercial” includes some agricultural. Cooperative credit associations.— The cooperative credit movement began in Lithuania with the founding of a credit bank in 1873. After losses during World War I, the cooperative organizations were re vived and subsequently advanced much of the funds required for the restoration of the country and the modernization of agriculture. The cooperative credit movement was composed of two groups of associations, each with its own central organization— the rural credit associations of which the membership in 1931 was more than 50 per cent agricultural, and the urban credit associations (including the Jewish People’s Banks) the members of which were chiefly town dwellers. The Raiffeisen credit cooperatives of the Memel district also had their own federation, the Raiffeisen Bank, founded in 1924. It was registered as a joint stock company of which the main share holders were the cooperatives. Although the number of Lithuanian credit cooperatives reached 547 in 1927 and had decreased to some 400 at the beginning of World War 162 Cooperatives in Individual Countries II, total share capital, deposits, loans, and net earnings showed a steady growth from 1935 to 1938. 1935 (lits) Own capital............................... 17, 672, 798 Deposits................................................ 30, 003, 371 Loans______________ 58, 359, 969 Net earnings______________________ 444,020 1937 (Ills ) 21, 278, 908 41, 423, 953 65, 900, 104 776,062 1938 (lits) 22, 177, 568 42, 677, 547 69, 602, 315 __________ The Lithuanian Government held shares in the Lithuanian Coopera tive Bank (the central organization for the majority of the associa tions) which was founded in 1920 and brought under Government control in 1933. This Bank supervised the operations of the affiliated credit cooperatives. At the beginning of 1937, the affiliates of the Cooperative Bank consisted of 3 federations, 13 trading, and 163 credit cooperatives. The Bank’s share capital, of which the State held {>art, then stood at 3,000,000 lits, its deposits at 6,560,000 lits, and oans granted at 15,900,000 lits. At the end of 1936, the 41 Raiffeisen cooperatives in the Memel district had funds of 8,730,000 lits (as compared with 20,130,000 lits in 1931) and loans granted amounting to 16,640,000 lits (as compared with 24,960,000 in 1931). The Jewish People’s Banks numbered 85 with a membership of 15,849 at the beginning of 1937. Own capital amounted to 3,350,000 lits, loans to 14,060,000 lits, and deposits to 14,730,000 lits. Cooperative association for bookselling.—A cooperative association for publishing and bookselling was founded in 1923 and by 1936 had be come the largest enterprise of the sort in Lithuania. The range of this cooperative’s activities was wide and novel and undoubtedly valuable in the development of the native culture. It dealt in all kinds of apparatus (radios, theodolites, typewriters, etc.), and it issued a great variety of educational material, including a Lithuanian encyclopedia of which 4 out of 16 volumes had been completed by 1936. Development o f Trading Cooperatives During the first few years of Lithuanian independence the cooper ative movement was organized with separate consumers’ associations and agricultural purchase and sale associations, but their operations were almost the same. As dairy farming and stock breeding spread and the organization of industries to utilize agricultural products developed, the number of cooperatives increased rapidly. The result ant overlapping of organizations encouraged the consumers’ and the purchase and sale cooperatives (of which the members were often the same individuals) each to extend operations into the other’s field and ultimately brought about the failure of some consumers’ cooperatives. Clarification of the fields of activities of the various cooperatives came largely from above. The Central Union of Cooperative Associa Lithuania 163 tions (Lietukis) was formed through the efforts of Government officials in 1923, and its affiliated associations included consumers’, agricultural, credit, and dairy cooperatives. Its original function was largely that of education. The credit groups soon withdrew to join their own cen tral organization, as did also the cattle-registration groups. In 1926 the dairy cooperatives also formed a separate central union, called Pienocentras. About the same time, the educational work of Lietukis was transferred to the newly incorporated Chamber of Agriculture. The final demarcation of activities occurred in 1930 and 1931 when an arrangement worked out between Lietukis and Pienocentras trans formed the agricultural purchase and sale cooperatives and the con sumers’ cooperatives (except cooperatives which were clearly urban) into a uniform type of rural association which became distinctive in Lithuania— the “ trading” cooperative association. These trading cooperatives handled ordinary consumer goods such as groceries as well as farm supplies, and they also purchased agricultural produce. Lietukis then began to act as the central union and wholesale for the trading cooperatives and henceforward its aim was declared to be the development and organization of the trade in agricultural products and the reconciliation of the interests of producer and consumer. Since there were only about 20 of the traditional types of consumers’ cooperatives in Lithuania and these had no cooperative wholesale of their own, the activities of Lietukis constituted the main cooperative wholesale business. During this early period a wholesale known as the Christian Cooperative Wholesale was liquidated (in 1928). A second wholesale organization was absorbed by Lietukis at the beginning of 1931. In the decade preceding World War II, Government participation in cooperative enterprise continued, and even increased, through its part ownership of certain joint stock companies. During this period a decline in membership began in the depression in 1932, and continued year by year throughout the 1930’s, whereas after 1934 sales and net earnings grew at the rate of 10,000,000 lits and 200,000 fits respectively a year (table 51). The decrease in individual membership appears to have been accompanied by the opening of cooperative facilities to the public, for the increase in sales (from 52,255,099 fits in 1929 to 114,285,259 fits in 1939) could scarcely be explained by a rise in prices and m member purchases. The remarkable decrease in the amount of members’ share capital after 1933 is also significant. By 1938 (the last full year of peace) Lithuania had 183 agricultural and rural consumers’ or trading cooperative associations, with a mem bership of 23,480, sales valued at 95,164,700 fits, and own capital of 8,200,000 fits. Credit cooperatives numbered 398, of which the membership was 117,155, the capital 13,990,000 fits, the deposits 41,670,000 fits, and the loans 63,570,000 fits. ^ Cooperative expansion continued in 1939, with the membership in agricultural and rural consumers’ associations increasing 17.3 percent, the number of stores increasing from 310 to 452, and the amount of turnover from 40,400,000 to 56,100,000 fits. 164 Cooperatives in Individual Countries T a b le 51.— D evelopm ent o f Consumers* Trading Cooperatives in Lithuania , 1925-39 [For par values of currency, see Appendix table, p 278] Num ber of co opera tives Year 1Q9J? 1926 Membership Total Farm ers Num ber of stores Amount of business Net earnings Lits L its Share capital Lits Reserves L its 20,631,975 23,524,254 52,255,099 676,886 389,419 490,965 514,571 764,649 2,154,606 2,198,589 1,481,023 2,584,886 1,168,653 509,780 543,604 634,460 741,265 1,182,894 44,992,836 46,003,579 37,314,464 37,534,228 37,342,382 875,390 605,198 288,667 413,223 483,091 1,177,891 1,112,116 877,987 1,029,014 880,582 1,330,548 1,444,172 1,138,053 1,387,342 1,301,826 290 46,427,654 298 55,562,955 316 65,045,674 334 95,164,700 378 114,285,259 680,448 821,248 1,042,931 1,374,775 2,277,009 759,150 725,775 916,804 693,901 673,233 1,246,263 1,451,830 1,628,956 1,975,432 417,770 1927.............................. 1928.............................. 1929.............................. 247 208 205 223 259 37,641 36,875 38,891 22,792 25,077 288 318 1930.............................. 1931.............................. 1932.............................. 1933.............................. 1934.............................. 254 213 185 184 176 23,841 33,993 28,747 26,087 22,285 23,486 22,399 18,330 16,074 13,890 313 294 271 284 284 1935.............................. 1936.............................. 1937.............................. 1938.............................. 1939.............................. 171 180 182 183 185 20,906 21,026 21,525 23,480 25,189 12,835 13,118 13,352 14,701 16,499 The largest Lithuanian consumers’ cooperative was Parama, at Kaunas, which in 1937 had 30 stores. Like other Lithuanian cooper atives, in the late 1930’s Parama encouraged all patrons to become members, at one time announcing that all nonmember customers whose purchases exceeded 1,000 lits might join the association with out paying the usual fees. In 1936 Parama maintained a bakery with a daily capacity of 50,000 kilos— the largest in the Baltic States. At that time the daily needs of Kaunas were 40,000 kilos and the out put of Parama 20,000 kilos of bakery goods. ACTIVITIES OF COOPERATIVE WHOLESALE, LIETUKIS After 1930 Lietukis divided its attention between supplying its member associations with consumer goods and farm supplies and the marketing of flax and grain. The two main divisions of its trading activities were the import of commodities needed by the members and the purchase and export of farm produce. The wholesale also provided accounting service, besides assisting member associations on matters of finance and real estate. Only about 20 percent of its affiliates were consumers’ cooperatives in 1936 and 80 percent were agricultural cooperatives. In 1939 Lietukis had 145 affiliates with a total individual membership of 25,000. The Central Union and Wholesale might thus be said to serve about 100,000 persons out of a total population of some 2,000,000. Lietukis was handling about 85 percent of the total Lithuanian wholesale trade in sugar, 76 percent of the salt, 80 percent of the agricultural machinery, 60 percent of the cement, and all of the fertilizer. The machinery department also handled automobiles, bicycles, and sewing machines. Groceries and building materials were important items of Lietukis’ turnover. Its petroleum trade expanded after 1936 when it acquired a number of storage tanks at Memel; in 1938 its imports of petroleum products constituted 42 percent of the total imports of these items. In 1939, Lietukis was the only exporter of, and the largest dealer in, cereals in Lithuania, 165 Lithuania and handled 45 percent of the total national flax export. By acquir ing grain mills in the late 1930’s, Lietukis was able not only to regulate flour prices but also to purchase in quantities sufficient to influence grain prices. Lietukis collaborated with the dairy union, Pienocentras, in the manufacture of soaps, oils, polishes, and lubricants, and with the Government in the operation of Maistas, a joint stock meat-packing company (founded in 1923 on an earlier cooperative beginning). In the mid-1930’s, Maistas maintained 4 processing plants and 50 retail stores and the Government apparently hoped to convert the enterprise into a purely cooperative association. From sales of about 32,000,000 lits in 1933, Lietukis increased its business more than fourfold by 1939, as table 52 indicates. The single break in its consistent growth occurred in 1937. T a b l e 52. — M em bership and Operations o f Central Union o f Lithuanian Cooperative A ssociations , Lietukis , 1933-39 [For par values of currency, see Appendix table, p. 278] Year 1033 ... ... _____ 1934.......................................................... 1935.......................................................... 1936.......................................................... 1937........................................................... 1938.......................................................... 1039 Number of affili ated asso ciations Amount of business Net earnings Share capital Reserves Lits Lits Lits 140 127 112 108 111 131 145 Lits 32,063,457 37,616,700 60,530,300 73,714,500 72,360,000 113,908,900 138,911,000 0) 83,100 382,900 640,600 776,800 957,500 1,147,700 0) 289.100 272,200 375,400 505.900 705.900 915.100 0 361,300 331,200 350,400 529, 700 568,500 807,900 1No data. Lithuanian Cooperatives in W orld W ar I I On March 22, 1939, the Lithuanian cooperatives suffered the first of many losses caused by World War II, with the cession of Klaipeda (Memel) to Germany. Following the Mutual Assistance Pact signed with the Soviet Union, October 10, 1939, Lithuania received its former capital, Vilna. Soviet troops occupied the country on June 15, 1940, and on July 21, the Lithuanian Parliament adopted a resolution for union with the U. S. S. R., which was accepted in Moscow on August 3. When Germany attacked Russia, Lithuanian patriots established an independent government at Kaunas, June 23, 1941. The Germans dissolved this government on August 6, and made Lithuania a district in the Ostland Province of the Reich under a German commissioner general. Though the Russian policy for the Baltic republics included the nationalization of land, farms less than 45 acres in size were left in the hands of the small owners and only the larger properties were placed under State administration. After the German occupation of Lithuania began, the Germans appointed their own administrators for the large farms and treated the small farmers as holders of German State property. The formation of a central German organization to “ manage and exploit all the State farms and their technical enterprises such as machine and tractor 166 Cooperatives in Individual Countries stations, also certain collective farms and other agricultural enter prises singled out by the Reich Commissioner,, was announced February 14, 1942. Raw materials and food were confiscated for German use. At least one of the joint stock companies affiliated to the Lithuanian cooperative movement was made a branch of the German organization in the same field of production. At the same time, the Germans were giving seized Lithuanian prop erty to German-speaking Balts who were being returned to Germanize the Baltic States, and 70,000 Lithuanians were moved to the Reich to work.4 Countries o f Central and Eastern Europe In all of the countries of central and eastern Europe—Austria, Czechoslovakia, Germany, Hungary, Poland, and Soviet Union— the cooperative movement had reached impressive proportions and was an important factor in the life of the people. In Germany the con sumers’ cooperatives were serving about 25 percent of the population, in Czechoslovakia 30 percent, in Poland 40 percent, and in Hungary 45 percent. The advent of Hitler and the gradual rise of totalitarianism changed the situation in five of these countries within a few years. In every case it was the consumers’ cooperative movement which was the main target of attack, the agricultural cooperatives being left for the most part unmolested. In Germany an avowed program of dissolution of the consumers’ cooperatives was adopted by the Nazis. Such was the cooperatives’ position in the economy of the people, however, that nearly a decade elapsed before the program could be carried out in its entirety, resulting in the disappearance of this form of cooperative. In Austria internal difficulties, added to the depression and the in volved financial difficulties of the Government itself, had produced knotty problems for the cooperative movement which it was only beginning to solve when the political crisis of February 1934 occurred, resulting in the adoption of totalitarian policies. After the Anschluss with Germany and the assumption of power by the Nazis, the Austrian cooperatives suffered a fate similar to that of the German associations. In Czechoslovakia a drastic policy of amalgamation and dissolution of consumers’ cooperatives was inaugurated almost as soon as the German invaders arrived in 1939, the outcome of which the outside world has not been permitted to learn. A large proportion of the cooperatives in Poland were dissolved or destroyed in or after the partition of its territory among Russia, Lithuania, and Germany. Reports from German-occupied territory indicate that the Germans have made use of cooperative facilities and have even encouraged the formation of new associations where this suited their purposes. 4 S o u rc e s — T h e report on Lithuania is based upon data from the following publications: Lietuvos Statistikos Metrastis (Centralinis Statistikos Biuras, Kaunas), 1931, 1936, 1938 (Vima) 1939; International Directory of Cooperative Organizations (International Labor Office), 1929, 1933,1936, 1939; European Con ference on Rural Life, 1939: Lithuania (League of Nations Publications, 1939); Review of International Cooperation (International Cooperative Alliance, London), June 1928, July 1931, September 1932, Novem ber 1933, September and October 1936, September 1937, October 1938, September 1939, and January 1940; The Cooperative Systems of Scandinavia and Baltic States (U. S. Bureau of Foreign and Domestic Commerce, Special Circular No. 372, Washington, D. C., September 15, 1936); People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1931, 1932. 1940, 1941;New International Yearbook (Funk & Wagnalls Co., New York, 1943); Cooperative Review (Cooperative Union, Ltd. Manchester, England), March 1942; Washington Post, February 14,1944. Austria 167 Among these five countries, the cooperative movement of Hungary alone received actual advantages from the war, profiting by the addition of associations in the territories reannexed (after 20 years) from Czechoslovakia, Rumania, and Yugoslavia. Cooperative Movement in Austria In the 60-year existence of the Austrian cooperative movement, Austria passed through practically the whole cycle of modem political and economic development—the Imperial Government until 1918, the Austrian Federal Republic, 1918-34, the Austrian Corporative State, 1934-38, and the German Reich since 1938. When the first coopera tive associations were founded before the 1890’s, the landholding classes and the craft guilds of the Empire held almost medieval power. Changes caused by the beginning of industrialization and political enlightenment appeared in the old Empire before World War I. In the new Republic, the connection between the political leadership of the National Government and the management of the cooperative societies was close. Cooperative associations acted with the State or with municipal bodies in the management of socialized enterprises. A series of crises, however, had followed the dismemberment of the Empire in 1918-19 and the subsequent collapse of the Austrian cur rency. In the consequent readjustment, legislation was passed which limited the privileges of the consumers’ cooperative societies. In the winter of 1933-34, when Austria was drawn into the backwash from the German National Socialist revolution, a combination of groups established the corporative form of government in Austria. For a time, the new government took over almost complete control of the cooperative associations, destroying their democratic machinery at one stroke. Cooperative circles included so much of the nation’s talent, however, that the committees appointed by the Government in 1934 to administer the movement were almost invariably headed by its friends. Within One year after the winter revolution of 1934 the co operative societies^ except the Workers’ Bank (Arbeiterbank), had resumed their busmess. Government control of economic life con tinued to increase until the Anschluss with Germany in 1938. After that event, German influence did not destroy the cooperative structure immediately. The consumers’ societies were “adjusted.” Three years later, on February 18, 1941, a German Reich decree announced that the “assets, properties and organization of the Austrian societies affiliated to the Zentralverband [Union of Austrian Distributive Societies], as well as those of the Wholesale Society with headquarters in Vienna, are to be handed over to, managed by, or disposed of by the Labor Front.” Throughout the changes of the 1930’s, the agricultural cooperative societies survived virtually untouched by regulation. Their fate since the Anschluss is not known, but for other sections of the cooperative movement the cycle from autocratic control through liberty and back to authoritarian control was complete. At their peak; the consumers’ cooperatives had been responsible for the provisioning of at least a thud of the population of Austria. 168 Cooperatives in Individual Countries T yp es o f Associations Austria had almost every form of cooperative association and excelled in some. Before World War I, the chief development was in Raiffeisen banks and agricultural cooperation, but most of these organizations were in the regions lost to Austria under the peace treaty. After the war the agricultural associations steadily increased in number. The consumers' cooperatives, on the other hand, just as steadily decreased, this being largely due to the policy of amalgama tion oi smaller associations into powerful district associations. The consumers' cooperatives were predominantly working-class organiza tions, although some associations of peasants and other groups also existed. Insurance was provided for the consumers' cooperative movement through a single organization, the Insurers' Protection Bureau (a subsidiary of the Central Cooperative Union). T a b l e 53.— N um ber o f Cooperatives in A ustria in Specified Years, by T ype Type of association 1910 1913 1919 1925 1929 1930 1934 All types............................................................ 16,468 19,091 3,870 5,014 5,430 5,372 5,845 Credit associations.......................................... 10.890 Schulze-Delitzsch...................................... (9 Raiffeisen.................................................... (9 Consumers’ associations................................. 1,361 Agricultural associations............................... 2,887 964 Industrial and professional associations___ Building (housing) associations.................... 312 Other associations............................................ 54 12,240 1,980 (9 (9 (9 (9 2,148 473 1,675 375 1,333 865 .252 41 2,303 545 1,758 322 1,674 803 293 35 2,308 545 1,763 302 1,672 757 300 33 2,424 611 1,813 234 2,067 805 299 16 1,451 3,511 1,216 616 57 321 900 524 121 24 1936 t 5,478 2,205 379 1,826 222 1,998 749 290 14 1 No data. The Austrian registry of cooperatives showed 312 housing associa tions in existence at the end of the year 1910. Of this total, 176 had been established within the year. This growth continued during the Balkan Wars. Though all cooperatives increased 10 percent in number during the year 1911, the increase among the housing associa tions was 56.4 percent. The latter numbered 482 in 1911, and 616 in 1913. During the first year of World War I— 1915— the housing associations founded a federation, the Austrian Union for Workmen's Houses and Allotments, which survived World War I and the vicissi tudes of the Federal Republic. The most recent membership figures available for the federation are shown below: N um ber 1929_______________ 236 1933_______________ 241 1936 ______ _________________________ - 339 1937 ____________ 290 M em bership 30, 180 34,800 33,300 38, 711 Austrian agricultural cooperative associations were organized into 16 provincial unions and 1 central union, the General Union of Austrian Agricultural Cooperative Societies (Allgemeiner Verband fu r das landmrtschaftliche Genossenschaftswesen in Osterreich). In 1934 the membership of the 3,617 local associations which made up these unions was approximately 408,000. The influence of the agricultural cooperatives in Austrian economic life, however, was far greater than these numbers suggested. Electricity cooperatives had made a beginning with 27 associations and a balance-sheet total of 916,000 francs in 1937 169 Austria In the same year the number of urban credit associations reached 332, their membership was 157,324 and their total turnover was 165,048,000 francs. About two-thirds of the credit associations were Raiffeisen associations among the farmers. The trend of development of these associations during the difficult years from 1931 to 1936 is shown in table 54. T a b l e 54.— D eposits and Loans o f R aiffeisen A ssociations in A ustria , 1931—36 [For par values of currency, see Appendix table, p. -278] Year 1931............................................................................................ 1932............................................................................................. 1933 ........................................................................................ 1934 ........................................................................................ 1936............................................................................................. Number of associations 1,792 1,796 1,804 1,816 1,839 Deposits Loans Schillings Schillings 318,700,000 305,000,000 316,200,000 332,700,000 316,535,000 289,100,000> 274,600,000 276,200,000 267,800,000 1534, 705,000 i Total turnover. Development o f Consumers* Cooperatives Though a consumers’ cooperative association was founded at Teesdorf in Austria as early as 1856, and cooperative associations began to spread after the formation of the Vienna Consumers’ Society in 1864, the Austrian cooperative movement did not develop as speedily as the parallel movement in Germany. The power of the long-estab lished craft guilds and bourgeoisie and the division of the cooperatives into eight rival groups, as well as the late appearance of the industrial revolution, all retarded the growth of Austrian cooperatives. In 1873, when the first law for cooperatives was passed, only 169 associa tions were in existence in Austria. In spite of this small total, a federation— the General Union of Self-Help Trading and Economic Societies—had been created in 1872. 'Consumers’ cooperatives were the principal supporters of this union, but it admitted all types of associations. For the next 20 years the movement grew slowly. By 1910, however, there were 1,361 distributive associations and 312 building cooperatives. The General Union had been the only cooperative federation in Austria for 30 years when, in 1901, a group of its member associations withdrew to form the Union of Austrian Workers’ Trading and Eco nomic Societies (Verband der Arbeiter-Erwerbs und M irfschaftsgenos* senschaften Osterreichs). Three years later, the consumers’ cooper atives from the seceding group joined the consumers’ associations which had remained in the General Union and formed the Central Union of Austrian Consumers’ Societies (Zentralverband ozterreichischer Konsumvereine). Under various names, the Zentralverband had a continuous existence until the German Reich absorbed Austria in 1938. The depleted General Union continued under the name Osterreichischer Genossenschaftsverband until at least 1938, its mem bership consisting of credit associations on the Schulze-Delitzsch plan. Although the attitude of the Imperial Government toward the co operative movement had been more or less hostile, by the time the Balkan Wars brought unemployment and a disruption of Austro588544°— 44------ 12 170 Cooperatives in Individual Countries Hungarian economy, the Central Union has established itself under strong leadership. In 1905 another forward step was taken with the formation of the Wholesale Society of Austrian Consumers’ Cooper atives (Grosseinkaufsgesellschaft osterreichiseher Consumvereine, known as “ GoC” ), as a subsidiary to the Central Union. Its bylaws provided that 30 percent of its earnings were to go into a productive fund and 10 percent to reserves. It accepted savings deposits from trade-unions as well as cooperative associations. The wholesale’s principal ware houses were in Vienna but even before World War I it had opened others in Moravia, Ostrau, Aussig, Briinn, and Trieste. WORLD WAR I AND EARLY POST-WAR PERIOD Conditions during World War I and the post-war readjustment period encouraged the development of cooperatives in Austria. Dim ing the war, weaknesses in the economic and political system forced the Imperial Government and the people themselves to rely for dis tribution and even supply on such organizations as the trade-unions and cooperative associations. When the Imperial Government developed plans for supplying the war workers, a new cooperative organization— the Victualling Union of War Workers—was formed, the members of which were the tradeunions, the employers in the industrial establishments involved, and the Wholesale Society, GoC. More than 400 industrial enterprises, employing 200,000 workers, had joined the Victualling Union by 1917. The main responsibility for the distribution of food fell upon GoC, which supplied the needs of 400 industrial enterprises and 575,000 persons (one-third of the wartime population of Vienna). The terms of the treaty of St. Germain (ratified October 17, 1919), creating Yugoslavia, Czechoslovakia, Hungary, and Poland and recti fying other national boundaries, left the new Austria with only about one-fourth of its former land and resources. The total number of cooperative associations dropped to 3,870 in 1919— a reduction of almost four-fifths from the 19,091 in Austria in 1913. Of the credit associations only about a sixth of the pre-war total remained in Austrian territory. Consumers’ , agricultural, and building associa tions each lost between three-fourths and four-fifths of their member groups. The Federal Kepublic of Austria was established in mid-November 1918, birth and class privileges were abolished, and a revolutionary socialization of industry was soon under way. At the same time, na tional industries whicJi once supplied an internal market of 50 million people were compelled, by the territorial changes mentioned above, to contract themselves to a market of 5,500,000, and that at a time when thousands of demobilized army and civil personnel were enter ing industry for a living. Although wartime controls—notably ration ing—were continued, the break-down of the supply system compelled the Government to turn to the cooperatives for the service of distri bution. For a time in 1918, the crisis was severe; Vienna had but 10 days’ supplies on hand and all distributive cooperatives suffered from looting. The public flocked to the associations; membership in the Central Union’s affiliates'rose from some 300,000 to about 371,000 and the increase would have been even greater had the associations not been forced to prohibit new admissions because of the scarcity Austria 171 of provisions. In 1920, GoC was supplying foodstuffs to one-third of Austria’s 6,000,000 people. Though individual membership de clined slightly as private shops began to open after the peace, the total membership in 1922 was 145,165 larger than before the war. This growth was due partly to encouragement by Social-Democratic Party leaders, partly to the cooperative associations’ collaboration with the trade-unions, and partly to economic conditions. The Distributive Society of Vienna and District was the largest in Austria and the best customer of GoC. It was formed in 1919 by a merger of existing associations. At the end of its first year it had 140,541 members, and a total turnover of 700,745,436 kronen. It employed more than 1,560 persons and, besides its stores, operated a bakery, saddlery, smithy, butchery, and dairy. It had established a publicity department and library, and its stores numbered 158. By the end of 1919 all cooperative associations, as well as other Austrian enterprises, were facing ruin in the inflation which led to the collapse of the Austrian currency. Because of the inflation, the need for increased working capital was continuous. Associations ceased payment of patronage refunds, allocated large sums tQ reserves, and increased the value of shares. The distributive cooperatives violated the Kochdale cash-sale principle and began to buy on credit; they also accepted credit of IK billion kronen from the State; and they encour aged members to increase their shares and savings deposits. In 1922, the Central Union held no congress and made no printed report. League of Nations’ loans had been made to Austria, but the Austrian people were still suffering from unemployment and under nourishment. Flour prices had gone up to 53,571 percent, pork 74,418 percent, lard 87,766 percent, and rice 105,822 percent above the pre-war prices. ACTIVITIES OF COOPERATIVE WHOLESALE AND CENTRAL UNION During the next few years, when the very existence of Austria as a nation was at stake, the wholesale participated in the reconstruction of wartime organizations, some municipal, some trade-union, and some industrial. Either alone or in conjunction with the city of Vienna or the National Government it formed companies for the production and distribution of fuel, food, wearing apparel, household goods, and farm articles and for the exportation of Austrian and the importation of foreign goods. In this way it acted with the municipality to buy and distribute coal from Czechoslovakia, fruit, vegetables, and meat. It participated with the Federal Government and the agricultural cooperative wholesale in an organization to buy raw cotton, which was then worked up by priviate factories and returned to the wholesales for sale through special cooperatives; and it participated with the State in the shoe and leather business. Acting independently it bought, cut, and sold fuel wood, bought or leased factories to make clothing, rubber, soap, bakery goods, and vermicelli. It participated with the trade-unions in the organization of the Labor Bank (Arbeiterbank), some of the funds of which helped to finance certain of the abovementioned enterprises. All these developments occurred in the years of inflation when the mere survival of the wholesale was remarkable. Even GoC itself did not claim that this survival would have been possible without 172 Cooperatives in Individual Countries the support of the trade-unions, the friendship of the Social-Demo cratic Party, and the orders received from the municipality of Vienna. Of the various enterprises in which the wholesale participated, two of the most interesting were the Labor Bank and the Aus tro-Russian Trading Co. Labor Bank (Arbeiterbank).— The Labor Bank opened January 1, 1923, as a joint stock company, since Austrian law did not permit its organization as a cooperative. It was organized to act as a “ financial intermediary” among the trade-unions, cooperative associations, and the Social-Democratic Party. In its first 10 years of operation its resources and business showed a continuous expansion until the onset of the depression, as the accom panying tabulation indicates. Share capital (schillings) 1923 ............................... 1924 _________________ ____________ 1925 1929. 1930_________________ 1931. ................. 1932. - ............... 1, 2, 4, 4, 4, 200,000 500,000 000, 000 500, 000 000, 000 000, 000 000, 000 Total deposits (schillings) 4 ,4 5 5 ,3 7 3 13,894,186 22, 276, 353 53, 276, 444 59, 118, 808 56, 203, 541 54, 313, 678 Reserves (schillings) 68,715 198,688 432, 358 2, 089,000 3, 528,000 3, 810,000 4, 140,000 The bank received deposits not only from various workers’ organiza tions but also from individuals. Its loans were made to workers’ child welfare groups, industrial workers’ housing associations, munic ipalities, and public utilities. It financed much of the wholesale’s expansion mentioned above, and it was also active in the development of the Austro-Russian Trading Co. Austro-Russian Trading Co. (Ratao).— The Austro-Russian Trad ing Co. was a result of the Austrian desire to replace some of the losses suffered from the Peace Treaty by finding markets and supplies in the East. In 1923 certain Austrian economic institutions led by representatives from the former “ Arsenal” arms factory (then manu facturing agricultural machinery) sent a delegation to Russia em powered to make a trade agreement on the spot. The result was a complicated organization— Ratao—in which the Austrian financing agents were the Cooperative Wholesale Society (GoC) and the Industrial Bank, and the Russian financing agents were the Russian State and the cooperative societies. When the financial crisis of 1924-25 endangered the Industrial Bank, the Labor Bank took over the Industrial Bank’s responsibilities; the Austrian Arbeiterbank and the Cooperative Wholesale then became the only Austrian members of Ratao, with GoC taking over its management. During its first 9 months, Ratao’s exports to Russia were valued at 3,235,000 rubles, its imports from Russia at 2,990,000 rubles. Austrian industrial articles worth 7,600,000 schillings were sent to Russia in 1927-28 and foodstuffs worth 1,400,000 schillings were received from Russia. In the calendar year 1928, the Austro-Russian Trading Co.’s turn over reached 63,965,884 schillings. 1926-30 In the late 1920’s, Austrian cooperative returns showed the results of the various enterprises begun by the wholesale. Both productive output and sales increased markedly. Under direct-delivery arrange ments to save handling of goods, 63 percent of its products went from factories to associations without entering its warehouses. PERIOD OF RECOVERY, 173 Austria By 1929, the wholesale’s annual turnover amounted to 95,239,273 schillings and the group of Central Union affiliates had become the most important commercial enterprise in Austria. The Central Union meanwhile began educational courses for members and took on specially trained auditors. In 1930 the associations affiliated with the Central Union were distributed, by type, as follows: N um ber C onsum ers’ a ssocia tion s__________________________________117 P rod u ctive a ssocia tion s__________________________________ 38 B uilding, housing, an d settlem ent a ssocia tion s_________ 34 W ork ers’ h om es_______________________________,_________ 15 C redit association s_________________________ C o op era tiv e depa rtm en t stores__________________________ 10 U nions an d oth er kinds o f societies_____________________ 11 D epression and the Corporative State, 1 9 3 0 -3 8 Austrian consumers’ associations withstood better than private enterprise the world-wide depression which broke in 1929. By 1931, when 108 private businesses in Vienna alone had gone into either liquidation or bankruptcy, not a cooperative store had been closed. Whereas purchasing power had dropped by 25 to 30 percent in 1931, the sales of the associations affiliated to GoC fell ordy 6% percent. Reserves, cash on hand, and share capital had increased. When the economic crisis became more severe in 1932 and 1933, the cooperative associations had funds sufficient to meet all their depositors’ calls for repayment. In 1932, however, the savings deposits represented over 40 percent of the aggregate liabilities of the Central Union’s affiliated associations and the problem of ultimate liquidity had even then been raised. The wholesale’s returns ran parallel with those of the local associa tions. After reaching a peak business of 95,239,273 schillings in 1929, the volume fell in 1930 to 91,854,806 schillings and in 1931 to 89,582,534 schillings. As the crisis reached its height in 1934, GoC’s total turnover amounted to only 65,664,355 schillings—a decline of 13.6 percent since 1933. Much of this drop was accounted for by the wholesale’s declining textile business. Austrians were making or remaking their clothes at home and the GoC clothing factory had to be closed. Private traders who had not profited from the semisocialized enter prises of the Federal Republic began attacks upon the consumers’ cooperative associations soon after such enterprises began. These attacks increased in intensity in the prosperous years of 1928 and 1929 and continued in 1931, 1932, and 1933. Consumers’ associations which sold foodstuffs and household goods were entitled by law to deduct 1 percent from the surplus and pay a 12-percent tax on the remainder. Private traders and enemies of the cooperatives generally were pressing for legislation to exclude from tax exemption all con sumers’ cooperatives which sold textiles, since these were not house hold goods. They similarly insisted that the large cooperatives were actually joint stock companies and should be taxed as such. The consumer associations’ defense that they were not organized for profit, as were the private companies, was not successful, although, for a time, the agricultural cooperatives, through the General Union of Agricultural Cooperative Societies, used their influence to hold off legislation against the consumers’ groups. 16 174 Cooperatives in Individual Countries In the crisis of 1933, Parliament ceased to function and the Govern ment began to rule by emergency decree. Austrian commercial laws were amended. By a regulation of March 1933, every trader was obliged to join the retail dealers’ association and to present to it his credentials and proof of having served an apprenticeship before open ing any new branch of his business, before appointing business man agers, or before being licensed to trade. Since this regulation did not apply to agricultural cooperatives, the consumer groups felt that they had been unjustly placed in the power of the private traders. As the depression grew worse, an Embargo Decree banned new enterprises in Austria, but the law was applied only to distributive cooperatives. In May, all consumers’ cooperative surplus, whether in patronage refunds or in reserves, was made subject to the full profits tax— 12 percent on earnings from sales to members (25 percent in case of non members) . In November 1933, consumers’ associations were forbidden to supply State institutions. The real crisis for the cooperatives came wheh the authoritarian regime was established under Dr. Dollfuss, and the Social-Democratic Party, to which most of the cooperative leaders belonged, was dis solved. Some cooperative leaders were imprisoned and some district associations— the Distributive Society of Vienna among them—were placed under Government-appointed administrators and, during the disorders of February 1934, many cooperative stores were seized. Small private traders were asking for the complete dissolution of the consumers’ cooperatives. The influence of the agricultural coopera tives and the International Cooperative Alliance, as well as the friend liness of Dr. Dollfuss himself, limited the restriction by a bargain by which the cooperatives agreed not to increase their membership beyond that of January 1, 1934, to distribute cooperative propaganda material only to members, and to discontinue textile production. The new authoritarian regime had grouped all enterprises, according to type, into seven organizations: Agriculture, industry, trade, crafts, finance, liberal professions, and public service. The consumers’ coop eratives found themselves in the trade group where their old rivals, the private dealers, held control. During the crisis of February 1934, police occupied the Labor Bank (Arbeiterbank) and arrested its principal officials. A law of February 16 provided that the bank be liquidated. Although shareholders’ and creditors’ rights were completely wiped out by the law, GoC and its affiliates ultimately won an arrangement whereby the creditors (coop eratives, trade-unions, and other organizations closely connected with them) each accepted a proportion of cash and specific assigned assets. Smaller banks somewhat dependent on the Arbeiterbank in Styria, Tyrol, Salzburg, Carinthia, and Upper Austria held the savings of more than 20,000 people. Two of these banks were in sound condi tion, three were liquidated without loss to depositors. Only in one bank did creditors suffer losses. Critics writing in 1935 believed that the Arbeiterbank might have been safe if it had continued its original policy and merely received and invested the funds of the cooperative associations and the tradeunions, instead of making investments outside the movement. One such investment, in a motion-picture company (Kiba) proved to be a particularly unsound venture. The Arbeiterbank officials were en deavoring to remove this source of danger when the February crisis overtook them. 175 Austria Before the end of 1935, the Government’s temporary administration of some of the distributive cooperatives (undertaken in 1934) was withdrawn and the cooperative leaders believed they had been recog nized as the spokesmen for the Austrian consumers. Autonomy was restored to the Vienna Distributive Society on January 5, 1935, and a year later, to the wholesale. The Government committee which had administered the GoC, acted under the friendly chairmanship of the leader of the agricultural cooperatives, and in this interval the whole sale’s business with affiliated associations actually increased. The wholesale even began operation of a new chemical plant. The Central Union, which had claimed to be free throughout the crisis, lost a few member societies in 1936. Individual membership in its affiliates dropped from 263,037 to 259,404. The business of the local associations, however, rose in that year from 118,197,000 schil lings to 120,998,000 schillings, and since the drop in membership was due almost entirely to the removal of nonpurchasing members from the lists, it was believed that the financial situation of the Union and its members had improved. T able 55.— M em bership and B usiness o f A ustrian Central Union and W holesale (GoC) [For par values of currency, see Appendix table, p. 278] Central Union of Distributive Associations Affiliated local distributive associations Year 1911........................................................... 1912........................................................... 1913.......................................................... 1914.......................................................... 1 9 1 5 .........................................................: 1919.......................................................... 1922.......................................................... 1923.......................................................... 1925......................................................... 1926.......................................................... 1929.......................................................... 1930......................................................... 1931.......................................................... 1932.......................................................... 1933.......................................................... 1934........ ........ : ....................................... 1935................................................ ... ..... 1936.......................................................... Total Their members 0) 0) (9 0) 525 0) 476 112 108 103 130 129 117 115 222 219 208 193 101 99 300,934 0) 314,814 Cooperative Wholesale (Q6C) Their sales Amount of business Schillings K ro n en 0) (9 67,167,155 (9 101,826,509 2,224,049 3,121,832 (9 0) (9 Value of own pro duction <9 0) (9 8 K ro n e n 370,866 0) 572,771,278 272,921,985,469 Schillings 481,949 321,014 317, 936 259,932 263,137 (9 0) 0) (9 263,037 259,404 103,463,940 133,845,977 129,296,085 162,185,551 147, 754,616 347,250,258 139,294,000 129,322,000 115,183,500 118,197,000 120,998,000 486,422,347 194,496,224,034 Schillings 46,656,420 70,770,269 70,112,603 95,239,273 91,854,806 89,582,534 83,054,002 76,276,000 65,664,355 69,498,430 73,616,832 8 Schillings (9 0) (9 8 (9 8 29,637,000 29,718,000 (9 i No data. During 1937, the Union expanded its educational work. Study circles, tried out in Vienna, were started among the Provincial societies. A central cooperative training school was established at which 1,790 students enrolled. Plans for 1938 included courses for board and supervisory council members, apprentices, inspectors, and salesmen. On the other hand, attacks upon the cooperative organizations continued. Cooperative leaders maintained that the growing power of cartels hindered their efforts to control prices in favor of the con sumer. The 1934 restrictions interfered with the extension of coop 176 Cooperatives in Individual Countries erative facilities. To protect themselves, the cooperative associations demanded the removal of the restrictions and the enactment of a law which would require the registration and supervision of cartels. Cooperatives Under the N azis In March 1938, the Germans occupied Austria and brought the whole network of Austrian consumers* cooperative organizations (then including 220 associations and 300,000 households) under the control of a commissioner appointed by the Nazi leaders. Though the German National Socialists appeared to respect the integrity of the cooperatives, probably because of the need for appeal ing to organized workers, the Consumers* Cooperative Congress held in November 1938 revealed the real revolution which had occurred. Beginning with July, Nazi-inspired notices issued by Zentralverband had required that all Jewish members and firms be excluded from the Union because “ the German cooperative will and the Jewish trading spirit** were contradictory. More than one-third of all the delegates at the Congress were uniformed Nazis; many trusted cooperative leaders failed to attend because of racial exclusion, suicide, or, as the obituary notice in the Zentralverband report explained, because they “ have departed from us since the last Congress.** It was made clear that the National Socialists expected the cooperative societies to play their part in the new Four-Year Plan, and the secretary of the “ adjusted** Austrian associations declared that they would be in the front line. The National Socialists established a new board to ex amine each cooperative society individually and submit proposals for fusion, separations, or possibly the liquidation of the movement. On February 18, 1941, a German decree announced plans for the liquidation of the Austrian (and German) consumers' cooperatives. The Austrian affiliates of the Zentralverband and of GoC, with their property and assets, were to be handed over to the Labor Front (later absorbed by the German Labor Front) and managed or disposed of by it. The wholesale was to become a subsidiary branch of the Public Works Management. The transfer was to be administered by the Bank of the Labor Front; an attempt to retain the cooperators* good will was made by providing that the Labor Front must repay the members* share capital and deposits. That this transfer eventually involved disposal of cooperative assets to private business is indicated by a statement in Fascism, January 1943, that the German order for the “ handing over of consumers* cooperatives to private enterprise * * * is now at hand.**1 1 Sou rces .—The report.on Austria is based upon data from the following publications: Statistisches Handbuch fur die Republik Osterreich, Bundesamt fur Statistik, Vienna, 1921, 1923,1924, 1926,1929, 1931, 1932, 1935,1936, and Statistisches Jahrbuch fur Osterreich (Vienna), 1938; International Cooperative Bulletin (International Cooperation Alliance, London), issues of June, July, and October 1911, July and August 1912, August 1914, January, April, and December 1915, June 1916, January 1917, July and August 1918, December 1919, January, February, and June 1920, January and March 1921, February and October 1922, July and August 1923, January and May 1924, May, September, andNovember 1925, July and August 1926, January, June, and July 1927; Review of International Cooperation (International Cooperative Alliance, London), issues of May, June, and July 1929, April, May, June, July, and August 1930, January, April, M ay, J u l y , September, November 1931, June and October 1932, April and June 1933, Mafrch, May, and November 1934, January, February, April, and M ay 1935, October and November 1936, October and December 1937, March. April, and August 1938, January 1939, and June 1941; International Directory of Cooperative Organizations (International Labor Office) 1929, 1933,1936; Cooperative Information (Inter national Labor Office) No. 7,1929, No. 6,1930; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1925,1928,1929,1930, 1931, 1933, 1934, 1935, 1937, 1938; and Annals of Collective Economy (Geneva), April-July 1927, January-June 1938. Czechoslovakia 177 Cooperative Movement in Czechoslovakia All forms of cooperation had been developed in the Republic of Czechoslovakia, but when that State was evolved in 1919 from areas previously under the rule of Austria, Hungary, Poland, and Russia the patterns of cooperative development and federation had already been formed along nationality and, to some extent, political lines. Under the friendly encouragement of the new government the co operative movement expanded and became unified to some degree. Certain well-marked divisions persisted, however, in the continuance o f Czech, German, Socialist, and even “ bourgeois” groups, though friendly relations were maintained among them and the various branches joined forces on many occasions, for the protection of the cooperative movement or the inauguration of some new service. By 1937, nearly 6 percent of the population were members of the three main consumers’ cooperative federations. Counting their families, and allowing for the membership of nonfederated associations, the retail cooperatives must have been serving at least 30 percent of all the people in Czechoslovakia. The membership of the entire coopera tive movement included about 6,000,000 of the 15,000,000 population. The cooperatives had recovered from the depression and a considerable degree of progress had been made in the manufacture of commodities by cooperators for their own use. This progress was abruptly terminated by the Munich Agreement, and the German branch of the cooperative movement was wiped out, practically at one stroke. The Czechoslovak cooperators (like their cooperative comrades in Belgium) saw their country overrun by the Germans for the second time in a period of 25 years. That they have bravely resisted and kept courage is indicated by reports of unrest and rebellion that have leaked out of the country. However, a condition of servitude and oppression is not a new thing to these people. As one writer, himself a Czech, commented after the end of the first World War: “ For a thousand years the Czechs have waged a grim struggle with the Germans,” against suppression of political, religious, and linguistic rights, and systematic attempts at Germanization and even extermination. T ypes o f Cooperatives Practically all of the main types of cooperatives were found in Czechoslovakia— consumers’ associations, workers’ productive and labor associations, home-building cooperatives, credit associations, and agricultural processing, marketing, and purchasing associations of all kinds, as well as rural associations for the supply of electricity. One type of local association not represented was the insurance asso ciation; apparently there were no local associations of this type, al though the Czech and German consumers’ cooperative movements each had a general insurance association writing policies for fire, life, accident, and casualty risks. Most of the various kinds of associations had their own federations, but there was a good deal of overlapping, as some of the agricultural and consumers’ cooperative federations also admitted other types of associations, such as credit, workers’ productive, housing associations, etc. 178 Cooperatives in Individual Countries The number of cooperatives of the different types in various years is shown in table 56. As is evident, a very great development of all kinds of associations took place in the early years of the Republic. T able Year 1920 1923....... 1927_____ 1929....... 1932____ 1934....... 1935....... 1936....... 56.— Num ber o f Cooperatives in Czechoslovakia, by T yp e9 1 9 2 0 -3 6 Work Agricul Credit tural ers’ Hous All pro market Con ing types sum All ing, con ductive Elec Other Schulzetypes except ers’ struc and tricity supply, Other* Desmall and Total Raiff credit tion eisen litzsch art produc tion isans 'll, 247 14,942 15, 576 15,973 17,232 17,021 16,832 16,744 5,997 1,639 9,090 <2,261 9,072 1,217 8,914 1,066 9,530 1,029 903 9,395 9,261 835 9,165 816 992 1,326 1,537 1,533 1,633 1,489 1,418 1,341 1,551 1,825 1,594 1,342 1,420 1,492 1,497 1,504 (2) (2) (2) 2,159 2,550 2,531 2,500 2,475 1,796 3,479 4,609 2,730 2,792 2,845 2,869 2,889 19 *5,250 199 5,852 115 6,504 84 7,059 106 7,702 135 7,626 142 7,571 140 7,579 53,872 4,385 4,807 4,190 4,384 4,390 4,376 4,374 s 1,378 1,467 1,697 1,800 2,065 2,016 1,988 2,005 (*) (*) 1,060 1,253 1,220 1,207 • 1,200 * Associations in Slovakia and Russian Subcarpathia (Ruthenia). * No data; probably included with agricultural. * Data are for 1921. * Includes workers’ productive. * No data. « Approximate. HOUSING ASSOCIATIONS Cooperative associations for the building of houses were among the early forms of cooperation in Czechoslovakia, and even as early as 1908 the Bohemian associations had formed their own federation. After the formation of the Republic, the housing associations were encouraged by State aid in the form of a direct subsidy and a guaranty of mortgage indebtedness up to 90 percent. By 1920 there were 992 of these associations, of which over 200 were members of the Central Union of Cooperative Housing Societies. Data published by the Government, covering the year 1924, showed that 787 reporting associations had constructed 11,926 buildings pro viding accommodations for 91,236 persons in 24,365 dwellings; they had also built 26 nonresidential buildings. The cost of construction amounted to 1,624,363,000 koruny,3 of which 124,502,000 koruny was advanced by the Government, and 1,159,024,000 koruny repre sented mortgages guaranteed by it. Public employees constituted 44 percent of the membership, industrial and building-trades workers nearly 24 percent, and artisans over 13 percent; farmers, miners, agricultural laborers, and others made up the remainder. Several of the consum ed cooperative federations also accepted housing associations into membership. In 1937, of about 1,300 co operative housing associations, 324 were members of the Central Union of Housing Cooperatives, 155 were affiliated with the “ Unie” (Socialist) federation, 138 with the Central Union of Czechoslovak Cooperatives, and over 70 with the German Union— a total of 687 associations. The Commission of Inquiry on Cooperatives, sent to Europe by President Roosevelt in 1937, reported that up to 1931 the associations affiliated with the Czech Union had provided dwellings for 10,787 families. It stated that their activities “ were not confined to urban centers but also resulted in the establishment of several new model communities.” 2For par values of currency, see Appendix table, p. 278. 179 Czechoslovakia w o r k e r s ’ p r o d u c t iv e a s so c ia t io n s The number of productive associations of workers, craftsmen, and small industries reached a peak of 1,825 in 1923. After that (through 1936) the number remained remarkably stable, ranging only between 1,342 (1929) and 1,594 (1927). These associations had their own federation which, in 1937, had 254 member associations. There were also nearly 60 associations affiliated to the “ Unie” federation, and 172 (with 25,685 members) belonged to the Central Union of Czechoslovak Cooperatives. The 965 workers’ productive associations for which the Government Statistical Office obtained data in 1930 had 104,043 members and did a business that year amounting to 1,346,926,000 koruny. The President’s Inquiry Commission found that few of these asso ciations had attained “ marked success,” being hampered by the usual problems of this type of cooperative—insufficient capital and difficulty of marketing the product. The Commission reported that the asso ciations affiliated with the Czech Union were in a more advantageous position than most of the others, “ since at least part of their market is provided for by consumers’ cooperatives from which in many instances they receive financial support and management advice.” In 1925 the 217 active associations in membership with the Czech Union were engaged in the manufacture of foodstuffs (bakery prod ucts, meat products, flour, etc.), clothing, footwear, stone and glass products, toys, baskets, wooden articles, printing and paper, as well as in the operation of transport facilities, theaters, movies, etc. The operations of the member associations from 1911 to 1935 are shown in table 57. T able 5 7 . — M em bership and Operations o f W orkers* Productive Associations Affiliated to Central Union o f Czechoslovak Cooperatives, 1 91 1 -3 5 [For par values of currency, see Appendix table, p. 278] Number of associations Year 1911............................................................................................. 1919............................................................................................. 1922............................................................................................. 1925........................................... .................................................. 1928............................................................................................. 1930............................................................................................. 1935............................................................................................. Members Amount Oi business K ro n er 33 85 253 245 202 190 172 ,% 184 3,903 13,082 11, 642 15,307 19,462 25,685 5,500,000 K o ru n y 30,685,301 173,562, 729 223,382,352 307,086,594 (9 *235,843,488 * No data. * Data are for 1936. CREDIT ASSOCIATIONS The credit associations formed an important part of the cooperative movement in Czechoslovakia. In 1936, of 16,744 associations of all types, 7,579 were credit cooperatives. Over half of these (4,374) were rural associations of the Raiffeisen type, which purchased sup plies as well as made loans,4 and 2,005 were associations of the Schulze-Delitzsch type, furnishing credit to artisans and industrial enterprises; there were also about 1,200 associations in Slovakia and Russian Subcarpathia (Ruthenia) whose type was not reported. 4 In Czechoslovakia these associations were called “ Kampelikies,” after F. C. Kampelik, through whose initiative the associations were introduced into the country. 180 Cooperatives in Individual Countries The credit associations were federated into several central organi zations. Thus the Schulze-Delitzsch associations had their own national federation, as did also the Raiffeisen associations. In addi tion there were in Slovakia a federation of rural credit associations and one of the urban associations. Each of the consumers’ cooperative federations also had a few credit cooperatives in affiliation, and the consumers’ associations themselves accepted savings deposits. The membership of the 7,579 cooperative credit associations in existence at the end of 1936 was not reported, but the 4,988 associa tions affiliated to the various federations had a total of 1,643,919 members or 11 percent of the total population. AGRICULTURAL COOPERATIVES The agricultural cooperatives included the usual purchase and sales associations as well as dairies, alcohol distilleries, flour mills, bakeries, fruit and vegetable canneries, chicory works, starch works, land cul tivation and leasing associations, electricity associations, and associa tions for joint use of machinery. Their number increased continuously after 1920, the first year for which data are available, though the membership and sales showed some fluctuation. In 1936 there were 5,364 agricultural cooperatives other than credit. Of these, 2,475 were electricity associations, over 700 were consumers’ cooperatives purchasing farm and household supplies for their members, and the rest were productive, processing, and marketing organizations. The Czechoslovak Office of Statistics reported that in 1930 the business of the agricultural consumers’ cooperatives amounted to 174,838,000 koruny and that that of the proc essing and marketing associations aggregated 2,147,436,000 koruny; no data were given for the electricity associations. The agricultural cooperatives were federated into a number of Provincial and National bodies. Among the latter were organizations for the cooperative purchasing of supplies, for the marketing of dairy products, seeds, sugar beets, and livestock, respectively, and for the purchase of electrical equipment and of plumbing materials. Most of the federations also carried on banking operations. Many of these federations accepted all types of associations into membership and most of them were in turn federated into a national organization, Centro-Kooperativ. This body was formed in 1921 and its duties included the auditing of the accounts of the federations and wholesale associations, arbitration of differences among them, giving legal advice, and representing the agricultural cooperative movement before the Government and the public. It also took an active part in the import and export of agricultural commodities. Electricity associations.— The first electricity cooperative was started in 1911. The development of these associations was hastened by the passage of an act granting financial assistance to organizations for the electrification of rural areas. By 1926 there were 736 of them, having a total of 6,300 kilometers of line and serving 1,720 village areas. These associations took two forms, one type of cooperative acting merely as distributors of electric current, the other generating current as well as distributing it. The tendency has been toward concentration in the former field, as generation and high-tension Czechoslovakia 181 distribution were taken over very largely by 24 public-utility districts covering the whole country. Of nearly 2,500 associations in 1936, only 30 were generating their own current (one of these distributed power to 224 communes and was among the largest in Central Europe), 500 had distributive installations only, and the rest were associations formed to finance extension of lines and residential installations to receive power from the utility district. The electricity associations generally also supplied their members with electrical appliances as well, buying through “ Ves,” the national cooperative purchasing association in the electrical field. The electricity cooperatives in operation at the end of 1925 had 59,146 members, of whom about 60 percent were farmers. In 1937 there were 2,122 of these associations; 1,512 reporting cooperatives had a combined membership of 91,561. con su m ers’ c o o p e r a t iv e s The data available do not indicate the various forms taken by the consumers’ cooperatives. It is believed that they were mainly of the store type, handling groceries and household and family supplies. Some of them also carried on welfare activities. One large association with 59.000 members operated a home where invalid children received care, free, for from 2 to 3 months. There were also numerous “ people’s houses.” In 1935 there were 148 such associations (with 14,671 members) in affiliation with the Czech union; no details are available regarding their activities. One important cooperative was “ Cooperative Work,” an associa tion founded in 1922 for the printing of books at as near cost as pos sible. By 1928 it had 5,200 members, each of whom purchased at least 4 books a year. It then employed 20 workers and had published 80 books. CENTRAL COOPERATIVE ORGANIZATIONS Up to the time Czechoslovakia was invaded, in 1938, there were at least three central federations in the consumers’ cooperative movement, separated by nationality and political differences. (1) The Czech associations had their Central Union of Czechoslovak Cooperative Associations, formed in 1908. Its member associations consisted mainly of local consumers’ cooperatives formed among the industrial workers, but it also admitted workers’ productive associa tions, housing cooperatives, credit associations, and even some agricultural supply associations. In 1937 (the latest year for which figures are available) the union had 743 affiliated associations with nearly half a million members. About 200 of these organizations, with 385.000 members, were consumers’ cooperatives. Affiliates of the Czech union were required to confine their dealings to members only, do business on a strictly cash basis, distribute their earnings on the basis of patronage, and put at least 10 percent of earnings into the reserves. The trading area of a local association was limited to a single locality and could not be extended without the* consent of the association in the locality to which extension was pro>osed. Only one association was admitted from any locality, regardess of the size of the area covered. ; 182 Cooperatives in Individual Countries Connected with this union, but incorporated separately, were the Cooperative Wholesale Society (known, by the initials of its name, as “ V . D. P.” ) formed in 1909 and serving about 300 associations, and the General Cooperative Bank formed in 1921 by the union and whole sale.5 There was also a central insurance association, “ Czechoslavia,” started in 1919, which wrote fire, life, accident, and other insurance for the members of cooperatives, (2) The German section of the movement had its G. E. C. Union of German Distributive Societies with about 140 associations. The original union (Union of German Provident Associations) was formed in 1919, but took the above name in 1924 when the German wholesale “ G. E. C.,” formed in 1905, became a department of the union. This organization also had in affiliation the Union of Polish Distributive Societies in East Silesia— a small organization with 8 member associations. (3) There was also a Socialist group with a series of central coop erative organizations. These consisted of the Union of Czechoslovak Cooperative Societies (popularly called “ Unie” ), formed in 1923; sub ordinate unions of the workers' productive and housing associations that were affiliated to Unie; and a wholesale called “ Union.” The Unie group consisted of about 130 associations. All of the above organizations were classified in the Czechoslovak official statistics as of the “ worker group.” The “ bourgeois group” included, in addition to several auditing unions, the following: (a) Central Union of Cooperative Housing Associations, formed in 1908 and having 324 member associations in 1937; and (6) Union of Coop erative Credit Associations, formed in 1884. The latter was the central union of the Schulze-Delitzsch associations providing credit for businessmen and small traders. It had its own central bank. In the group classified as “little industries” was the Union of Craftsmens' Cooperatives, formed in 1910 and having 254 affiliated associations in 1937. There was also an informal committee, the Working Alliance of the Cooperative Agricultural and Distributive Societies of the Czecho slovak Republic, formed in 1928, to which all branches of the coop erative movement in Czechoslovakia belonged. Its duties were to consider changes in the laws, and to protect the movement on ques tions of taxation, tariff, and other matters. Development o f Consumers’ Cooperatives Under Austrian Rule The consumers' cooperative movement in Czechoslovakia dates from about 1869, when a beginning was made that grew rapidly for a few years and then died out as a result of unfavorable laws and lack of practicality in the cooperative leaders. About 1890 a second start was made, largely trade-union in origin and closely connected with Marxian Socialism; it never attained much success. The first asso ciation on the Rochdale basis was a retail association formed in Prague in 1905. ^ During all this time the local associations had been part of the Austrian cooperative movement and members of the Austrian Coop erative Union at Vienna. In 1907, however, the Bohemian coopera-* *In 1925 the German union also acquired part of the bank’s share capital and became a member of it. Czechoslovakia 183 tive associations decided to form their own educational federation and in 1908 established the Central Union of Czechoslovak Cooperatives, with headquarters at Prague. In the following year the V. D. P. cooperative wholesale was started; in that year, also, the Czech union became a member of the International Cooperative Alliance. All this gave new impetus to the movement and by 1912 the union had 265 member associations. The Balkan Wars retarded the development of cooperative activity but it had begun to expand again when the first World War broke out. Operations became extremely difficult, especially in view of the peri odic suspensions of transportation of civilian goods. However, the wholesale was able to hold its prices below the general level and was thus of real advantage to the workers, who were the largest group of cooperative members. It paid its mobilized employees two-thirds of their wages all during their war service and took out insurance for them against death in action. From the very beginning of the Rochdale cooperative movement in Czechoslovakia, emphasis had been laid on financial stability. One of the first duties undertaken by the Central Union was that of auditing the books of its member associations and installing a uniform system of bookkeeping among them. Instead of paying high rates of patron age refund, the associations held the rate to 3 percent and put the rest into reserves and welfare funds (for funeral benefits, etc.). Even the patronage refunds that were declared were not paid in cash but were credited to the members, savings accounts with the association. Nonmembers received refunds at half the members’ rate. So strongly organized were the associations that, although during the war period 1914-18 a special fund was created for assistmg local associations, the money never had to be touched. Consumers’ Cooperation Under the Republic The Republic of Czechoslovakia was established by revolution of the people against the Austro-Hungarian Empire in October 1918, and later received confirmation by the peace treaty after the end of the war. The new Republic consisted of the former Austrian Provinces of Bohemia, Moravia, and Silesia, Russian Subcarpathia (Ruthenia), and the former Hungarian Province of Slovakia, the people of which voted to be included. The new Government faced an enormous task. The former Austrian territories contained the richest natural resources in all Central Europe; Bohemia and Moravia were also highly industrialized even at that time and had produced about 80 percent of the entire industrial output of the former Austro-Hungarian Empire. Slovakia was largely agricultural. During the war, however, the machinery had been worn out or requisitioned for German factories, the cattle had been carried off or slaughtered, and even the railroad rolling stock had been expropriated. The country had been so stripped, in fact, that even the provision of food sufficient for the bare subsistence of the populace was difficult. The president of the Central Union of Czechoslovak Cooperatives reported to the Inter-Allied Cooperative Conference in Paris in Febru ary 1919 that the entire food supplies of the country would be exhausted within 4 weeks and the people would be dependent on what could be 184 Cooperatives in Individual Countries imported on credit from abroad. The workers’ efficiency was low because of the long period of undernourishment that they had endured. The currency was badly inflated also, and in addition, the Republic had assumed the old internal debt of the former Empire for the terri tory of Czechoslovakia. However, difficult as conditions were, it was pointed out that Czecho slovakia was the only State in either Central or Eastern Europe in which there was “ absolute social peace and order.” During this period (known as the “ hunger crisis” ) the Government used the services of the Czech cooperative wholesale to supply food to about 1,200,000 indus trial workers not members of cooperatives. The Republic entered upon its existence with very enlightened policies and democratic practices. With universal suffrage and an announced policy of “ social reforms without bloodshed,” it was far in advance of most of the other countries of Europe. President Masaryk pledged that “ our national policy will loyally recognize the national and linguistic rights of the racial minorities [Germans, Magyars, and Ruthenians] of our Republic.” PERIOD OF COOPERATIVE EXPANSION One of the early legislative acts of the Republic was the passage of the agrarian law of April 16, 1919, which authorized the acquisition and breaking up of the great estates (almost one-third of the land of Czechoslovakia was in the hands of German proprietors) for distri bution to the people. Under this law the Government acquired an area totaling some 17,000 square miles, for which compensation was paid to the owners, except in case of those who had been “ guilty of offenses against the Czechoslavak Nation.” Thousands of peasant holdings were thus created, the farmers buying them from the Govern ment on a long-term basis. The law gave tremendous impetus to all kinds of agricultural cooperatives among these new landholders, and between 1920 and 1923 the number of agricultural associations rose from 1,796 to 3,479. When the Republic was formed there were already, in Czechoslovak territory, a number of separate cooperative movements each federated not only territorially but by language as well. Thus the Czechs, Slovaks, Germans, Ruthenians, and Poles each had one or more federations, and for the most part these continued on the former basis. All during the war, the Czech union at Prague and the Austrian union at Vienna had collaborated to meet the problems of the coopera tive movement. After the fall of the Empire, however, by mutual agreement between the two unions, the Czech cooperative associations that had continued in affiliation with the Austrian Cooperative Union (84 in number) withdrew from it and joined the Central Union of Czechoslovak Cooperative Associations, bringing the total member ship of the latter to 440 associations. In 1919 the V. D. P. wholesale decided to cease the payment of patronage refunds to member associations and, instead, to lower its prices. In the same year the Czech consumers’ cooperatives, the tradeunions, the Social-Democratic Party, and the health-insurance funds joined in the formation of “ Czechoslavia,” a cooperative insurance association. In that year, also, some 55 German cooperative associations formed the Union of German Provident Associations in Czechoslovakia. Czechoslovakia 185 Representatives of the Czech union were present and expressed their good will, as did also representatives of the Austrian union to which the German cooperatives had formerly belonged. These original friendly relations continued throughout the next 20 years and on many occasions the two unions and wholesales joined forces. In 1919 the Prague branch of the Austrian cooperative wholesale became an independent organization, known by the initials of its name as the G. E. C. wholesale. As early as 1920 it was reported that G. E. C. was supplying one-third of the 3,500,000 Germans living in Czechoslovakia. P O S T -W A R D EPR ESSIO N A N D R E C O V E R Y Under the encouragement of the Government, cooperatives of all types expanded rapidly— so rapidly, in fact, that they suffered from diffusion of energies among too many activities. However, they were so soundly organized that at least the consumers7cooperatives were able successfully to resist for some years the post-war depression, with its unstable currency, fluctuating prices, and unemployment. Through out 1921 their business continued to increase. The consumers7 cooperative unions had already begun to urge the consolidation of the resources of the movement through the merger of small associations. The announced aim of the Czech movement was eventually to have not more than 3 associations in the whole of Moravia, 7 in Bohemia, and 4 or 5 in Slovakia. In the German move ment also the merger idea received impetus through the merger, in 1924, o f the German union and wholesale into a single organization, the G. E. C. Union. In 1925 the German and Czech wholesales agreed upon a plan whereby neither would enter into production of goods already manufactured by the other but would obtain its supplies of the commodity in question from the other wholesale. No new fields of production would be entered except by mutual consent. Further, It was agreed that in the interests of efficiency, local associations situated nearer to the other wholesale than to their own would obtain their supplies from the former. In 1928 a further joint step was taken by the Czech and German unions in their decision to participate in the International Cooperative Congress as one body (both were members). They also formed a joint committee which was given authority to decide all questions of principle, propaganda, legislation, business matters, etc., arising in the consumers7 cooperative movement. After the cooperative congress of 1928, V. D. P. and Kooperativa (the joint purchasing agency for the agricultural cooperatives) created a committee to facilitate collaboration between the two bodies. Each agreed to obtain from the other the commodities handled by it and to •exchange information on costs of production. Each association became p member of the other. With the general stabilization of the economic life of the country, during 1928, nearly every branch of industry benefited, unemploy ment went down to unusually low levels, and purchasing power increased. This in turn was reflected in both the German and Czech branches of the consumers7cooperative movement, where sales reached a 10-year peak. 688544°— 44------13 186 Cooperatives in Individual Countries However, even then the secretary of the German union warned that the building industry was slackening, there were signs that business generally was falling off, and “ world economic conditions also give cause for anxiety." This statement was amply justified by the events of the next few years, when business was practically at a standstill. COOPER ATIVES IN T H E T H IR T IE S The worst of the depression in Czechoslovakia occurred in 1930, but even as late as the end of 1933 the situation was still extremely bad, especially in the Sudeten areas where the German consumers' cooperatives were most developed. The German union reported that in some of these localities 10 percent of the population were out of work and were on relief or “ literally face to face with destitution." During the early thirties the devaluation of the currency resulted in some improvement in foreign trade, but it was reported that the resulting decrease in unemployment was “ offset by lower wages and more short-time work." Cooperative sales decreased each year through 1935, but the decrease was not proportionately so great as the decline in prices and in purchasing power, and the membership continued to rise steadily. In 1935 the G. E. C. union reported that its associations returned some 14,000,000 koruny in patronage refunds on the year's business. In that same year the union, in collaboration with the German tradeunions, formed its own insurance association, “ Vorsorge." This organization started business, writing fire and life insurance, on April 1, 1936. It was pointed out at that time that most of the troubles of Czecho slovakia came not from within, but from the general international situation and political troubles in the surrounding countries. The trend toward the corporative state and dictatorship in Austria, Bulgaria, and Italy, and the rise of the Nazis in Germany did, how ever, have one favorable result in Czechoslovakia: it brought the German and Czech branches of the cooperative movement closer together than they had ever been before. Together they undertook a campaign of publicity which brought in many new members. The situation during the early thirties had been complicated for the cooperatives by what were characterized as “ guerrilla attacks of the mixed forces of capitalist commerce and political extremists." How ever, these attacks, with the attendant publicity, really benefited the movement by attracting new members and strengthening the loyalty of the others. The Czech Union reported an influx of some 2,000 artisans and over 5,000 farmers into the store associations during 1934. Altogether the store associations in the Czech group were, it was estimated, serving about 1,500,000 persons. The occupational make-up of the store associations' membership was reported as follows: Wage earners in industry, 233,533; clerical workers, 64,725; artisans (independent workers in trades), 23,202; farmers, 29,703; and others, 33,857. In 1936 the Czech cooperative movement adopted a 10-year plan of expansion, setting definite quotas to be reached as regards number of associations, membership, business, capital, production, etc. The German branch followed suit shortly thereafter with a 3-year plan, and reported in the very next year (1937) that some of the 3-year goals had already been reached. 187 Czechoslovakia T a b l e 58.— Operations o f M em bers o f Czechoslovak Cooperative Union and o f Cooperative Wholesale, V . D . P ., 1 9 0 8 -4 0 [For par values of currency, see Appendix table, p. 278] Czechoslovak Cooperative Wholesale, V. D . P. Central Union of Czechoslovak Cooperatives Num ber of mem ber asso cia tions Year Their mem bers Amount of business Net earnings A u stria n kronen A u strian kronen 7,180,309 12,459,972 26,664,770 Num ber of mem ber asso cia tions 172,568 516,218 614,195 Amount of business Net earnings Value of own pro duction A u stria n kronen A u stria n kronen A u strian kronen 1908................... 1910................... 1914................... 86 198 285 14,267 37,202 71,504 1919................... 1920................... 1922................... 1925................... 1929................... 1930................... 1931................... 698 1,117 1,373 1,238 1,043 1,035 939 291,309 574,020 556,749 470,660 443,242 461,541 488,275 307,397,747 5,340,316 984,570,005 13,510,581 1,326,315,043 5,051,692 1,180,153,725 4,876,511 1,342,849,828 9,016,223 1,319,076,103 8,032,845 1,281,156,158 6,892,030 431 533 518 367 347 344 340 294,423,210 2,145,333 875,186,632 2,385,620 588,685,870 2,590,065 544,852,947 140,682 604,723,506 363,107 490,196,739 271,105 477,945,815 318,114 <0 (0 47,539,213 90,142,650 174,009,431 112,674,140 118,114,394 868 459,733 0) 472,538 469,320 0) 490,909 1,111,022,610 (0 1,029,770,385 (0 (0 1,314,319,000 341 331 322 316 304 301 0) 0) 494,054,326 758,163 460,227,275 0) 455,458,000 0) 471,299,553 (0 528,682,913 4,621,227 550,566,000 0) 638,500.000 0) 123,678,681 136,974,659 138,815,898 154,663,190 198,723,550 172,421,000 0) K o ru n y 1932................... 1933................... 1934................... 1935................... 1936............... 1937................... 1940................... 0) 775 0) 0) 743 0) 0) 1,024,296 3,238,427 0) 58 262 K o ru n y K o ru n y 0) 0) 0) 0) (0 0) 0) 0) (0 11,120 45,539 K o ru n y 0) 0) 0) K o ru n y * No data. T a b l e 59.— Operations o f German Cooperative Wholesale and o f M em bers o f Union of German Cooperatives in Czechoslovakia, 1 91 8 -3 6 [For par values of currency, see Appendix table, p. 278] Members of German union Year Asso Their ciations members Amount of business German cooperative wholesale, G. E. C. Num ber of mem ber associa tions K o ru n y Wholesale’s operations Amount of business K o ru n y Value of own production K o ru n y 1918-19...................................... 1919-20...................................... 1920-21...................................... 1921-22...................................... 1922-23................................... 1924-25...................................... 285 288 285 271 239 206 182.236 264.386 303,054 301,253 286,004 269,591 166,341,829 366,394,081 712,625,447 749,788,001 490,027,409 461,690,395 1925-26...................................... 1926-27...................................... 1927-28...................................... 1928-29...................................... 1929-30..................................... 1930-31.................. .................. 181 173 168 168 159 153 248,640 238,058 233,722 231,875 236,568 243,781 495,536,917 529,409,902 558,655,329 587,170,299 590,753,950 578,061,696 0) 0) 0) 0) 255,864,949 278,302,142 288,681,734 302,092,627 323,698,873 318,416,856 22,911,000 30,729,506 46,211,000 51,156,219 56,052,453 56,255,428 1931-32...................................... 1932-33...................................... 1933-34...................... : ............ 1934-35..................................... 1935-36..................................... 148 146 0) 140 0) 256,482 262,300 0) 247, 474 238,525 573,812,433 532,564,261 459,982,263 447,531,509 465,944,542 158 166 0) 160 0) 310,525,092 292,165,370 281.426,481 273,728,000 295,938,000 57,494,722 53,005,470 54,216,168 52,700,000 57,268,000 1No data. 2 18 months, ending June 30. 300 0) <0 (i) v) 0) 183 133,122,175 403,453,635 459,422,672 301,739,340 282,231,527 2 382,999,702 5,687,000 7,573,000 8,775,000 10,480,000 12,395,000 21,090,000 188 Cooperatives in Individual Countries The decreases in membership during the period 1922-28, shown in tables 58 and 59, were caused almost entirely by the dropping of nonpurchasing members from the rolls. Legal Status and Relations W ith the Government The first law under which cooperative associations could be formed in Bohemia was an Austrian “ patent” law of July 1840. This was superseded by a patent law of November 1852. In 1873 a law relating to “ cooperative and economic societies” was passed, in the belief that by giving workers the opportunity to form their own enterprises and improve their economic position— All danger of communism will be avoided, as its false doctrine, which flatters the worker, will not find suitable soil, for the introduction of the principle of self-help into real life, protected and carefully safeguarded by legislation and the Government, will morally raise and strengthen the worker. Further, experience has taught that thereby the best opportunity is given to the worker to improve his material position and to help him to be independent without injuring other tradespeople or endangering the possessions of the well-to-do classes. This law was carried over into the Republic and was still in force at the time of partition of Czechoslovakia in 1938. It provided for four types of associations: Consumers' retail and wholesale cooperatives, industrial associations of independent artisans and farmers, building and housing associations providing houses for purchase or lease, and credit associations of the Raiffeisen and Schulze-Delitszch types. Later amendments made compulsory an independent audit of the books of cooperative associations every 2 years, exempted dealings of cooperatives with their members from the stamp tax, provided for payment of taxes on share capital, and imposed special trade taxes. This last tax measure divided cooperatives into two classes— those dealing only with members and those serving nonmembers also; a higher rate of taxation was provided for the second class and an addi tional profits tax, ranging from 2 to 4 percent according to the rate of earnings of the association. The new Government, in its first decade, passed several measures to aid cooperatives. Thus, in January 1922, three branches of the co operative movement— the agricultural, artisan, and labor coopera tives—were each given outright grants of 50 million koruny to assist their development; the consumers' cooperatives did not share in this largesse. However, cooperatives of all types shared with private businesses the benefits of a law of October 9, 1924, that provided com pensation for property destroyed during the war of 1914-18. In 1922 a Department of Cooperation was established in the Min istry of Social Welfare and in 1934 an advisory board composed of representatives of all the consumers' cooperative federations was created in the same Ministry, by decision of the Government Council of Ministers. Like all representative Governments, that of Czechoslovakia was subject to and sometimes responsive to pressure from special groups. For many years the private merchants had been agitating against the competition of the cooperatives. Part of their displeasure may have stemmed from the fact that most of the consumers' cooperative Czechoslovakia 189 associations of industrial workers, which formed the larger part of the membership of the Czech and German unions, did not follow the Rochdale method of sale at current prices (which avoids the appearance of price cutting) but sold their goods as cheaply as possible consistent with safety. This practice, of course, gave immediate emphasis to the savings possible through membership in the cooperative, as com pared with those in private stores. A study made by the Government Office of Statistics in 1933, revealed that the prices in the large urban associations were as much as 9.6 percent below those in the private stores and for the whole country about 5.1 percent lower. As already noted, the opposition of the merchants was intensified during the depression of the early thirties. As the distributive machinery in Czechoslovakia was very much overdeveloped (in 1930 it was found that there was 1 retail store for every 58 inhabitants) thousands of small businesses failed when the purchasing power of the people fell off sharply. In 1928, the merchants had been successful in obtaining passage of a law to regulate “ unfair competition.” This law contained (among other things) heavy penalties for cooperative associations having bylaws providing for dealings with members only, which made sales to nonmembers; their charters could even be revoked. The cooperatives charged that, in order to harass the associations, agents provocateurs were used by the merchants to make purchases from new clerks not acquainted with the members. The merchants also attempted to obtain legislative measures to prevent the expansion of cooperative associations, to require them to join chambers of commerce, to have associations of mixed types de clared illegal, and to subject cooperatives to special legislation. Thanks to assistance by the various liberal political parties, all of these measures were defeated. During the economic crisis extraordinary powers were delegated by Parliament to the Executive branch of the Government, to issue orders which, if signed by the President, had the force of law. A decree of May 18, 1935, issued under this authority, relaxed the provisions of the 1928 law, in order that the Government might utilize the coopera tive machinery for the improvement of conditions. This order authorized cooperative associations to undertake, in addition to the regular business for which they were chartered, social, educational, and health (but not curative) activities for nonmembers as well as members, provided these activities had no political object. The order gave specific authorization to mixed types of associations (such as a consumers' association carrying on a productive department) and relaxed the nonmember-trading ban as regards such subsidiary activi ties. It declared that sales to nonmembers were not in contravention of the fair-trade-practice law and that thereafter they could be pun ished only by fine. Nonmember sales were specifically permitted (1) in order to help local authorities, (2) to prevent spoilage of goods, and (3) when the sale was made inadvertently. A Government decree of July 16, 1935, providing for temporary restrictions on new enterprises in certain lines of business, specifically recognized the special status of cooperative associations and required merely that opening of new shops must have the formal permission of the Central Union. Another decree, prohibiting the making of gifts in connection with the sale of goods or services, was supported by the private merchants 190 Cooperatives in Individual Countries in the belief that this would abolish the patronage refund, which is the distinguishing feature of consum ed cooperatives. As a result of representations by the cooperatives, a provision was written into the decree specifically recognizing and exempting refunds bearing a fixed proportion to purchases. Status o f Cooperatives Just P rior to M unich Agreem ent By 1937 the cooperative movement had, as noted, attained a posi tion of some importance in Czechoslovakia, with a considerable de velopment in practically all branches of cooperation. The movement had reached its greatest development in the “ his toric” Provinces of Bohemia, Moravia, and Silesia, where (according to official figures for 1936) over 80 percent of cooperatives of all types were found. Nearly half of all associations were credit cooperatives. In Slovakia nearly 83 percent of the associations were either agricul tural or credit associations. The geographical distribution of co operatives in Czechoslovakia in that year is shown in table 60. T a b le 60.— Geographical Distribution o f Cooperatives in Czechoslovakia in 1936 , b y T yp e All types Type of association Entire country___________ ___ _____ "Rnhpmift M n r e v ift a n d S ilesia „T Workers' producCon Housing Electri Agri tlves and Credit cultural associa sumers' cooper associ associ city asso associ tions of Other atives ations ations ciations ations artisans and small tradesmen 16,744 }l3 ,670 / .... 1 Slovakia_______ ____________________ / } Russian Subcarpathia (Ruthenia)___ 3,074 { 816 398 821 78 19 1,341 2,475 2,889 1,504 140 895 f 2,121 274 } 6,379 \ 319 158 } 1,200 f 33 14 l 2 809 744 1,165 171 882 411 158 53 90 27 20 3 7,579 Figures published by the Statistical Office of the Government indi cate that the 9,165 cooperatives other than credit were distributed, as to language, as follows: N u m b er o f associations Czech____________________________ _______________ 6, 825 German__________________________ _______________ 1, 695 Ruthenian_____________________________________ 135 Polish___________________________________________ 32 Other and mixed nationalities_____________________ 478 No complete data as to the business done are available later than 1930. The Government figures for that year indicated a total coopera tive business (not including, however, the loans granted by the credit cooperatives) of almost 6 billion koruny. The agricultural cooperatives were extensively federated, with over 50 central organizations giving various kinds of service, such as auditing, banking, technical advisory service, and purchasing of supplies, besides large national associations specializing in a given line. The marketing cooperatives handled 87 percent of all the cereals in the country. The local agricultural cooperatives (not including the electricity associations) had an aggregate membership of nearly 500,000 in associations doing processing, marketing, and buying farm and household supplies. Czechoslovakia 191 An even larger number— about 800,000—were members of con su m ed cooperatives of various types. The housing associations had a membership of over 100,000, but many of these were also members of the store associations. The retail associations accounted for about 3.8 percent of the total retail trade of the country; the percentage would have been much higher if the comparison were made on food stuffs alone. The greater part of the consumers’ cooperatives were federated into the Czech union, the German union, and the “ Unie” federation. In 1930 of the total of 861 consumers’ cooperatives, 62 percent were affiliated to these three federations. That these were the larger associations is indicated by the fact that their combined membership constituted 93 percent of all the consumers’ cooperative membership in the country and their business 91 percent of the total. Both the German and Czech branches of the movement had by 1936 overcome the effects of the depression and were well on the upgrade. This was true of the wholesales as well as of the local associations. The former had made especial progress in their productive depart ments. Proceeding on the principle that the greater the cooperative production the greater the degree of cooperative self-sufficiency, both wholesales early in their existence had begun to make some of the goods they handled. Even through the depression the output of their productive departments increased from year to year, almost without a break. (For list of goods, see table 8, p. 28.) As early as 1920 the Czech V. D. P. wholesale had become one of the most important producers of flour in Czechoslovakia and by 1937 it had become the largest flour-mill operator in that country. By 1936 its factories were producing about 130 articles; it also operated a laundry. In that year it produced nearly 38 percent (in value) of the goods it sold to member associations. The productive activities of the German wholesale began while it was still only a branch of the Austrian wholesale, with the opening of a factory for canning fruit in 1918. Four years later it was operating a chicory and spice plant, a coffee-roasting department, and a chemical laboratory for analyzing food. It also manufactured elastic goods of various kinds, underwear and other articles of clothing, shoe polish, and flour. This association consistently emphasized the importance of manufacture of its own products and nearly every year increased the scope of its manufactures. By 1935 its productive enterprises were producing many other commodities. Its own manufactures accounted for about 20 percent of the goods it sold to its member associations in 1935-36. Cooperative M ovem ent and the N azis During the year 1936 the German cooperative associations (that were situated mainly in the Sudeten regions) were beginning to feel the effects of the campaign by the Nazi sympathizers in the SudetenGerman (or Henlein) Party that had been formed in 1935. The avowed intention of that party was to unite all the Germans in Czechoslovakia under the Nazi banner. On the other hand, the cooperators, though German, had through their associations taken the stand of uncompromising defense of free, democratic action and were collaborating with their Czech comrades to that end. They, there 192 Cooperatives in Individual Countries fore, became objects of attack by the Nazi sympathizers, as “ traitors” to the Pan-German philosophy. Under the pressure of the intimidation, ridicule, and social boycott resorted to by the Henlein followers, some of the middle-class members began to leave the cooperatives. The attacks were only sporadic at first, but had become continuous by 1937. The German invasion of Austria in March 1938 led to a new campaign against the cooperators, culminating in threats against the jobs of members if they failed to withdraw, and even in physical violence. Only the most hardy and independent members remained; these were mainly of the wage-earner group. The attacks reached a climax in September in assaults upon coop erative members, individually and in their meetings. Cooperative premises were looted and wrecked in many cases. So great was the terrorism that many officers and leaders of cooperatives were forced to flee for their lives. All this, commented one of them (later a refugee to England) occurred “ at a time when Sudeten territories still formed part of the Republic of Czechoslovakia. The damage amounted to millions of Czech crowns.” In an attempt to cope with the disorders deliberately provoked by the Henlein Party, the Czechoslovak Government issued a general mobilization order. However, English Prime Minister Chamberlain had made the historic trip to Munich and shortly after the mobilisa tion order was issued, the Czechoslovak Government representatives were forced to sign the Munich Agreement. That agreement handed over to Germany the entire Sudeten region, constituting about a fourth of the land area and containing a Fourth of the population. Early in November the Teschen district in eastern Silesia was ceded to Poland and parts of Slovakia and Ruthenia to Hungary. In the same month the Government of Czechoslovakia was changed by the Parliament from a unitary to a Federal State and autonomy was granted to Bohemia-Moravia, to Slovakia, and to Ruthenia. Almost immediately an authoritarian regime was inaugurated in Slovakia, and in March 1939 the independence of that State was proclaimed. Within a few days the Germans invaded Bohemia, and on March 16 Bohemia and Moravia were proclaimed a protectorate belonging to the territory of the Greater Reich, the Germans there being made nationals of Germany and the others becoming “ subjects of the protectorate.” By this move, Germany obtained possession of a region that was the richest—both industrially and in natural re sources— in all Czechoslovakia. Meanwhile Hungary had seized the rest of Ruthenia and additional Slovak territory, and had denation alized both the Ruthenians and the Slovaks there. When the terms of the Munich Agreement were announced, the German cooperators in Sudetenland and their leaders became marked men. Many were seized and sent to concentration camps or were killed. Others were fortunate enough to escape from the country. The cession of Sudetenland practically wiped out the German cooperative movement, which, according to data published by the International Cooperative Alliance, had assets of 259,000,000 koruny, and was operating about 1,550 stores. The goods therein were sold to private traders at prices far below their value. The Czech branch of the movement was relatively untouched, at that time, as most of the associations were within the boundaries of Czechoslovakia 193 the new Czechoslovakia. However, in the areas taken by Germany and Poland it lost associations with nearly 500 stores and assets of over 70 million koruny. Later estimates indicated that altogether there were some 415,000 members in these German and Czech asso ciations. No data were available regarding the losses involved in the territorial seizures by Hungary. The G. E. C. wholesale (with headquarters at Prague) had had its entire business wiped out at one stroke, with the loss of the Sudetenland. After the Germans invaded Bohemia and Moravia, one of their first acts was to take control of this German wholesale. A long-time enemy of cooperation was appointed as commissar and he in turn appointed other Nazis to take inventory and dispose of the assets which totaled some 110 million koruny. Final dissolution of the wholesale took place in July 1939. The productive plants, built up over so many years, were also disposed of. All democratic practices were stamped out by the Germans in Bohemia. They, even demanded reparation for the German-owned estates that had been purchased and distributed under the agrarian laws of the early 1920’s. One of the greatest losses to the country was sustained in the cutting down and carrying off of the great pine forests. Although the Czech branch of the movement was allowed to con tinue, apparently unmolested, at first, a violent campaign was started against the cooperat’ves by the private merchants who cited as an excuse the duplication of cooperative facilities and their competition with the private retailers. In order to meet this criticism and prevent further attacks, the various central cooperative organizations under took consolidation of the movement in Moravia and Bohemia. The Czech Central Union, the “ Unie” federation, and two smaller organ izations were merged under the name “ Sdruzeni.” The wholesales connected with them were also merged, the name V. D. P. being used for the new body. In the city of Prague, where there was one large retail association (belonging to the Czech Central Union) and several smaller associations, one consolidated association was formed and the excess stores were closed, reducing the total number from about 700 to about 550. Similar consolidations in other districts resulted in the closing of about 150 more stores. These, it was reported, were to be turned over by the Minister of Trade to the private dealers. (In this process two outstanding officials of the cooperative movement were compelled to resign, one of them “ for reasons of health.” ) Thus, unity and increased efficiency in the cooperative movement in Moravia and Silesia (aimed at since 1924) were obtained under pressure from hostile sources. A report in the Review of International Cooperation pointed out, however, that the success or failure of the reorganized movement depended not on the cooperators but on political factors. No data on the status of the Czech consumed cooperative move ment have become available since that time. A report late in 1943 indicated, however, that the agricultural cooperatives, at least, were still a considerable factor, even though no longer free. In the socalled protectorate, nearly 6,400 associations were still functioning, of which almost half were credit cooperatives. These latter had a combined membership of about 750,000 in a population of about 9 million. 194 Cooperatives in Individual Countries Little is known of cooperative events in Slovakia after the partition of Czechoslovakia. The International Cooperative Alliance, report ing on cooperative developments in 1941, stated that there were three cooperative wholesales in operation, of which two— the German and the V. D. P. (probably a branch of the V. D. P. in Prague)— were quite small. The third was the wholesale of a farmers, organization which had 772 cooperative associations supplying about 144,000 families in the small towns and villages of Slovakia. A fifth of the population was reported to be registered with the cooperative associ ations, for sugar, and the associations were characterized as “ trust worthy factors in the official distribution and allocation of necessities.” Among the credit cooperatives in Czechoslovakia were a small number of associations identifying themselves as Jewish. In 1937, these numbered 24 (there were also 2 cooperatives of other types), all in Slovakia and Russian Subcarpathia (Ruthenia); there were numerous others composed of Jews but not wishing to be regarded as Jewish. The Jewish associations had 17,772 members in 1937, and had made loans to the amount of 15,802,028 koruny during the year. After the partition of Czechoslovakia, only 7 still remained in Slovak territory; the others were in territory seized by Hungary. It was re ported that they were all still functioning at the end of 1939, but “ with some restrictions.” How they fared after the German antiSemitic laws began to be enforced is not reported but can be guessed. As is well known, the unrest and rebellious spirit of the Czechs, under the occupation, manifested itself in disorders, sabotage, slow downs, and even the killing of prominent Nazi officials. In the en suing reprisals by the Germans, many citizens were seized by the Germans, including numbers of cooperative leaders. Among them were* officials of the Postal Workers Cooperative in Prague. Another victim was the president of the cooperative bank, who was hanged by Heydrich on the charge of “ economic sabotage.” ® • Sou rces .—The report on Czechoslovakia is based upon data from the following publications: Annuaire Statistique de la RGpublique TchScoslovaque (Office de Statistique, Prague), 1934, 1936, 1937, and 1938; Office de Statistique de la Republic TchScoslovaque Rapports No. 18,1921, No. 30,1922, Nos. 4 and 16,1924, Nos. 17 and 23,1926, and No. 6,1927; Bohemia Under Hapsburg Misrule, by Thomas Capek (editor), Lon don, Fleming H. Revell Co., 1915; The First Year of the Czecho-Slovak Republic, by Alexander Broz, London, Twentieth Century Press, 1920; International Cooperative Bulletin (International Cooperative Alliance, London), issues of April 1911, August 1912, January and July 1913, July 1914, September 1915, July 1916, April 1918, April, July-August, and December 1919, January, August, September, and OctoberNovember 1920, July-August 1921, April, September, and October 1922, September, November, and De cember 1923, January, June, August, and September 1924, January, May, July, September, and December 1925, March, April, and August 1927, May 1928, and March 1929; Review of International Cooperation (In ternational Cooperative Alliance, London), issues of January, May, and August 1928, June and August 1929, October 1931, January 1932, October 1933, January 1934, January, April, May, July, October, and Novem ber 1935, February, June, and October 1936, April and July 1937, February and December 1938, April, Au gust and September 1939, and December 1942; International Directory of Cooperative Organizations (Inter national Labor Office), 1933, 1936, and 1939; Cooperative Information (International Labor Office), No. 31, 1926, No. 41, 1927, Nos. 5,14, and 19, 1928, and No. 2,1935; Cooperative Societies Throughout the World: Numerical Data (International Labor Office, 1939); People’s Yearbooks (English Cooperative Wholesale Society, Manchester, England), 1929,1930,1933,1934,1935,1936,1937,1939, and 1941; Monthly Labor Review, November 1920; unpublished report to the U. S. Bureau of Labor Statistics, 1919, from H. B. Brougham; Report of the Inquiry on Cooperative Enterprise in Europe, 1937 (Washington, 1937); Cooperative League News Letter (New York), April 22, 1943; Cooperative Builder (Superior, Wis.), April 2 and December 24, 1942; News Flashes from Czechoslovakia Under Nazi Domination (Chicago), No. 193, July 12, 1943; New International Yearbooks, 1939 and 1941; Jewish Social Service Quarterly (New York), December 1939; and Rochdale Cooperator (New York) October 1,1943. Germany 195 Cooperative Movement in Germany The consumers’ cooperative movement in Germany had become such an integral part of the lives of the workers that, in spite of Nazi antagonism, it was not until 1942— about 9 years after the advent of the Hitler regime— that the latter was able entirely to destroy it. The cooperative movement in Germany started in 1849 when Hermann Schulze, a local judge in the town of Delitzsch, started an association to purchase raw materials for a group of joiners. It was not until 1867, however, that legal status was achieved by the co operatives in Prussia, with the passage of a cooperative law for that State. In the succeeding years similar laws were passed in other parts of Germany, and finally, in 1873, a national statute was enacted. With that encouragement all forms of cooperative associations developed, until by the time of the first World War the German co operative movement was one of the most successful in Europe. Although a working-class movement whose members had little margin of economic safety, its inherent soundness enabled it to with stand not only the hardships of World War I but also the series of crises that occurred in the next 15 years— depression, inflation, deflation, and then partial recovery toward the end of the twenties. The great depression beginning in 1929, the bank shut-down, and the prevailing unemployment (with drastically decreased purchasing power of its members) presented almost insuperable difficulties. Nevertheless, the movement had not only survived but was showing unmistakable signs of recovery when the Nazis came to power. The consumers’ cooperatives immediately felt the weight of the oppressor. As champions of the small private retailers, the Nazis quickly took steps for the control and eventually the extinction of the cooperative distributive movement. However, its very great hold upon the masses of the people who looked upon it not only as a source of supply but as a creation of their own, built upon their hard-won savings, forced the National Socialists to slow their rate of advance upon it. Therefore, over 8 years went by before they were able to achieve their goal of final suppression, under the decree of February 28, 1941. Even then more than a year was required before the movement was finally absorbed into the Labor Front. T ypes o f Cooperatives The German cooperative movement appears to have appealed particularly to three sections of the population: (1) The farmers, who organized credit associations as well as marketing and processing associations; (2) workmen, who started not only store associations to supply their household needs but various kinds of productive associations; and (3) businessmen, who saw in joint undertakings of a cooperative character an opportunity to pool their buying power and therefore organized associations for the purchase of their stock in trade as well as those to manufacture articles needed in their business. Enterprises of private business are not usually regarded as part of the cooperative movement of a country, but in Germany the official statistics have always included them. These numbered about 1,300. 196 Cooperatives in Individual Countries Among the genuinely cooperative types were some 20,000 savings and loan associations (table 61), many of which carried on purchasing of supplies for members, between 3,500 and 4,000 cooperative building associations, about 1,600 retail store associations, less than 200 workers, productive and labor associations, and about 1,600 supply associations buying raw materials and doing warehousing and market ing for associations of workers (journeymen). Among the crafts in which such cooperatives existed at the beginning of 1932 were bakers, confectioners, millers, tailors, weavers, furriers, locksmiths, plumbers, pipefitters, gunsmiths, ropemakers, saddlers, shoemakers, upholsterers, bookbinders, butchers, workers in hides and skins, painters, cabinet makers, wood turners and other woodworkers, building-trades workers, hairdressers, basketmakers, potters, glaziers, stove fitters, roof tilers, and gardeners. The “ miscellaneous” group of associations contained probably as varied a lot of associations as could be found in the cooperative movement of any country. In one year alpne new. societies were formed to carry on the following functions: Water supply, breeding of fur-bearing animals, radio supply and operation, assistance to the blind, cultivation of medicinal herbs, house repair, road construction, sale of German books and writings, giving of apprentice training for the metal industry, operation of sanitariums, convalescent homes and old people’s homes, motor transportation of goods, publishing, silk worm culture, hiring out of beach chairs, theatrical production, and provision of information on matters related to “ transportation, amuse ment, and intellectual life.” The number of associations of each type, as shown by official statistics, for specified years prior to the National-Socialist regime, is given in table 61. T able 61.— Num ber o f Cooperatives 1 in Germany in Specified Years, by T yp e Number of associations, January 1— Type of association 1922 All typos ____ _ _ __ Credit (savings and loan), urban and rural...................... Consumers’ retail associations............................................ Housing (building) associations........ _................................ Supply, etc., cooperatives of craft groups........... .............. Labor cooperatives__________________________________ Farmers’ marketing, processing, etc., associations......... Private dealers’ purchasing associations *________ _____ Joint productive enterprises of private business8............ M iscellaneous......................................................................... 1923 1932 1933 46,615 49,052 52,328 51,795 20,566 2,411 3,064 3,503 317 14,818 1,333 603 (3) 20,931 2,475 3, 265 3,493 296 16,580 1,424 588 (3) 21,880 1,695 3,939 1,726 164 18,800 1,296 558 2,270 21,607 1,674 3,813 1,670 158 18,821 1,295 559 2,198 i Includes types not usually regarded as cooperative. * Not usually regarded as part of the cooperative movement. * No data. Cooperative H ousing ( Building) Associations There appear to be very little data regarding the housing associa tions. In 1914 these associations had a combined membership of 292,389. By 1928, the 2,706 associations affiliated to the Union of Housing Federations had 633,629 members. Eight years later 3,490 associations were members of the Union and had 673,285 members. 197 Germany That these associations formed an important source of housing in Germany is indicated by the fact that in 1927, of 281,090 dwellings constructed, 78,426 (27.9 percent) were erected by the cooperatives, 60.3 percent by private builders, and 11.8 percent by the public authorities. Tabulation of the proportions built by cooperatives in that year, by size of community, indicated that these organizations were relatively most important in the cities, having built over half of the total housing in large cities. In Berlin, 68.3 percent of the dwell ings erected in 1927 were built by cooperatives. Cooperative construction as percent of total dwellings Population of— 5.1 Less than 2,000___________________________________ 2.000 and under 5,000____________________________ 12. 7 5.000 and under 10,000___________________________ 18. 0 10.000 and under 20,000___________________________ 26.4 20.000 and under 50,000___________________________ 33.8 50.000 and under 100,000.....................— .................... 34. 4 100.000 and over__________________________________ 51.1 All groups_____________________________________ 27. 9 In 1929 cooperative housing associations constructed 109,121 dwellings— 18,300 more than in 1928. Credit and Agricultural Associations Germany has the distinction of being the initiator of cooperative credit. Hermann Schulze, who had been the first person to organize a purchasing association, was also the first to start a credit coopera tive in 1853. The subsequent spread of this type of association in Germany was largely the result of his unremitting advocacy through brochures, speeches, and organizing ability. The Schulze-Delitzsch credit cooperatives were intended mainly for artisans and small tradesmen in the urban districts, but larger busi nesses also found them useful. An adaptation of the Schulze-Delitzsch idea was worked out a few years later for the benefit of rural and farm classes of the population, by Friederich Wilhelm Raiffeisen, burgo master of a small town in a poor farming region. The associations promoted by Raiffeisen were combinations of lending of money and purchasing of farm supplies. The Raiffeisen associations spread much more quickly than the Schulze associations and by the end of the century outnumbered the latter by 3 or 4 to 1. By 1932, of 21,880 credit cooperatives, 19,910 (about 91 percent) were farmers’ organizations of the Raiffeisen type. M ost of the urban credit associations were members of the German Cooperative Union (Deutscher Genossenschafisverband). The Raiffei sen associations were affiliated to the National Union of AgriculturalRaiffeisen Cooperatives. Agricultural producing, processing, and marketing associations have always formed one of the largest groups of cooperatives in Germany. The credit associations have long led in numbers but, as noted, most of these were farmers’ organizations. In 1932, counting the rural credit associations, the agricultural cooperatives formed about 75 percent of all the cooperative associations in Germany. The farmers’ cooperatives have taken varied forms. In 1932 the largest group of agricultural cooperatives (aside from the savings and 198 Cooperatives in Individual Countries loan associations) consisted of 6,677 organizations specializing in the sale of one or more farm commodities. Electricity associations, num bering 5,863, comprised the next largest group. Nearly 90 percent of these agricultural cooperatives were members of the National Union of Agricultural-Raiffeisen Cooperatives. At the end of 1931 the associations belonging to the National Union had a combined membership of 3,800,000. They had 27 regional whole sales which marketed their members, products and purchased their farm and household needs for them. In 1931 their purchases of sup plies amounted to 448,389,996 reichsmarks and their sales of farm products to 327,088,460 reichsmarks. Distributive Cooperatives By the beginning of 1923 there were 2,475 retail cooperative asso ciations. Reports from United States consuls in Germany com mented that the consumers’ cooperative movement had “ thoroughly established itself as a permanent and substantial element in the national economy” and that the associations had successfully survived the “ business crises” of the post-war years. They had, however, lost the controlling influence on prices which they had possessed before the war. In the next few years the economic situation rapidly went from bad to worse. Money had less and less value. Before ordered goods could be delivered, the amount of money required for its purchase would be multiplied many times. Cooperatives, like other businesses, suffered greatly from these conditions. A report by the International Labor Office pointed out that by the beginning of 1924, “ after 10 years of war and inflation, the distributive societies were practically in ruins,” although externally the movement was still “ imposing.” The currency was stabilized in November 1923. The effect was that—in one month— the amount of money outstanding was reduced from 1,955,001,736,412,000 (paper) marks in October 1923 to 589,841 (gold) reichsmarks 7 in November. The cooperative associations were among the first to revalue their accounts. Savings deposits of members were revalued at a rate very favorable to the members, but of course this increased the difficulties of the associations, for it made their burden of liabilities heavier. As a result of the inflation and the subsequent revalorization their work ing capital was practically destroyed and reserves were wiped out al most completely. “ Indeed,” the International Labor Office com mented, “ when stabilization was introduced the distributive move ment had to be built up again from the beginning.” Since 1903 the German consumers, cooperatives had had savings departments and had relied upon them to a large extent for the financing of the business enterprises. Savings deposited with the associations affiliated to the Zentralverband amounted to 80,200,000 marks in 1913 and rose to 146,694,000 marks at the end of 1918. The loss incident to the inflation and subsequent revaluation is indicated by the fact that the savings deposits (in terms of the new gold cur rency) amounted to only 49,500,000 reichsmarks in 1924. So success ful were the associations in attracting new loan capital, however, that by 1926 the amount had increased to 138,000,000 reichsmarks and by 1928 to 292,500,000 reichsmarks. 7 For par values of currency, see Appendix table, p. 278. Germany 199 During this whole difficult period the consumed cooperatives pursued a policy designed to strengthen and stabilize the movement. Nonpurchasing members were removed from the roster, small associa tions were merged into larger and sounder organizations, and a policy of “ scientific management,” or “ rationalization,” was introduced which resulted in improved efficiency and reduction of operating expenses. These measures were largely responsible for the survival of the movement, although a great many local associations (as also an even greater number of private businesses) went into bankruptcy or voluntary dissolution. The remarkable recuperative powers of the consum ed cooperatives and the loyalty of their members were demonstrated by the fact that by 1928 this branch of the cooperative movement had reached and exceeded its pre-war level. However, forces were at work that were beyond the control of the cooperators and their leaders. Shortly after the stabilization of the currency in 1923, a downward trend in business activity and employ ment set in which continued, with increasing velocity, through 1931 and came to a head in a number of economic disturbances not the least of which was the shut-down of all the banks in Germany from July 13 to August 4, 1931. The number of unemployed during the winter of 1931-32 exceeded 6,000,000 in a population of about 65,300,000. Various attempts were made by the Government to deal with the situation. With a view to raising funds for relief,and at the same time favoring the small retailer, on January 1, 1932, it levied a turnover tax of 2-2H percent on all retail trade; in addition many States and municipalities levied special trade taxes on the cooperatives. This naturally reduced the cooperative earnings (and consequently their patronage refunds), and this in turn reduced the purchasing power of the members. In September emergency decrees were issued which provided Gov ernment credit for business organizations, in an attempt to bolster the economic structure of the country. Only a very small part of this was earmarked for cooperatives and that on such onerous terms that only a part of the credit was ever applied for by the associations. In an attempt to assist its local associations and enable them to tide over, the Zentralverband in 1931 established an “ aid society,” capitalized at 14,000,000 reichsmarks, and with supplementary capital guaranteed by the Union. In spite of this the number of affiliated associations fell from 988 to 985 during the year. The number of individual members of the local associations fell by about 60,000, but to some extent this was caused by striking from the roster the names of nonpurchasing members. (In the 8 years ending with 1931 more than 1,600,000 names had been removed for this reason.) Condition of Consumers’ Cooperatives Im m ediately Preceding National-Socialist Regim e About 65 percent of the consumers’ distributive cooperatives were federated into two central organizations— the Zentralverband and the Reichsverband. The Zentralverband was overwhelmingly a workingclass organization, over 70 percent of its membership being workers either on farms or in industry, and it was strongly supported by the trade-unions. In the Reichsverband (the more conservative of the 200 Cooperatives in Individual Countries two federations), professional people and Government officials and employees formed 31 percent of the membership. The farm and in dustrial workers (slightly less than 50 percent of the total) were largely connected with the Christian trade-unions. The following statement shows the occupational distribution of the membership of the associations affiliated to the two federations in 1931: Zentral verband {percent) (percent ) 69. 2 2. 4 4 9 .7 .7 9. 3 4 .8 2. 5 1 2 .0 3 1 .0 5 .0 3. 2 10. 4 Reichs verband P rofessional m en an d G overn m en t em p loyees Each of the federations had its own wholesale association, to supply goods to the local associations. These were known, from the initials of their names as “GEG” (Zentralverband) and “GEPAG” (Reichsverband). Table 62 shows the development of the Zentralverband from 1903 (the year of its formation) through 1932. The table also shows such data as are available for the Reichsverband. It will be noted that even during the depression, which reached its lowest point in 1932, both GEG and the local associations affiliated to the Zentralverband made substantial earnings, although a continuous decrease in both earnings and the money volume of sales occurred from 1930 to 1932. T able 6 2 . — M em bership and B usiness o f Two M ain German Consum ers’ Cooperative Federations and T heir M em bers in Specified Years ZENTRALVERBAND [For par values of currency, see Appendix table, p. 278] Year ions ______ 1914.................................... 1920.................................... 1922.................................... 1925.................................... 1928.................................... 1929................................... 1930.................................... 1931.................................... 1932.................................... Number of mem ber as socia tions GEG (wholesale) Their members Their sales Amount of business Rm 573,000 666 1,718,000 1,109 1,291 • 2,714,000 3,161,000 1,350 1,110 3,382, Oil 1,024 2,803,232 2,859,516 988 974 2,940,308 2,979,210 968 2,895,985 949 131,786,107 486,419,059 0) 0) 616,188,362 1,045,962,404 1,176,294,809 1,240,327,868 1,160,156,341 944,198,074 Net earn ings Value of own production Rm Rm 26,445,889 157,524,041 91,549,934 99,118,624 228,169,471 444,371,664 501,378,122 495,257,404 428,419,904 339,831,261 115,816 2,174,358 253,761 136,841 2,460; 583 4,361,350 4,946,369 4,360,812 2, 232,468 1,095,448 Rm 10,493,615 11,720,857 9,635,572 35,339,389 104,720,506 123,879,470 137,619,670 145,326,693 129,428,293 REICHSVERBAND Year Number of mem ber associations Their members 276 0) 277 263 786,758 764,960 792, 551 786,709 GEPAG (wholesale) Their sales Rm 1928.................................... 1929.................................... 1930.................................... 1931.................................... No data. 0) 195,500,000 204,600,000 180,384,179 Amount of business Net earn ings Value of own production Rm Rm Rm 0) 0) 74,000,000 70,323,220 0) Q) 0) 0) (») 0) 11,000,009 10,000,000 Germany 201 In 1931 (as shown by table 62) the two national federations of con sumers’ cooperatives had in affiliation 1,231 local associations with a combined membership of 3,765,919 persons, or about 6 percent of the total population Counting their families, the movement was there fore serving about 24 percent of the German people. However, because their business was largely restricted to groceries, meat, and certain household supplies, the cooperative associations accounted for only about 5 percent of the retail trade of Germany. They em ployed 65,310 persons in 13,575 retail stores. GEG was a large importer of foreign goods, mostly purchased from cooperative sources. Its imports in 1931 amounted to 11,200,000 reichsmarks, and represented commodities from 22 European countries and Asia. In 1932, GEG was producing about 40 percent of the goods it sold to the retail associations. Its productive departments included 2 fish canneries, 8 meat-products plants, 4 flour mills, 2 macaroni factories, 2 mills making malt coffee, 7 tobacco factories, 2 soap factories, 2 match factories, 2 clothing factories (and was part owner of a third), and one plant each making vegetable and fruit preserves, cocoa and chocolate, chemicals, cheese, textiles, and lumber. In addition it operated a large farm, a weaving and dyeing shed for cloth, and a stationery and printing plant. It started construction of a margarine factory in 1931 but the depression and subsequent events prevented its completion. In the ssime year GEPAG, the wholesale of the Reichsverband, was operating a printing plant, a coffee-roasting plant, and one establish ment each making sausages, macaroni, soap, and cigars. The local associations were also substantial producers, mainly of perishable commodities. In 1931 the retail associations of the Zentralverband group produced goods valued at 317,559,105 reichsmarks. The greater part of these goods consisted of meat products (such as sausage) and bakery goods. In 1930, Reichsverband associations manufactured goods valued at 28,000,000 reichsmarks. Here again, bakery and meat products were the most important items, but the output also included such commodities as macaroni, coffee, sauerkraut, chocolate, distilled liquors, carbonated water, flour, and clothing. In 1930 and 1931 the Zentralverband associations had net earnings on their business amounting to 120,900,000 reichsmarks. Of tins sum 12,340,604 reichsmarks were returned to members in patronage refunds on their purchases, 56,014 reichsmarks were paid to members in interest on their shares, and 99,035,915 were paid in rebates pay able in merchandise. Thus, even in that 2-year depression period the members of these associations directly benefited by the operations of their cooperatives to the amount of 111,432,533 reichsmarks. Social welfare.— The associations affiliated to the Zentralverband had a pension fund to which association and employees contributed equally and most of the consumers’ cooperatives devoted part of their surplus to welfare purposes (burial funds, convalescent and holiday homes, unemployment relief, etc.). As early as 1918 the Cooperative Association of Hamburg had purchased a mansion on the shores of the Baltic Sea, in which 100 children could be accommodated at a time. The home was maintained from a special fund of the co588544°— 14------14 202 Cooperatives in Individual Countries operative association and each child enjoyed a 4-week stay, free of charge. In 1929 the wholesale GEG paid 1,000,000 reichsmarks for a large holiday home in the Thuringer Wald, with accommodations for 110 vacationers at a time. At Jena there was a special cooperative association, whose duty was the operation of vacation resorts. It had 5,043 members in 1929 and was running 12 holiday homes. This association received support not only from the cooperatives and trade-unions, but also from several of the States and municipalities and sickness-insurance funds. At its 1929 meeting the association voted to organize a central body (in collaboration with all of the supporting organizations) for operating holiday homes. Cooperatives Under the N azis The National Socialists, under Adolf Hitler, came to power in 1933. Table 63 shows the number of associations of each type in each of the 5 years thereafter. For comparative purposes the number at the beginning of 1933 is also shown. T able 63.— N um ber o f Cooperatives 1 in Germ any, 1933 to 1938, by T ype Number of associations, January 1— Type of association 1933 1934 1935 1936 1937 51,795 51,820 53,631 53,499 52,878 51,988 Credit (savings and loan), urban and rural___________ 21,607 1,674 Consumers' retail associations......................... ................. 3,813 Housing (building) associations........................................ Supply, etc., cooperatives of craft groups_____________ 1,670 158 Labor cooperatives__________________________________ Farmers’ marketing, processing, etc., associations........ 18,821 1,295 Private dealers’ purchasing associations *....................... 559 Joint productive enterprises of private business *.......... Misnp.llariAOiis 2,198 21,323 1,606 3,698 1,667 153 19,518 1,293 557 2,005 20,866 1,634 3,616 1,751 147 22,001 1,315 554 1,747 20,552 1,582 3,507 1,890 144 22,429 1,284 550 1,561 20,283 1,512 3,452 1,948 20,005 1,488 3,372 1,917 22,403 1,241 542 1,497 22,239 1,201 533 1,233 All types _ _ _______ _ ____ _ 1938 1 Includes types not usually considered as cooperative. 2 Not usually regarded as part of the cooperative movement. It is apparent that craft and agricultural cooperatives increased in number during the period covered in table 63. The increase in the latter case appears to have been caused by the formation of a large number of dairy cooperatives. In the case of all other types of asso ciations, there was a diminution in number during the 6-year period, and the associations of workers contracting their labor disappeared altogether. In most cases the decrease represented not a contraction of cooperative activity but an actual strengthening of the movement by amalgamations of small associations. Such was not the case, however, in respect to the consumers’ cooperatives. The decline of these associations from 1,582 in 1936 to 1,488 in 1938 represented the loss of the largest cooperatives in this branch of the movement. The eonsumers, cooperatives appear to have been singled out, among all the types of cooperatives, for the adverse attention of the Nazis because of the determination of the latter to destroy all forms of business com peting with the small private retailers. Accordingly, the large privately owned department stores and chain systems also came under their displeasure, but most especially the consumers, cooperatives which had large organizations in all the cities and a network of smaller ones throughout Germany. Germany 203 The German agricultural associations had confined their activities strictly to the economic sphere. They regarded themselves as part of the capitalist system and, although they had business competitors, “ they had no real opponents.” The agricultural associations showed no opposition to the “ adjustments” made by the Nazis and the latter apparently had no fundamental objections to the associations. The farmers1 cooperatives were incorporated into the Nazi Agricultural Estate and the important administrative posts in the associations were filled by members of the National-Socialist Party. The marketing and purchasing associations, although they had only “ very limited freedom of action,” as the delivery of grain, milk, etc., by farmers was very strictly regulated, nevertheless increased their business and sales. About 45 percent of the cereal crops and about 70 percent of the milk was handled by cooperative marketing associations. In 1935 the cooperative electricity associations formed about onethird of all organizations supplying electric power. A law of 1935 placed all electric-power organizations under the Ministry of Economy and provided for the merger of all enterprises in a given region into one. It also provided that an enterprise might be dissolved if it was unable to supply the needs of the region. As the electricity coopera tives were generally small, a number of them “ which for many years had done pioneer work in the villages” were dissolved under this provision. co n su m er s’ c o o p e r a t iv e s Among the first acts of the National Socialists was the merger (in August 1933) of five central consumers’ cooperative organizations— the Zentralverband, the Reichsverband, their two wholesales (GEG at Hamburg and GEPAG at Cologne), and the Printing Association of the Zentralverband. All of the five organizations were dissolved and a new organization, Reichsbund der deutschen Verbrauchergenossenschaften, was formed. Although the authorities stated that they had not seized these central organizations, but had merely taken them into “ protective custody,” they abolished the right of member ship voting, placed the management in the hands of Government appointees, and gave orders to incorporate the whole consumers’ cooperative system into the Labor Front. Cooperatives were even forbidden to receive the Review of International Cooperation, published by the International Cooperative Alliance, of which the German cooperative movement was a member. At the same time, the whole consumers’ cooperative movement was divided into 11 regional unions, each headed by a commissioner who was given the authority to sit with the board of directors of the cooperative associations and to “direct decisions.” Cooperative sources stated that many of these commissioners were drawn from the ranks of the private traders, and that some of them later obtained full-time jobs as directors of cooperative enterprises which they then proceeded to run like private businesses. Less than a year after the merger that formed the Reichsbund, the organization was again divided, the Reichsbund retaining only propaganda functions and a new German Wholesale Society (without even the name “cooperative”) being formed for purely trading pur poses. The latter immediately issued a statement that it would oper 204 Cooperatives in Individual Countries ate as a “ private economic enterprise/’ and that its services would not be restricted to cooperatives but that it would sell to anybody. During the next few years the attitude of the State public authori ties toward the consumers’ cooperative movement varied from the almost cordial (as in Wiirttemburg) to extreme suppression (as in Gau). The measures taken by the central Government showed the same vacillation. The fact that the cooperative movement represented such a large section of the population and was so intimately bound up with Ger man economic life made it only prudent for the Government to move upon it slowly. Realizing that the consumers’ cooperatives were “ made up of the most substantial elements among the working classes” whom the Nazis desired to bring into their fold, the Govern ment resisted the demands of the retailers for the immediate extinc tion of the cooperative movement. The Nazi director of consumers’ cooperatives (Karl Mueller) stated in November 1933 that he waa endeavoring to “ solve the consumer cooperative problem in the inter ests of the entire people.” For nearly 2 years, during which the wavering Party policy re sulted in a do-nothing attitude, the cooperatives were able to continue, although under strict supervision. However, both membership and business dwindled steadily, largely as a result of the panic induced by the early Nazi acts. Then, ostensibly to protect the movement, a law regulating coop eratives was passed on M ay 21, 1935. The purpose of this law (which was signed by Hitler, Dr. Schacht, and Graf von Krosigk) was to bring about the extinction of the consumers’ cooperative movement—painlessly if possible. Under the law no new cooper atives could be formed without express permission of the Federal Minister of Economy—a provision which effectively prevented any expansion. As an inducement to voluntary liquidation by the associations, the law made an appropriation of 60,000,000 reichs marks to be used as a guaranty to the savings depositors of the asso ciations, if dissolution was undertaken within a specified time. The usual provision of cooperative bylaws, requiring a three-fourths vote by a special meeting of the membership before an association could be dissolved, was changed to allow an association to be terminated by unanimous vote of the directors or a simple majority vote at a mem bership meeting, convened at the request of one-tenth of the members “ or their representatives.” No cooperative association was allowed, after the passage of the law, to accept any additional deposits and all savings departments were to be closed by December 31, 1940. (This, of course, prevented the workers from investing in their own enterprises and wiped out what had always been one of the main sources of capital for the movement, besides placing a very great burden upon the associations, which had the greater part of the funds tied up in plant, stocks, equipment, etc. To refund all these savings meant the liquidation of a large part of cooperative holdings.) Finally, the law placed all the remaining cooperatives under the “ strict regu lation” of the Federal Minister of Economy. The law was expressly limited to the member associations of the Reichsbund, but this organization contained practically all the consumers’ cooperatives in Germany. Germany 205 The International Cooperative Alliance pointed out that “ nothing is more typical of the lack of freedom of the German cooperative movement than the fact that the German consumers, cooperative press does not dare to offer one word of serious criticism of this bill!” (The Alliance had, early in 1934, deprived the German cooperative movement of its membership in the Alliance on the ground that it was no longer free.) It noted that “ propaganda for the ideals” of consumers’ cooperation had been forbidden for some time and vision as to the “ final goal of cooperation has long since disappeared from the German consumers’ movement.” In view of the express purpose of this 1935 law to induce the liqui dation of the consumers’ cooperatives, it is significant that the 82 cooperatives (of about 1,200 affiliated to the Reichsbund) that were singled out as being “ unsound” financially 8 included all the largest associations in Germany, which together accounted for 60 percent of the total capital of the movement and about half of the business. The two Berlin associations alone had 284,000 members. Some of the larger associations were closed, others were turned over to former managers as private enterprises. The latter was the situation with regard to the larger of the two Berlin associations. In October 1935, Ministerialrat Dr. Zee-Heraeus, reporting on the process of liquidation of the cooperative associations, remarked that “ in trying to broaden the scope of the independent retailer the Government is trying to transfer cooperative premises to inde pendent traders.” He noted that of the 72 associations all or partially liquidated, 10 percent of their 3,000 stores had been closed, 35 percent had been turned over to independent dealers, and 55 percent had been or would shortly be transferred to private companies. The so-called “ privatization” method resulted in a hybrid that was neither private nor cooperative. Some of the organizations were under individual management and some were managed as subsidiaries by the wholesale society. Altogether the consumers’ cooperative movement lost about 1% million members as a direct result of the law of May 1935. In addition to the contraction incident to the dissolution of the individual associations, with the consequent loss to the movement of their membership and facilities, the central organizations had had losses of productive plant. Under a law passed on January 10, 1936, the two match factories belonging to the former GEG were turned over to the Match Monopoly (a private cartel), with the proviso that their earnings were to be handed over to the Government. Some of the other productive departments were either closed or liquidated. Data showing the effects of all the foregoing events upon the mem bership and business of the local and central organizations are shown in table 64. It gives the combined data for the Zentralverband and Reichsverband for 1932 and 1933 and for the Reichsbund (formed in 1933) for 1934-37, the latest year for which data are available. 8 The International Cooperative Review of August 1935 remarked: “ The alleged financial instability of the German consumers’ societies is a charge which carries no conviction to anyone who has known the German cooperative movement during the last quarter of a century.” 206 Cooperatives in Individual Countries T a b l e 6 4 . — M em bership and Business o f Reichsbund 91 in Specified Years [For par values of currency, see Appendix table, p. 278] Year Wholesale Number of member associa tions Their mem bers 1,208 1,154 CO 1,113 (*) 1,162 3,654,402 3,334,400 3,210,000 2,130,000 2,094,500 2,010,900 Their sales Amount of business Rm 19322................................................ 1933 2 ................................................. 1934................................................... 1935................................................... 1936.................................................... 1937................................................... 1,095,095,769 818,488,609 660,100,000 502,000,000 510,000,000 532,069,098 Rm 339,831,261 279,940,844 295,266,000 289,419,000 309,999,304 330,009,321 Value of own production Rm 137,000,000 108,000,000 (3) (3) (3) 120,608,663 1 Formed in 1933 by merger of Zentralverband and Reichsverband end their wholesales. 2 Data represent combined figures for Zentralverband and Reichsverband. 8 No data. The war broke out in 1939, after which time no statistical data regarding the German consumers’ cooperative movement were obtainable. Evidently, however, the cooperatives continued to oper ate in some fashion until early in 1941. Then on February 28, Dr. Walter Funk, Federal Minister of Economy, issued a decree putting an end to the consumers’ cooperative movement not only in Germany proper but also in the former Austria and the Sudetenland. This decree provided for the transfer to the Labor Front of all property and funds of both wholesale and retail associations in all these territories, with the proviso that all the retail associations were to be “ converted into model retail shops and turned over to private ownership.” However, this latter transformation will, apparently, have to be post poned until after the war, for it is intended that the shops shall be given to veterans who fought at the front, as a reward for their services. It remains to be seen how this can be done and at the same time fulfill the Nazis’ promise to refund to the cooperative members their equity in deposits, shares, and social capital, so that they “ will not suffer any material loss.” In announcing the new decree, Dr. Ley, head of the Labor Front, made the following comments: C onsum ers, coop era tiv e societies h ave alw ays been on e o f ou r stron gest o p p o nents. * * * It m a y b e readily u n derstood th a t th e p rob lem o f th e c o op eratives w as difficult fo r N a tion al Socialism t o solve w hen it cam e in to p ow er. T h e w ork er saw in th e coop era tiv e m ov em en t som eth in g he h ad created an d in w h ich he h ad in vested m a n y m illions o f capital, as w ell as m illions o f savings. F o r th is reason, w e cou ld n ot have liq u idated th e coop era tiv es w ith ou t causing g^eat d isqu iet am on g th e b roa d masses. Besides, w e saw th a t im p orta n t industrial centers, an d even entire regions, w ere depen den t on th e coop era tiv e distribu tive system . T h e industrial regions o f th e R hineland, an d pa rticu la rly o f O stm ark [Austria], cou ld n ot be p rov id ed w ith fo o d an d oth er h ousehold good s w ith ou t th e distribu tive m a ch in ery o f consum ers' coopera tives. M oreov er, there w ere a great n um ber o f p ro d u ctiv e units w hich cou ld n ot be suppressed w ith ou t causing serious eco n om ic disturbance. On th e oth er hand, t o let th em continu e m ea n t unden iable p olitica l danger, fo r th eir ten m illion m em bers w ere all enem ies o f N a tion a l Socialism an d elem ents o f the Centre P a rty [C a th olic] an d M arxism . At the same time he stated that the taking over of the cooperative associations would enable the Government to use cooperative personnel to man the machinery for retail distribution in the newly acquired territories in the East and to operate the businesses seized from the Polish and Jewish communities there. Hungary 207 Under the reorganization the separate branches of the movement— wholesaling, productive, and retailing—were to be made subsidiary enterprises of the Public Works Management (the operating machinery of the Labor Front). The announcement of the decree was accom panied by an appeal to the cooperative employees to do their utmost to “ explain away and eliminate any cause for unrest among the members.,, By the middle of 1942, the “ reorganization” had been to a large extent completed. Although the size of the individual cooperatives had been one of the main points of criticism by the Nazis, under the reorganization a large-scale regional concentration was effected, far beyond that ever achieved by the cooperatives. At the same time the capital of the organizations was much enlarged— a circumstance that led the International Cooperative Alliance to wonder whether this might not represent another manifestation of the expansionist tendencies of the Labor Front, whose Labor Bank became one of the largest in Germany and which practically took control of the banking machinery in the conquered territories. The cooperative press (which had long ago lost its freedom of expression) ceased publication on January 1, 1942. In view of the other developments, this was a logical step, since (in the words of the International Cooperative Alliance) “ it had no longer a cause to defend nor a public to serve.” Thus, after 9 years under Nazi rule, the German consumers' cooperative movement came to an end. However, there still remain thousands of workers— cooperators— and their families to whom the cooperative is a tradition and a necessary way of life and it is upon them that the task of rebuilding the movement after the close of the war will depend.9 Cooperative Movement in Hungary In Hungary the cooperative movement had, prior to the outbreak of the present war, attained an outstanding pliace in the economy of the country. It was estimated, in 1937, that cooperatives were serving about 45 percent of the population. Their central organi zations had attained leading positions in both the distributive and export trade of the country. As far back as 1935 the International Labor Office pointed out that almost every commune in Hungary had a consumers’ cooperative society, and commented that: “ It is probable that the Hungarian consumers’ and credit cooperative movement has now reached the point where it meets the country’s8 8 Sou rces .—1The report on Germany is based on data from the following publications: Report from United States Commissioner at Berlin, August 11, 1920; United States consular reports, July 1922, February 21, May 25, and June 14, 1923 (No. 335), November 20, 1924 (No. 34), September 28, 1925 (No. 424), May 24 (No. 724) and December 20, 1926, January 4,1927, June 30 (No. 516) and October 11,1932 (No. 605), June 18 (No. 897) and November 13,1933 (No. 1033), August 1,1935 (No. 274), and August 4,1941 (No. 2882); Coopera tive Information (International Labor Office), 114/A, No. 62,1927, Nos. 4 and 19,1928, Nos. 2, 4, 7, and 10, 1929, Nos. 3,4, and 13,1930, Nos. 11 and 14,1931, No. 5,1932, No. 2,1933, No. 2,1934, No. 5,1935, No. 3, 1936, No. 3, 1937. Nos. 3 and 11, 1938, and No. 4, 1941; Review of International Cooperation (International Co operative Alliance, London), issues of February, May, September, and December 1932, February 1933, February 1934, July and August 1935, February, September, and December 1936, July 1937, August 1938* June and July 1941, and June 1942; People’s Yearbooks (English Cooperative Wholesale, Manchester, England), for 1933, 1934, and 1935; International Directory of Cooperative Organizations (International Labor Office), 1929, 1933, and 1939; Cooperative News Service (Cooperative League, New York), March 25,1927; Consumers’ Cooperation (Cooperative League, New York) July 1933; Cooperative Builder (Central Cooperative Wholesale, Superior, Wis.), August 15, 1936; Fascism (International Federation of Trade Unions, Amsterdam), June 29, 1933, and August 22, 1936; Konsumgenossenschaftliche Rundschau (Ham burg), April 21, 1923; Wirtschaftdienst (Hamburg), October 2, 1925; and Jahrbuch des Zentralverbandes deutscher Konsumvereine (Hamburg), 1933. ’208 Cooperatives in Individual Countries needs, and that any further increase in its strength will be in the form of the economic stabilization of existing societies rather than the creation of new ones.” The Hungarian cooperative movement differed from that of most other countries in that most of the central organizations were formed either with the help of the Government or as a result of the social initiative of individuals. The central bodies then took the lead in forming local associations. This reversed the usual (and recom mended) procedure, under which central organizations are formed only after a network of local associations reaches the point of needing wholesale or educational service which they then federate to provide. In Hungary by far the greatest part of the cooperative movement was among the farmers. They, however, were released from serfdom only in 1848, after which the country was plunged into a serious depression. These peasants, previously unaccustomed to any kind o f independent action, were totally unable to meet the situation by any action of their own. Their plight was of serious concern to some o f the more socially enlightened members of the upper classes, among them Count Alexander K&rolyi. Through his initiative both a •central union and wholesale, “ Hangya” (the “ Ant” ), and a central credit organization were founded in 1898. Thereafter, for many years, the development and spread of the ^cooperative movement was carried on mainly through the efforts of the educated people— teachers, priests, notaries, doctors, and even members of the nobility. Being naturally intelligent and receptive, the peasants quickly became accustomed to cooperative activity and by the end of the first decade had begun to participate in the management and direction of their cooperatives. As Hungary is primarily an agricultural country, the farmers have remained the largest component of the cooperative movement there. However, the industrial workers to some extent, as well as the middleclass people (including employees of the Government and the State railroads), also formed cooperative associations. There were also several other branches of the cooperative move ment that grew in the more usual way— from the ground upward. These included the cooperative dairies; the land-leasing associations; the associations of workers contracting their labor for such tasks as flood control, irrigation, and road construction; and cooperative associations for credit and production in small-scale industry. Although, as noted, the cooperative movement developed separately among the various social classes, there was always “ harmonious collaboration” among the different branches of the movement. Cooperative leaders recognized, however, that the lack of a closely integrated organization including all types of cooperatives was “ a serious drawback.” A central organization (the Union of Hungarian Cooperatives) was formed in 1909 to act as representative for the whole movement and was extremely successful at first/ It was, however, reported to have been “ paralyzed” by the war of 1914-18 and existed largely in name after that time. Official recognition has been accorded the cooperative movement for many years. In 1927, when the upper House of Parliament was revived, five representatives of the cooperative movement were seated in that body. One of these was elected by the nobility, one by the agricultural interests, and the other three were appointed. Hungary 209 Up to 1928, cooperatives were accorded certain tax privileges as well as low-interest loans from the Government. These privileges were withdrawn in that year. In recent years the Government has more and more made use o f the services of the cooperative movement in Hungary, particularly that part represented by Hangya. This has, of course, entailed an increasing measure of control. It is not known to what extent the totalitarian regime has vitiated the independence and freedom of action necessary for the sound development of the cooperative movement. T ypes o f Cooperatives and Their Activities The latest data showing the number of associations of various types in Hungary were collected by the Statistical Office of Budapest and relate to the year 1935, as follows: N um ber All types___________________________________________________ - — - _____ 4, 502 D istrib u tiv e co o p e ra tiv e associa tion s________________________________ ________ 1, 800 C o o p e ra tiv e cred it associa tion s_______________________________________________ 1, 4 0 2 C o op era tiv e insurance a ssocia tion s___________________________________________ 11 A gricu ltural m arketing, p rod u ctive, an d purch asing associa tion s_________ 800 W ork ers’ p ro d u ctiv e a ssocia tion s: L a b o r a ssocia tion s___________________________________ 29 C raftsm en’ s associa tion s__________________________________________________ 16 3 W ork sh o p s________________________________________________________________ 24 H ou sin g associa tion s___________________________________________________________ 105 O ther ty p e s : A ssociation s op era tin g clu b h ou ses____________________________ - __________ 73 M in in g associa tion s_____ ______ 1 T ran sp ort co o p e ra tiv e associa tion s______________________________________ 10 M iscella neou s_____ _ __________________________________ ;____________________ 78 More than three-fourths of all these associations were federated into central associations in their particular field. With the exception of certain specialized marketing associations (such as those of beekeepers, fruit growers, and distilleries), most of the distributive and agricultural cooperatives were affiliated with Hangya. Notable exceptions were the consumers’ cooperatives among the indus trial workers and the large retail organizations of the State railway employees and of the Hungarian civil service employees. Hangya, although composed mainly of farmers’ cooperatives, also had associa tions in some of the large towns and cities. The figures shown in the foregoing tabular statement included some associations not genuinely cooperative. The 50-year old law under which cooperatives were formed permitted the organization, under it,, of pseudo-cooperatives that were really profit-making enterprises. Not until 1937 was a really cooperative code drafted. Credit cooperatives.— The credit associations are one of the oldest forms of cooperative activity in Hungary, and have always operated in close collaboration with the Government. Their central organi zation, the Central Institute of Cooperative Credit Associations, was started in 1898 with funds subscribed partly by private persons and partly by the State. Under a law (Act No. A X X ) of 1920, every new credit cooperative was required to affiliate with the Institute.. Of about 1,400 credit associations in 1935, slightly over 1,000 were members of the Institute. 210 Cooperatives in Individual Countries Workingmen’s consumers’ cooperatives.— The spread of consumers* cooperation among the industrial workers, not being fostered by any organization, had spread more slowly than was the case with the Hangya associations. The foremost workmen’s cooperative in Hungary was the General Distributive Association at Budapest, founded in 1904 with funds advanced by well-to-do citizens. This method of financing was opposed by the trade-unions, but after 3 years’ operation by the association they were won over to its support. In the great depression the association was able at first to hold its own surprisingly well, and continued its practice, begun in 1926, of presenting every member whose annual purchases had amounted to over 400 pengos 10 a free life-insurance policy. The long-continued depression period and the failure of the workers’ savings bank proved to be too much for the General Distributive Association, which was forced to liquidate in 1939. In order to pre vent the loss of the workers’ savings, invested in this association, Hangya (at the request of the Government) took over part of its assets and shops and continued its service. Workers’ productive associations.— The small group of workers’ co operatives in Hungary had its own central organization (Central Union of Handicraftsmen’s Cooperatives), formed in 1920. A con siderable variety of industries was represented among these associ ations—woodworking, building construction, shoemaking, tailoring, and various home industries. In 1928 there were 71 of these asso ciations with a combined membership of 17,712. By 1934, however, the number had fallen to 52 and the membership to 7,414. Public employees’ associations.— One of the largest retail associations in Hungary was the Hungarian Civil Servants Cooperative Asso ciation, established in 1893. In 1934 its members numbered over 55,000 and its business exceeded 19,000,000 pengos, nearly a third of which (6,385,000 pengos) represented goods produced in its own factories. The employees of the State railroads also had a large retail associa tion, with many branches throughout Hungary. It had a business in 1932 amounting to 3,600,000 pengos. H angya Associations9 1 8 9 8 -1 9 3 5 To a considerable degree, the history of cooperative marketing and distribution in Hungary is the history of the farmers’ wholesale coop erative, Hangya. As already noted, this association— the Society for Consumption, Sale, and Production, of the Hungarian Farmers’ League— was formed in 1898, on the initiative of Count Alexander Karolyi, using privately subscribed funds. There were no local asso ciations at the time, but immediately after the establishment of Hangya, the latter proceeded to organize local distributive coopera tives among the farmers. Later it extended its activities to the towns and cities. Each association was pledged to make all of its wholesale purchase through Hangya, provided the goods were procurable through it and provided the prices were at least as low as offered by private wholesalers. In spite of the difficulties of manpower, supply, and communication, Hangya showed a continuous development during 10 For par values of currency, see Appendix table, p. 278. H ungary 211 the first World War, achieved in spite of the political upheaval and turmoil in Hungary. The dual monarchy of Austria-Hungary was overthrown and a republic was established in 1918 by the revolution of October of that year. It, in turn, gave way to a short-lived Com munist government under Bela Kun in 1919. In 1920 the various parties of the Right Wing (aided by Rumania) succeeded in over throwing the Bela Kun regime and establishing a Regency, with Admiral Horthy at the head. In the dismemberment of Hungary under the Treaty of Trianon, Hungary was reduced to a third of its former size. Slovakia became part of the new country of Czechoslovakia, Transylvania was taken by Rumania, and Croatia and Slovenia became part of the new kingdom of Yugoslavia. In this transfer, over 1,300 Hangya associations thus became foreign associations. A t the end of 1920 there were only 1,752 Hangya associations left in Hungary. B y 1922 Hangya had enlarged its scope by admitting to member ship workmen's as well as farmers' cooperatives. One oi its members was the Haztartas Cooperative Association in Budapest, which by 1922 had 36,772 members and supplied about 20 percent of the people of the city in its 77 stores. The aim of this association was to organize the middle class in the towns. Another association, the “ Pannonia," was started to supply the associations of the Christian-Socialist rail way men, postal workers, and tobacco workers. The economic condition of the country went from bad to worse in the next few years. As Hungary is an agricultural country dependent upon its exports, the loss of foreign markets had a disastrous effect upon its internal economy. In 1924 the League of Nations appointed a commissioner to take charge of its finances, and floated a $50,000,000 international loan to be used for rehabilitation. Hangya's affiliated associations experienced great difficulty in renewing their capital after the deflation, particularly as Hungarian cooperative associations (except credit cooperatives) were not allowed to accept savings deposits from members. Regarding the credit coop eratives, it was reported that the value of their shares and deposits was practically wiped out. By 1926, however, Hangya itself had com pletely recovered. In the depression that began in 1929, Hungary felt severely the slump in prices and the restrictions on trade imposed in the various countries in the attempt to alleviate conditions. As the members of the Hangya associations were mostly farmers whose products were among Hungary's largest exports, they also encountered extremely hard times and a considerable number of associations had to be liquidated. By 1933, however, signs of improvement appeared. An unusually rich harvest in the fall of 1932 improved the members' purchasing power somewhat. This, combined with improved condi tions resulting from Government controls on foreign trade and on the national currency and the lightening of farmers' debts, was reflected in the increased business of the cooperative associations. The trend of membership and sales of Hangya through 1935 is shown in table 65. 212 T able Cooperatives in Individual Countries 65.— M em bership and Operations o f H ungarian Cooperative W holesale, H angya, 1910-35 [For par values of currency, see Appendix table, p. 278] Number of mem ber associations Year 992 1,195 1,276 1,307 1,386 1,940 1,945 1910. 1912. 1914. 1915. 1916. 1918. 1921. Amount of business Net earnings K ro n e n K ro n en 19,016,419 28,000,000 30,218,913 46,064,332 57,531,133 126,775,127 1,890,000,000 P engds 1926. 1928. 1930. 1932. 1934. 1935. 0) 1,698 0) 1,573 >1,541 1,488 68,529,255 73,745,181 63,576,587 46,635,460 50,627,421 57,238,272 139,732 185,931 <9 439,656 758,197 <9 ' 450,000,000 P engd s 433,428 646,258 (0 8 210,406 i No data. * Data are for 1933. Table 66 gives data on the membership and operations of the associations affiliated to Hangya. The result of the currency infla tion is shown strikingly in 1921. T able 6 6 . — M em bership and B usiness o f H angya Cooperatives in H ungary, in S pecified Y ears , 1910-37 [For par values of currency, see Appendix table, p. 278] Number of associations Year I9in __ .... 1918_____ 1921 ... ___________________________ ____ ____ __________________________________________ ______________ ____ _____________ 1928__________________ ________________________ 1932 _ _ ____ .. . .. _ _ 1935 ___________ ______ _____ ________________ 1937 . . ____ ________ Their membership 992 1,940 1,945 156,563 658,267 795,137 1,698 1,573 1,488 1,481 714,918 >664,024 627,693 630,000 Their sales K ro n en 38,216,954 124,926,975 3,000,000,000P engd s 122,441,033 66,539,432 81,148,481 91,306,000 i No data. * Data are for 1930. PRODUCTIVE ACTIVITIES In 1916 the Hangya Industrial Company (Ltd.) was organized, for purposes of production. By 1922 it was operating 12 factories producing such commodities as soap, tooth paste, shoe polish, blacking, starch, matches, brooms, brushes, rope, cord, knives and forks,, mustard, candy, and various liquors. By 1926 it had added chemicals and costume jewelry to its list and early in the thirties started the manufacture of lubricating oil and dyes. Until 1929 Hangya owned one of the largest match factories in Hungary. In that year the Government granted a monopoly on matches to the Swedish American Match Trust, and Hangya was compelled to sell its factory to the trust. Hangya has never reached the importance as a manufacturer attained by the wholesales of certain other European countries. Its manufactures never exceeded 12 percent of the amount of the distributive business. H ungary 213 Place o f Cooperation in the E conom y o f H ungary Ever since the first World War, the cooperative movement, es pecially as exemplified by Hangya, has played an important part in the life of Hungary. With the exception of a few urban cooperatives connected with the Social-Democratic Party, the cooperatives in Hungary have never taken any part in politics. Probably partly for this reason and partly because of the wide economic vision of the cooperative leaders, Hangya especially received much official recog nition. In all of the recurrent crises, economic and financial, Hangya proposed or assisted in constructive measures to meet the situation. At the celebration of Hangya’s fortieth birthday in 1938, the Prime Minister paid tribute to its constructive accomplishments in improv ing the living standards of the agricultural population, and promised a continuance of Government support. W ELFARE W ORK Hangya was the first employer in Hungary to pay family allowances to its employees,11 and as early as 1910 it had established a system of old-age pensions for its superannuated workers. The system ap parently had to be abandoned during the war of 1914-18 and the early post-war period, but by 1928 the organization was again making regular appropriations for pensions. In 1922 Hangya and the Central Institute of Cooperative Credit together established a modern cooperative hospital in Budapest. This hospital was enlarged and provided with additional surgical equipment in 1938. Hangya also entered the field of housing when it acquired land near Budapest and constructed modern low-rent dwellings for its workers; this project was enlarged in 1938. In allotting dwellings, preference was given to the larger families. In the same year a block of flats was built, using money from the pension fund. E X P O R T B U SIN E SS “ Futura,” Hangya’s trading and export company, was established in 1919 by joint action of the State, the Cooperative Credit Institute, and Hangya, as a result of the conditions that followed in the wake of successive changes in government and the occupation of Hungarian territory by the Rumanians. The Horthy Government came into power in 1920. At first hostile to cooperatives, it gradually realized the importance of the cooperative movement. Under the “ planned economy” inaugurated under the Horthy Regency, the possibilities of the cooperative network were rec ognized and more and more use was made of the associations as ma chinery for collection and export of agricultural products. In 1923, when the Government undertook the export of wheat to Switzerland and Bavaria in order to bolster the currency on foreign exchange, Futura was given the task; later, it also handled in the same way other State-controlled goods—wool, onions, newsprint paper, agricultural machinery, etc. When the State came to the rescue of farmers who had lost their machinery and tools during the* u The general family-allowance system was introduced in Hungary in 1939. 214 Cooperatives in Individual Countries revolutions and Rumanian occupation, Futura distributed 37,500 machines and 397,000 tools for the State. After the abolition of State control of commodities, Futura em barked upon a program of improvement of quality of agricultural products. Through its operations on the market it was able to obtain better prices for the farmers, also. It had export relations with co operative organizations in German Austria, Czechoslovakia, Switzer land, Italy, and Poland. By the end of 1933 Futura was characterized as the leading produce organization in Hungary. Its marketing business rose steadily each year, from 5,463,302 pengos in 1934 to 30,592,400 pengos in 1937, and it had a Government monopoly in the export of camomile and paprika. Mills were being built in various sections of the country, to handle the paprika business. D IST R IB U T IV E A N D M A R K E T O PER ATIO N S The year 1934 was the most critical period of the depression in Hungary. In that year the Government forced a reorganization of the whole distributive cooperative movement, under Law No. X X I. Cooperatives were divided into two classifications—urban and rural. T o the Hangya network were allotted associations in the rural dis tricts. Associations in towns and cities were allocated to the Hun garian Civil Servants’ Cooperative Society. This forced the liquida tion of Hangya’s Budapest association, H&ztartds, and of the large State railway employees’ association, Konzum. The General Dis tributive Association— the workingmen’s cooperative at Budapest— was left untouched at that time but was taken over by Hangya several* years later. The reorganization resulted in eliminating duplication of coopera tive facilities and consequently in a general reduction of overhead expenses. Also, Hangya subjected its affiliated associations to a searching examination as to financial soundness, and as a result 42 associations were liquidated or consolidated with other associations during 1935. The 1,488 affiliates at the end of the year were operating 2,785 stores. Hangya territory was divided into 140 sections, for purposes of auditing and technical improvement, and a Hangya repre sentative was placed in charge of each. This period of gradual recovery was reflected in increased coopera tive business and earnings. Net earnings of 212,406 pengos enabled Hangya to pay a 2-percent patronage refund, after a barren interval of 7 years, and to start a new reserve fund to replace the reserves wiped out by the previous losses. The wholesale had succeeded in obtaining a fair share in the Government export quotas and had been accorded representation on all of the State-controlled syndicates and commissions handling the various exports. Another good harvest in 1936 speeded recovery and in that year the distributive business of Hangya amounted to 69,330,760 pengos— nearly the pre-depression volume. At the end of the year the more than 600,000 members of Hangya’s affiliates and their families represented about a fourth of the popula tion. Hangya was doing about one-eighth of the total trade, was the largest distributor of wine in the country, and had become “ the most important commercial institution in Hungary.” It supplied the 215 H ungary farmers with all their household and farm needs and in addition marketed their products through eight central associations handling specific lines. One of these dealt in the products of home industry. It was reported that this organization was “ providing the women in the villages with work and occupation during the idle winter months, and the ever-increasing demand from overseas proves the excellence of the quality.” In the spring of 1938, when the price of cattle had fallen to an unusually low level, the Government authorized Haiigya to make large purchases on the market and to can the meat in its factory. Again, in the autumn of the same year, action by Hangya prevented a rise in the retail prices of lard, bacon, and other foodstuffs. In that year, for the first time in the history of Harigya, not one of the mem ber associations had a loss on the year’s operations. In the same year, at the request of the Government, Hangya took over part of the assets and shops of the failing General Distributive Association of Budapest, and formed a new association, in order to assure a continuance of supply to the former members. By this step Hangya resumed operations among urban industrial, workers— a func tion it had lost in 1934 under the reorganization law that restricted its activities to rural areas. In 1939 in the interest of economy and efficiency, the subsidiary marketing companies were reduced to departments of Hangya. There was a considerable expansion in the goods produced in Hangya factories. Operating expenses of the whole Hangya enterprise for the year reached a low of 5 percent and net earnings totaled 1,126,989 pengos. The development of the wholesale and marketing business and of the productive plants since 1934 is shown in table 67. T able 67. — M em bership and Business o f Hungarian Cooperative W holesale, Hangya , 1935-41 [For par values of currency, see Appendix table, p. 278] Year ______________ 1936.......................................................................... 1937 ____ _____ 1938 ____________ - ____ 1930 ______ _______ 194A ___________________ 1941 ...................................................................... 193*5 Number of mem ber asso ciations 1.488 1.480 1.481 1.489 1,783 (1) 0) Amount of business Wholesale distributive Marketing P engos Pengds 57,238,272 69,330,760 80,063,757 98,413,829 127,569,299 162,400,000 230,000,000 13,205,336 23.037.000 30,592,400 41.871.000 84.489.000 91,900, U00 129,100,000 Value of own production P engds 4,355,879 3,596,2i 8 4,783, C95 7,398. 559 11,352,734 15.600.000 28.600.000 i No data. Developments Since Outbreak o f Present W ar Hungary was drawn into the present war, on the side of Germany, almost from the beginning. Its troops were among those that invaded Czechoslovakia in March 1939. Hungary received as its reward parts of Czechoslovakia that it had lost 20 years before, under the Treaty of Trianon. In this reacquired territory several hundred former Hangya associations were brought back into membership; to 216 Cooperatives in Individual Countries supply them Hangya opened 7 new wholesale warehouses. The rean nexed territory also contained about 200 associations which had been formed in the interval after the Treaty of Trianon; they had estab lished their own wholesale, “ Hansa,” which they continued to operate after the reannexation. In 1939 when Carpatho-Ruthenia was returned to Hungary, Hangya established a new retail association there, with 50 stores. From 1939 through 1941 Hangya’s distributive and marketing business rose by nearly 70 percent. The International Cooperative Alliance, reporting Hangya's sales for 1940 and 1941, commented in the Review of International Co operation (November 1942) as follows: * * * There can be no doubt that the stricter control and the planning of agricultural and industrial production, as well as the regulation of trade and distribution, must greatly affect cooperative development and freedom of action. The general policy of the Government so far as the cooperative organizations are concerned seems to be motivated by a recognition of the economic value of the cooperative apparatus and the desire to use it for their own ends, while the social aims of cooperation, the new view of society for which progressive cooperation stands, must of necessity be alien to their more or less totalitarian or autocratic view of society. Government interference, not without danger even when offered in the form of disinterested assistance, becomes doubly dangerous if the Government, consciously or unconsciously, dilutes and weakens not only the voluntary character but also the idealistic social basis of cooperation. How far this danger has already materialized and how far, in addition, State officials have penetrated into cooperative organizations and diluted their leadership, we do not know, but there is no doubt that the danger is real. In Hungary, before the war, the cooperative wholesale society Hangya and its subsidiary organization Futura were entrusted by the Government with more or less monopolistic functions in the collection, marketing, and export of agricultural produce, the scope of which has been enlarged during the war in the field of agricultural marketing and the supply of the rural population, particularly in the territories annexed by Hungary. The growth of the Hangya and the public recognition it has received have aroused the suspicion and opposition of the private traders, and the friction between the two groups of interests recently prompted a public statement by the Minister of Trade, Josef Varga, to the effect that in a “ State-directed economy,” cooperative organization as well as private trade must find its proper place. “ The new economic order cannot do without the cooperative organization, though, on the other hand, it cannot allow ithe cooperative societies with their greater capital resources to endanger the legiti mate interests of private trade.” This statement is a remarkable recognition of the exceedingly strong position which the Hungarian cooperative societies have attained in the trade of their country.12 Cooperative Movement in Poland The Polish cooperative movement was characterized by a multiplicitv of small associations, but reached a large proportion of the population. Even as early as 1920, it was estimated by the Inter national Labor Office that the consumers' cooperatives were supplying 20 percent of the Polish people. Under a law passed in 1934 (largely as a result of the extreme depression in agriculture and the resultant effect upon the agricultural cooperatives) there was a considerable u Sou rces .—1The report on Hungary is based upon data from the following publications: Internationa Cooperative Bulletin (International Cooperative Alliance, London), issues of May and November 1911, March 1913, April 1915, July 1916, January 1918, January 1919, July 1920, May-June and November 1922, and May 1923; Review of International Cooperation (International Cooperative Alliance, London), issues of March and April 1927, June, July, and October 1928, November and December 1929, February and June 1931, October and November 1932, January, March, and November, 1934, May, August and December 1935, May 1936, June and November 1937, February, June, and August, 1938, June 1939, June 1940, and No vember 1942; International Directory of Cooperative Organizations (International Labor Office), 1929,1933, and 1939; Cooperative Information (International Labor Office), No. 12, 1935, and No. 13, 1937; People’s Yearbooks, 1930,1933,1937,1938,1939, and 1941; and New International Yearbooks, 1924,1925,1941, and 1942, 217 Poland amount of amalgamation both of local associations and of federations (notably the so-called “ auditing unions” ) by which the movement was decidedly strengthened. The Polish Government was given power to interfere in the affairs of the cooperatives but was reported to have exercised this power wisely. The movement itself was neutral and nonpolitical, except in the Ukraine. It was encouraged by both the Government and the Catholic Church,13 and the public authorities had established a chair of cooperatives in the University of Warsaw, as well as a school for employees of agricultural cooperatives. Under the 1934 law, the 26 auditing unions were reduced to 10, representing various social groups as well as the different national minorities. Thus there were two auditing unions for German associa tions, two for Jews (one Zionist and one Orthodox), and one each for the Ruthenians and Ukrainians, as well as four unions for Polish asso ciations. The Polish associations included (1) “ Spolem” (“ To gether” ), the General Union (and wholesale) of Distributive Coopera tives of the Polish Republic, serving consumers’, workers’ productive, and labor associations; (2) the Auditing Union of Army Cooperative Societies (also served by Spolem); (3) the Union of Agricultural and Provident Cooperatives of the Polish Republic, combining credit, marketing, processing, and productive associations; and (4) the Union of Cooperative Societies and [Government Employees’ Associations, combining credit, housing, and construction associations. All of the unions were on friendly terms, and most of the central organizations were members of the Scientific Institute for Cooperation. The abundance of small associations is indicated by the fact that the average membership per association was only 250— a very small size for European cooperative associations— and that in the population of about 35 million there were some 14,000 cooperative associations, or an association for about every 2,150 persons. In 1939 these cooper atives were serving about 3% million families, or about 40 percent of the population. In 1930 cooperative exports constituted 3.2 percent of all exports from Poland and ranged from 1 percent for eggs and pigs to 20 percent for corn and 64 percent for butter. T ypes o f Associations The 13,004 associations in existence at the end of 1936 were grouped, by type, as follows: N u m ber associa tio n s Consumers’ cooperatives__________________________________ 1, 552 Agricultural consumers’ cooperatives________________________2, 659 Agricultural marketing cooperatives_______________________ 392 Cooperative dairies_______________________________________ 1, 323 Health cooperatives______________________________________ 8 Credit cooperatives____________________ __________________ 1 School-children’s cooperatives_____________________________ 17 07(* Housing associations___________ - _________________________ f u/ u Other____________________________________________ J 18 In rural areas, the priests were often presidents of associations, and lectures on the organization of co operatives were given in the Catholic seminaries. 588544°— 44----- 15 218 Cooperatives in Individual Countries All but about 1,500 associations were affiliated to the auditing unions. The accompanying table shows the number and type of associations affiliated to each of the auditing unions in the latest year for which data are available (1937 in most cases). T able 6 8 . — Mem bership and Business o f Polish Auditing Unions 1 [F or par values of cu rrency, see A p p e n d ix table, p. 278] A ffiliated asso ciation s A m o u n t o f business of— Central organization and ty p e o f affiliate N um M em ber M cm oers ber associations Z lo ty s Union of Distributive Cooperative Associations........................... Union of Agricultural and Provident Cooperatives........................ Rural credit associations............................................................. Urban credit associations............................................................. Trading associations........... . . .............. ...................................... Auditing Union of Ukrainian Associations..................................... Rural credit associations............................................................. Urban credit associations............................................................. Trading associations..................................................................... Auditing Union of Ruthenian Associations.................................... Rural and urban credit associations........................................ . Trading associations........................ ............................................ Union of German Cooperatives in Poland...................................... Rural credit associations.............................................................. Urban credit associations............................................................. Trading associations..................................................................... Union of German Agricultural Cooperatives in Poland............. Union of German Agricultural Cooperatives in Pomerania........ Rural credit associations................................................. ........... Trading associations................................................................... Auditing Union of Army Cooperatives.......................................... Union of Cooperative Societies and Employees’ Associations... Union of Jewish Cooperative Societies........... .......... ....................... Union of Jewish Tradesmen’s Cooperatives................................... F edera tio n Z lo t y s 332,555 21,535 150,918,000 9 0 ,6 0 7 ,0 0 0 5.503 1,655,292 a 191.000,000 2 ,756 711,711 (i*4) 639 375,663 (4) 2.108 567,918 (4) 645,595 3,326 139,431,000 3 3 ,092,000 80,052 543 (4) 124 78,058 (4) 2,659 477,150 (4) 218 30.553 2,6 5 5 ,0 0 0 67 21, 293 (4) 9 .260 151 (4) 585 45,133 69,978,000 4 0 .160,000 268 14,726 (*) 78 15,443 (4) 239 14.964 ( 4) 97 7 ,466 1,099,000 202 ,0 0 0 176 12,566 (4) 63 6,398 ( 4) 113 6,168 34,151,000 24,067 231 20,350,000 121, 245 525 (4) 638 «135,717 (4) 120 20,706 (4) i E xcep t w here otherw ise noted, data are for 1937. * G rouped into 6 federations. »1938. 4 N o data. The membership of the unaffiliated associations is shown, by type of association, in the following statement: A s s o c ia tio n s M em bers All types—..................................... - ............................................... 1,514 154,000 Consumers’ cooperatives___________________________________ Agricultural consumers’ associations________________________ Dairies____________________________________________________ Credit associations___ _____________________________________ Housing associations_______________________________________ Other types—_________________ 1___________________________ 20, 000 24, 000 17,000 73, 000 5, 000 15, 000' 238 315 155 440 106 260 Consumers’ Cooperatives Consumers' cooperation in Poland dates from 1869, but it spread very slowly and by the beginning of the twentieth century only 50 associations had been formed. The revolution of 1905, which won from the Kussian Government a substantial degree of freedom for the people, gave impetus to the cooperative movement and by 1908 there were 670 consumers' associations. In 1911 a cooperative wholesale association was formed, which by 1913 had in affiliation 297 member societies with 39,000 members. 219 Poland In addition, and without connection with the union, there was a group of Catholic associations with their own central organization; a num ber of independent associations; and in Austrian and German Poland (Galicia, Silesia, and Upper Silesia) some associations either inde pendent or having their own unions. Altogether, before the first World War, there were on Polish territory about 1,300 consumers' cooperative associations with 122,000 members and annual sales of 20,000,000 rubles. During the war the impossibility of maintaining continuous contact between the wholesale and its affiliates resulted in the formation of nine regional wholesales which in practice enjoyed complete autonomy. The advantages offered by the cooperative movement as a medium of provisioning the people in wartime resulted in considerable ex pansion of the movement, and the union at Warsaw emerged from the war period with 327 affiliates (with a total of 57,000 members). The union was operated on strictly Rochdale principles and observed political neutrality. A Socialist movement had, however, grown up, having its own central body, called the Workers' Union of Coopera tive Societies; the Central Society of Christian Cooperatives (Catho lic) resumed its activities; and there was also a powerful group of associations of Government employees, as well as one of soldiers' or military cooperatives. Altogether there were some 2,200 associations with 200,000 members. One of the first acts of the new Polish Republic was the passage of a liberal cooperative law. Under it the movement grew rapidly, but to a large extent upon a political or professional basis. Much of this growth disappeared when the period of deflation of currency began, and only the stronger and more stable enterprises were able to sur vive. One after the other the groups of Government employees' organizations, the Socialist cooperatives, and the Catholic associations joined the original union at Warsaw, renamed “ Spolem,'' Union of Distributive Cooperatives of the Polish Republic. By the late twenties the cooperatives had recovered from the pros tration of the deflation period and reached a peak of prosperity in 1928-29. This was short-lived, however, for the long depression set in shortly afterwards and the cooperatives suffered, along with private business. Beginning with 1933 (which was the turning point in the depression in Poland) cooperation once more began to thrive and both the con sumers' and agricultural branches of the movement made rapid prog ress. In 1933 it vras estimated that the consumers' cooperatives were doing about 3 percent of the general retail trade of the country and about 10 percent of the trade in food. In other commodities the percentages were as follows: Sugar, 5.4 percent; tea, 5.7 percent; rice, 8.4 percent; and salt, 9.6 percent. Until 1935, industrial wage earners formed the largest group in Spolem. In that year the peasant members exceeded them numeri cally and for several years thereafter increased their lead. In 1937 the membership was distributed occupationally as follows: Percent o f total Peasants__________________________________________ Industrial wage earners____________________________ Clerical workers___________________________________ Others_______________________________ 44 31 10 15 220 Cooperatives in Individual Countries By 1935 Spolem had become the largest commercial organization in Poland. In 1939 it had in membership 1,776 associations (grouped into 6 federations), with 412,762 members. The wholesaled business in that year reached the sum of 98,000,000 zlotys. Under a syste matic policy Spolem expanded its productive departments, but never attained the development achieved by the wholesales in certain other European countries. In 1937 goods made in its own factories ac counted for about 10 percent of its total turnover (see table 8, p. 29). Health cooperatives.— Poland had a cooperative research organiza tion, the Scientific Institute for Cooperation, established in 1919. Until 1930, this Institute devoted its attention to agricultural coopera tion. In that year its field was broadened and it began to admit to membership all types of cooperatives. In 1935 the Institute began to explore the possibilities of cooperation in the field of medical care, and started to carry on educational work with the idea of organizing associations in this field of activity. The first health association was established in September 1936 in the town of Markowa, with a group of 150 member families. Six months later its membership had increased to 260 families and it was providing medical service in 7 surrounding villages with about 12,000inhabitants. By 1938 there were 8 cooperative health associations in Poland, some of which had been started by the Auditing Union of Ukrainian Coop eratives and some#by the Polish Union of Agricultural Cooperatives. Each of the associations operated throughout a territory of 6 to 10 villages. Each of the associations had its own dispensary, a full-time physician, and sometimes a midwife. Some associations also arranged for the services of a dentist, once a week. Additional activities of the physicians included advice on infant welfare; investigation of housing conditions; advice on personal, family, and social hygiene; and organization of preventive health measures. Under Polish law cooperative associations were not allowed to operate drugstores, but in some cases the associations had contract arrangements with local druggistsby which members received discounts. Housing.— In 1934, according to the Scientific Institute for Coop eration of Warsaw, there were in Poland about 1,080 housing associa tions. They had erected buildings containing some 75,000 rooms, at a cost of 360,000,000 zlotys. One of the important local associations was the Cooperative Housing Society in Warsaw, started in 1921. This was an association which operated on a genuinely Rochdale basis, retaining collective ownership of all the properties. Its mem bers, exceeding 4,000 in number, were almost entirely of the wageearner and low-salaried class. Up to 1936 the association had built 24 apartment houses, with accommodations for 1,713 families. Resi dents in the cooperative buildings had their own credit association, dispensary, library, motion-picture theater, laundry, a nursery school, a primary school and a secondary school, athletic field, and even a small zoological and botanical garden for the use of the schools. All of these were operated cooperatively. Student cooperatives.— One feature of the consum ed cooperative movement in Poland was the cooperative associations of students in the elementary schools, the formation of which was encouraged by the Polish Ministry of Education. Poland 221 Effects o f the W ar The outbreak of war occurred in a period of rapid cooperative development, when many new associations were being formed, co operative trade was expanding, and new productive facilities were being acquired. It is reported that after the invasion of the country in September 1939, “ notwithstanding the cruelty of the war and the terrible destruc tion of the country, the majority of the directors of the cooperative organizations remained at their posts.” In the subsequent cession of territory to Germany, Lithuania, and the Soviet Union, the cooperatives which had headquarters in Warsaw, but had member associations throughout Poland, lost the greater part of their members and resumed their activities only with the greatest difficulty. In the Soviet-occupied territory the urban associations were dissolved (as they had also been elsewhere in the Soviet Union in 1935), but a certain amount of freedom was left to the agricultural cooperatives. In Vilno, ceded to Lithuania, the Polish cooperatives were “ forced to liquidate in favor of Lithuanian organizations.” Cooperatives may be said to have ceased to exist in the western Provinces that were incorporated into the Reich; in the other German-occupied Provinces (including Cracow and Warsaw) a certain measure of autonomy was allowed and there the cooperatives continued to oper ate, under the close supervision of the occupation authorities. Re ports received by the International Cooperative Alliance indicate that, nearly 2 years after the invasion of Poland, cooperatives and their federations were still operating in German-occupied Poland. In fact, they were accorded a favored position in respect to obtaining supplies, being allowed to make purchases in Germany and being given the necessary transport facilities. According to the International Co operative Alliance, “ this surprising appearance of friendliness” toward the cooperative movement, which had always been associated with the Polish struggle for independence, was explained by two factors— the determination of the occupation authorities to destroy the liveli hood of the Jews (who were largely engaged in private trade) and the Germans’ desire to use the cooperatives as machinery for collection and distribution of foodstuffs. The rich western agricultural regions had been incorporated into the Reich; the less-fertile remainder of the territory had not only to supply its own inhabitants (some 15 million) and also about lK million Poles who had been expelled from the western Provinces, but was compelled to hand over a considerable part of its crops to the occupation authorities. The agricultural cooperatives were forced to act as the collection agencies for these requisitioned supplies, and the cooperative stores were allowed to sell goods to the farmers only in exchange for specific amounts of farm produce at prices set by the Germans. The urban associations were used as distributors of supplies to the city dwellers. Regarding this situation the International Coopera tive Alliance commented as follows: The small supplies left in the country are distributed through the cooperatives, which are thus made the instrument through which the rations— which are very often below the subsistence level— reach the population of Warsaw and the larger towns, and through which much higher rations are supplied to the German settlers. 222 Cooperatives in Individual Countries It must, be a bitter experience for the Polish cooperators to see their organizations, which for almost two generations played such an important part in preserving Polish nationhood against the Prussian policy of assimilation and annihilation, used as a channel for robbing and starving their own people and feeding theNazi invader. In some places where cooperative associations were few in number, the Germans even fostered the development of new cooperatives. Thus, in the town of Baranowicz, in eastern Poland near the Soviet border, a Ruthenian school teacher named Potapovycz was persuaded to organize a cooperative network for the whole city; by 1942 there were in operation 21 cooperative stores, 5 meat markets, 3 bakeries, and 2 restaurants, and additional associations were being started in the surrounding villages. Possibly as a result of such encouragement, about 300 new associations had been formed throughout Poland and some 140 had joined Spolem, so that that organization was stronger than before. Evidently the workers’ productive associations were also being used by the Germans. A Central Office for Handicraft Deliveries had been started, which distributed orders to the associations “ in the interest of the German war effort” and received the finished goods. Of 154 housing associations in Warsaw, 36 had been liquidated by the end of 1942 and the rest had been merged into 6 new associations. Of course none of the cooperative organizations was really free after the invaders arrived.14 Cooperative Movement in the Soviet Union In the period preceding and during the first World War, the Russian cooperative movement showed the most phenomenal growth in all Europe. Since the overthrow of the Czarist regime and the establish ment of the Soviet Union, its fate has depended upon the policies of the Government, which have ranged all the way from grant of monop oly to suppression. In 1935 the urban associations were absorbed into the system of State stores, and since then consumed cooperation has been found only in rural districts where they are the predominant factor in retail trade. Both the workers’ productive associations (“ artels” ) and the agricultural cooperatives have been encouraged by the Government, but the latter exist now mainly in connection with the Kolkhozes (collective farms). Cooperatives Through W orld W ar I Cooperatives in primitive form have existed in Russia as far back as the records go, the early forms being based largely on the “ artels” — or group activities for the carrying out of a definite enterprise, such as the cutting of wood, processing of milk, fishing, etc. This natural bent of the people received impetus when the serfs were freed in 1863. As there was little or no private commercial enterprise, artels sprang up in a clear field, and other types of enterprises followed. h Sources .—The report on Poland is based upon data from the following publications: Directory of Co operative Organizations, (International Labor Office, 1939), Cooperative Information, issues No. 11, 1930, No. 12, 1937, Nos. 8 and 11, 1938, and International Labor Review, April 1921; Revue des Etudes Coopera tives (Paris), January-March 1929; Review of International Cooperation (International Cooperative Alli ance, London), March and April 1932, October 1935, November 1936, January and July 1939, and February and May 1941; People’s Yearbooks (English and Scottish Cooperative Wholesale Societies), 1930 to 1941; and the Task of Cooperatives in Post-War Relief and Reconstruction, by Halbert, Shoskes, and Tereshtenko (Washington, 1943). 223 Soviet Union Although the first consumers’ cooperative association with written bylaws was organized only in 1865, by 1874 there were 353 such asso ciations, and by 1914 over 11,000. The local consumers’ associations were federated into regional unions and the latter in turn into the all-Russian Central Union of Consumers’ Cooperatives (known as “ Centrosoyus” ). In 1918 some 40,000 of the 50,000 local associations then in existence were, through their regional federations, members of Centrosoyus. Even at that early date Cen trosoyus had entered into production and was operating flour mills, refrigeration plants, fisheries, and factories making candy, shoes, soap, syrup, tobacco, chemicals, and matches. The workers’ productive associations or artels included shoemakers, potters, toy makers, and other craftsmen, and were federated into a national body, called the Kustar Union. These organizations were assisted in their financing by the credit cooperatives. T ypes o f Associations The Russian cooperatives have always been of two or three standard types. In 1920 a Russian cooperative leader classified them as con sumers’ , credit, insurance, and productive (including both agricultural producers’ and workers’ productive) associations. Since 1920, when the “ consumers’ communes” by official decree absorbed the other types of associations, no mention has been made of credit or insurance cooperatives. T able 69.— M em bership and Operations o f Cooperatives in the Soviet Union in 19379 by T yp e o f Association [For par values of currency, see Appendix table, p. 273] Type of association Number Membership Amount of business L o c a l a ssociations R u b le s Consumers' associations........................................................ Occupational associations...................... ................................ Affiliated with central federations: Artels........................................................................ Disabled men’s associations.................................... Forestry associations................................................. Fishermen's associations........ ................................. Other......................... ...................................................... . Agricultural................................................... .......................... Kolkhozes (collective farm associations).................... . Other................................................................................... C en tra l fed era tion s Centrosoyus (consumers’) .............. ....................................... Federation of disabled men’s associations.......................... 24,113 15,577 39,200,000 2,402.971 28,141,100,000 5,411,743,000 2,228 2,327 3,905 1,022 6.095 246,905 243,000 3,905 1,642,073 240,277 370, 621 150,000 12,727,000 3,460.300,000 1,635,416,000 303.300,000 0) 19,156,921 18, 786,300 370, 621 0) 8 (9 M e m b e r a sso ciation s 24,113 2,327 39.200,000 240,277 2,300,200,000 1,728,000,000 1No data. Agricultural cooperatives.— Most of the agricultural cooperative activities, as the table indicates, are carried on by the Kolkhozes. These communities have their processing and marketing associations, all operating within the Party framework. The Kolkhozes and their associations are stated to occupy “ the foremost place in the agricul ture of the U. S. S. R., as 93 percent of the peasant families belong to them or are employed by them.” 224 Cooperatives in Individual Countries Workers' productive associations.— “ Kustar” or cottage industries have always been a characteristic of Russian life. Whole villages engaged in the production of commodities of one kind or another, sometimes specializing in a single type of work. Such factories as existed were small. Sometimes the work was done on a cooperative basis, either in a workshop owned by the cooperative or with the association acting merely as marketing agent. Such cooperatives were known as “ ar tels.” The lack of large-scale manufacturing enterprises in the coun try enabled these associations to hold their own, and even as late as 1930 a survey by the Planning Commissariat indicated that 60 per cent of the industrial workers in the Soviet Union were employed in small industries and that about 25 percent of them belonged to artels. Their main field was that of unskilled labor, temporary and seasonal labor, production on a small scale, and handicrafts. Under the vari ous 5-year plans, the artels have been encouraged to make the fullest possible use of local materials and, in total, have played a substantial part in industrial production. In the 5-year period from 1932 to 1937 the value of their output rose from 5,763,500,000 rubles to 13.178.000. 000 rubles. The value of consumer goods produced by them amounted to 10,000,000,000 rubles in 1937 and in 1938 to nearly 12.000. 000.000 rubles. In 1938, about 20 percent of Russia's con sumption goods was produced by these industrial cooperatives. They produced about 35 percent of the furniture, 35 percent of the felt footwear, 42 percent of the metal goods, 65 percent of the metal beds, 33 percent of the piece goods, 15 percent of underwear, and 80 percent of the notions in the Soviet Union. Such goods as artistic rugs, embroideries, scissors, kerosene burners, utensils, toys, and musical instruments were produced entirely by the artels. Cooperation Under the Soviet Government Since the advent of Bolshevism, late in the first World War period, the consumers' cooperative movement of Russia has undergone many changes of status. The first attitude of the Communists, after the revolution, was to regard cooperatives as remnants of a bourgeois society, which had no place in a system in which all private ownership was abolished and everything belonged to the people through the commonwealth. The general economic collapse of Russia, however, prevented the new government from organizing a new system of dis tribution and it was compelled to utilize the existing forms. Among these the cooperatives were of considerable strength. During this period a change took place in the official attitude, and by a decree of March 20, 1919, the associations were deprived of their autonomy but were given the status of government organizations. Every consinner was required to become a member of a consumers' cooperative. A decree of January 27, 1920, amalgamated all other cooperative organizations with the “ consumers' communes” and their central or ganizations were also incorporated into Centrosoyus, formed in 1917 from an older federation that had been in existence since 1898. The comparative lack of success of this measure led to a relaxation of restrictions under the New Economic Policy and on M ay 20, 1924, an order was issued nominally restoring the voluntary membership, Soviet Union 225 membership capital, and formulation of policy—all, however, under the final control of the Communist Party. Somewhat earlier (in 1922) the Government had started a number of retail and wholesale associations connected with State industries and this system was expanded during the next few years. As the process of industrialization of Russia was intensified, a greater degree of compulsion was exercised in all lines of activity— cooperative as as well as others. An official of the International Cooperative Alliance described this as follows: Nominally cooperative enterprise was developed on a large scale in retail dis tribution, wholesaling, and agricultural marketing. New organizations were set up and the turnover of the old ones greatly increased. But these cooperative organizations have actually developed on the same lines as State trading organ izations. The share capital of their members, where it existed, lost any direct relation with the actual size of the transactions of the societies, whose working capital was being procured from State financial sources. The town consumers' societies slowly developed into stores managed from one center without consult ing the members. The consumers' societies were, during that period, made practically the monopolistic distributors of rationed goods, and their members and customers consisted actually of the whole local population which were en titled to rationed supplies. In their internal organization and management the consumers' societies became indistinguishable from State stores, but the actual distinction between them was that the former had a monopoly for rationed sup plies and the latter a monopoly for nonrationed supplies. This process continued under the second 5-year plan, but with the introduction of uniform prices the cooperatives lost their monopoly. In 1932 and 1933, the so-called “ closed cooperatives” attached to factories were turned over, by Government decree, to operation by the factories. Later the Communist Party and Government decided to abolish the urban associations, which at that time were handling about 30 percent of the urban retail trade. The question was not referred to the membership for decision. These societies were wiped out at one stroke when, on September 29, 1935, a decree was issued stating the decision of the Council of People's Commissars and the Central Committee of the Communist Party that the organiza tions of consumers' cooperatives in towns be liquidated and all their property transferred to the People's Commissariat of Internal Trade. This action was explained as being necessary because the cooperatives, it was said, were not capable of supplying the market and because the unnecessary expenditure and extra staff involved in having two types of distribution (State stores and cooperatives) could not be justified. This measure reduced the number of consumers' cooperatives in the Soviet Union from over 100,000 to about 25,000 and the member ship from over 70,000,000 to fewer than 40,000,000 persons. The village cooperatives continued to operate, and in 1938, according to the chairman of Centrosoyus (who was also vice chairman of the Pre sidium of the Supreme Soviet of the U. S. S. R.), were running not only grocery stores (an average of 7 each) but also some 53,000 whole sale warehouses, nearly 20,000 bakeries, and over 6,800 eating places (lunch counters, restaurants, etc.). They also carried on a wide range of welfare and cultural activities. Although the cooperative associations in the Soviet Union, like all other enterprises that are allowed to operate there, are under the final control of the State, a Soviet official stated that they elect their own officials and in all ordinary matters the members operate the business. A report to the International Cooperative Alliance stated that as 226 Cooperatives in Individual Countries far as the primary (local) associations are concerned, there are gener ally only one or two Communist Party members in each association. Their function, it was said, was to act as “ guardian of cooperative democracy in the consumers’ movement” as well as “ responsible agents of the Party and the Government entrusted with the task of satisfying the essential needs of the people.” The International Cooperative Alliance appears to have been con vinced of the essential democracy and freedom within the coopera tives themselves, for Centrosoyus is still a member of the I. C. A. The development of the consumers’ cooperatives in the Soviet Union from 1914 to 1939 is shown in table 70. T able 70.— M em bership and Business o f Consumers9 Cooperatives in the Soviet Union , 1 9 1 4 -3 9 (For par values of currency, see Appendix table, p. 278] Local associations Year Centrosoyus: Business Number Members 1914............................................................... 1917............................................................... 1919............................................................... 1923............................................................... 1924............................................................... 1927............................................................... 1930............................................................... 1932............................................................... 1933............................................................... 1934............................................................... 1935 »............................................................. 1939............................................................... 11,400 35,000 53,000 *26,006 25,974 0) (0 45,764 (0 103,000 25,252 26,500 Business Gold rubles 1,650,000 11,550,000 18,500,000 <9 8,722,000 15,075,000 37,806,000 71,953,000 69,000,000 70,700,000 39,400,000 40,000,000 290,000,000 1,243,617,021 (?) Gold rubles 10,263,544 46,791,000 44,179,000 0) 215,649,000 1,040,748,000 10,070,531,000 127,500,000 662,500,000 <9,909, 400,000 16,418,000,000 19,605,600,000 20,796,200,000 7,604,000,000 14,154,400,000 14,910,000,000 0) 42,000,000,000 (0 0) (0 i No data. * No data; this was the year of civil war. * Reduction in number from 1919 was the result of the reorganization and consolidation that took place under thed ecree of March 20,1919. * Data do not include restaurant business. * From this year onward, data relate only to rural cooperatives, as the urban associations had been ab sorbed into the system of State stores. Cooperatives in W orld W ar I I Only scattered data are available regarding cooperatives in the Soviet Union since the beginning of the present war, but it appears that the services of the workers’ productive associations, as well as of the village consumers’ cooperatives, have been utilized to an in creasing extent. Early in 1943 it was announced that the labor unions had been made responsible for supervision of the “ trading network” (presumably including the village cooperatives), to insure correct weights, good quality, cleanliness, etc. What, if any, effect the announcement of autonomy for the various republics that compose the Soviet Union has had or will have upon the status of the cooperative movement is not known. Situation in western Ukraine.— When the western Ukraine was in corporated into the Soviet Union, after the partition of Poland in September and October 1939, the 5,000 cooperative organizations there were transformed along the same lines as the Russian associations. All associations (previously organized mainly along nationality lines— Ukrainian, Polish, Russian, Jewish, and German) were merged into a Soviet Union 227 single association for the whole of western Ukraine and this organiza tion was made subordinate to the federation at Kiev. It was stated that “ the Soviet influence was strengthened by the appointment of men bred and trained in the Soviet cooperative movement to leading positions in western Ukraine, including those of directors and managers of societies, chief accountants, managers of financial and planning departments, and experts of all kinds.” 15 The greater part of the industry in this region consisted of small family enterprises, sometimes with one or two outside helpers. A considerable number of these were organized into about 250 new cooperatives (artels). Some 230 small factories taken from private owners and nationalized by the Soviet Government were handed over to these new cooperatives, together with a special loan of 20 million rubles for expansion and mechanized equipment. It was expected that these productive enterprises would produce various consumption goods (foodstuffs, metal articles, leather goods, footwear, textiles, etc.) in the next year. These goods were to be disposed of, partially at least, to the State retail and wholesale organizations (formerly private enterprises, taken over by the Soviet Government).16 Countries o f Southern Europe Of the countries of southern Europe— Italy, Portugal, and Spain— only Italy can be said to have attained any considerable degree of cooperative development. Even in that country, religious and political divisions and the too great individualism of the associations prevented the movement from attaining its potential power. Co operative wholesaling was a failure, because of the lack of loyalty of the local associations, until a decree by the Fascists made member ship and patronage of a central wholesaling organization compulsory. Similar divisions were characteristic of the movement in Spain. With the exception of Albania, Portugal was the least developed cooperative ly of all the countries of Europe. Spain and Italy each excelled in a special type of association: Spain, in the P6s‘tos Maritimos— fishermen’s general-purpose associa tions combining thrift and loan activities with joint purchase of oc cupational and household supplies, educational work, and marketing of the catch; Italy, in the workers’ productive and labor associations which undertook contracts for all kinds of projects (including bridge, road, railroad, and other construction, printing, farming, and many others). As Italy was the first European country to adopt a totalitarian form of Government, many years have passed since its cooperatives have been free. In all three countries the movement has been ab sorbed into the corporative machinery, but still exists under Govern ment control. 16 Review of International Cooperation (London), February 1940 (p. 61). i« Sources— T a e report on the Soviet Union is based on data from the following: Planovoe Khoziaistvo (Gosvzdat, Moscow), Nos. 2 and 12,1938; U. S. S. R. Handbook (London, Camelot Press), 1936; Bulletin of All-Russian Central Union of Consumers’ Societies, Centrosoyus (London), Nos. 1-14; Kooperativnaia Shizn’, Vsia Kooperatsia U. S. S. R. (Moscow), 1920; Russian Cooperative Movement, by A. J. Zelenko (in Monthly Labor Review, June 1930); Review of International Cooperation (International Cooperative Alliance, London), March 1936, May and June 1939, February 1942, and March 1943; People’s Yearbooks (Cooperative Wholesale Society, Manchester, England), 1926, 1929, 1936, 1936, 1937, 1941, and 1943; Inter national Directory of Cooperative Organizations (International Labor Office), 1939; Cooperative Informa tion (International Labor Office), Nos. 7 and 10, 1937, No. 2, 1940, and No. 1, 1943; Annals of Collective Economy (Geneva), May-December 1937; and Russian Economic Notes (U. S. Bureau of Foreign and Domestic Commerce), August 30, 1939. 228 Cooperatives in Individual Countries Cooperative Movement in Italy The cooperative movement in Italy dates back to about 1854 when the first cooperative store in that country was organized at Turin, to mitigate the effects of a famine. In the half century between the unification of Italy and the rise of Fascism, all of the branches of cooperation showed some degree of development. The outstanding characteristics of the Italian movement were the great variety of types, the multiplicity of small, rather weak associations, religious and political division, and consequent rivalry and lack of even friendly relations among the factions. Though a National League of Cooperative Associations (Lega Nazionale delle Cooperative) was founded in 1886, it never held the allegiance of the whole movement. A cooperative wholesale, estab lished in 1905 and reestablished in 1911, never was able to win support of rival groups. Religious, political, and economic differences in tensified toward the end of the first World War. The Christian Socialists withdrew to form their own consumer federation in 1917. In 1920 the National League, apparently believing that its fate depended upon the Socialists in Parliament, abandoned the tradi tional cooperative political neutrality. By 1921, when Fascism was well under way and even had its own cooperatives with a national federation, the number of cooperative associations in Italy was re ported as 19,510. During the early period of Fascism, consumers’ cooperatives suffered from vandalism, the terrorism employed by the Black Shirts, and the loss not only of goods but of plant. Many associations disappeared entirely during this time. From 1921 to 1922 the total number of Italian cooperatives fell from 19,510 to 8,000 (the distributive asso ciations from 6,481 to 3,600). The headquarters of the National League in Milan was taken over by the State in 1925 and late the following year an act consolidated the Government’s power over the cooperatives. In 1931 the cooperatives were required to join the Fascist federation. They continued, how ever, not only to be tolerated— under strict Party control, of course, and provided that, as the People’s Yearbook pointed out, “ all political opinions (other than Fascist) have been banished” —but even enjoyed some degree of official favor, and continued to operate as Fascist organizations. In 1937, the latest year for which statistics are avail able, Italian cooperatives numbered 12,076, of which consumers’ dis tributive associations accounted for 3,500. T ypes o f Associations and Their Activities The cooperative movement of Italy was one of the most varied in type, with specialized associations confining their operations to a limited field. The development of the various branches of the move ment, as shown by number of associations, is indicated in table 71. 229 Italy T able 71.— Num ber and T yp e o f Cooperative Associations in Italy , in Specified Years, 191 0 -3 4 Number of associations 1910 Type of association Asso Mem cia tions bership 1914 1915 1917 1921 1922 19271 19321 1934 All types............................................... 5,064 795,206 7,429 8,251 8,764 19,510 8,000 8,391 11,062 11,771 Consumers’ cooperatives____ ______ Productive and labor associations: Transport__ _____ ______ ____ Workers’ productive..................... Labor Fishermen’s associations..................... Bakeries, slaughteries, and other associations producing consumers’ goods Agricultural (wine, etc.) associations. Insurance associations..................... Housing associations____ __________ Ex-soldiers’ associations _____ _ Other types_____ ____________ _____ 1,764 223,192 2,255 2,312 2,499 6,481 3,600 3,334 3,240 3,860 564 1,017 31 244 305 918 1,666 7,643 *2,700 *1,283 1,630 1,817 831 70,719 399 94,738 1,758 2,175 2,257 75 122 136 94 2,871 (3) 167 139 87 16,058 125 700 926 161,115 1,242 1,371 1,386 133 162 165 124 108,000 151 709 *1,534 704 379 677 / 2,239 348 445 1,480 1,000 172 |*118,513 \ 296 314 (3) 499 810 3,598 553 218 696 1,239 1Totals include some associations the type of which was not shown. * Including some labor associations. * No data. * Including some credit associations. ^Includes an unspecified number of mutual-aid and transport associations. PH ARM ACEU TICAL COOPERATIVES Three main groups of pharmaceutical cooperatives had developed in Italy by 1930: Specialized cooperatives established to run drug stores such as those in Milan, Bergamo, Mantua, Brescia, Parma; enterprises which were branches of distributive cooperatives, such as the 7 cooperative drug stores of the Turin Cooperative Alliance; and cooperatives of druggists themselves. The first pharmaceutical cooperative was founded in Milan in 1890 and within a few months had 694 members and capital amounting to about 80,000 lire.1 By 1910 cooperative drug stores had the largest membership of any type of cooperative carrying on production in Italy—38 associations reporting 19,242 members. In 1930 the Milan Pharmaceutical Cooperative owned 13 of the largest drug stores in Milan; in addition it had a pharmaceutical laboratory which held several patents and produced much of the medicine the cooperative stores sold. The Milan association’s drug business amounted to approximately 9,000,000 lire; patronage refunds to members averaged about 5 percent on purchases and the association’s prices influenced pharmaceutical prices throughout the whole city. In addition to its retail and productive activities, the pharmaceutical cooperative published the “ Medicamenta” (a guide for doctors), and periodicals for practical use. COOPERATIVE CREDIT In 1866, Luigi Luzzati, later Minister of Finance (later still, Prime Minister) of Italy, introduced in Milan the first people’s bank— a cooperative credit association of the Schulze-Delitzsch type. A National Association of Italian People’s Banks appeared in 1874. After the Raiffeisen type of association developed, the credit move 1 F o r par values of currency, see Appendix table, p. 278. 230 Cooperatives in Individual Countries ment continued in these two main channels. By 1911 there were 1,872 credit cooperatives in Italy— 1,117 in the North (where the people's banks predominated), 218 in Central Italy, 164 in the South, and 313 in Sicily, and 60 in Sardinia. Preparations for a central credit institution were completed in 1913 and the National Institute for Cooperative Credit (Instituto nazionale di credito per la cooperazione) began operations in 1914. It was stated at the time that the Government planned to use the Institute for the collection of taxes and the payment of pensions. Policies such as the latter and also the granting of credit for purposes other than cooperative account partially for the fact that the credit organi zations have not usually been considered a part of the true cooperative movement in Italy, and statistics are not available for them. After 1920, when post-war reconstruction greatly enlarged the undertakings of the workers' cooperatives, the Institute opened two new independent sections, one dealing with the land and agricultural cooperatives and the other with the building cooperatives. Locally, cooperative credit was handled by cooperative banks such as those in Milan and Genoa, which did an annual business of 170,000,000 lire and 54,329,000 lire respectively. Under the Fascists, the credit cooperatives were maintained on their former legal basis, with some additional regulation. Some of the former regional federations continued, but all credit organizations became members of two national associations, one (Casse Rurali) for the Raiffeisen type of cooperative with unlimited liability and the other (Banche Popolari) for the Schulze-Delitzsch type with limited liability. Though both systems were reported to be succeeding, examination of the official records of their business indicates that deposits declined throughout the decade until 1936. w orkers’ p r o d u c t iv e and labor c o o p e r a t iv e s Workers' productive cooperatives achieved remarkable success in Italy. Two different forms developed: The workers' productive association in which the group of workers owned and managed a plant such as a printing or small-scale engineering establishment; and the labor cooperative or labor-contracting cooperative {cooperative dei braccianti) . The latter consisted of a group of workingmen organized to find their own employment by obtaining and fulfilling contracts for work, such as the construction of roads, buildings, ships, the drain ing of marshes, or the loading of boats. These organizations developed early in the Po River valley. Legislation of 1889 permitted contracts with the State up to the value of 20,000 lire. Later all limitations were removed, and contracts could be made by private agreement without open bidding or the customary guaranty deposit. By 1910 the workers' cooperatives consisted of 774 associations of which the main groups were those of builders, bricklayers, artisans, and long shoremen, with a total membershhip of 100,000. Regional federations were recognized by national law in 1911. A national federation which planned to give technical advice, make contracts, and assign them to the proper local federation was formed in 1919 and affiliated to the National League. By 1914 the Ministry of Public Works was giving 15 percent of its contracts to labor cooperatives. In Ravenna and Ferrara 85 and 90 Ita ly 231 percent respectively of all public works were constructed by coopera tives. After World War I the Government continued its reliance on labor cooperatives, and their federation participated in the disposal of war materials. When the Government advanced 1,500,000,000 lire to ease post-war unemployment, the labor cooperatives received most of the money for works of reconstruction. In the early 1920’s all of Italy showed the effects of the work of workers’ cooperatives— at Milan, the well-known printing works and many fine houses; at Venice, excellent mosaic work and wood carving; at Genoa, the Piazza Tommaseo, bridges, ships, etc. ; at Ravenna and Ferrara, a large proportion of all public works; at Bologna, a large bridge; at Rome, a vast drainage system and a suburban development; in Emilia and Sicily, large farms cooperatively run; elsewhere, rail roads (the Reggio Emilia, the Reggio Ciano built and managed by a labor cooperative), roads, harbors, and docks. A great variety of occupational groups was represented in the membership of the Milan Federation of Productive and Labor Coopera tive Associations— iron- and marble-workers, plasterers, paperhangers, gilders and varnishers, goldbeaters, shoemakers, glove dyers, tauors, printers, bookbinders, porters, the Milan builders (the largest group of all), and others. In the field of agriculture, Italian workers’ cooperatives not only carried on draining, building, and the customary crop-producing activities but also leased and cultivated farm lands collectively. The acreage cultivated immediately before the Fascists came into power was reported to be 55,032 hectares.2 Much the greatest acreage cultivated in any one Province was that of Emilia— 25,603 hectares. The Ravenna Federation, which was reported to represent one-fifth of Italian cooperative agriculture, managed 15 farms and held 13,041 acres on collective lease. Serious division among the workers’ cooperatives appeared after World War I. In 1920, the Catholic, or Christian Socialist, coopera tives formed the National Union of Productive and Labor Associa tions, which by 1923 consisted of 984 cooperatives with 49,360 members. Drawn into the current struggle between Socialists and Fascists, this Federation was compelled to choose between liquidation or “ reconstruction.” In 1923, the Federation adopted new aims, admitted the new Fascist groups, and joined the Fascist National (Sindacato Italiano delle Cooperative). Ravenna continued to be the leading Province as regards member ship of productive and labor organizations, though it was exceeded in the value of contracts by Modena in the late 1920’s. Large projects of land reclamation, the cost of which reached millions of dollars, received widespread publicity. The cooperative printing groups re ceived large contracts for printing railroad timetables, telegram forms, and books for the Ministry of Education. Agricultural labor cooperatives operated independently or accepted contracts. In the North under the Fascists, cooperatives in Lom bardy, Emilia, and Tuscany usually held and worked land collectively. In the South, the cooperatives held the land but the members worked it individually. In Sicily, for example, 77 cooperatives divided 41,573 acres among 19,200 members. In 1932, Italian farm cooperatives held about 85,800 acres on lease and owned more than 16,000 acres. 2Hectare=2.471 acres. 232 Cooperatives in Individual Countries Deflation of agricultural prices harmed this type of cooperative and in 1935 collective leaseholds were reported to be on the decline. Under the Fascists the fishing cooperatives proceeded with the de velopment of a marketing system, and were aided by a credit law of 1931. In Naples a federation of cooperatives created a new market, which was granted a monopoly of wholesaling fish in the region. In the group of transport cooperatives, some expansion occurred after Fascist domination began. The railway cooperative founded in 1904 still owned and ran the Reggio Emilia railroad in the early 1930,s. The Mantua navigation cooperative owned boats and barges valued at £10,000. The Genoa boat-building cooperative of 1883 remained active. Porter associations received monopolies of the work in rail road stations. Cooperatives provided taxi and transport service. After Italy acquired possession of Tripoli in the wrar with Turkey, the Government requested the workers7 cooperatives to undertake the building of roads from Tripoli to other towns inland and along the coast. The Fascist Government continued this policy, not only in many of the early reconstruction projects but also in Africa. T a b l e 72.— Operations o f Affiliates o f Workers’ Cooperative Federations at M ilan and Genoa, 1 90 6 -3 5 [For par values of currency, see Appendix table, p. 278] Year Total amount of Italian productive and labor cooperative contracts L ire Milan Federation affiliates Capital L ire 1906................. 1910................. 1912................. 1914................. 1918................. 1919................. 5,220,450 10, 583,300 18,351,000 1921................. 1922................. 1924................. 1933................. 1935-.-............ 166,225,269 123,548,478 285,475,635 561,254,477 500,000,000 (9 (9 0) 301,766 357,699 671,980 711,169 1,033,806 Value Amount of work paid performed in wages L ire 2,148,375 3,343, 292 3,865,458 3,468, 575 5,293, 713 (9 <9 (9 0) (9 (9 0) (9 (9 (9 (9 <9 (9 (9 (9 0) Asso ciations L ire 888,543 1,393,486 1, 768, 501 1,583, 780 1,773,902 (9 (l) Genoa Federation affiliates (9 (9 (9 (9 (9 (9 (9 Capital Value Amount of work paid performed in wages L ire L ire L ire 13 (9 (9 (9 (9 (9 (9 (9 (9 18 2,125,425 3,217,501 23,488,97$ 21 16 5,339,966 12,045,708 8,269,498 (9 59,400,38$ 587, 521 (9 (9 (9 (9 2,063,379 2,438,954 (9 (9 (9 (9 7,955,374 (9 (9 (9 (9 (9 1 No data. Consumers’ Cooperative M ovem ent EA R LY PERIO D The Italian consumers7 cooperative movement developed in the decade following the unification of Italy and, with a few exceptions, succeeded best in the North where the spirit and economic prepara tion for independence had been strongest. When in 1911 the Gov ernment published comprehensive data describing the operations of cooperatives, 1,764 or almost 33 percent of all cooperatives in the nation were consumers7 associations and the majority of these were in Lombardy, Emilia, and Tuscany; with a membership of almost 350,000 the consumers7 cooperatives were serving about 5 percent o f the Italian population of 34,814,000. The variation in the size of the cooperatives may be seen by comparing the membership of the largest association— the Cooperative Union of Milan (with 14,566 Italy 233 members)— with the average membership of 213. Whereas the an nual trade of the Milan Union had reached 10,732,609 lire, the ma jority of the cooperatives were reported to have a turnover of less than 50,000 lire. In spite of the age of the movement, the success of cooperatives in cities like Milan, Turin, and Verona, and the friendship of public officials, the consumers’ cooperatives as a whole had failed to unify either their policies or their organization. The National League of Cooperative Associations (Lega Nazionale delle Cooperative) which was formed in 1886, with headquarters at Milan, had never controlled the policy nor had it been able to obtain the allegiance of the whole co operative movement. Nevertheless its growth from 68 affiliates in 1886 to 2,189 in 1916 was impressive. Between 1910 and 1911 the circulation of the League’s publication, Cooperazione Italiana, grew from 2,300 to 6,000. As World War I approached, this periodical complained that the Italian cooperative movement was “ more split up” than any in Europe and that a distributive cooperative appeared to be a private affair, “ almost a family center,” the aim of which was merely the personal profit of its members. The Italian consumer movement also lacked the services of a satis factory wholesale association. Though such a wholesale appears to have been suggested in 1887, it was not until 1905 that a Milan co operative, “ Umanitaria,” gave 17,000 lire to begin both a coopera tive wholesale and the auditing of cooperative association accounts. It was hoped that the wholesale would curb the individualism of rival cooperatives. Efforts were made to confine the wholesale’s trade to large cooperatives only, and the Cooperative Union of Milan even re fused to purchase at all until “ numerous distributive societies had become amalgamated.” At first the new organization merely au thorized the Milan Civil Servants’ Distributive Association to under take purchases; next it undertook warehousing, but it overstocked and almost went bankrupt, after which it served as a purchasing agency only. In 1910 the National League’s cooperative congress authorized the creation of a wholesale later known as Consorzio Italiano delle Co operative di Consumo. The following year, 1,500 shares of 25 lire each were subscribed by various cooperatives in northern and central Italy and 200 shares each by the Cooperative Alliance at Turin and the Milan Cooperative Union. The wholesale handled coffee, sugar, candles, sardines, wine from its own cellars, cheese, and (on commis sion) flour, oil, butter, and rice. Although its sales grew rapidly and earnings were made, the Consorzio was not well supported; at the end of 1911 reserves amounted to only 1,998 lire, assets to 286,329 lire, and liabilities to 273,595 lire. In 1914 the Conzorzio had sales of 1,431,276 lire on which net earnings of 21,901 lire were made. The Government looked upon the cooperative distributive move ment during the war as an “ ally of the State,’’ and continued to befriend it in the post-war period. By 1921 the consumers’ cooper atives numbered 6,481. Invigorating new life and even unity might have been given the movement by means of the import and foreigntrade associations and the national federations which now appeared, but dislocations based on post-war needs, and differences in labor groupings, political allegiance, and religion, created new divisions. 588544°— 44----- 16 234 Cooperatives in Individual Countries In 1919 the Government created the National Soldiers’ Aid So ciety (Opera Nazionale dei Combattmti) with a fund of capital and land. The soldiers seized the lands they desired, and formed coop eratives for trade and industry. In 1917 the National League had lost 600 cooperatives through the formation of a separate Catholic federation. In 1919, the Christian Socialists or Roman Catholic groups formed an entirely separate cooperative movement culminat ing in the Confederazione Cooperativa Italiana, commonly known as the “ White League.” In 1920 the Council of the National League of the original cooperative movement abandoned the traditional political neutrality and prepared “ to come to an agreement with the General Federation of Labor and with the Italian Socialist Party in Parliament,” thus acquiring the appellation of “ Red League.” COOPERATION U N DER TH E FASCISTS In the meantime Mussolini had organized his Italian Soldiers Fascist Party in 1919 and at its congress in October of the same year had been hailed as Duce of Fascism. Some Fascist cooperatives had also been formed and by 1921 these had formed the Fascist Union of Italian Cooperative Federations (Ente Nazionale fascista della Cooperazione), which claimed a continuous existence from that year. The total number of consumers’ cooperatives at that time was 6,481; the ex-soldiers’ organization claimed 464, the “ White League” 2,940, and the Fascists’ Ente 35. By this time both the wholesale of the National League and the Catholic federation had been reduced to dealing only in dairy produce. Only 120 Fascist cooperatives had yet been formed in Italy, but the figures for the years 1921, 1922, and 1923 in tables 71 and 73 illustrate the speed with which the cooperative associations collapsed before the policy of coercion and terrorism adopted by the rising Fascist groups. Table 73 shows the status of certain forms of cooperatives in this period. T a b l e 73.— Growth o f Specified Cooperative Groups in Italy, 1921—24 [For par values of currency, see Appendix table, p. 278] Ex-soldiers’ co operatives Fascist cooperatives Catholic coopera tives Item 1921 1923 1924 All types of associations: Amount of business or value of work done (lire). 50,000,000 650,000.000 840,000,000 Total amount of capital (lire).................................. 3,435,000 36,430,000 60,450,000 Consumers’ associations.......... Number of members.......... Amount of business (in lire).................................. Productive and labor associa tions.................. ...................... Number of members.......... Amount of business (in lire)....... ........................... Agricultural associations.......... i No data. 380 35 1923 1921 1923 0) 62,283,841 888,000,000 0) 0) 6,783,056 0) 92 2,940 180,000 14,645,882 750,000,000 0) 0) (0 464 0) (0 0) 0) 0) 1,400 0) 572 0) 166 984 49.360 0) 0) 47,637,959 52 112 138,000,000 (l) 60 (l) 0) 590 0) 25 0) 240 740 1921 430 0) 0) 0) 3,200 0) (0 694 0) 0) 0) 235 Italy In November 1925, a party of Fascists and police met the National League’s president, as he was leaving the offices, and seized the keys. A local deputy was appointed to liquidate the organization. In 1926 the national center of cooperation was transferred from Milan to Home. Late that year, a new law consolidated the State’s authority over cooperative associations. Controversy over the place of the coop eratives in the new corporative state was not fully settled in the Fascist Grand Council of 1926 and 1927, which formulated the Charter of Labor. In 1931, the cooperative associations were incor porated into the syndicalist order, as regards the “ conclusion of labor agreements,” and the cooperative federations were required to adhere to the Fascist Ente. Rules for the operation of the Ente were pro vided by the Ministry of Corporations. The position of the cooper atives under the Commercial Code was only slightly changed. Presi dents of the Ente and the federations had to be chosen from persons approved by the Minister of Corporations and thus be members in good standing of the Fascist Party. The consumers’ cooperative movement continued, however. It might even be said to have enjoyed some favor, for it was exempted from the law of 1930 which prohibited the opening of new retail stores “ except in newly settled centers or when it is a question of a cooperative consumers’ shop.” In 1927, the preponderance of consumers’ cooperative strength lay in the North, as before the Fascist revolution. Of a total of 3,334 cooperatives with 826,845 members and sales amounting to 1,644,687,670 lire, the share of Lombardy, Piedmont, and Tuscany was represented by the following figures: N u m b er of associations 1,305 Lombardy..................... 513 Piedmont......................... Tuscany__________________________________ 515 M em bers 314,012 138,263 117,370 A m o u n t o f sales (lire) 706,378,283 260,799,708 171,216,023 By the early 1930’s, the consumers’ movement was reported to include more than 3,000 associations with almost 1,000,000 members, the great majority of whom were still to be found in the North. Cer tain cooperatives developed services throughout the entire local community. At Pietrasanta in Lucca, the consumers’ association was said to feed the whole district and to maintain a bakery, butchery, macaroni works, wine-cellars, and restaurants, as well as 70 branches. The largest annual sales made by consumers’ cooperatives in 1931 were those of the Cooperative Alliance of Turin (83,000,000 lire), but sales of cooperatives in Trieste, Milan, Bologna, Pietrasanta, and Brescia ranged from 65,000,000 lire to 20,000,000 lire, and 20 other coopera tives sold goods worth about 8,000,000 lire annually. By 1934 the consumers’ cooperative movement represented 3,860 associations in a total of 11,771 Italian cooperatives. The value of consumers’ cooperative sales amounted to 1,600,000,000 lire, being approached in value only by the agricultural purchase and sale co operatives with a total of 1,300,000,000 lire. After the opening of the Abyssinian campaign, the value of consumer sales began to decline, whereas that of agricultural purchase and sale cooperatives increased. The operations of the various types of associations affiliated with the Fascist Ente in 1934 and 1937 are shown in table 74. 236 Cooperatives in Individual Countries T a b l e 74.— Status o f M em bers o f Ente Nazionale Fascista della Cooperazione, 1934 and 1937 by T ype [For par values of currency, see Appendix table, p. 278] 1934 Associ ations report ing Type of association Consumers’ cooperatives............................ 3,860 Building associations.: ............................... 1,352 Workers' productive and labor associa tions 3.......................................................... 1,194 106 Fishermen's........................................... 344 Transport associations...... ................... Agricultural labor associations.................. 350 Electricity associations.............................. 0) Agricultural cooperatives: 701 Purchase and sale__________________ Processing............................................... 3,665 Dairies............................ ........................ <9 Wine growers...................................... . (9 Oil mills.................................................. 0) 753 Agricultural insurance................................ Mem bers 1937 Amount of business Associ ations report ing Mem bers Amount of business L ire 775,000 1,600,000,000 71,000 2 2,000,000,000 69,000 8,706 16,500 45,000 500,000,000 54,000,000 <50,000,000 0) 0) <9 750,000 258,300 L ire 3,500 1,348 800,000 1,500,000,000 75,000 2 1,200,000,000 1,394 112 381 358 197 20,000 50,000 107,000 500,000,000 100,000,000 60,000,000 «110,000 <200,000,000 684 800,000 1,500,000,000 3,200 194 20 1,000 245,666 •6,000,000 •800,000 1,300,000,000 0) 0) <9 (i) ?i) 35,000 to 70,000 0) 17,000 (9 35,000 <9 780,000,000s 1 No data. 3Value of buildings constructed. 3 Figures include other types than those indicated below. 4 Invested capital. 3 Hectares cultivated. 3 Quintals handled. 7 Insurance outstanding. FASCIST COOPERATIVE W HOLESALE In 1927, the Fascist Government tried to fill the lack of cooperative wholesaling by founding the Wholesale of the Consumers’ Movement (Ente Centrale Approvvigionamenti, known as “ E. C. A .” ) to buy at wholesale and sell only to cooperatives. With head offices at Milan, a purchasing office in Genoa, and a sales office at Como, this organi zation sold to cooperatives mainly in northern and central Italy. From the beginning, it had the support of the cooperatives in Milan, Turinr Trieste, Bologna, Imola, ana Como. In 1930 and 1931, E. C. A. handled rice, flour, oil, fish, and cheese. Data in table 75 show a growth in sales which was almost fourfold between 1928 and 1932. After 1933, E. C. A. gave up its earlier policy of buying on commission and began to manufacture in its own factories. T a b l e 75.— M em bership and Operations o f Fascist Wholesale, E . C , A ., 1 92 8 -3 2 [For par values of currency, see Appendix table, p. 278] Year Depend Affiliated “ent” or Net earn organiza ganiza Wholesale’s business ings tions tions L ire 1Q9K , . ________________ 1929.............................................. 1930............................................. 1931.............................................. 1932.............................................. 84 108 150 176 251 33,365,918 122 418 68,509,439 635 73,483,378 872 96,106.735 1,233 115,526; 994 L ire 21,323 34,522 25,337 25,747 27,004 Sub scribed capital Required reserves Special reserves L ire L ir e L ire 290,000 310,500 310,500 338,000 343,600 5,865 12, 769 17,837 22,986 12,133 21,264 25,005 36,20$ 237 Ita ly ST R U C TU R A L O R G A N IZA T IO N OF FASCIST CO OPERATION Among the various branches of the Fascist cooperative movement each had its own federation and, with the exception of those of the credit cooperatives, these federations were in turn affiliated with the Ente Nazionale fascista della Cooperazione. Table 76 gives for each of the federations the membership and business done in the latest available year— usually 1937. T able 76.— M em bership and Operations o f Italian F ascist Cooperative Federations, 1937 [For par values of currency, see Appendix table, p. 278] Organization Fascist Union of Italian Cooperative Federations (E n te N azion ale fascista della Cooperazione) ......................................................... National Fascist Federation of Producers’ Cooperatives for Collective Purchasing and Marketing................................... Italian Federation of Agricultural Cooperative Associa tions **.................................................................................... National Fascist Federation of Distributive Associations—. Cooperative Wholesale of Distributive Associations___ National Fascist Federation of Housing Cooperatives......... National Fascist Federation of Transport Cooperatives___ National Fascist Federation of Agricultural Labor Coopera tives........ .................................................................................... National Fascist Federation of Workers’ Productive and Labor Cooperatives............................. ..................................... Central Office of Fishermen’s Cooperatives.................... National Fascist Federation of Agricultural Producers' Associations................................................................................. Dairies__________________________ ____________________ Wine growers’ associations____________________________ Oil mills................................. ................................................. Flour mills.............................................................................. National Fascist Federation of Mutual Aid Associations.., National Fascist Federation of Mutual Livestock Insurance Associations__*.......................................................................... Mutual Insurance Society of Cooperative Organizations * .. National Federation of Rural Credit Associations (Raiffeisen).. National Bank of Rural Credit Associations........................... National Fascist Federation of Cooperative People’s Banks___ Num Year to ber of which member Their figures associa members apply tions 1936 1937 15,647 3,317,730 830 800,000 1934 1937 1937 1938 1936 3,865 2,115 1,204 344 825,000 0 71,000 16,500 1935 350 45,000 1936 1936 1,224 106 70,000 15,000 1937 1937 1937 1937 1937 1935 260,000 3,358 3,130 240,000 194 16,000 2,300 20 14 0 3,823 1,300,000 1935 1937 1937 1935 1935 753 2,372 200 440 Their business L ir e 0 1.300.000. 000 855,000,000 1.300.000. 000 115,567,000 8 0 *500,000,000 *54,000,000 0 m 35,000 *71,000,000 / *755,338,000 0 l 71,669,000 481,742 * 1, 200,000,000 *3,100,000 0 0 0 1No data. * Central trading organization of preceding federation. * Approximate value of contracts carried out in 1935. * Data relate to 1935. * Amount of insurance outstanding. * Fire, accident, livestock, hail, and other insurance. 7 Premium income. * Loans granted. Italian Cooperatives in W orld W ar I I Since the beginning of the Abyssinian campaign in 1936, very little information has been issued regarding Italian cooperatives. Coopera tive enthusiasm, however, was not permitted to flag either in Italy or in the lands held by Italians in Africa. As the new empire expanded in Ethiopia and Eritrea, efforts were made to develop oil, wine, and dairy cooperatives. Cooperative organization was encouraged in North Africa in Tripoli, Bengasi, Derna, and elsewhere. An exhibit prepared for the Fiera di Tripoli showed the three branches of Italian cooperatives—workers', consumers', and agricultural. In Libya late in 1940, the Government named cooperative officials and mobilized the most important cooperative groups. 238 Cooperatives in Individual Countries In Italy, the Government passed legislation for the promotion of cooperatives among small farmers. New cooperative organizations appeared, for example the Consorzio Artisti in Rome, which planned to produce films. In 1941 the national federation was endeavoring to support the war effort by sending out manifestos to be displayed in stores. These urged upon consumers the evil of hoarding and the need for discipline and self-control. Cooperatives were warned to favor their habitual customers but to prevent them from buying in quantity. Everything was to be “ subordinate to the highest aim: To conquer.” 3 Cooperative Movement in Portugal Though the Portuguese cooperative movement was not strongly developed at the time of the organization of the corporative state in Portugal in 1933, the principles of the movement were known to the Portuguese as early as 1848 and had been recognized in law in 1867. By 1883 the movement consisted of about 60 credit, productive, and consumers’ associations and some workers’ cooperatives in the North. Cooperative organization and membership reached a peak of develop ment at the end of World War I, though cooperative trade continued to increase until the onset of the depression after 1929. The National Federation of Distributive Cooperative Associations (Federagao nacional das Cooperativas) was founded in 1920 and, for a time, maintained an official journal. Though the success of the Federation was hampered by its lack of wholesaling and the conse quent lack of its affiliates’ loyalty, by 1927 the number of affiliated associations and their members was 180 and 85,572 respectively— a small showing, it is true, in a nation of some 6,000,000. The Federation then owned property worth 23,000,000 escudos,4 and the value of its annual trade amounted to 12,200,000 escudos, whereas that of the affiliated associations had reached 105,000,000 escudos. By 1929 there were only 270 cooperatives in Portugal, with a mem bership of some 76,000, as is shown in table 77. Of this number, 150 associations were said to be consumers’ cooperatives with a mem bership of 33,964 and a turnover of 35,000,000 escudos. Another group included in the total consisted of 31,956 members organized in 52 cooperatives which performed both consumer and credit functions. The Federation did not appear in the International Labor Office directory of cooperatives of 1933, or thereafter, and information regarding the Portuguese movement since the depression is slight. In the early 1930’s, the Piedense Consumers’ Association of Caramujo near Lisbon tried to combat unemployment by undertaking the manu facture of corks, and the Government established the National 3 Sou rces .—1The report on Italy is based upon data from the following publications: Annuario Statistico Italiano (Ufficio Centrale di Statistica, Home), 1917 and 1918; Annuario Statistico Italiano (Istituto Centrale di Statistica del Regno d’ltalia, Rome), 1938,1939; Sindacato e Corporazione, Bollettino di Informazioni Corporative a Cura del Ministero delle Corporazioni, Rome, issues of March 1935, July-December 1939, and June 1941; Cooperative Societies Throughout the World, Numerical Data (International Labor Office, 1939); International Directory of Cooperative Organizations (International Labor Office), 1936, 1939; Co operative Information (International Labor Office), No. 8,1930; International Cooperative Bulletin (Inter national Cooperative Alliance, London), issues of May, June, and September 1911, February, May, and July 1912, February and July 1913, April 1914, April, October, and December 1925; Review of International Cooperation (International Cooperative Alliance, London), issues of March and July 1931, and February 1935; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1930, 1931, 1934,. 1935; International Labor Review (International Labor Office, Geneva), issue of January 1922; The Coop erative Movement in Italy, by E. A. Lloyd (G. Allan & Unwin, Ltd., London), 1925; Cooperation in Chang ing Italy, by Karl Walter (P. S. King & Son, Ltd., London), 1934; and certain confidential sources. * For par values of currency, see Appendix table, p. 278. 239 Spain Federation of Portuguese Wheat Producers to “ help the farmers to dispose of their crops at a reasonable price.” T a b l e 77. — M em bership and Business o f Portuguese Consum ers9 Cooperatives, 1891-1929 (For par values of currency, see Appendix table, p. 278J Year 1891............................................................................................. 1901.................................................................... ........................ 1911............................................................................................. 1921............................................................................................. 1926 _____________________________________________ _ 102ft Associations Amount of trade Members E scudos 1 18 71 492 336 271 20 5,681 28,179 96,883 43,548 76,214 453 749,229 3,046,191 21,501,452 35,263,596 63, 925,614 Two Federations of Cooperative Agricultural Supply Associations* one “ of Northern Portugal” and the other “ of Central Portugal,” were listed as true cooperative organizations in 1933. That year, however, a one-party corporative State was established and a Government decree provided for the organization of all Portuguese economic life on a corporative basis. Two years later, special legislation brought agriculture within a guild system divided into regional unions and provincial federations. The guilds were included within the corpo rative body and provision was made for them to promote cooperative associations for distributive, credit, and marketing purposes. Cooperative activity in northern Portugal resulted in the formation of the Federation of Cooperative Associations of Northern Portugal in 1931. Membership reached 19,000 in 1935 and total trade 9,500,000 escudos, but detail describing the cooperatives’ activities is lacking.6 Cooperative Movement in Spain Although the Spanish cooperative movement began in 1860, the first organizations soon disintegrated, not to reappear until the 1880’s when a remarkably liberal cooperative law laid the foundation for cooperative development. Progress began with the formation of a federation in the industrial region of Catalonia in 1897, the calling of a congress, and the publication of the Catalonian Cooperative Review. In 1908 when the population of Spain was about 19,000,000, the membership of the cooperative associations was as follows: N u m b er o} associations M em bership A ll ty p e s __________________ ______ _______ ___________273 6 0 ,5 5 0 D istrib u tiv e __________________________________________ 182 P ro d u ctiv e ____________________________________________ 17 C re d it___________________ ________ — ................................ 42 P ro d u ctive and cre d it________________________________ 1 C redit an d s u p p ly ___________________________ 22 P rod u ction , credit, and d istrib u tive_________________ 1 B u ild in g_________________________________________ 3 Sick ben efit_____________________________ _____________ 5 29,000 4,900 6 ,5 0 0 200 19,150 100 700 _______ * Sou rces .—1The report on Portugal is based upon data from the following publications: Review of Inter national Cooperation (International Cooperative Alliance, London), issue of February 1928; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1932,1933,1939; Les institutions de Pr6voyance du Portugal, Jose C. da Costa Goodolphim (SociStifi de GGographie de Lisbonne, Lisbon,. 240 Cooperatives in Individual Countries By the early 1920,s, considerable growth in membership and in the formation of cooperative federations had occurred, but the lack of unity and the political and religious division (into Socialist, Catholic, and “ neutral” groups), characteristic of Spanish cooperation, had been intensified. From a population of some 20,000,000, the entire coopera tive movement was then estimated to enroll only 262,000 members. Beginning with the installation of a military dictatorship under the monarchy, in 1923, many political changes occurred during the next two decades, disrupting Spanish life. Under these changes the coop erative movement waxed and waned, being encouraged under the Republican Government, only to be absorbed into the corporative form of government inaugurated under General Franco. T ypes o f Cooperatives The Spanish cooperative movement included not only consumers’ , workers’ productive, and housing associations, but also some rather unusual forms. Among the latter were cooperative motor associations, electricity, radio, building and health, pharmaceutical, printing, taxi drivers’, olive-oil, orange-growers’, and shoe-repair cooperatives. In Catalonia, one cooperative manufactured sewing machines and another firearms. The relative growth of the various types of cooperatives for which data are available, in 1937, are shown in table 78. T a b l e 78. — M em bership and B usiness o f Various T ypes o f Cooperatives in Spain , 1937 Associations Type of association P,on sum firs’ dist.rihnt.ivfl association s __ ................ Housing associations_________________________________________ Workers' productive associations (including fishermen)_______ Agricultural associations_____________________________________ Other associations_________ ___ _____________________________ 1,803 13 847 3,056 7 Members Business F ra n c s * 1,178,817 63,566 79,617 400,688 162,000 13,638,000 (2) 2,220,000 (*) 1,084,000 i Swiss gold francs; for value, see Appendix table, p. 278. *No data. The most unusual of the large Spanish cooperative federations con sisted of the fishermen’s associations (Pdsitos Marftimos) of which the modern organization began about 1910. The purpose of these co operatives was to enable the fishermen to own their equipment, to sell their catch themselves, and to help them educate themselves. By 1934 these cooperatives were organized into 9 regional federations which covered the entire coast of Spain, and the Balearic and Canary Islands. Some consumers’, credit, and productive branches were also established within the fishermen’s movement and the adherence of the Positos Marftimos to the National Federation and their collabora tion in the Spanish Cooperative Wholesale gave the necessary strength for the wholesale’s success. Development o f Cooperatives Under the Republic The Spanish Republic was established in April 1931, and for 5 years clashes occurred among the various political groups. The Govern ment of the Republic practised a policy of encouragement for co 241 Spain operatives which included exemption from the payment of income tax on cooperative net savings. A new general cooperative law was enacted incorporating Rochdale principles and recognizing the follow ing classes of cooperatives: Consumers' associations (including also those which distributed water, gas, and drugs, or operated chemical laboratories, buildings, transport systems, or schools); employees' associations designed to improve working conditions; occupational associations (workers' productive, small traders', and agricultural associations); and credit and thrift associations. By 1933, three regional federations were operating successfully: The Catalonian (229 affiliated associations) with headquarters at Barcelona, which began in 1899; that of northern Spain (43 affiliates), with headquarters at Bilbao, which was founded in 1914; and that of central Spain (23 affiliates), which began in 1932 and included a wide variety of associations, among them one for printing and another operating a colony for children. The greatest cooperative success was achieved in the industrial region of Catalonia. The growth of the cooperatives affiliated to the Union of Catalonian Distributive Cooperative Associations is shown in table 79. T able 79.— M em bership and Sales o f A ffiliates o f Catalonian Cooperative Unionr 1906-37 [For par values of currency, see Appendix table, p. 278J Number of member associations Year and type of associations ■niptribiitivA ftssnr»mtfnns Housing ftssnmat.inns TTpalt.h assnpiat.inns ■Rlectrinity associations.... All typos l _ 1987 _ _ . _ 659 5 7 6 .. __ _ . __ _ .. . 1934............................................................................................. 1090 1097 199fi ____________ __ 1094 1093 1014 ___________ ion« ____________ ___ ____ _ ________________________________ _________________________________________ ______________________________________________________________________________________________ . . . ______________ __________ _____________ _ ____________ Their membership 346,017 148 162,000' 10,688 8 677 518,853 266 149 164 148 130 123 308 160 66,326 (8) 26,821 24,127 19,269 (8) 27,947 8,000 Their sales Pesetas 49,718,000s 78,000 5,860,000 320,000 55,976,000 50,402,122* 35.000. 000 32,803,873 26,884,092! 16,560,686 12,856,716 14,574,000 10.000. 000^ 1Not including workers* productive associations. 8 Plus 17 federations. 8No data. Cooperatives D uring and Since the Civil W ar The Cooperative Federation of Spain (Federacion nacional de cooperativas de Espana), founded in 1928, had at the end of 1934 a mem bership of 482 associations, with about 157,000 individual members. These included 343 consumers' distributive associations, 78 workers' productive organizations, 8 building associations, 18 agricultural marketing and processing associations, 8 mutual-aid organizations, and 27 associations and federations for special purposes. Their total paid-up capital amounted to 18,137,853 pesetas and their combined business to 124,054,319 pesetas. 242 Cooperatives in Individual Countries When the Spanish Civil War began in July 1936, the Federation offered its services to the Government. The latter, taking advantage of this offer, used the network of cooperatives as public utilities for the distribution of supplies. Rapid expansion of the cooperative move ment followed, and by 1938 the membership of the General Union of Catalonian Cooperative Associations included 518,853 families, or about 70 percent of the population in Catalonia. In at least one town, all economic life was organized on a cooperative basis. The Government gave the newly established Cooperative Wholesale Association (Cooperativa Central de Abastecimiento) the status of an official body and granted the Federation a seat on the National Committee of Food Supply. At the beginning of 1938 there were reported to be 1,200 consumers’ cooperatives in Spain with a member ship of 833,000 families. After the defeat of the Loyalists and assumption of power by General Franco, the new government announced that the old coopera tive system and law were “ not in harmony with the orientation of the new State.” A law of November 1938 required all cooperatives to re-register and draw up new rules. Many cooperators became refugees, among them the secretary of the National Federation who led the first group across the frontier on February 1, 1939. On January 2, 1942, a new cooperative law was passed which integrated the whole cooperative organization into the totalitarian structure of the country. It established a central control and imposed a system of regional and national bodies in which membership was compulsory. Each branch of the movement had to be affiliated to the “ syndicate” for that branch. These syndicates appeared to be partly or entirely Government bodies. They had no authority over the business operations, but had a voice in the ‘ ‘appointment” (not election) of the cooperative officials. The syndicates, in turn, were controlled and their officials selected by the higher bodies of the “ political and economic hierarchy.” 6 Balkan Countries The outstanding facts to be noted regarding cooperation in the larger Balkan countries— Greece, Bulgaria, Rumania, and Yugo slavia— are the striking development it managed to achieve in spite of a succession of devastating wars and political upheavals and the important part it played in improving the condition of the people. Before the outbreak of World War II the cooperatives in Greece were serving about 20 percent of the population, in Bulgaria and Rumania about 30 percent, and in Yugoslavia some 40 percent. The Bulgarian cooperatives accounted for nearly 25 percent of the total retail trade of the country. 6 Sou rces .—1 The report on Spain is based upon data from the following publications: Anuario Estadistico de Espana; Instituto Geografico, Catastral y de Estadistica (Madrid), 1934,1935; International Directory of Cooperative Organizations (International Labor Office) 1929, 1936, 1939; Cooperative Information (Interna tional Labor Office), No. 12,1938; International Cooperative Bulletin (International Cooperative Alliance, London), issue of February 1924; Review of InternationalCooperation (International Cooperative Alliance, London), issues of October 1934, June and April 1935, January, February and September 1936, February and May 1937, May and September 1938, April 1939, and April 1943; Monthly Labor Review, issues of April 1924 and October 1927; People’s Yearbook (English Cooperative Wholesale Society, Manchester, England), 1918, 1929, 1932, 1933, 1937; C. Gide, La Cooperation dans le Pays Latins, AmGrique Latine, Italie, Espagne, Roumanie (Paris, 1928); and certain confidential sources. Bulgaria 243 In Bulgaria the Government intervened in the affairs of the coopera tives from time to time to assist or curb the movement, and in Greece where cooperatives were, in the main, rural, the associations were encouraged in various ways by the Government. The Rumanian cooperative movement had always been under the close tutelage of the State, which was sometimes helpful, sometimes repressive. In Yugoslavia, on the other hand, although public officials were usually friendly and publicly acknowledged the achievements of the coopera tives, the progress of the movement had generally been attained by the efforts of the cooperatives themselves. Yugoslavia may be said to be the birthplace of cooperatives devoted to raising the sanitary and health condition of the members, and all its cooperatives were interested in cultural and welfare activities. Diversification and variety were features of the cooperative move ment in all of these countries except Rumania. The Balkan coopera tive movement, in fact, included some types rarely found in other countries. Among these were the collective-farming associations, those distilling attar of roses, and the “river associations” engaged in reclamation, irrigation, and flood control, in Bulgaria; the cooperative “ settlement” associations for refugees in Greece; the forestry associa tions in Rumania, supplying not only the domestic market but also engaging in foreign trade; and the health and medical-care associations of Yugoslavia, already mentioned. In all of these countries, except Greece, the cooperatives were federated into strongly knit central organizations; and the two move ments in Bulgaria and Yugoslavia also had an international organiza tion to further cooperative relationships between the two countries. With the outbreak of the second World War, Bulgaria and Rumania became satellites of Germany, whereas Greece and Yugoslavia resisted Nazi aggression. Reports indicate that in Bulgaria the cooperative movement continued to expand. In Rumania, which lost substantial amounts of territory which it was forced to yield to Bulgaria and Hungary, a corresponding loss to the cooperative movement was en tailed through these territorial shifts; it appeared also that the coop eratives in the remaining territory were being largely ignored in war time measures adopted by the Government and were “ completely overshadowed” by the mass of State machinery created to put these measures into effect. In Greece, devastated by war and dismember ment, it appears from such scanty reports as are available that the invaders have not only allowed the cooperatives to operate but have made use of their facilities. The same has been true in Yugoslavia. Cooperative Movement in Bulgaria Among the outstanding characteristics of the cooperatives in Bulgaria was their great diversity. All of the various branches of cooperation— consumers', credit, insurance, agricultural, and workers' productive—were found in Bulgaria. In addition, these various branches included not only the usual types found where the coopera tive movement is well developed but also some rather novel forms of cooperation. Thus, the consumers' group was composed not only of the usual supply associations providing food, household supplies, etc., but also of school (students') cooperatives and medical-care associa tions. The credit cooperatives included both people's banks (urban) 244 Cooperatives in Individual Countries and agricultural credit associations of the Raiffeisen type many of which also operated retail stores handling both consumer goods and farm supplies. Among the agricultural cooperatives were not only the usual joint buying, processing, and marketing associations but also associations of cocoon growers, forestry associations, collective farming associations, and associations distilling attar of roses. The workers’ productive associations included forestry, water-supply, and electricity cooperatives, as well as handicraftsmen’s associations buy ing raw materials and marketing the products. The Bulgarian cooperative movement was also well integrated, each branch having one or more central unions which were in turn members of nation-wide federations. By the end of 1941 the cooperative membership of all types of associations numbeied 1,288,915, representing over 15 percent of the population. Although Bulgaria is primarily an agricultural country, about 62 percent of the cooperative membership in 1939 was in urban areas and only 38 percent in rural districts. Development o f Cooperatives, 1 9 0 0 -3 9 Bulgaria, formerly under Turkish rule, became an autonomous Province in 1878 and an independent nation in 1908. The first cooperatives in Bulgaria were of the credit type and were promoted by a Turk, Mithat Pascha. After autonomy was granted m 1878, the credit cooperatives were reorganized and federated into a new central organization, the Agricultural Bank of Bulgaria. The first Raiffeisen association was formed in 1897, but this type of associa tion at first spread slowly. Early in the 1900’s a few distributive associations were formed, the first being a bakery that soon failed. In 1907 a general cooperative law was passed and that same year the General Union of Agricultural Cooperatives was formed. At that time practically all of the 240 cooperatives in operation were agricul tural cooperatives, mainly of the Raiffeisen type. At this point political parties began to take an interest in the cooperatives and to try to influence their administration. According to one commentator, “ soon almost every political party, and each profession, had influence over cooperative societies.” By 1909 there were some 600 cooperatives. Cooperative develop ment, however, was interrupted first by the Balkan wars and then by the first World War. After the end of that war, the cooperative movement began to expand and to federate. In 1919 the workers’ productive associa tions and those doing purchasing of supplies and marketing of products for small craftsmen formed a Union of Productive Cooperatives. In the same year the Social-Democratic Party established a central co operative organization, called “ Napred” (“ Forward” ), to act as a cooperative union and wholesale for the urban distributive associa tions. Starting with a membership of 7 associations, 4 years later it had 69 member associations with a combined membership of 43,000. In 1919 the Communist Party, which was gathering strength, formed a distributive cooperative with branches in all the localities where there was a sufficient number of Communists to support a store. 245 Bulgaria B y 1923 this association had 64,000 members. The Communist Party was declared illegal in 1923, and the various organizations of the Party (including the retail cooperative association) were abolished under a special law “ for the defense of the State.” By 1928 all coop eratives under political influence had disappeared or had become neutral in policy. During the difficult period of the twenties all types of cooperatives in Bulgaria continued to grow in number and membership, except the consumers’ cooperatives. The closing of the large Communist co operative had reduced the total distributive membership veiy con siderably. Another factor in the reduction of the retail distributive movement was the fact that the credit associations were more and more undertaking consumer functions and opening retail stores. Also, an earthquake occurred in 1928, in which 237 cooperative buildings were destroyed and 50,000 cooperators lost their homes. The trend of development of the various branches of the Bulgarian cooperative movement from 1920 to 1939 is shown in table 80. As it indicates, notwithstanding the control imposed by the Government and the increasingly stringent restrictions upon trade and foreign exchange, all branches of the cooperative movement showed a growth between 1936 and 1939. Part of the apparent drastic reduction in insurance cooperatives is due to the fact that the 1939 figures do not include the 2,200 cattle-insurance associations which were dropped (without explanation) from the official statistics in 1935. In the same year considerable changes were made in classification, so that there is some question as to the comparability of the 1936 and 1939 figures for the productive associations with those of previous years. T able 80.— Num ber and Membership o f Bulgarian Cooperatives in Specified Years, 1 9 2 0 -3 9 , by T ype 1920 Type of association 1925 1929 1936 1939 Asso Mem Asso Mem Asso Mem Asso Mem Asso cia cia cia cia cia Mem bers bers bers bers bers tions tions tions tions tions All types.................................... 1,705 348,892 2,202 516,588 3,200 709,009 4,964 882,984 3,438 950,571 Consumers’ distributive_____ 387 116,790 154 84,347 187 80,503 138 72,259 97,937 161 Credit,....................................... 1,003 121,845 1,335 199,191 1,707 319,271 2,115 391,182 2,378 441.981 Hygiene, public works, hous ing, etc.: Housing............................. 22 3,775 79 145 7,919 7,060 0) 0) 0) 0) Building and loan......... . 8 28,804 10 28,195 Health and public works. 30 16,365 30 16,616 Purchase and sale: Agricultural....................... 219 58,771 125 36,324 139 52,965 6,396 20 18 6,898 Industrial and commer 24 cial.................................... 1,674 2,609 49 3,633 40 94 6,758 99 8,727 2 4 2 370 Liberal professions............ 281 678 (2) (2) (2) (2) Insurance................................... 32 64,149 221 137,146 700 187,618 1,969 206,142 «9 8151,634 Production: Production and mutual aid.................................... 49 2,839 129 55,078 80 34,381 723 197,639 567 143,542 105 Production and labor____ 59 113 2,206 3,747 1,199 4 2 157 Labor................................... 6 35 5 57 12 16 335 1 These associations (mostly apartment buildings) were abolished under a 1935 law forbidding ownership of dwellings “ by floors.” * This classification was dropped without explanation in 1935. * The cattle-insurance associations previously carried in this group were dropped without explanation In 1935; they numbered 2,243 (with 224,644 members) in 1936,685 in 1929, and 208 in 1925. 246 Cooperatives in Individual Countries Relations W ith the Government The Government of Bulgaria was always interested in the coopera tive movement and from time to time intervened to assist or regulate it or to assume increased control; it also made regular statistical surveys of the extent of the cooperative movement. In 1924 it opened a Higher School of Cooperation, for the purpose of training employees and managers for cooperative associations, with 2-year courses covering cooperation in all its branches, accountancy, foreign languages, agriculture, etc. The military revolution that took place in May 1934 resulted in the overthrow of the constitutional monarchy. All political parties were abolished and the formation of new ones was prohibited. King Boris, who had remained on the throne, overthrew the military dictatorship early in 1935 and continued to rule under an increasingly totalitarian form of government. At the same time the Government increased its control over the cooperative movement. By a legislative order (No. 163, October 18, 1934) it merged the Agricultural Bank (a State organization) with the Central Cooperative Bank which made loans largely to urban asso ciations. This measure, it was felt, would tend toward greater co hesion among the various branches of the cooperative movement and make for a more even distribution of funds. Although designed to promote the development of various kinds of cooperatives, this order also permitted the Government to exercise supervision over the work of all the cooperatives and gave the Government authorities the right to remove any officers or administrators in the cooperative movement not acceptable to them and to replace them by their own appointees. Cooperative apartment associations were abolished under a decree of 1935 forbidding ownership of housing accommodations “ by floors.” Government representatives were given seats on the board of directors of the General Union of Agricultural Cooperatives (which had always been strictly neutral in political matters). The cooperative union and wholesale, “ Napred,” which had been established by the SocialDemocratic Party but had become independent of party control and had adopted a policy of political neutrality, was left untouched and was assured of the friendliness of the Government. Later, not only were the Government restrictions relaxed, but the cooperative movement was given representation on the Economic Council, and two active cooperators were given portfolios as Govern ment Ministers. Status o f Various Branches o f the M ovem ent9 1939 At the end of 1939, the cooperative movement had a combined total of 950,570 members out of a population of 6,077,939. The distribu tion of this membership, classified to show the relationship of the* various branches of the movement, is shown in table 81. 24? Bulgaria T a b l e 81.— Num ber and M em bership o f Cooperatives in Bulgaria, 1939 , b y T ype o f Association Type of association Alltypes__ _ _ _ _ _ _ _ ____ ____ Associations _ _ ___ Consumers’ distributive associations ___ ____ _ _ ___ Public works, health, etc., cooperatives __ _ _ _ _ _ _ _ Credit cooperatives: Agricultural credit (mainly Raiffeisen) _ _ __ __ _ People’s banks. .................. .................................................................................. Building and loan associations . Other types........ ................................ ................................................................. Productive associations: Cooperative workshops _______ _ r _ _ ____ Labor associations_________ _____ ___ _____ _________________ :__________ Productive associations, industrial and other........ .......... ............................. Purchase and sale associations and associations of small craftsmen and trades men............................................................................................................................ Insurance associations_____________________________________________________ Agricultural cooperatives: Productive and labor l _ _ _ __ ___ _ Marketing and supply_________________________________________________ Members 3,438 960,670 161 30 97,937 16,616 1,978 276 8 124 161,484 220,308 28,804 60,189 107 12 423 1,063 336 122,328 99 9 8,726 151,634 193 18 74,258 6,898 1 Includes forestry, landholding, etc., associations. Cooperative credit associations.—Even as early as 1931 the coopera tive credit associations were regarded as “ the best-organized and soundest cooperative societies” in Bulgaria. By 1939 there were nearly 2,400 of these associations, of which about 2,000 were agricul tural-credit associations of the Raiffeisen type and some 275 were people's banks serving mainly urban and village (nonagricultural) populations. As already noted, a great many of the Raiffeisen asso ciations also carried on a retail distributive business. Nearly half of the total cooperative membership of Bulgaria in 1939 was in the co operative credit associations. The people's banks were much larger in size than the agriculturalcredit associations, with an average membership of nearly 800 as com pared to less than 100. These banks not only granted loans to their members but had advanced considerable sums in long-term credit to local public authorities for various kinds of public works such as con struction of electric-power plants, waterworks, etc. Insurance associations.— Of the insurance associations, the Coopera tive Insurance and Savings Society of Bulgarian Civil Servants was the most important. It wrote life, fire, and accident insurance, and combined policies to cover building construction. It also carried on extensive welfare activities, including holiday homes for its members, medical service, and a modem laboratory for chemical research. Agricultural cooperatives.— In Bulgaria the cooperatives among the farmers were of great importance and represented a wide variety of activities. As the Bulgarian law prohibited more than one agricul tural cooperative in a village, the associations therefore performed all kinds of services for their members, besides marketing their crops. The forestry cooperatives were of two types— those composed of owners of small plots of forest land, who formed associations in order to work their holdings jointly, and (far more numerous) labor associa tions composed of forestry workers. These last undertook contracts for the State, the local authorities, schools, etc., for planting, felling, transporting, and even working up the lumber. They also purchased groceries, tools, and other supplies for the members. In 1937 there 248 Cooperatives in Individual Countries were 131 of these forestry associations that were affiliated to the Union of Cooperative Forestry Societies (Gorski kooperativen soyus). Collective-farming associations were among the more recent types o f agricultural cooperatives, this kind of cooperative having made its first appearance only in the last decade. The members of these associations were mainly persons owning or leasing land. They worked the land collectively and through the associations also sup plied themselves with agricultural machinery, implements, and other farm supplies, carried on soil-improvement work, constructed roads on the holdings, furnished legal and other advice, and had a broad social, cultural, and educational program. The members supplied the share capital, paying also an annual fee of 60 leva 1 which was applied on the purchase of additional 100-leva shares. The members were paid according to number of hours of work performed, plus ground rent for their land. At the end of 1940 there were 21 such associations with 1,601 land-holding members. They had in cultiva tion, that year, 29,500 decares (7,290 acres) of land. Since 1939 these associations have been under the supervision of the Agricultural and Cooperative Bank. An unusual type of agricultural association was the association distilling attar of roses. The first organization of this type was started in the 1920,s. By 1933, it is reported, these cooperatives had won a dominant position in the market (with 96 percent of the total product) and had “ made an important contribution to the rose growing industry ,” which had suffered greatly from the competition o f synthetic perfumes. Before the war the annual marketing business of all types of agri cultural cooperatives amounted to between 2 and 2K billion leva, in addition to about 1 billion leva in distributive business (farm supplies, services, etc.). Most of the agricultural cooperatives belonged to the General Union of Agricultural Cooperative Societies. In 1936 (the latest data) it had in membership 393 local associations grouped into 38 federations; these had some 200,000 members. Workers’ productive associations.—At the end of 1932 the Bulgarian Central Cooperative Bank created in its organization a handicrafts men^ section. Its principal duties were to encourage the formation o f cooperative associations among handicraftsmen, to organize the sale of their products, to buy supplies and raw materials for them, and to give them vocational training. The International Labor Office characterized the results of this program as “ remarkable.” During 1933 about 200 new associations were formed, so that at the end of the year there were 302 cooperatives among handicraft workers; most of these were buying supplies for the members. By the end of 1939 there were over 500 workers’ productive associa tions of all kinds, with about 124,000 members. These figures would be increased considerably if the forestry labor associations were in cluded; the Bulgarian official statistics classify this latter type of association with “ agricultural cooperatives” but do not show separate data for them. Among the varied types of cooperatives were the so-called “ river” associations (soctitfe aes rividres), the first of which was formed in For par values of currency, see Appendix table, p. 278. Bulgaria 249 1919. These operated mainly in rural districts and were classified in the official statistics among the associations “ in the field of pro duction/J Among the activities carried on by these associations were irrigation, draining of marshes, flood control, construct on of dams, generation of electricity, and extraction of salt from the sea. Certain privileges were allowed to these associations, such as the right to use crown lands, exemption from specified taxes, special railroad shipping rates, etc. In certain cases membership in the loca river association was compulsory for both municipalities and landowners. Their activities were regulated not by the cooperative law but by a special statute enacted on September 20, 1920, and new associations could be formed only when the necess ty for them was proved to the Ministry of Agriculture and Crown Lands. At the end of 1926 there were 43 such associations, with 36,523 members. No later data are available for these associations separately. DEVELO PM EN T OF CONSUMERS’ COOPERATIVES The retail distributive associations constituted the greater part of the consumers’ cooperative movement of Bulgaria. There were, however, some associations of other types, notably student cooper atives and those for provision of medical care. Also, in 1929, a women’s cooperative guild was formed in Sofia. The first cooperative health association was formed in 1931 in Burgas, a port on the Black Sea, with the purpose of founding a hos pital. The initiative in this move was taken by a group of doctors, local cooperators, and other citizens. The hospital was opened in July 1934. At that time it had in membership 316 individuals and 29 corporate members (people’s banks, cooperative credit associat ons, cooperative federations, the town of Burgas, and even the central Government of Bulgaria). The success of this cooperative led to the formation of so many similar schemes, not all of which were genu ne, that the Bulgarian Government in 1935 drew up a law specifically to regulate them and to set standards to which they must conform. In 1938 the retail distributive cooperatives were doing almost 25 percent of all the retail business in Bulgaria. The greater part of this Was accounted for by the distributive associations federated in the cooperat ve union and wholesale soc ety, “ Napred,” formed in 1919. In 1940 this body had in membersh p 69 local associations, with 87,938 members. Although its affiliates constituted only 42 percent of all the consumers’ cooperatives in the country, their membership com prised nearly 89 percent of the total membership of the consumers’ cooperatives in Bulgaria. Napred was, before the war, the largest organization in wholesale trade in Bulgaria. It carried on an extensive export and import business, was the sales outlet for the salt produced by an agricultural cooperative syndicate, and led all the businesses in Bulgaria in the sale of sugar, rice, salt, oil, and cereals. In 1939 its capital amounted to about 550,000,000 leva. It had substantial productive enterprises from which were drawn some of the supplies for its retail affiliates. Among these were plants for canning vegetables, fish, and milk prod ucts ; a cheese factory, rice farm, and flour mill, and an electric-power plant that, besides generating power for the cooperative mill, supplied electricity for the nearby town. In 1938 Napred joined with a co588544°— 44----- 17 250 Cooperatives in Individual Countries operative association of beet growers, an insurance association, and the People’s Bank in forming a new organization called Cooperative Sugar Factories, which produced 70 percent of the country’s sugar supply. Later, with the assistance of the Swedish Wholesale Society, Kooperativa Forbundet, Napred began the construction of a rubber factory. Its sales rose from 556,900,000 leva in 1937 to 1,140,000,000 leva in 1942 (the latest year for which data are available). T a b le 82.— M em bership and Business o f Bulgarian Cooperative Wholesale, Napred , om Its Affiliates, 1 9 2 3 -4 2 [For par values of currency, see Appendix table, p. 278J Member associations Year Num ber Their members Their business Leva 0) Wholesale distributive business of Napred Leva 1923..................................................................................... 1925..................................................................................... 1927........................................................................ ........... 1930..................................................................................... 1931..................................................................................... 69 60 54 57 58 42,968 45,249 46,588 60,277 62,780 1,254,700,000 1,436, 229,548 410.019,431 351.684, 239 (0 1,186,862,000 1,801,075,292 436,819,728 423.802,872 1934..................................................................................... 1935..................................................................................... 1938..................................................................................... 1940..................................................................................... 1942..................................................................................... 58 61 66 69 78 64,000 69,000 80,478 87,938 100,000 175,254,644 0) 620,600,000 656,400,000 0) 439,035,480 609,838,359 687,000,000 698,167,000 1,140,000,000 i No data. Data are for 1839. Intercooperative Relations The whole cooperative movement of Bulgaria culminated in the National Committee of Bulgarian Cooperation, to which 10 of the 12 federations in the various branches of cooperation belonged. Its functions included defense of the interests of the cooperative movement, coordination of their activities, and organization of publicity and educational work regarding the movement. In April 1937 the Yugoslav-Bulgarian Cooperative Institute was formed in order to establish “ a system of permanent collaboration for the promotion of the cooperative movement and of mutual economic assistance in the two countries.” The bylaws emphasized, however, that the Institute “ has no political aims, and its attitude toward political organizations and movements is one of strict neutrality.” The membership consisted of the General Federation of Cooperative Unions in Yugoslavia and the National Committee of Bulgarian Coop eration and the Bulgarian General Union of Agricultural Cooperative Societies. The headquarters of the organization were to be in which ever country the person currently serving as president lived. Cooperatives and the W ar In September 1940, Bulgaria, “ yielding to mingled threats of in vasion, promises of territorial compensation and economic pressure,” 2 signed a compact with Germany, making it a satellite country. As Bulgaria was used as a base from which Germany attacked Yugoslavia 2New International Yearbook, 1941, p. 86. Greece 251 and Greece, the fate of the Yugoslav-Bulgarian Cooperative Institute, above noted, can be imagined. Only meager information is available as to the effect of the war on the cooperatives in Bulgaria. It is known that the agricultural coopera tives and the credit associations have been acting as agents of the Government in the collection of agricultural produce. Even as early as 1940 it was reported that over two-thirds of the associations’ marketing business consisted of the handling of Government-con trolled produce. In 1942 over a third of all the agricultural products marketed in Bulgaria were handled by the cooperatives. One outcome of war conditions has been the entrance of cooperatives into the canning and preserving industry. Bulgaria had been, since the beginning of the war, exporting considerable quantities of fruit and vegetables. Because of the necessity of utilizing to the utmost the available transportation facilities, it seemed desirable to ship these commodities in the least bulky form. Hence the drying, cann ngr and preserving of these goods became an important industry, in which by the end of 1941 from 22 to 37 percent of the product was the output of cooperatives. Eight of the 23 tomato canneries, 99 of the 300 strawberry-collection centers, 13 of the 18 vegetable and fruit dehy drating plants, and 5 of the 12 cold-storage plants belonged to co operative assoc ations. Data for 1941 for the various branches of cooperation in Bulgaria indicate that all of them had increases in membership. In comparison with the pre-war year, 1939, the total cooperative membership in Bulgaria rose nearly 36 percent (from 950,570 to 1,288,915). In 1941 the members accounted for a little over 15 percent of the population. Both share capital and reserves showed increases The wholesale association, “ Napred,” made progress in both 1941 and 1942, its business in the latter year showing a 60-percent increase over 1940. It appears, therefore, that at the end of 2H years of warfare the cooperative movement was not only holding its own but was making gains; it is not known to what extent the cooperatives are free to act or how far their facilities are being utilized in the interest of the totali tarian State policies.3 Cooperative Movement in Greece The cooperative movement in Greece—largely agricultural— dates only from 1914 when the first legal authorization for cooperative associations was passed. Once started, however, it grew rapidly. To a considerable degree this growth was due to the encouragement of the Government, which turned to the cooperatives as an aid in the various problems with which it had to deal. It even sent organizers to help start cooperatives. Cooperative settlement associations were favored as a means of distributing land to the people during the agrarian reforms. General-purpose cooperative associations helped S o u rces .—The report on Bulgaria is based upon data from the lollowmg publications: Bulgaria, Direction G£n£rale de la Statistique, Statistique des Cooperatives dans le Royaume de Bulgarie, 1927,1932,1933,1937, and 1940; International Cooperative Bulletin (International Cooperative Alliance, London), issues of April 192$ and April 1924; Review of International Cooperation (London), issues of March 1925 and November 1942; Cooperative Information (International Labor Office), Nos. 13 and 20,1928, Nos. 6 and 11,1929, Nos. 4 and 16,1931, Nos. 5 and 16,1934. No. 11,1935, No. 14,1937, No. 6,1939, No. 7,1941, and No. 8,1942; International Directory of Cooperative Organizations (International Labor Office), 1939; Industrial and Labor Informa tion (Geneva), March 17,1924; and People's Yearbooks for 1929, 1933. and 1935, through 1941. 252 Cooperatives in Individual Countries to solve the problem of caring for and rehabilitating, economically, the persons who fled into Greece from Turkey and southern Russia after the first World War, as well as those involved in population ex changes with Bulgaria and Turkey— altogether 2,000,000 persons. Despite the decade of war, the change of government from con stitutional monarchy to republic, and the stresses entailed by the absorption of masses of people, the cooperative movement grew steadily. Because of the turbulent times and the speed and manner of growth, it was said that “ neither the cooperators themselves nor the authorities had time to organize the idealistic side of the move ment.” By 1930, however, it was reported that even persons who had joined accidentally, as it were, had come to realize that the cooperative association was “ an institution which with mutual help will improve conditions of life.” The agricultural cooperatives had always been favored by the authorities. The 1914 law granted them certain postal facilities and various exemptions from taxation, and provided penalties for persons hindering their operation or endeavoring to dissuade others from joining such associations. A later law, that of January 22, 1919, forbade the seizing, by personal creditors or members, of agricultural produce consigned for sale by members, or of the proceeds of such sales. An added stimulus was given to the formation of agricultural associations by the agrarian laws of 1917 and 1920, which provided that grants of land expropriated by the State from the large landowners might be made t> cooperative settlement associations, formed for the purpose. The cooperative movement has, therefore, been predominantly rural, with the rural credit associations forming by far the largest single group. T ypes o f Associations The steady development of the movement is indicated by the accompanying statement showing the number of urban and rural associations in existence at the end of specified years. Total 1921................................................................. 1,710 1924.............................................. ................... 3,655 1 9 2 7 - ............................................................. 5,714 1930................................................................. 7,387 1 934 .................................. .............................. 9, 197 1936................................................................. 9,611 R ural (*)♦ 2, 801 4, 481 5, 754 0) 6, 270 U rban P) 854 1, 233 1, 633 0) 3, 341 i No data; l, by types, as follows: Total R u ra l U rban 611 All types__________ __________ ___________ ________ ____ 9,9,611 6, 270 3,341 625 4, 476 1, 684 493 514 7 37 946 33 796 156 4, 401 469 75 1, 684 3 Insurance associations. Fishery associations. __ Cooperative federations. 490 514 1 708 7 37 946 32 88 Greece 253 In 1918 the 917 associations of all types had a combined membership of 45,070. By the end of 1938, the membership of the cooperative associations in Greece numbered about 300,000. Taking into consideration the families of the members, the cooperative movement at that time was, therefore, serving about a fifth of the population. About 65 percent of the agricultural population were members of or served by the cooperatives. The movement was strongest in the Peloponnesos and Macedonia; next in importance were Thessaly and the Aegean Islands. Urban cooperatives.—As the foregoing tabulation indicates, the urban associations were of more varied type than the rural organi zations, including as they did the workers’ productives, and the housing, insurance, and fishery associations for which there were no counterparts in rural areas. As noted, the productive associations formed about half of the total. These were composed of craftsmen in various trades— tailoring, shoe making, hairdressing, shipbuilding, etc.— and workers taking con tracts for labor. Among the last group were the porters’ and the stevedoring associations in the harbor cities. In 1928 the porters’ associations had 2,357 members. The number of building associations increased rapidly after the end of the first World War, when the waves of refugees flooded the country with families for which there was no housing. Several laws were passed to encourage the construction of new dwellings. Co operative housing associations were given special privileges, including exemption from building taxes and from import duties on building materials. The distributive associations also grew quickly during the war of 1914-18, when provisions were difficult to obtain. Possibly because of the lack of cooperative education previously mentioned, when the food shortage was over, many of the associations disappeared. The urban associations, scattered over the country, had little or no relations with each other and no central federation. They were under the jurisdiction of the Minister of National Economy, and were given none of the advantages accorded to the agricultural cooperatives. Greece is one of the few countries in which the con sumers’ cooperatives have never federated into a central body. Agricultural cooperatives.—The credit associations have constituted more than two-thirds of the farmers’ cooperatives. About one-third of these associations, it is reported, carried on side-line activities such as the purchase of farm and household supplies, processing and sale of farm products, and warehousing. Among the agricultural process ing and productive associations were those raising silk cocoons, and those producing olive oil, wine, currants, etc. Included in the miscel laneous group, “ other types,” were the many associations formed under the agrarian laws, for the purchase, improvement, and leasing of land. The Greek law gave specific authorization for the formation of associations not only for resettlement of expropriated lands, but also for drainage and irrigation of land. It also provided, regarding the latter, that if the approval of such an association by three-fourths of the residents of a village could be obtained, membership was obli gatory for the other fourth. By the end of 1928 there were 1,585 resettlement associations with a membership of 93,000 families. They had distributed to their members over lji million acres. 254 Cooperatives in Individual Countries In 1930 the agricultural cooperative law was amended to provide for the dissolution of any cooperatives which “ become members of political parties, or pass political resolutions in their meetings, or use their property or funds to assist any political party, or take part in meetings which are concerned with political questions.” Any person who was a candidate for either House of Parliament or for the position of mayor was barred, for a period of 3 years thereafter, from member ship on a cooperative committee or board of directors. Further amendments to the law, enacted in June 1931, prohibited such cooperatives as were doing purchasing for their members from buying any goods in excess of the amount represented by their actual orders in hand; in other words, this amendment prevented any ware housing or stocking of goods by these associations. Membership in an association was limited to residents or property owners in the asso ciation’s area of operation. Associations were required to deposit all reserve funds in the Agricultural Bank, having for their own use only the interest thereon. The same law gave the auditors of the Agricultural Bank the right to attend any meetings of a cooperative’s members, committees, or board; and gave them powers as “ public agents of inquisition, under the criminal law, and for certain cases, as pyblic prosecutors.” In 1939 a law was passed which placed all cooperatives under the supervision of a new office, the Under-Secretariat of Cooperative Societies, responsible to the Prime Minister. Cooperatives and the W ar Italy, which had previously taken possession of Albania, invaded Greece through that country in October 1940 and was reinforced in April 1941 by German troops when the Greeks not only had driven out the Italians, but had occupied about a third of Albania. After that time the condition of Greece and its people grew progressivly worse. No direct reports are available as to the situation of the cooperative movement since the invasion and dismemberment of the country. Word through indirect channels indicates, however, that the author ities have not only allowed the cooperatives to continue operation but have made use of them in collecting and distributing supplies. It appears, therefore, that the cooperative machinery is still in existence, though subverted to the conquerors’ purposes.4 Cooperative Movement in Rumania Unlike the situation in certain other countries, the Rumanian coop erative movement did not suffer particularly in the war of 1914-18, notwithstanding that the country was invaded by Austrians, Germans, and Bulgarians. Individual associations were looted, destroyed, or taken over and operated for the invaders, but as a whole the associa tions continued to operate about as usual. 4 S o u rc e s —The report on Greece is based upon data from the following publications: Annuaire statistique <le la Grece, 1937 (Athens, 1938); International Cooperative Bulletin (International Cooperative Alliance, London), November 1919; Review of International Cooperation (published by International Cooperative Alliance, London), issues of June 1930, September 1932, and April 1938; People’s Yearbooks for 1933, 1938, 1940, 1941, and 1942 (published by English and Scottish Cooperative Wholesale Societies); Cooperative In formation (published by International Labor Office), No. 13, 1928, No. 11, 1929, No. 3, 1930, and No. 3,193% International Review of Agricultural Economics (Rome), October-December 1923; Economic Review (London), May 15, 1925; New International Yearbook, 1939; and Task of the Cooperatives in Post-War Belief and Reconstruction, by Halbert, Shoskes, and Tereshtenko (Washington, 1943). Rum ania 255 At the close of the war, the old Kingdom of Rumania was enlarged by the addition of considerable territory taken (“ liberated” ) from other countries— Bessarabia from Russia, and Bukovina, Transylvania, and the Banat of Temesvar from Hungary. The acquisition of these territories resulted in a considerable accession of cooperative associa tions also. Authorities estimated that, with these new accessions added to the 630,738 members of peopled banks and the 63,699 mem bers of agricultural cooperatives in old Rumania, there were altogether about 1,300,000 cooperative members even at that early date. Development o f Cooperation Under State Supervision and Control In Rumania, more than in any other country in Europe, the history of the cooperative movement has been one of close relationship with the Government, a relationship that has sometimes been helpful, sometimes dominating and repressive. Even before the war of 1914-18, relations between the Rumanian Government and the cooperative movement had been very close. The relationship has continued throughout the 25-year period since that time, with the State exercising a great deal of supervision and control, generally favoring but sometimes discriminating against the movement, and always expending large sums for the maintenance of the supervisory machinery and even for cooperative subsidies of one kind or another. At no time could the cooperative movement in Rumania have been said to be really independent or entirely selfsupporting. This fact was commented upon in 1927 by Charles Gide, eminent French cooperator and educator6 who noted that the cooperative movement in Rumania occupied a peculiar status, with the State “ exercising oyer the cooperatives a tutelage well-meaning but not despotic, conferring upon them official attributes” and thereby making them a branch of the public administration. He said that he did not blame the Rumanian Government for its policy toward the cooperative movement, in view of the fact that the Rumanian people, having been for centuries in a state of near-serfdom, were not yet ready for the spontaneous, self-directed action necessary for real cooperation.6 He commented, however, that control by the political state was likely to go on indefinitely and that the time never came when the pupil was deemed able to go on alone. This indeed was the case in Rumania. Lacking the sound sturdi ness and self-reliance of the movements that have been built up by the unaided efforts of the cooperators themselves, the cooperative associations there remained very small, their own capital very limited, and their reliance upon public funds very great. Some of the Government measures taken in regard to the coopera tive movement were remarkably enlightened. Among these may be cited the educational work done under the 1929 law, and the relations maintained with the International Cooperative Alliance and with the cooperative movements of other countries. The only objections were that they represented steps taken for but not by the movement itself, and that the fortunes of the movement were, thus, inevitably tied up with those of the political state.*• 6 Gide, Charles: La Cooperation dans les Pays Latins. Paris, Association poor L ’Enseignement de la Cooperation, 1928(?), p. 207. • The same was true of a large part of the Yugoslav territory prior to 1920, but there, in spite of the terrible poverty and the ignorance of the peasants, the movement developed independently of Government assistance. 256 Cooperatives in Individual Countries LEGISLATION ON C O OPERATIVES, 1903-35 Gide noted in .1927 that, being under the continuous attention of the public authorities, the cooperatives suffered from a “ superabun dance of laws.” In a period of 13 years at least 10 laws were passed, each modifying or superseding its predecessors. In the next 15 years almost the same number of acts and decrees established, abolished, and revised all or parts of the cooperative machinery and procedures. Even as early as 1903 the Government had passed a consumers’ cooperative act. It had also formed the Central for People’s Banks to supply the local credit cooperatives with funds, as well as to control their activities. Law of 1929.— In 1929 under a law of March 28, applying to all the territory of Rumania, the whole previous organizational arrangement of the cooperative movement was abolished. Under the law the associations were authorized to form federations on either a regional or a type basis. Such federations were to be autonomous. However, the usual cooperative practice was reversed, in that these federations, instead of being under the control of their member associations, were given power not only to control these affiliates, but also to organize their educational activities. “ Chief authority” in the movement was to be given to a central organization to which the regional unions would be affiliated. Pending the organization of this central body, a National Office of Rumanian Cooperation was to carry on its functions, under the direc tion of the General Cooperative Council, half of whose members were to be elected by the cooperatives and half “ nominated by the various authorities concerned.” Educational activities under 1929 law.— One distinctly favorable phase of the situation was that the National Office of Rumanian Co operation immediately set about organizing educational work for and in the cooperative movement, expanding and developing that which the associations themselves had started previously. Four training schools for cooperative employees were started in various places, which provided 2 years of theoretical teaching and 10 months of practical work in selected cooperative enterprises. These schools, in the scholastic year 1930-31, gave instruction to 385 students. As early as 1919 the Government had established in Bucharest the School for Advanced Cooperative Study, for the giving of both special ized and general training. This school was reorganized in 1929, its curriculum being widened and the course extended to 2 years. Special courses designed for the training of managers and officials were also organized in different parts of the country. Beginning in 1930 radio talks and motion-picture films were used as a means of acquainting the public with the cooperative movement— a rather remarkable occurrence in a country as little developed as Rumania. Courses in cooperation were also required in the curriculum of all schools and colleges giving instruction in agriculture; lectures on cooperation were given at the Universities of Bucharest and Jassy and at 65 theological schools and seminaries, and in 1928 a chair of cooperation was created in the Academy for Higher Commercial Studies. Debt-conversion law oj 1933.— In 1933, in the attempt to improve the condition of agriculture, a law was passed providing a 5-year Rumania 257 moratorium on agriculturists’ debts. The cooperative credit associa tions were singled out in one provision which wrote off 25 percent of their outstanding loans, besides reducing the rate of interest allowed to be charged on loans. As the assets of the credit cooperatives amounted to 6,800,000,000 l ei7 at the beginning of the year, the 25percent write-off alone meant a loss of 1,700,000,000 lei. It took the cooperative credit movement several years to overcome the effects of this blow. Law of 1985.— Although the 1929 law involved a good deal of Government supervision (largely of a benevolent nature), it was on the whole favorable to the development of the movement through the latter’s own efforts. The central union provided for under the law never actually materalized, and the National Office for Rumanian Cooperation (part official, part cooperative) continued to function until 1935. In that year, under a change of government, a law was passed on March 27 which abolished the organizational arrangement of the 1929 law and established an elaborate structure consisting of a Central Office of Cooperation and subsidiary bodies for banking, purchase, marketing, and control. The central and its subsidiaries were given control not only over the associations that chose to affiliate, but also over the nonaffiliated associations. The autonomous regional federations that had previously been formed by the local cooperatives were also abolished. The new central organizations were given power to audit the accounts of the local associations, to cancel decisions of their general meetings, to dismiss elected officials and cooperative employees, and even to liquidate associations. It was openly charged that the purpose of the law was to guarantee control by the party ;n power. This law was in operation until June 1938, but the Central Office was able to obtain the affiliation of only a very small proportion of the total number of associations. T ypes o f Cooperative Associations and Their Activities The cooperative associations of Greater Rumania tend to fall into a few classes: Credit; consumers7cooperatives (with which the official statistics usually include the rural farm-supply associations); agri cultural associations, including the land-lease and land-purchase associ ations; the forestry associations, and a group of service associations; a n d productive associations, i n c l u d i n g agricultural processing associations (such as dairies), as well as both urban and rural associa tions carrying on productive activities in various industrial fields. COOPERATIVE CREDIT ASSOCIATIONS The first type of association to be started in Rumania was the “ people’s bank,” a form of cooperative credit association, the first of which was founded in 1891. These associations were fostered by a group of village school teachers whose purpose was to assist the peasants in escaping from their burden of debt to the local usurious money lenders. The idea took hold very rapidly and by 1903 there were 1,027 of these banks. By 1913 their number had grown to 2,901 with 584,632 members (in a population of 7,508,000). Their out standing importance in the cooperative movement was indicated by » For par values of currency, see Appendix table, p. 278. 258 Cooperatives in Individual Countries the fact that all other types of cooperative associations combined (about 869) had only 25,538 members. The banks not only acted as a source of credit but also did some purchasing of farm supplies as well as marketing of members, products. In 1903 the Government had formed a department— the Central for People’s Banks— to which control over the people’s banks was given. In the annexed Provinces, the credit cooperatives were largely of the Raiffeisen and Schulze types and were those of the German and Hungarian people. Very few credit cooperatives were found before the war among the Rumanian population of the “ liberated” Provinces; they had supplied their credit needs largely through the joint stock banks, having adopted that form of organization mainly because of the close ties of the Hungarian credit cooperatives with the Govern ment, and “ the Rumanian population disliked being assisted by the Hungarian State, fearing an interference also with their national life.” After the first world War, the credit associations created by the Rumanians in the annexed territories tended to be of the people’s bank type and to become a part of the Rumanian Central for People’s Banks; the minority populations continued with both Raiffeisen and Schulze associations and maintained also the central federations which had previously been formed. At the end of 1936 about a fourth of the credit associations and membership was in the annexed Provinces. Of 5,235 local associations at the end of the year, 4,709 were affiliated with the 53 regional federations, and all but 531 of these were of the people’s bank type. T able 83.— Developm ent o f Credit Cooperative Associations in Rumania in Specified Years, 1 9 1 3 -3 8 [For par values of currency, see Appendix table, p. 278J All associations Year 1913 L__........................ 19181............................. 1926.............................. 1929............................... 1933............................... 1935............................... 1936............................. 1938............................... Number Members 2,901 2,965 4,413 5,286 5,291 5,267 *5.235 6,140 583,632 641,359 915,388 1,134,018 1,131,827 1,096,259 1,102,841 1,120,130 Minority associations Number 8 Members Rumanian associations Number Members 2,901 2,965 4,413 4,732 (2) 4,674 4,633 4,525 583,632 641,359 915,388 1,002,926 (2) 957,751 963,637 975,130 ? (2) 554 (2) 593 8602 *615 (2) 131,092 (2) 138,508 139,204 *145,000 Loans granted L ei 152.000. 000 156.000. 000 2,892,000,000 6.300,000,000 (2) 3,119,000,000 2,985,000,000 1,141,000.000 i Data relate only to cooperatives in old Kingdom of Rumania. * No data. * Not including 92 Jewish cooperatives in Bessarabia under the Commercial Code. * Estimated. consum ers’ c o o p e r a t iv e s In the old Kingdom of Rumania, consumers’ cooperatives had existed in the urban areas as far back as 1900. The cooperative act of 1903 resulted in the formation of a few others which were short lived. The first rural consumers’ cooperative was started in 1902, and by 1908 there were 150 of this type; the chief commodity sold by most of them, however, consisted of alcoholic drinks. There were, to offset these, some 62 temperance associations formed under a law of 1908, with 2,145 members. 259 Rumania By July 1920, there were 424 urban cooperatives in the old Ru manian territory with about 50,000 members. The associations were very small and were found only in the city of Bucharest (which had 142 associations) and the few other big towns. The larger part of the consumers7 cooperative movement at that time consisted of the rural supply associations, some of which also did marketing of agricul tural products. Table 84 shows, for the combined supply and consumers7 coopera tives, the trend of development of both the associations of minority groups and of those of Rumanian stock in certain years. Separate data are also shown for the consumers7 cooperatives among the Rumanians. T able 84.— Development o f Supply and Cot sumers’ Cooperatives in Greater Rumania, in Specified Years, 191 2 -3 8 Supply and consumers’ cooperatives Year Total Number 1912i...................................... 19241...................................... 1929........................................ 1935......................................... 1936......................................... 1938......................................... 294 2,516 2,132 1,536 1,632 2; 791 Mem bers 13,105 288,722 289,961 208,302 214, 321 8 154,735 Minority asso ciations Number (2) C) 467 444 453 370 Mem bers (2) C) 104,839 82,386 82,028 C) Rumanian asso ciations Number 294 2,516 1,665 1,092 1,179 2,421 Mem bers 13,105 288,722 185,122 125,916 132,293 «154,735 Rumanian consumers' cooperatives Number 294 (*) (*) 766 824 1,810 Mem bers 13,105 C) (8) 85,831 89,500 8117,360 i Data relate only to associations in old Kingdom of Rumania. * No data. * May include some membership of the racial minorities. PRODU CTIVE ASSOCIATIONS The productive associations include miscellaneous types of coopera tives, the oldest form being that of the land-leasing associations. In the annexed territories, no productive associations of any kind existed before the first World War. Land associations.— Before the first World War, the land in Rumania was held largely by the great landowners, so that the only way for the average farmer to obtain land for cultivation was to rent it from these owners. As individuals, none could handle enough land to be considered worth while; as members of a cooperative, however, they could rent considerable tracts of land jointly. It was customary, then, for the cooperative to lease a tract, parceling it out to the mem bers, each of whom worked his plot or plots individually, but utilized the threshers and other machinery of the cooperative. After the end of the war, the great estates were broken up and the land was given free (in lots up to 500 hectares8) to the peasants, the owners being paid in paper money. The early type of land association, being no longer so necessary, became greatly reduced in number and by 1920 had fallen from 605 to about 160. Pending final allotment of land to individual farmers, the Government adopted the expedient of turning over tracts to groups of farmers, forming them into a cooperative association for the purpose. By 1920 there were over 2,000 of these associations. 8 Hectare** 2.471 acres. 260 Cooperatives in Individual Countries As the division of the expropriated lands was carried to completion, and the need for the leasing associations became less urgent, these associations also tended to decline. On the other hand, a later type of association, that for the purchase of land, expanded in importance. Forestry associations.— The first forestry associations were started early in the twentieth century but their development was slow until, in 1910, the Government adopted a policy of letting contracts to co operatives to exploit the timber in State-owned forest land. This policy was extended in 1918 to cover the great mountain regions that were thickly forested. The development of these associations was hastened, after the end of the first World War, ironically enough, as a result of the wartime-supply activities of the German authorities when they occupied the country. In order to get supplies of wood and lumber, they built light railroads into the forests and in some cases built sawmills as well. In one territory, after the war, the Rumanians found 120,000 cubic meters of wood already cut. The Central for Agricultural Cooperatives, established in 1919, organized an associa tion for the exploitation of these forested areas, with membership open to women. A decree of 1918 had authorized the sale of State forest land to cooperative associations, with provision for certain advantages to residents of the mountain districts where many of the forests were found. As 22 percent of the area of Greater Rumania was forest land, and as the lumber industry occupied third place in productive output of the country, naturally these associations became important. The associations were of three types— those to supply the lumber require ments of the members, those to manufacture rough timber for the market, and those working up lumber for building purposes. The third group developed some very large and powerful associations, own ing not only lumber mills but also warehouses and short railroad lines, as well as rolling stock for these lines. Some of these associa tions also engaged in export as well as domestic trade. To some extent, the development of these associations fluctuated with the varying State policies. Thus, in the twenties and the early thirties, the Government favored exploitation of the forest resources through State monopolies rather than through cooperative associa tions, and this fact, along with the unfavorable economic conditions, caused a decrease in the number and activity of these associations. In 1936, thanks to the influence of a Government Cabinet Minister friendly to cooperatives, the former policy was resumed and the condi tion of the associations improved accordingly. By 1938 there were 448 forestry associations registered, but nearly 100 were in liquidation. The 247 which supplied information had about 28,000 members. These forestry associations were given certain preferential treat ment, being exempted from stamp taxes and from all charges con nected with legal proceedings; certain other taxes were reduced by from 25 to 75 percent. The associations were also given preference as re gards purchases of lumber by public welfare and charitable institu tions. The International Labor Office noted, regarding these associations, that they had “done much * * * to improve the material and moral conditions of the population among whom they work. There is hardly a village in the mountain districts where they have not erected 261 Rumania or repaired a school, a church, or a building for some charitable pur pose.” All of the forestry associations (except one whose members were Hungarians) were those of the Rumanian people. Other 'productive associations.— The other types of productive co operatives were those for the production and sale of various com modities. In the rural areas these were generally associations for pro duction and marketing of fish, dairy produce, quarrystone, coal, etc., whereas in towns they included bakeries, printing plants, tanneries, and weaving establishments. This group also contained the one co operative insurance association in all Rumania, writing fire, life, and hail insurance. The minority groups were well represented among the productive associations, as table 85 indicates. All types of productive associations.— During the 13-year period ending in 1936, the whole group of productive associations declined both in number and in membership (table 85), but this was due to the trend of the forestry and land associations; the “ other productive” cooperatives nearly tripled their number and almost quadrupled their membership. By 1938 both number of associations and membership were about at the 1923 level. T able 85.— Trend o f Developm ent o f Productive Cooperatives in Greater Rum ania, in Specified Years, 1912-38 Total Tear 1912........... 1923........... 1929.......... 1935........... 1936........... 1938........... Land lease and purchiase associ- Forestry assoations : Ruman ciations: Ru manian ian Number of asso Members ciations Num ber 544 1,085 1,135 673 8 741 l, 571 63,915 149,406 128,690 76,126 « 83, 459 127, 686 389 8496 484 207 231 468 Mem Num bers ber 55,707 882,295 46,116 20,770 24,629 25,686 143 4 476 *492 191 * 207 448 Mem bers 8,208 4 57,935 62,401 23,565 «25,062 728.000 Other productive associations Minority associations Rumanian associations Num Mem Num Mem ber bers ber bers Num Mem ber bers TotaJ ‘ 12 (2) 113 9,176 159 20.173 275 31,791 303 33,768 * 655 *74,000 (2) (2) (2) (2) 51 5,733 93 8,879 111 10,432 216 730.000 12 113 108 182 192 39 (2) 9,176 14,440 22,912 23,336 4,000 1 Associations operating under the CommerciaJ Code in 1914; no membership data given * No data 8 Data are for 1918. 4Data are for 1924. 8 Data are for 1928. 6Includes 1 Hungarian forestry association with 841 members. 7Approximate. 8Includes 400 associations with about 40,000 members, nationality not reported. Cooperatives o f National M inorities The new territories assigned to Rumania after the end of the first World War contained not only the Rumanians formerly under Hun garian and Russian rule, but also sizable groups of other nationalities, each of which had developed its own cooperative associations (some of these also had been favored and even organized by the Russian and Hungarian Governments). These latter continued to retain their national identity even after they became a part of Greater Rumania. The various Rumanian laws and decrees governing cooperatives applied to the “Liberated Provinces” as well as to the old Kingdom. The Slavs throughout greater Rumania tended to become members of “Rumanian” cooperatives, but apparently no steps were taken to 262 Cooperatives in Individual Countries ward fusion of other nationalities, even when cooperatives were being consolidated for greater stability of operation. The minority coopera tives, indeed, grew in number under Rumanian rule. Thus, in Transylvania there was a German as well as a Hungarian cooperative movement, the latter of which retained its former affiliation with a branch of the Hungarian Cooperative Union and Wholesale (“ Hangya” ), which became an independent organization after the partition of Hungary following the World War. Each of the other racial minorities— the Saxons of Ardeal, the Swabians of the Banat, the Jews in Bessarabia, and the Germans, Poles, and Ruthenians in Bukovina—had its own group of associations. The part played by the minority associations in the cooperative movement of Greater Rumania in 1936 is shown q table 86. T a b l e 86. — Cooperative A ssociations in Greater Rum ania in 1936 , by N ationality , Location , and T ype Type of association Minority associa All nationalities Rumanian associations Num tions ber of fed Rural Urban Total asso era Total Rural Urban Total associa Rural Urban cia tions associa tions tions tions Number of associations All typos „ „ _ __ _ CJrftdHr Onnsiimpra*. Supply _______________ Productive (including agrinnlt.nrftl) _ 60 7,608 6,716 892 1,167 1,095 72 6,441 5,621 820 i 56 *4 6,235 1,193 439 4,638 1,087 381 697 106 68 602 369 84 664 359 82 48 10 2 4,633 824 356 4,084 728 299 649 96 56 741 610 131 112 100 12 629 510 119 Membership All types........— . . . _____ _____ 1,400,621 1,146,660 264,061 232,506 200,855 31,650 1,168,116 946,705 222,4U Profit ________ ^onsunier?’ _ Supply ________________ Productive (including ag ricultural) ____________ 1,102,841 167,979 66,342 83,469 906,420 197,421 139,204 115,877 23,327 128,916 29.063 68,479 62,349 6,130 221 46,286 11,057 13.649 13.328 66,939 16,620 11,273 9,301 1,972 963,637 789,543 174,094 89,600 66, 567 22,933 42,793 31,957 10,836 72,186 57,638 14,548 i 3 of these belonged to minority groups. * 2 of these belonged to minority groups Rumanian Cooperatives Just B efore the W ar Up to the onset of the depression in 1929 the total number of cooperatives and their members had increased. From that year through 1935 both number and membership declined. In 1936 the cooperative movement was described in an official publication as being in a “ serious depression.” Altogether, a loss of 945 associations and 152;048 members was shown as compared with 1929. The largest relative losses were those of the forestry, land, and consumers’ cooperatives; the productive associations had, on the other hand, increased. “ Hangya,” the union and wholesale of the Hungarian cooperatives in Rumania, had in affiliation at the end of 1937 some 325 local asso ciations with 65,000 members and an annual business of 237,000,000 lei. The wholesale itself in 1937 had sales amounting to 121,000,000 263 Rumania lei. The German consumers’ cooperatives, although they had suf fered from the depression, had survived and shown a considerable improvement in 1938. They had their own wholesale association, which not only marketed supplies but did a distributive business as well. In 1937 the .German Union of Raiffeisen Cooperatives had in affiliation 190 associations with 18,411 members; its wholesale society was serving 54 local distributive associations with 4,352 members and had an annual business of 38,042,000 lei. The wholesale itself had sales in that year of 13,300,000 lei. ^COOPERATIVE reform ” LAW OF 1938 AND ITS EFFECTS In February 1938, an authoritarian constitution was adopted and King Carol proclaimed the Rumanian Front of National Regeneration which replaced all political parties. Shortly afterwards another cooperative law was passed, effective June 22, 1938, which in its turn abolished the Central Cooperative Office and its subsidiaries, and substituted a whole new set of coopera tive machinery headed by a National Institute of Cooperation under the Rumanian Minister of National Economy. By the end of 1938 there were in existence 10,080 cooperative associations, distributed by type as follows: A ssociations T o t a l.................................................................................................... 1 10, 080 C red it a ssocia tion s_______________________________________ Su pply and consum ers’ a ssocia tion s_____________________ A gricultural associations: F o re stry ____ _________________________________________ L an d lease an d purchase____________________________ O ther (service, e t c .) _________________________________ P ro d u ctiv e associations, urban and rural_______________ M em bers 1 1, 453, 127 5, 140 2, 791 1, 120, 000 154, 735 448 468 39 657 2 8 ,0 0 0 25, 686 4 ,0 0 0 70, 000 1Includes 537 associations with 50,706 members, not reported as to type, the greater number of which were in liquidation. After the passage of the 1938 law, the National Institute subjected the local associations and their administration to a searching examina tion with a view to “ the sorting out of viable units,” the liquidation of “ artificial establishments,” and the “ amalgamation of the lessimportant societies.” At the end of the year, nearly 2,000 associa tions, of the 10,080 on the register, were reported to be in process of liquidation. Thus, many of the consumers' cooperatives, about a fourth of the supply and marketing associations, about 100 of the forestry associations, and 19 land-purchase associations were being dissolved. It appeared, however, that the majority of the associations were making progress and an official report expressed the opinion that the “ new constitutional era” which “ had the effect of abolishing the polit ical struggles of the country, offered the cooperative movement the possibility of escaping from foreign influences, thus permitting it to recover the real autonomy enjoyed before the [first World] War.” At the end of 1938, altogether 1,453,127 persons out of a population of 18,850,000 (or about 7.3 percent) were members of cooperatives of one kind or another. Counting the family members, about a third of the population was, therefore, served by the cooperative movement in that year. 264 Cooperatives in Individual Countries Rum anian Cooperatives in W artim e In 1940 Rumania again lost a considerable part of its territory, as a result of the war. Southern Dobroqea, which had been part of the old Rumanian Kingdom, was taken by Bulgaria, Transylvania was shifted to Hungary again, and Bessarabia went back to the Soviet Union along with northern Bukovina. The remaining territory be came a German protectorate. The territorial shifts reduced the population by nearly 6,000,000 (about 30 percent) and the territory by 39,000 square miles (about 34 percent). Rumanians constituted about 85 percent of the Kingdom’s population in 1941, as compared with about 72 percent prior to the 1940 partition. By these transfers considerable numbers of cooperative associations were also lost to the Rumanian cooperative movement. The greatest cooperative losses were in Transylvania, but the cooperative move ment was also well developed in Bessarabia and northern Bukovina, whose cession reduced the total number of cooperative associations in Rumania by over 13 percent and the membership by 12 percent. The recovery of Bessarabia as a result of the German-Russian War restored a large part of these losses. The use of the cooperative movement for the distribution of food to the people is indicated by a decree-law published October 1, 1940, which required the National Institute of Cooperation to carry out the instructions of the newly created Ministry of Coordination “ with regard to general food supplies.” In 1941 the cooperative law was again completely revised, and a new law was written incorporating the law of 1935 together with the enactments of June 23, 1938, January 20, 1939, October 18, 1940, and February 22, 1941. The law contained the usual standards for cooperatives, besides regulating in detail the powers and procedures of cooperative associations and defining the powers and duties of the National Institute which, as previously, is under the supervision and control of the Ministry of National Economy. In 1942, by a series of decrees, control over the cooperative move ment was increased, and the National Institute became one of the main agencies carrying out the Government’s agricultural policy. Under it, productive and warehousing facilities were greatly increased but, the International Cooperative Alliance pointed out, the coopera tive associations had been “ completely overshadowed” by the mass Government agencies. “ Farmers’ communities” were also provided for, which were to take over most of the functions of the former agricultural cooperative associations. A new type of “ village bank” was created by the Government, to the capital of which the credit cooperatives were to be “ allowed to contribute” ; these banks were directed to work with the rural cooperative associations for the pur pose of accelerating agricultural production. The cooperative asso ciations of the German minority were federated into three central or ganizations, a central bank, and a national association of Raiffeisen cooperatives. By-passing the consumers’ cooperatives also, the Government resorted to a plan (designed to protect the consumers from blackmarket operations) of compulsory consumer groups for the joint pur chase of food and other essentials. These groups were to be organized Yugoslavia 265 in factories, offices, and other business enterprises, as well as in public institutions.9 Cooperative Moveriient in Yugoslavia Yugoslavia, the Kingdom of the Serbs, Croats, and Slovenes, was assembled after the first World War, from Serbia, Montenegro, and bits of territory formerly governed by Austria-Hungary, and Austria and Hungary jointly. The cooperative movement there had, there fore naturally developed under diverse conditions. Nevertheless, except in Montenegro, each region had a thriving cooperative move ment. A Yugoslav cooperator, writing in the Review of International Cooperation for December 1941 pointed out that the Yugoslav is a ‘ ‘ born cooperator. ” “ The primeval family community of the southern Slavs, the so-called zadruga, still exists in many places to this day * * *. The conception of a State organized as a single huge zadru ga, that is, as a peasant cooperative union, is very widespread among these people. Indeed, the old tradition of the family cooperative is so much alive that the word zadruga has been adopted as the accepted name for cooperative societies, while other nations had to invent modern appellations for these organizations.” In the new Kingdom, Serbia (which had won its independence from Turkey in 1878) represented cooperative development of the longest standing, its first cooperative association dating from 1894. By 1914 there were about 1,200 associations— including 800 credit, 200 dis tributive (consumers,), 154 machinery, 40 livestock-insurance, and 8 wine associations— as well as a central bank formed by these organ izations. The movement in Serbia was, even at that time, a united one, most of the associations being affiliated to a central federation formed in 1897. In the other territories the cooperatives had developed largely along religious and political lines. In Croatia, which had been ruled by Hungary, the cooperative movement consisted of associations of Croats, associations of Serbs, and associations encouraged and partly financed by the Hungarian Government in an attempt to assimilate and Magyarize the minority groups. The Serb and Croat associations were largely led and controlled by priests of the Greek Catholic and Roman Catholic Churches, respectively. As one of the main objec tives of the nationality cooperatives was to maintain their national individuality against the assimilating policies of the ruling govern ment and serve as patriotic rallying points, naturally they were gener ally looked upon with some distrust by their rulers. (Nevertheless, the Government had used their facilities during the first World War as distributing agencies for Government-controlled goods such as flour, potatoes, paraffin oil, and coal.) Bosnia and Herzegovina also had nationality cooperatives of Serbs and Croats. In Slovenia the asso ciations were divided into clerical and anticlerical organizations. 9 S o u rces.—1The report on Rumania is based upon data from the following publications: Correspondance Economique Roumaine (Rumania, Ministerul industriei si comentutui, Bucharest), January-March 1939, January-March 1940, and July-September 1941; Review of International Cooperation (International Cooperative Alliance, London), February 1932, September 1938, April 1939, July 1940, May 1941, November 1942, and July 1943; People’s Yearbooks (English Cooperative Wholesale Society, Manchester), 1929, 1930 1934, 1935, 1938, and 1941; Cooperative Information (International Labor Office), No. 8,1938; International Directory of Cooperative Organizations (International Labor Office), 1939; The Cooperative Movement in Jugoslavia, Rumania, and North Italy during and After the World War, by Diarmid Coffey (New York, Carnegie Endowment for International Peace), 1922; La Cooperation dans les Pays Latins, by Charles Gide (Paris, Association pour L’Enseignment de la Cooperation), 1928?; and New International Year Books. 1942 and 1943. 588544°— 44------ 18 266 Cooperatives in Individual Countries During 1914-18 the whole of Serbia was occupied by enemy forces and as a consequence the cooperative movement came to a complete standstill during that time and had to be built up again when peace came. Largely as a result of the work of one leader, M. Avramovitch, the movement was started again and by 1920 there were about 800 associations of which 600 were old associations revived and 200 were new. In Croatia by the end of the war all of the associations promoted by the Hungarian Government had disappeared. In that region the cooperative credit associations were the predominating type remain ing, although most of these associations also purchased supplies for the members and sometimes marketed their produce as well. In Slovenia where (being under Austrian rule) the cooperatives had more opportunities for development, the associations were of more varied type and more likely to carry on a single line of activity instead of combining many functions in one organization. The Slovenian movement also differed from that in the other regions in that it was largely of the urban consumer rather than the agricultural type. Montenegro had no cooperative movement, but in Bosnia and Herzegovina (first under Turkish and then under Austro-Hungarian rule) there were active cooperatives among the Christian inhabitants. In each of the regions there was a central federation for each branch of the cooperative movement, to which some or all'of the local co operatives were affiliated. Although generally these federations maintained friendly relations, each went its own separate way. No data are available showing the number and membership of various types of associations or even of the total Dumber in the new Kingdom of Yugoslavia in 1920. It is known, however, that the individual associations were very small. This was a deliberate policy among the nationality cooperatives, the idea being that with a small membership (among the Serbs 100 was regarded as the maximum desirable number and the average was about 35) each member knew all the others and could act to “ keep in line” any member who showed signs of accepting Hungarian (Magyar) ideas or customs. With the formation of Yugoslavia (Kingdom of the South Slavs) at the termination of World War I, the aim of the cooperators changed from that of the attainment of Slav independence to that of raising the economic and cultural level of the people. The first step in the task of welding the separate parts of the cooperative movement into one organic whole began in 1919 when the regional federations formed a super-union— the General Federation of Cooperative Unions in the Kingdom of Yugoslavia. Three years later at the end of 1922, the General Federation had in affiliation 27 of the 32 regional unions and these included in their membership 96.8 percent of the total number of cooperatives and 94.5 percent of all the cooperators in the Kingdom. T ypes o f Cooperatives and Their Activities By the end of 1927 there were 4,265 cooperatives in Yugoslavia. Credit associations formed over half of the total, and the cooperative distributive associations were the next largest group. The coopera tive movement had become much more varied than in the immediate post-war period and included handicraft associations of various occu pational groups, house-building associations, associations for rural 267 Yugoslavia health and sanitation, electricity associations, fishermen’s associations, and organizations for the production, processing, and marketing of agricultural products, as well as cooperative communities. That the Government recognized the importance of the cooperiative move ment was indicated by cooperatives’ participation, through the General Federations of Cooperative Unions, in the formulation of legislation. In 1930 the Federation took part in the preparation of a legis lative measure for the whole of Yugoslavia, to take the place of the 18 different laws under which cooperatives in the various regions operated. Other measures in the preparation of which it assisted were those dealing with chambers of agriculture, public and coopera tive warehouses, and bills relating to various branches of trade. Finally it collaborated with the Government and the exporters’ association in the formation (in June 1930) of the Chartered Company for the Export of Agricultural Produce; 6 of the 18 members of this company’s board of directors were representatives of agricultural cooperatives. Notwithstanding the depression beginning in 1929, the Yugoslav cooperatives made steady progress from year to year. At the end of 1933 the total number of cooperatives in the country was about 8,400, of which 6,647 were members of regional unions affiliated to the General Federation of Cooperative Unions; they accounted for 890,150 individual cooperators (or 88.3 percent) of the total for the country, 1,007,790. As each cooperative member represented an average household of 5 persons, the cooperatives at that time were serving about 34 percent of the total population of 14,500,000. The credit cooperatives (about half of the total) which were very evenly distributed throughout the country were, according to a United States consular report, “ shaken more or less by the prevailing crisis” but were endeavoring to strengthen and stabilize their organiza tions. The retail associations were also affected by the fact that the unfavorable agricultural situation had cut the purchasing power of the farmers, who still formed the larger part of the membership. The cooperative communities had grown to 536 in 1931 but had dedeclined to 470 by 1933. The agricultural production, processing, and marketing associations on the other hand had grown by nearly 35 percent, and were playing an increasingly important part in the export trade of Yugoslavia The following statement shows the number of the various types of cooperatives in 1927, 1931 and 1933: im N um ber of associations 1981 1988 All ty p e s ______________________________________ 4, 265 7, 483 1 8, 227 C red it a ssocia tion s____________________________ D istrib u tiv e associa tion s_____________________ E lectricity associa tion s_______________________ H ou se-bu ild in g associa tion s__________________ R u ral health and sanitation association s____ H a n d icra ft associa tion s_______________________ F isherm en ’s a ssocia tion s______________________ C o o p e ra tiv e agricultural com m u n ities_______ A gricu ltural p rod u ction , processing, and m a rk etin g associa tion s__________________ _ A gricu ltural service associa tion s_____________ O th er 3________________________________________ 2, 459 1, 105 43 48 30 38 37 123 4, 407 1,217 51 89 84 93 43 536 4, 624 1, 566 (2) 88 88 116 58 470 216 37 129 697 60 206 1 Not including about 200 independent associations not affiliated with any regional union. 3Included with “other.” 2Includes regional unions and auditing unions. 936 00 281 268 Cooperatives in Individual Countries RURAL HEALTH AND SANITATION ASSOCIATIONS The cooperative associations for rural health and sanitation may be considered as Yugoslavia’s outstanding contribution to the cooperative movement. These associations, though not numerous, in the 20 years following their introduction made a significant contribution toward improving rural conditions of living in Yugoslavia. However, in order to evaluate their importance it is necessary to study them in relation to general conditions in the rural areas. Yugoslavia is primarily agricultural and even the industrial workers are of peasant origin, never losing contact with their native villages and always planning to return. Industrial workers formed, as late as 1936, only 10.7 percent of the gainfully employed population, whereas agricultural workers accounted for 77 percent. The agriculturists were in the main very small farmers, working plots that were in many cases too small to support their owners even at a bare subsistence level. The rural classes led a miserable existence, as their living conditions were of the most stark and primitive type. The death rate was appallingly high. The Yugoslav Government eventually established a public health service. At the time the Kingdom was established, however, there were no public health facilities. Accident, sickness, and maternity insurance were provided by an act of 1922, but the clinical and other facilities were in urban areas and were not accessible to the peasants. Of the 5,000 doctors in Yugoslavia, only 20 percent were in rural areas— about 1 doctor for every 12,000 rural residents. It was to assist in relieving these conditions and to raise the general level of health and of living that some of the cooperative leaders 10 started the health and sanitation cooperative movement in 1921. As the problem was largely one involving the education of the rural families, it was believed that the approach should be through the family rather than the school. Cooperatives were believed to be the best form of organization, as they involved personal effort by the members and it was desired to emphasize the idea of self-help. The problems required an attack from three directions, i. e., curative medicine, preventive and social medicine (including hygiene as well as campaigns against social and infectious diseases), and rural sanita tion work. Curative medicine was the first branch of the work undertaken. In the health cooperative the funds were provided by small regular contributions from the member families, in order to insure a flow of funds for the work. These contributions were usually paid by the month but sometimes at the end of a crop season. Quarters were rented and a doctor hired. The simplest type of health cooperative had a doctor and sometimes a nurse or midwife, who were employees of the association, and there were generally a consulting room, dis pensary, one or two rooms for meetings and lectures, and sometimes a room with bathtubs or showers. Beds for persons seriously ill were also provided, in separate quarters. As the associations grew they expanded their services and generally built their own headquarters buildings which were known by the name of “ health houses” — the symbol of the work the associations were try10 The idea had come to them through their participation in American relief work in the country after the end of the war. 269 Yugoslavia ing to do. The first such houses were built in 1928, and by 1934 there were 14 of them. Where there was more than one cooperative in the same village it was the practice to have the headquarters of all in a single building and this then was known as “ The Cooperative H ouse/’ Generally in villages having health cooperatives the “ health house” was the headquarters of all. T h e size [of th e “ health h ou se” ] naturally depen ds on th e services th ey are t o a c c o m m o d a te and th e sum it has been possible to p rov id e for b u ildin g them . T h e y con ta in quarters fo r the d o c to r and his fam ily, a fu lly eq u ip p ed consultin g ro o m , a w aitin g room , a dispensary and som etim es a la b ora tory , several sick room s, in som e cases room s for nurses and attendants, room s fo r ou t-pa tien ts, a lw a ys a show er ba th and usually baths. Som e o f th em h ave a p oly clin ic fo r sch o o l children, a m atern ity w ard, a day nursery, etc. All, o f course, h ave on e o r m ore room s fo r m eetings and lectures, equ ipp ed w ith teaching m aterial, and o fte n a sm all library. A lm ost all o f th em h ave vegetable gardens, pigsties, etc., w h ich can be used fo r voca tion a l edu ca tion . A t least one— a t B eljin a— has an o p en -a ir sw im m ing b a th . T h e “ health houses” usually p rov id e a ccom m od a tion also for the oth er co o p era tiv e societies o f the village (for credit, stock im p rov e m en t, the-sale o f corn, e tc.). T h e “ health h ou se” a t Lazarevats, on e o f the b iggest w hose sim ple an d dign i fied architecture is qu ite im pressive, cost a m illion dinars to bu ild. T h e tota l v a lu e o f the “ health h ouses” is n ow 3,240,863 d in a rs.11 Irrespective of their size, all of the health cooperatives took part in the promotion of health, hygiene, and education. The development of these associations was not spectacular but was steady, as is indicated by the data in table 87. In 1922 the existing associations federated into the Union of Rural Health and Sanitation Cooperatives and this gave new impetus and stability to the movement. T a b l e 87. — Developm ent o f Rural Health and Sanitation Cooperatives in Yugoslavia in Specified Years, 1922-39 Number of associations Number of members Year 1922...................................................... 1923....... ............................................. 1925...................................................... 1930..................................................... 1933.............................................. . 1938-39................................................ Total Active 12 13 21 59 90 134 (2) 12 16 41 85 125 Families 5,286 5,049 8,386 16,647 43,847 65,586 Members in family Amount of Number of business done persons (medicine sold, treated treatments, etc.) D in a rs J (2) 30,249 50,316 99,882 (2) (*) 18,518 14,568 14,179 34,445 58,577 136,187 (2) 119,949,000 370, 553,000 1,241,984.000 1,200,000,000 2,695,000.000 1For par values of currency, see Appendix table, p. 278. 8No data. In the 11 years ending in 1933 the health cooperatives gave curative treatment to 301,386 persons. This represented only one phase of their work, however. In addition they carried on a great deal of preventive work, such as vaccinations (given free to any person applying), advice and supervision for mothers, lectures and preventive work in connection with such diseases as malaria, tuberculosis, tra choma, and the venereal diseases. Mothers of young children and expectant mothers in the region were visited by the cooperative doctor 11 International Labor Review (Geneva), July 1935. 270 Cooperatives in Individual Countries once a week, without charge, and the doctor also carried on medical inspection in the village school. Five associations had established day nurseries under the supervision of experienced persons. Sanitation work of the most varied kind was carried on. In most cases the actual work was done by the villagers, under the direction of the cooperative. Among the activities so carried on were the laying of water pipes and drains; construction of wells, manure pits, latrines, and refuse pits; repair of poultry sheds, cattle barns, and dwellings; and even paying a street or the village square. As noted in a report to the International Labor Office 12 “ all these various activities obviously reinforce each other and all of them are also linked up with a many-sided, methodical, and steadily pursued educational program. * * * They try to keep their educational work in close touch with everyday life, and their system is first and foremost concrete and active.” These two considerations led to the formation of juvenile sections and women’s sections, with the view to enlisting the active support and collaboration of the young people and the women. By 1933 there were 33 juvenile sections, with 743 members from 12 to 18 years of age who were doing village-improve ment work, making simple furniture, growing new kinds of food to supplement the peasant diet, etc. “ From the moral and social points of view they [these sections] give young people the habit of rendering services to the community accordmg to their ability.” The women’s sections provided instruction on general health questions, rearing of children, gardening, poultry keeping, practical household questions, etc.; and were “ responsible for organizing fetes and concerts and for creating a real social life— a genuine feminist triumph, this, in the Yugoslav village.” In 1934 the associations organized veterinary sections with the duties of care for sick animals prevention of animal disease/ improve ment of breeds, provision of serums, etc. The activities of one large veterinary association covered 37 villages. In 1938 the Union of Rural Health and Sanitation Cooperatives organized a traveling dental clinic which visited all the health centers. D IST R IB U T IV E CO O PER ATIVES As so very large a proportion of the population (not excepting the industrial workers) consisted of peasants, even the consumers’ dis tributive cooperatives of Yugoslavia were very largely rural. How ever, most of the central federations in all branches of cooperation had their headquarters in the larger towns and cities and there was thus a certain consumers’ cooperative development in the urban cen ters. Also important in the consumers’ cooperative branch of the movement were the associations of the railway workers and persons employed by the Government. As used in Yugoslavia, the term “ civil servants” included not only employees in Government administrative offices, but also soldiers, teachers, railway workers, miners, employees in Government-owned salt and sugar factories, and persons on Government pensions. At the end of 1938 there were 322 societies of “ civil servants” of which con sumers’ cooperatives accounted for 130, and credit associations for 167; the remainder consisted of 15 building associations, 9 productive organizations, and 1 insurance association. The total membership, 13 International Labor Review, July 1935, p. 31. Yugoslavia 271 163,056, included 88,173 Government employees, 42,436 workers in other public employment, 7,519 soldiers, and 23,855 pensioners. The associations were members of the Union of Civil Servants Coopera tives, an all-embracing federation with wholesale, propaganda, pro ductive, credit, and insurance departments. Its productive depart ments operated flour mills and a bakery, which in 1937 produced goods valued at 20,091,000 dinars. The Union used its surplus to purchase and run hotels and vacation homes for the use of its members. One of the largest local associations in the country, and probably the largest retail consum ed cooperative, was the Railwaymen's Dis tributive Cooperative Association. T.his association, whose member ship exceeded 7,900, had its headquarters at Ljubljana (in Slovenia). As its membership was restricted to railway workers and practically all of them were members by 1935, its efforts were directed mainly toward expansion of its services. It operated grocery stores, 2 meat markets (the pork products for which were made in its own plants), a milk-distributing system, a refreshment bar, and a restaurant. In addition to food, the association also handled household equipment, shoes, and dry goods, carried on ready-made and custom tailoring business, and manufactured underwear. Its business in 1933 amounted to 46,300,000 dinars. As its members were scattered to all points of the railway system, it had built up a mail-order business on a large scale, its bills being settled automatically by deductions from the members' wages. As many of the railway workers were also small producers of farm products, honey, etc., the association bought their surplus products. It also did considerable cultural and welfare work. The railwaymen also had their own cooperative credit association, most of the loans of which were made for the construction of dwellings. Recreational and Cultural Aspects o f Cooperatives The cooperatives in Yugoslavia did not stop with purely economic measures. One report to the International Labor Office noted that generally Yugoslav cooperative associations “ however small," strove to meet the cultural requirements of their members. As already noted, the “ health houses" all were social and educational centers for the areas in which they were found. One of the workers' productive cooperatives had a library and reading room in the “ Coop erative House" which it and the local consumers' cooperative had established together; this house also contained a lecture and recreation hall. The Railwaymen's Cooperative Association, already described, in 1934 purchased a tract of 50,000 square meters of mountain land with a view to starting a cooperative vacation resort. One of the large credit cooperatives made a practice of using half of its annual earnings for various educational and social purposes. In this way the association became the owner of several nurseries for which it paid 400,000 dinars and which could accommodate 150 chil dren at a time; these nurseries were run, not by the association itself but by the Central Organization for Workers' Education. Cooperatives in the Decade P rior to the N azi Invasion The year 1932 was the worst year of the depression in Yugoslavia and led to a number of measures by the Yugoslav Government de 272 Cooperatives in Individual Countries signed to improve the agricultural and currency situation. In Novem ber 1933 a moratorium was declared on agricultural debts, which, although it relieved borrowers, virtually crippled the agricultural credit cooperatives. As a result of their protests, the Government in August 1934 exempted those associations which accepted savings deposits, but this arbitrary division into protected and unprotected associations created certain other difficulties. In the same year the cooperative representation on the export association was cut by two-thirds. The International Cooperative Alliance noted that “ in the legal and fiscal sphere the movement’s position also changed for the worse during 1934,” causing the movement to petition for a change in the law, to remove the cooperatives from control by associations of private dealers. Private traders were allowed to borrow from the National Bank, at 5 percent interest; this privilege however, was denied to the cooperative wholesale. During 1934 the agricultural cooperatives also suffered a reduction in their export business, largely as a result of the unfavorable prices on the European markets and the devaluation of the currency in Czechoslovakia (one of their chief markets). PASSAGE OF THE COOPERATIVE LAW In 1937 the cooperative measure, introduced in 1930, finally became a law. It replaced 18 acts and orders which had been in force in various parts of the country and introduced the first uniform legal definition of a cooperative association and the first uniform regulations for the movement. However, the act stipulated that cooperative associations could do business only with members, thus eliminating one very fruitful source of members— persons who through their patronage of the associations became acquainted with cooperative policies and eventually joined. The act also provided that every local association must be affiliated to one of the auditing unions. Supervi sion of agricultural cooperatives and their federations was delegated to the Minister of Agriculture, and supervision of consumers’ coopera tives, craft cooperatives, and associations of private traders to the Minister of Trade and Industry. Cooperatives of public employees were to be under the supervision of the Minister of Finance. These three officials were empowered to send representatives to meetings of the federations in that branch of the movement which they supervised. On the other hand, auditors of the cooperative auditing unions had the privilege of free travel on Government railroads; and a fund for promotion of cooperation was provided for, financed by 2 percent of the net surplus of two Government banks and 10 percent of the net surplus of the State lottery (these were estimated to aggregate 4,000,000 dinars per year). DEVELOPMENT OF COOPERATIVES, BY TYPE By the end of 1938 the cooperative membership in Yugoslavia stood at 1,414,876; thus (counting their families, but allowing for some duplication of members) about 40 percent of the total population was served in one way or another by cooperatives. The 10,832 coopera tives to which the cooperators belonged were all affiliated (as required by the 1937 law) to the General Federation of Cooperative Unions at 273 Yugoslavia Belgrade, through their regional unions. Table 88 shows the develop ments of the Federation up to the end of 1938. T a b l e 88.— Total N um ber o f Cooperatives in Yugoslavia and N um ber and M em bership o f A ffiliates o f General fed era tion o f Cooperative U nions, 1927—38 [For par values of currency, see Appendix table, p. 278] Total number of coopera tives Year 19**>7 . _ _ . . . ___ __ _ .... ___________ _______ ___ _ .......... _ ___ —. ______ _______ . . _____________ _____________________ ... 1933 1934 law 193a 1937 1938 Associations affiliated to General Federation of Cooperative Unions Their member ship Number Their business D in a rs 4,265 7,077 ‘ 8,227 ‘ 8,526 (*) (2) 10,144 10,832 3,049 5,796 6,647 6,952 7,254 7,610 10,144 10,832 458,162 784,011 * 890,150 876,342 918,114 8 1,000,000 1,329,015 1,414,876 717,033,000 1,234, 368,000 (2) (2) (2) (2) (2) (2) i Not including: about 200 independent associations not affiliated with any union; total members all types in 1933,1,007.790. * No data. 8Approximate. Most of the regional unions carried on commercial activities, as well as the auditmg activities required by the law. In 1938 the commercial departments of these central unions had a total business aggregating 458,400,000 dinars, of which 115,200,000 dinars repre sented the purchase of supplies and 343,200,000 dinars represented the marketing of the members' products. The size of 16 of the central unions for which data are available is indicated in table 89. T a b l e 89 .— M em bership and B usiness o f Specified Central Federations in Yugoslavia , (For par values of currency, see Appendix table, p. 278] Central federation Serbia; General Federation of Serbian Rural Cooperatives___ General Union of Craftsmen’s Cooperatives ............. . Union of Public Officials’ Consumers’ Cooperatives... Slovenia: Cooperative Union of Ljubljana.......... .................. ........ Union of Slovenia Cooperatives in Ljubljana3........ . Union of Cooperatives in Yugoslavia3.......................... . Bosn ia-Herzegov ina: Union of Croatian Agricultural Cooperatives.............. . Union of Serbian Agricultural Cooperatives_________ Dalmatia: Union of Cooperatives in Split........................................ . Cooperative Union of Split.............................................. . Union of Fishermen’s Cooperatives............................... . Croatia: Croatian Central Agricultural Cooperative.................. Central Union of Croatian Agricultural Cooperatives. The Cooperative Union.. ............. ................................. Central Union of Rural Credit Cooperatives8............. . Slavonia: Union of Agricultural Communities............................... Number of affil Their Business iated member done by ship associa federations tions D ina rs 3,316 159 304 225,000 8,334 153,427 ‘ 6,229,000 703 381 102 140,617 91,197 18,102 2 21,107,000 141,400,000 548,000 69 172 5,894 12,615 2,089,000 200 267 60 18,188 23,880 2,126 182 422 230 1,484 13,280 60,294 58,468 105,283 2,382,000 6,602,000 78 6,600 4,086,000 83,647,000 *13,000 1 Data are for 1935; in addition the wholesale belonging to the union had a business amounting to 57,846,000 dinars in 1937. * Business of union’s supply and marketing associations, 1936. *Data are for 1936. *Data are for 1935. 274 Cooperatives in Individual Countries The credit cooperatives still formed the largest single group of cooperative associations. In 1937 their own funds and the savings deposited with them accounted for about a third of the total banking resources of the country. The agricultural cooperatives were still strong, also. In the 1938-39 season 28 percent of all the wheat exported from Yugoslavia was supplied by the cooperatives, as well as 40 percent of the cattle and poultry exports. Consumers' cooperatives.— The consumers' cooperatives represented erhaps the fastest-growing type of association in the 1933-38 period, aving increased from 1,566 at the end of 1933 to 2,259 in 1938. Most of the rural consumers' cooperatives were affiliated to the General Union of Serbian Rural Cooperatives at Belgrade. This association had its own wholesale association formed in 1929, with an initial membership of 130 associations, but the difficulties of transport confined the wholesale's services largely to the associations in the areas where the union had branch wholesale warehouses. Up to 1935 the union and wholesale both accepted agricultural cooperatives as members; by agreement, in that year, the wholesale association thereafter accepted as new members only consumers' cooperatives, the central organizations of agricultural cooperatives, and cooperative unions. The wholesale made a modest start in the field of production and by the end of 1935 had a factory making candy and confectionery, a cheese factory, a plant making lubricating oil, and a factory producing salt, shoe polish, etc. The development of the General Union of Serbian Rural Coopera tives from 1928 to 1938 is shown in table 90. E T a b l e 9 0 . — Developm ent o f M em bers o f General Union o f Rural Cooperatives in Y ugo slavia and its W holesale for Specified Years9 1928-38 [For par values of currency, see Appendix table, p. 278] General Union Year Wholesale association Number Number of affil Their pur of affil Their Wholesale's iated chasing and iated business associa members sale business1 associa tions tions D in a rs 1928 ur_________ - _ _ __________ 1931............................................................................ 1932............................................................................. 1934............................................................................ 1935............................................................................. 1936............................................................................ 1937............................................................................. 1938................- ........................................................... (2) 2,286 2,509 (2) 2,979 3,172 3,316 (2) 78,350 118,290 220,200 (2) (2) 225,000 225,000 243,670 (2) (2) (2) 230,479,282 257,155,804 220,426,000 8 D in a rs 3 130 (2) (2) 991 (2) 1,236 (2) (2) 31,731,177 37,166,955 (2) 57,846,000 (2) » Not including loans of credit associations. 3No data. *1929. Rural health and sanitation cooperatives —During 1933-38 the number of active health associations had risen only from 85 to 125. Their growth depended on the slow, laborious process of education and they therefore had not by any means achieved their ambition of stamping out tuberculosis, malaria, etc. However, limited as their development had been, in relation to the size of the task confronting Yugoslavia 275 them, they had made a noteworthy contribution in raising the level of health and sanitation in rural areas. A report to the International Cooperative Alliance noted that they had played “ a remarkable part in the unwavering toil for economic and cultural progress and for raising the standard of national health, and their cultural importance would no doubt have finally equaled their economic power had not the Nazi attack on Yugoslavia interrupted their evolution.” Cooperation Under the N azis On April 6, 1941, Germany attacked Yugoslavia and Greece without warning or declaration of war. Twelve days later the Yugoslav Government capitulated to the Germans. By the end of the year the Yugoslav cooperative movement was in ruins, partly as a result of the partition of the country and partly as the result of specific acts of the Germans against the movement. The cooperative movement and the centred federation had grown up largely on a Provincial basis. In the partition of Yugoslavia that followed the German invasion the Provinces were not preserved as units. Slovenia was divided among Germany, Italy, and Hungary; Serbia was divided among these countries and Bulgaria; and parts of Croatia were annexed by Italy and Hungary, and the remainder was made a puppet State, parts of which were occupied by Italy. Thus the retail associations were cut off not only from the General Federa tion at Belgrade but also in many cases from their own regional unions. In Slovenia the Germans completely destroyed the cooperatives in that territory which they annexed, confiscating their property and the members’ savings deposits (about a billion dinars), and arresting or deporting the officials. In the part of Slovenia taken by Italy most of the cooperative property and warehouses were looted, “ but the storehouse of the Itailwaymen’s Cooperative Association escaped by an inconceivable chance.” In Serbia, the cooperatives of the German minority (“ which had been strongly assisted by Nazi Germany prior to the occupation” ) were favored in many ways. Thus they were given a monopoly of the very important hemp trade throughout Serbia. The rest o the Serbian cooperatives were turned over to a former cooperator (Lyotitch, by name) who had gone over to the Nazis even before the invasion, and he began to take measures to “ Nazify” them. In Croatia, Nazi “ commissioners” were installed in all the cooperatives. Kegarding Croatia, which was formerly a rich agricultural region, one account (some time after the invasion) noted significantly that “ Croatia which formerly produced an agricultural surplus, is now obliged to import grain and fats.” Apparently, however, the conquerors had to recognize the value of the cooperatives and even worked to use their services and extend their operations. Thus, at the beginning of 1944, more than 2% years after the invasion, high Government officials in Croatia were aiding in the formation of a central agricultural cooperative in Baranja which would collect all the produce of the members and “ supply all their agricultural and domestic needs.” A site for the building of the new association was to be given by the city prefect of Osijek. In Dalmatia it was announced at the beginning of 1944 that “ special importance” 276 Cooperatives in Individual Countries was expected to be bestowed upon the cooperatives, of which there were at that time 144 credit, 172 consumers’ , and 137 productive associations. In Serbia, in M ay 1943 the officers of all the central cooperative organizations were removed at one stroke by the puppet Government of General Nedi6, on the ground that they had proved to be “ unre liable elements” in the adjustment of the cooperatives to the “ new peasant cooperative State.” Avramovitch, aged pioneer of Serbian cooperation, was recalled from retirement to head the General Federa tion of Cooperative Unions. Some time later, the Minister of Agri culture and Supply announced that a questionnaire had been sent to all the cooperatives for their vote on a proposed “ reorganization of the entire Serb cooperative system.” The result of the circulariza tion, he said, was an overwhelming vote in favor of the organization of a “ customers’ purchasing association” for farmers and of a coopera tive for popular education, in every commune, both of which all farmers would be required to join; formation of a single federation (Serb Cooperative Alliance for all of Serbia); establishment of a cooperative providing old-age pensions and sickness and accident insurance for farmers; transfer of the State hail and flood insurance to cooperative management; and formation of livestock-insurance and farm-machinery cooperatives. The vote also favored the organization of a health cooperative 13 for every 4,000 rural residents, “ with com pulsory membership.” Shortly afterwards, an order to this effect was issued. Early in 1944 cooperatives were made the sole source of supply of rationed and controlled articles for rural residents.14* Cooperative Movement in Albania Almost no data are available concerning Albania. The Interna tional Labor Office reported in 1933,16 the formation of the “ first cooperative society in Albania.” Although not specifically identified as an agricultural association, evidently this was the case, for it led the Government to promulgate a law formulating standards and conditions governing the making of grants or advances to agricultural cooperatives. Search of cooperative and other literature reveals no further data regarding the above association or any others in Albania between that time and the invasion of the country by the Italians on April 7, 1939. i* In th e second h a lf o f 1942 there w ere in Serbia 228 health associations w ith 32,426 m em b ers (a b o u t h a lf o f th e pre-w ar m em bership total for the w h ole o f Y u g o s la v ia ). 14 S o u r c e s .— T h e report on Y u goslavia is based u p o n data from the follow in g p u b lica tion s: A nnuaire sta tistiqu e du R o y a u m e d e Y u goslavie, 1933 (B elgrade, S tatistiqu e g6n£rale d ’ E ta t, 1935); R e v ie w o f Inter national C oop era tion (International C oop era tive A lliance, L o n d o n ), issues o f January 1935, M arch and A pril 1936 A u gu st 1939, and M a y and D e ce m b e r 1941; P eop le’s Y e a rb o o k s (E nglish C oop era tive W holesale, M a n ch ester, E n gla n d ), 1933 through 1942; International L a b or R e v ie w (international L a b o r O ffice), J u ly 1935; International D irectory o f C oop era tiv e Organizations (International L a b o r O ffice), 1939; C ooperative Inform ation (International L a b or O ffice), N o s. 12 and 50, 1929. N o . 10,1931, N o . 13, 1932, N o . 4,1933, N o . 4, 1934, N os. 2, 3, and 6,1935, N o . 7, 1936, N o . 1,1938, and N o . 1,1940; C oop era tiv e M o v e m e n t in Jugoslavia, R u m a n ia and N o rth Italy D u rin g and A fter the W o rld W ar, b y D ia rm id C o ffe y (N e w Y o r k , C arnegie E n d o w m e n t for International Peace, 1922); C onsular reports, A u gu st 14, 1925, an d M a rc h 7,1935; and N e w s D ig est (L o n d o n ), issues o f F ebruary 8 and 9, 1944. w C oop era tiv e Inform ation , N o . 9,1933. A ppendix— Par Values o f National Currencies The accompanying table gives, for each of the countries of Europe, the par value of its basic unit of currency and the dates on which new values became effective. P ar Values o f Currency o f European Countries, Through A p ril 1940 [D ata are from Federal R eserve B u lletin , Septem ber 1940, p p . 928-934] C ou n try Unit A lb a n ia ___________ F ran c.......... A u stria.................... K ro n e Franc_____ B e lg a .......... Franc.......... B ulgaria.................. Lev C z e c h o s lo v a k ia ... K o r u n a .. . D en m a rk ................. E stonia___________ F rance____ ______ _ 1925......... 2 /1 9 3 4 ... $0.1930 .3267 .2026 .1407 .2382 .1875 .1887 .1883 .1930 .1390 t.0471 ‘ .0353 ‘ .0339 .1930 .0072 I t a l y ___ .0122 N orw a y 1925.......... 2 /1 9 3 4 ... 4 /1 9 3 4 ... 1 2/1935 .. 1 2 /1936 .. 1926_____ 2 /1 9 3 4 ... 3 /1 9 3 5 ... 4 /1 9 3 6 ... _ 1927.......... 2 /1 9 3 4 ... 1931.......... 2/1934___ 10 /1 9 3 6 .. K ro n e E . m a r k .. K roon ......... F in la n d ........ ........... Par value _ S c h illin g .. B elg iu m ................... D ate effective M ark ka- 2 /1 9 3 4 ... 1921.......... 1924.......... 1928.......... 2 /1 9 3 4 ... 3 /1 9 3 9 ... 1913_____ 12 /1 9 2 5 .. 2 /1 9 3 4 ... 1 2 /1 9 3 8 .. G r e e b e __ I c e la n d .. L a t v i a ______ _ . M a r k .......... Reichs m ark. D rachm a. 1924.......... 2 /1 9 3 4 .-. K rone_____ K oron a___ P engo......... K ro n e _____ D a te . effective . Let L it h u a n ia Lit N e th e r la n d s F lo r in . 1927.......... 2 /1 9 3 4 ... 10/1936 ._ 1913.......... 2 / 1 9 3 4 ... 1 0 /1 9 3 6 .. 1 /1 9 3 7 ... 1938.......... 1 /1 9 4 0 ... 1922......... 2 / 1 9 3 4 ... 2 / 1 9 3 4 ... 4 /1 9 4 0 . . . K r o n e ___ 2 /1 9 3 4 ... P o la n d ____ Mark____ Zloty_____ _ P ortu g a l _ ... Escudo R u m a n ia . .. L e n _____ 1924.......... 1927.......... 2 /1 9 3 4 ... 7 /1 9 3 1 ... 2 / 1 9 3 4 ... Soviet Union........ R u b l e _____ Ch e r von e tz . S p a in ______ .0496 .0435 .0279 S w eden. . 2^82 S w it z e r la n d 2 / 1 9 2 9 ... 2 / 1 9 3 4 ... 1 1 /1 9 3 6 .. 1913.......... 1917.......... 1 9 2 2 ..... 2 / 1 9 3 4 ... 9 /1 9 3 5 ... Peseta___ 2 / 1 9 3 4 ... Krona. 2 / 1 9 3 4 ... _ Franc .3382 ^ 1 9 3 4 ... 9 /1 9 3 6 . . . United Kingdom. Pound___ 5/1928— 2/1934— H u n ga ry.. L ira Franc_____ 6 /1 9 2 8 ... 2 /1 9 3 4 ... 1 0 /1 9 3 6 .. 7 /1 9 3 7 ... 1 1 /1 9 3 8 .. 3 /1 9 4 0 ... G erm any. .0296 .0418 .0351 .2680 .4537 .0024 .0027 .2680 .4537 .3153 . 1930 .0252 .0426 Unit C o u n try 1924.......... 1925......... 2 /1 9 3 4 ... 1 /1 9 3 9 ... 1944.......... .0130 2 /1 9 3 4 ... 3 /1 9 3 9 . . . 5 / 1 9 3 9 ... 6 / 1 9 3 9 ... 8 /1 9 3 9 . . . 9 /1 9 3 9 . . . <*) .2026 .2026 .1749 .2961 .1974 .2680 Y u g o s la v ia . _ D in a r 6 /1 9 3 1 . . . 2 / 1 9 3 4 ... i O ne-fifth o f belga; belga (5 francs) used o n ly in foreign exchange. 8 N o t available. 277 Par value $0.1930 .0526 .0891 .0526 .1930 .3267 .1974 .1960 .1990 .1951 .10 0 0 .1693 .4034 .6830 .5601 .2680 .4537 .2382 .1930 .1122 .1899 1.0805 .0422 .0748 .1930 .0060 .0101 .0073 .5146 0) 5.1460 8.7123 (») .1930 .3267 .2680 :4537 .1938 .3281 .2426 4.8665 8.2397 4.7138 4.7165 4.7138 4.4164 4.1667 .1930 .0176 .0298 Index P ag® A g r i c u l t u r a l cooperatives................................................................................................................................................. 6-9. 16, 20, 35, 46, 47, 58, 61-63, 74, 75, 98,100,103,104,110, 111, 113,117,120,130,132,135, 147-149, 152, 154, 155, 158, 159, 161-164, 166-168, 170, 173, 174, 177, 178, 180, 181, 184, 188, 190, 198-197, 202, 203r 208, 209, 217-219, 221-223, 229-231, 235-241, 243-248, 251-255, 262-265, 267, 268, 274, 276, 277 A lban ia, cooperatives i n ...................................................................................................................................................... 277 A llian ce, International C ooperative............................................................................ 2,32-37,205, 216,225,226,255,264 A m a lga m a tion of cooperatives...................................—................................................. 52, 64, 68, 73, 77, 78, 83, 84, 139, 154,158,159,166,171,185,193,203,207,218,222,226,263 A u d itin g , central co o p e ra tive ......................................... 68,81,82,95,131,143,152,164,180,183,190,214,217,218,273 A ustria, cooperatives in ............................................................................... 6,8,12,17-24,26-28,30-34,38-40,42,167-176 B a k e r ie s .......................................... 16,17,64,71,73,100,104, 111, 124,129,145,164,171,180,222,225,229,235,244,261 B altic countries, cooperatives in {see a lso E stonia, Latvia, L ith u a n ia )............................................................. 31,43 B an k in g activities, cooperative {see also C redit cooperatives; P eop le’ s b a n k s ).................................. 52, 67, 68, 74,79,81,101,114,131,138,150,162,180,182,190,230,244,256,258,265 B an k in g D ep artm en t, C . W . S. (G reat B rita in )...................................................................................................... 52 B elgium , cooperatives in .......................................................... 6,8,10-12,14-20,23-26,28,31,33,34,36,38-40,42,60-73 B u ildin g associations {see H ousing, cooperative). B ulgaria, cooperatives in ................................................ 6,8,11,12,14,16-18,20,22-29,32-34,36,33-40,42,43,243-251 Business, cooperative, statistics o f.............................................................................................................. ......... .......... 14, 23-25, 35, 37, 38, 46, 47, 49, 50, 52, 54, 58, 59, 62, 63, 65, 70, 78,80, 85, 86, 94, 96, 101, 103, 105, 106, 111, 113-116, 122, 124, 125, 127, 130, 132, 136, 138, 140-142, 145-147, 152, 155, 156, 159, 160, 163, 165, 172, 175, 179, 187, 200, 206, 212, 215, 218, 226, 232, 234-237, 239, 241, 250, 258, 270, 273-275: B usiness, p rivate, and cooperatives {see P riv ate business and cooperatives). C a p it a liz a t io n o f coop era tives....................................................................................................................................... 52, 58, 59,68,69,70,80,103,106,107,115,121,122,124-126,136,140,141,144,146,156,158,159,162-165, 173, 211, 236, 241, 249, 255. C entralization in cooperative m ove m e n t........................................................................ 68,81,82,214,256,257,273,276 C hildren, cooperative care o f ._____________ ________ _____ _________________ 10,11,66,78,85,181,201,202,269,272 Congresses, International C o op era tiv e............. ................... ......... ............................................................................... 36 C onsum ers’ coop e ra tive s ,.............. ............ ................................................................................................... ................. 6-9, 16-32, 35, 46-57, 59, 60, 62-72, 74-84, 91-100, 103-111, 114-118, 120-135, 138-145, 147, 149-166, 168, 178, 180-196, 198-207, 209, 210, 217-226, 228, 229, 232-241, 243-245, 247, 249-253, 256, 258, 259, 262266,268,271,273-276. C red it cooperatives {see also P eople’ s b a n k s).......................................................................................................... 1,6-9, 35, 46, 58, 62, 74, 98, 100, 101, 111, 119, 120, 128, 135, 136, 149, 150, 155, 159-163, 168-170, 173, 177182, 188, 190, 194-197, 202, 209. 217, 218, 229, 230, 237-241, 243-245, 247, 249, 252, 253, 257, 258, 262, 263,265-268,271,272,274,276. C zechoslavakia, cooperatives in ................................................ 6,8,10-12,14-21,23-28,30,33,34,36,38-40,42,177-194 D e n m a r k , cooperatives in _ _ ............................................ 6,8,10,12,14,16,17,19,23-28,31,33,34,36-38,40,110-117 Depressions, cooperatives in ....................................................... ...................... 18-22,67-70,81,95,96,114,115,123,131, 147,151,154,156,157,163,171,173-175,185,186,195,198,199,210,214,219,262,267,272 D is tr ib u tiv e cooperatives {see C onsum ers’ , also R etail cooperatives). D rugs, cooperative p rovision o f . . .................................................................... ..................... 10,49,61,62,71,220,229,240 E a r n i n g s of coop era tives....... ................... ....................................................................................... 50,90,96,105,106,115, 116,124,125,127,140,147,154,156,158,160,163,165,187,200,201,212,214,215,236 E d u ca tio n and training, coop era tive................................................ 35,76,97,152,175,217,246,255,256,269,270,276 E ire {see Ireland). E lectricity associations— —....................................................................................................................... 16,46,74,100,102, 111-113,120,135,136,149,150,168,177,178,180,181,190,198,203,236,240,241,244,267,268 E nglish and Scottish Joint C ooperative W holesale S o cie ty ..................................................................................54,55 E nglish C ooperative W holesale S o cie ty ........................................................................................................................51,58 E ston ia, cooperatives in ................................................ 6,8,14,16-18,20,21,23-29,31,33,34,36,38-40,42,43,148-154 F a m ilis t £ r e , L a (w orkers’ p rod u ctiv e at Guise, F ra n ce)____________________________________ __________ 86,87 F a m ily allow ances paid b y c o o p e ra tiv e s ....................................................................................................... 72,74,86,218 F arm ing b y consum ers’ cooperatives................................................................................................... 49,107.124,152,201 F ederation s, national and regional.................................................................................................................................. 2,51, 76, 78-82, 84-86, 94, 98-101, 103-109, 111-114, 116-121, 125, 130, 135-137, 150, 154-156, 161, 163, 168, 169, 175, 177-182, 184, 187, 190,191,193, 196-203, 208-218, 220, 223, 224, 228, 230. 231, 233-235, 238, 240-244, 248-250, 252, 253. 256, 257. 263-267, 269, 271-276. F in lan d, cooperatives in ........................................................................ 6,8,12,16,17,19,23-28,32,34,36-40,42,118-128 F ish erm en’s associations..................................................................................................................................................... 16, 46, 111, 130,147,149,152,155,156,223,227,229,232,236,237,240,252,253,261,267,268,274 ‘ F orestry associations................................................................................................................... 16,120,223,243,247,260,268 F rance, cooperatives in ....................................................... 6,8,10,11,13-21,23,24,26-29,31,33,34,36,38-40,42,73-84 G e o g r a p h i c a l d istribu tion o f cooperatives............................................................................... 6-9,51,190,232,235,258 G erm a n y , cooperatives in ........................................................................... 7,8,11-13,17,18,20,22-29,31-33,38,195-207 G ov ern m en t, cooperatives and the........................................................................................................................ 57, 67, 74, 75, 82-85, 93, 95, 97, 98, 100, 101, 105, 108,112, 115, 117,118, 122, 127,128, 132,133, 136, 137, 143, 144, 146, 148, 149-160,162,165,167,169-171, 174, 175,177, 178,180, 184, 185, 188,189,199, 203, 204, 206, 208, 209, 212-217, 222, 224-228, 230-234, 238-240, 242, 243, 246, 251, 255, 260, 261, 264, 266, 267, 272, 273, 276. G reat B ritain, cooperatives in_______________________________________ 7,8,12-18,23-29,33,34,36,38-40,42,45-60 G reece, cooperatives in ____________________________________________________________ 7,8,12,13,15,16,25,251-254 H e a l t h insurance.................................................................. H e a lth w ork, cooperative {see also M ed ica l care) ...................................................................................................... .. ......................................................... 5 2 ,5 8 - , 10 12 111, 1 8 9 ,2 1 7 ,2 2 0 ,2 4 0 ,2 4 1 ,2 4 3 ,2 4 5 ,2 4 7 ,2 4 9 ,2 6 7 -2 7 1 ,2 7 5 ,2 7 6 H o lla n d {see N etherlan ds). 278 Index 279 Page H ou sin g, cooperative.............................................................................................. „ .......................................................... 6-9, 12-14, 46, 62, 66, 74,101,102, 111, 112, 120, 121, 130, 136-138, 145, 149, 161, 168, 169, 172, 173, 177, 178, 181,182,188, 190, 191, 196, 197, 202, 209, 213, 217, 218, 220, 222, 229, 237, 239-241, 245-247, 252, 253,267,268,271. H u n ga ry, cooperatives in ________________________________________________ 7,8,11-18,22-30,32-34,36,38,207-216 I c e l a n d , cooperatives in ..................................................................................................... 7,8,23,24,27,28,30,34,145-147 Im p or ts and exports b y cooperative w holesales................................................................................ ............. ......... 80, 106,142,143,145,151,157,164,165,172,180,201,213,214,249, 272 Im ports a n d exports, cooperative im portance in .......... ................. ...........................................- ............... ............. 29, 30,110,145,148,149,151,152,157,164,165,214,217,267,274 Industrial cooperatives (see W orkers’ p ro d u ctiv e and labor associations). Insurance C om m ittee o f International C ooperative A lliance............. ........... ................... ................................. 36 Insurance, coop era tive_____ 35, 36, 46, 48, 55, 62, 66-68, 74, 98, 101, 111, 114, 120, 126, 131, 135, 138, 147, 149, 150,155,159,161,168,177,182,184,186,209,229,236,237,243,245,247,252,253,261,265,271,276 Ireland, cooperatives in ........................ ............................................................................ 7,8,23,24,38,40,42,48,55,57-60 Irish A gricultural O rganization S o cie ty ....................................................................................................................... 57,58 Irish A gricultural W holesale S o cie ty...................... ...................................................................................................... 55 Irish Free State (see Ireland). Intercooperative relationships an d a ctio n ____ 35,36,43,61,69,80,82,93,104,107,117,132,135,138,144,154,158, 161-163,165,173,177,182,184-186,208,217,243,250,266,272,274 Ita ly , cooperatives in .......... ..................................... ............................................... 7,8,12,14-16,20,21,23,24,34,227-238 L a b o r ban ks ....................................................................... ...................................................................... 67,167,171,172,174 L a b or cooperatives (see W ork ers’ p ro d u ctiv e an d labor associations). L a b or organizations, cooperatives a n d .......... 61,63,67,69,73,114,116,121,170-172,182,186,199,200,202,210,226 L a n d leasing an d/or cu ltiva tio n (see also A gricu ltu ral cooperatives) .............. ................................................ 16, 46,180,208,231,243,244,248,253,259-263 L a tv ia , cooperatives in ........................................................................... 7,8,16,20,21,23-26,28,33,34,36,38,43,154-160 L a w s, and legal basis of cooperation ....................................... ................. ................ .................................................. 60, 63, 69, 73, 82, 84, 85, 94, 105, 108, 110, 112, 114, 119, 128, 132, 149, 153, 157-159, 167, 169, 172, 174, 184, 188, 190, 195, 204, 205, 209, 214, 216, 217, 219, 220, 224, 225, 235, 238, 239, 241, 242, 244, 246, 247, 249,251-254,256,257,260,261,263,264,267,272,273. L in es handled b y cooperatives.............................................................. ........................... 16,17,49,71,73,79,104.123,181 L ithuania, cooperatives in .............................................................. 7,8,17,18,21,23-26,28,30,31,33,34,38,43,160-166 L u x em b u rg, cooperatives in ................................................................................................................................ 7,8,24,25,99 M a n a g e m e n t o f unsuccessful local cooperatives, p rov ision fo r......................................................... 53,71,143,152 M ed ica l care, coop erative........................................................................ 10,66,78,79, 111, 113,213,220,243,247,249,269 M em b ersh ip , cooperative, statistics o f_ _ ..................................................................................................................... 8-10, 14, 25, 35, 46, 50, 52, 54, 58, 59, 62, 63, 65, 70, 78, 85, 86, 94, 96, 101,103,105, 111, 113-116,122-125, 127, 130, 132, 136, 140, 145, 147, 152, 155, 159, 163, 168, 175, 179, 187, 200, 206, 212. 218,226,234-237, 239, 241, 245, 247, 250, 258, 259, 261, 262, 270, 273-275. M in in g , coop era tive...................................................................................................... 15,16,152,209,261 N a tio n a lit ie s , cooperatives o f variou s......................................................................................................................... 177, 178,181,182,184-187,190-194,217-219,226,258,259,261-266,274,276 N eth erlands, cooperatives in the................................................ 7,8,10,12,14,16-21,23-28,31,34,36,38,39,42,87-97 N o rw a y , cooperatives in ................................................ 7,9,12,16-18,21,23-25,27,28,31,33,34,36-38,40,42,130-134 O c c u p a t i o n a l d istribution o f cooperative m em b ersh ip _______________________________ 140,156,200,219 P a r t y , C ooperative (G reat B ritain) (see a lso P olitica l parties)------- ------------------------------------------ --------- - 45,56 Patronage refunds, statistics o f........................................ 46,60,65,70,82,103,105,115,116,140,158,160,186,201,214 P e o p le ’s banks (se t also C redit cooperatives).................... 74,161,162,168,181,182,229,237,243,247,249,255,257 P e o p le ’ s houses, cooperative...................................................................... 11,61,65,66,68,71,178,180,181,209,269,272 Pharm acies (see D rugs). P ola n d , cooperatives in .............................................................. 7,9,10,12-14,17,18,21,23-28,30,34,38-40,42,216-222 P olitica l parties and cooperatives................................................................................................................................... 17, 18, 41, 45, 56, 60, 62-66, 72, 73, 76, 82, 94, 95, 108, 133,158, 171, 177, 178, 181, 182, 184, 189, 213, 217, 219,223,227,228,231,234,235,240,244-246,250,254. P op u la tion , cooperatives in relation t o ................................................................................................................. ....... 25, 51, 60, 72, 99, 110,114, 119, 122, 123, 125, 129, 130,133, 134,139, 145, 148, 149,161, 164, 166, 167, 170, 171, 177, 180, 193, 194, 201, 207, 214, 216, 217, 223, 232, 242-244, 251, 253, 257, 264, 267, 273. P ortugal, cooperatives in ..................................................... 7,8,34,227,238,239 P ost-w ar reconstruction and coop era tives........................................................................ 3,13,14,36.37.75.77,231,252 P riv ate business and cooperatives— ........................................................................................................................... 19, 20, 61, 69, 81, 82, 93, 105-108, 115, 118, 128, 134, 141-144, 153, 173, 176, 186, 183-190, 193, 195, 196, 204,205,216. P ro d u ctio n b y consum ers’ cooperatives...................................................................................................................... 24-29, 35, 40, 46, 48, 50, 52, 54, 55, 57, 64, 65, 70, 71, 74, 75, 79, 80, 94, 95, 99, 106, 107, 116-118, 123-127, 129, 131-134,138, 140-142, 144-147, 151-154, 157, 165, 171-173, 175, 185, 187, 191, 193, 200, 201, 205, 206,212,215,220,223,229,236,238,240,249-251,271,274. P rod u ctiv e F ederation, C ooperative (G reat B rita in )............................................................................................. 47,55 P u b lic em ployees, cooperatives o f .................................. 60,63,71,72,83,209,210,211,214,217-219,233,247,271,274 Q u a lit y o f goods, cooperative efforts to im p rove_________________________________________________ 108,116,214 R a iffe is e n associations (see C redit associations). R ailw a y workers, cooperatives o f.......................................................................................... 83,209-211,214,271,272,276 R ecreation (see WolferG) R eligious groups, cooperatives o f . ..................... 17,20,60,63,72,95,103,163,217-219,226-228,231,234,240,265,266 R estaurants and other associations p ro v id in g m eals...................................... 16,100, 111, 123-125,128,135,222,225 R etail cooperatives (see a lso C onsum ers’ coop era tives)......................................................................... ............... 49-51, 62,100, 111, 135,149,191,198-207,209,239,240,245,247,267,268,271 R etailin g b y cooperative w holesales......................................................................................................... 53,54,80*141,151 R etail S ociety, C . W . S. (G reat B rita in )..................................................................................................................... 53 280 Development o f European Cooperatives Page R iver associations...................................................................... .............................................. ........ ....................... ...... 16,243,248,249 R ochdale principles and practice...........................................................................- ............................................... 2,35,65,66,1 89 R um ania, cooperatives in.................................................................................. 7 ,9 ,1 4 -1 8 ,2 0 ,2 2 -2 5 ,2 7 ,3 2 ,3 4 ,3 6 ,4 2 ,2 5 4 -2 6 5 Sanitation (see H ealth w ork). Savings deposits accepted b y cooperatives (see also B anking activities)............................................................... 65, 67,70,74,124,131,136,138-140,170,171,173,180,198,204,211,272,275 Scandinavian Cooperative W holesale............................................................................................................................. 30,37,109 School children’ s cooperatives................................................................................ . ...................................................... 217,220,243 Scotland, cooperatives in ................................................................................................................. ....................... 2 4 ,2 9 ,3 8 ,4 0 ,4 2 Scottish Cooperative W holesale Society........................ . ............................. ........ ............................................................... 53,54 Soldiers’ cooperatives.......................................................................................................................................... 217,219,229,234,271 Soviet U n ion , cooperatives in th e................................................................. 7 ,9 ,1 4 ,1 5 ,1 8 ,2 4 ,2 5 ,3 1 ,3 4 ,3 8 ,4 0 ,4 2 ,2 2 2 -2 2 7 Spain, cooperatives in.............................................................................................. 7 ,9 ,1 4 ,1 6 ,1 7 ,2 3 -2 5 ,3 1 ,3 4 ,3 8 ,2 2 7 ,2 3 9 -2 4 2 State, cooperatives and the (see G overnm ent, cooperatives and). Sw eden, cooperatives in............................................................ 7 ,9 ,1 2 -1 4 ,1 6 -1 8 ,2 1 ,2 3 -2 8 ,3 0 ,3 1 ,3 3 ,3 4 ,3 6 -4 0 ,4 2 ,1 3 4 -1 4 4 Switzerland, cooperatives in ............................. ........................... ................ 7 ,9 ,1 2 -1 4 ,1 6 -1 9 ,2 1 ,2 3 -2 6 ,2 8 ,3 0 ,3 4 ,3 8 -4 0 ,4 2 Taxation of cooperatives.... 69,81,85,108,110,118,128,132,146,156,160,173,188,199,209,241,249,252,253,260 T elephone associations....................................................................................................................................... ..... 16,46,120 T rading A gen cy, International C ooperative................................................ ................. ......................................2,38-40 T rad in g and M anufacturing A ssociation, International C ooperative___________________ _____________ 4,37 T rade (or business) total, o f cou ntry, cooperative im portance in...................................................................... 26, 50, 60, 72, 73, 93, 99, 105, 106, 109, 110, 114, 117,119, 124, 134-136, 138, 139, 142, 145, 148, 150-152, 158,164,173,190,191,197,201,203,211,214,219,220,224,230,231,242,248-251,274. Trade-unions, cooperatives and (see L abor organizations, cooperatives and). T ransport associations..................................................... ............................................................... 16,209,229,232,236,237 Ukraine, western, cooperatives in .......................................................................................................................... 226,227 U lster A gricultural Organization S ociety.................................................................................................................. 58 U nion, T h e C ooperative (G reat B ritain)_____________________________________ __________ ____ 45,48,53,55,56 War, cooperatives and the............................................................................................................................................. 56, 57, 64, 72, 75-77, 83, 84, 86, 87, 96-99,108,117,118,121,128-130,133,134,140,143,144,145,150, 153, 154, 160, 165-167, 176, 183, 191-194, 206, 211, 215, 216, 221, 222, 226, 227, 237, 238, 243, 250, 251, 253, 254,264,266,275-277. W elfare w ork b y cooperatives...................................................................................................................................... 11,12, 61,65-67,70,72,76,78,79,85-87,93,126,138,181,183,196,201,213,239,243,247,271,272 W holesales, cooperative.................................................................................................... ............................................ 24, 25, 35, 46, 48, 51-55, 70-72, 79, 80, 83, 94-96, 106-108, 111, 116-118, 123, 126-134, 139, 141-146, 148, 150-152, 154, 156, 157, 159, 160, 163-165, 170-173, 175, 176, 182, 184, 185, 187, 191, 193, 194, 200-202, 208, 210-216, 218-220, 223, 227, 228, 233, 234, 236, 237, 240, 242, 244, 246, 249, 250, 262, 263, 271. 272, 274,275. 2,37,38 W holesale Society, International Cooperative.............................................................................................. W om en in the cooperative m ovem en t........................................................................................................ 40-42,249,270 W o m e n 's G uild, I n te r n a tio n a l C o o p e r a t i v e . . _______________ _________________ _______________________ 40-42 W orkers’ prod u ctive and labor associations....................................................................................... ................... .. 6-10, 14,15, 35, 36, 46, 47, 61-63, 65, 67, 70, 73, 74, 76, 83-87,110, 111, 131,132,135, 149, 161, 173, 177-179, 181, 188, 190,195, 196, 202, 208, 210,212, 222-224, 226, 227, 230-232, 234, 236-241, 243-245, 247, 248. 252,253,260-262,267,268,271-274. Yugoslavia, cooperatives in. 7,9,11,13,14,16,17,23-25,28,30,34,43,265-277