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Cooperatives in Postwar Europe
Survey o f Developments in
Scandinavian Countries and
Eastern, Central, and W estern Europe

Bulletin No. 942
UNITED STATES DEPARTMENT OF LABOR
JOHN W. GIBSON, Acting Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner

For sale by the Superintendent o f Documents, U. S. Government Printing Office, Washington 25, D. C. -




- • • Price 15 cents




Letter of Transmittal
U nited States D epartment of L abor,
B ureau of L abor Statistics,

,

Washington D . C

.,

June 1 8 ,1 9 4 8 .

The Secretary of L abor :
I have the honor to transmit herewith a report on cooperative developments
in postwar Europe. This study summarizes, against a brief background of
prewar and wartime events, what has happened to the cooperatives (especially
the consumers, associations) since the end of the war. It thus brings up to
date the material presented in a previous report—Bulletin No. 770 (European
Cooperatives and Their Possibilities in Postwar Reconstruction). This re­
port was prepared by Florence E. Parker of the Bureau’s Office of Labor Eco­
nomics.
E wan C lague, Commissioner«
Hon. J ohn W. G ibson,
Acting Secretary of Labor.
m

[Reprinted from the M




onth ly

L a b o r R e v ie w ,

January, April, May, and June 1948 issues]




Contents
Page

Part 1— Western Europe________________________________________________________________
Great Britain________________________________________________________________________
Postwar situation______________________________________________________________
Relations with labor___________________________________________________________
Nationalization_________________________________________________________________
Belgium______________________________________________________________________________
Postwar situation_______________________________________________________________
France_______________________________________________________________________________
Postwar situation______________________________________________________________
Netherlands_________________________________________________________________________
Postwar situation______________________________________________________________
Switzerland__________________________________________________________________________
Postwar situation___________________________
Part 2— Scandinavia and Finland_____________________________________ ’ ________________
Denmark_____________________________________________________________________________
Finland______________________________________________________________________________
N orw ay______________________________________________________________________________
Sweden______________________________________________________________
Part 3— Central Europe__________________________ : ______________________________________
Austria_______________________________________________________________________________
Czechoslovakia______________________________________________________________________
Germany_____________________________________________________________________________
Italy__________________________________________________________________________________
Part 4— Eastern Europe_________________________________________________________________
Prewar situation_____________________________________________________________________
Situation during the war___________________________________________________________
Postwar developments-----------------------------------------------------------------------------------------------

IV

1
2
2
3
3
3
4
5
5
6
6
6
7
8
8
10
11
12
14
15
16
17
18
19
19
20
20

Cooperatives in Postwar Europe
Part 1.—Western Europe:
Developments in Great Britain, Belgium, France,
the Netherlands, and Switzerland

Florence E . P a r k e r 1

W ide variations in conditions were faced by
the cooperatives, both during and after World
War II, in Great Britain, Belgium, France, Nether­
lands, and Switzerland. Nevertheless, in spite
of substantial losses of manpower and plant, in all
five countries the cooperatives survived and
emerged in some respects in a better position than
was the case in prewar days. Few permanent
changes in the legal status of cooperatives occurred
in these countries, notwithstanding the Nazi
conditions enforced during the war.
By the end of the war most of the bomb damage
to property sustained in Great Britain had been
patched up or restored, but lack of materials
has hampered complete restoration or much
physical expansion. In France and the Nether­
lands, the greater part of the damage to plants
occurred during the liberation campaign. De­
struction of premises, loss of equipment and goods
through looting by the retreating Germans, and
the cutting of means of communication left the
cooperative movement in the area of hostilities
almost prostrate. Elsewhere in these countries,
as well as in Belgium and Switzerland, the problem
was mainly that of replacement of worn-out
equipment. The cooperatives in Switzerland,
which had had no physical destruction, took the
lead in giving assistance to associations in the
war-torn countries.
i O the B
f
ureau's L
abor E
conom ffice.
icslO




Reports, however, indicate a worsening of the
supply situation since the end of hostilities. Goods
of all sorts are either in short supply or unobtain­
able in all five countries, and in those for which
data are available (Great Britain, France, and
Switzerland) continue to be under Government
control.
Because cooperators had more money than
ration coupons, their unspent money poured back
into the cooperative movement in the form of
deposits and new capital. In Great Britain the
consumers’ cooperatives, all during the war, had
no difficulty in obtaining whatever amounts of
capital were needed. Large increases in capital
were also reported for the CWS Bank in Great
Britain and the cooperative banks in France and
Switzerland. An improved financial condition, as
compared with prewar, was reported for the dis­
tributive cooperatives in all these countries. The
Belgian cooperatives had the most difficult time,
but succeeded in maintaining financial stability,
with more or less regular depreciation of assets,
maintenance of reserves, etc.
Considering all the circumstances, cooperative
membership held up well, registering steady in­
creases in Great Britain and Switzerland and a
moderate gain in Belgium. An apparent decline
took place in France, but the smaller figure may
have been due to failure to include the cooperative
membership in Alsace-Lorraine. In the Nether­
lands the membership appears to be at about the
same level as before the war.
l

COOPERATIVES IN POSTWAR EUROPE

2

intervals. In the “ second battle o f London,” in
1944-45, it was reported that at least 700 cooper­
ative shops in that city were damaged by the
“ flying bombs.” Permanent restoration has been
impossible in some cases, even yet, because of
inability to obtain materials. The same cause
has delayed the realization of many of the postwar
plans for expansion.
After the first period of bombing, which resulted
in a movement away from the cities where the
cooperatives were strong to the rural districts
where they were relatively weak, cooperative
membership began to rise and continued to do so,
in spite of the steady decrease of the civilian popu­
lation. Whereas, before the war, British coopera­
tives were serving between a fourth and a third of
the population, by 1945 (according to the report
of the central board of the Cooperative Union)
they embraced about half of the families in Great
Britain.
Cooperatives shared in the general wartime
decline in trade in nonfood items resulting from
shortages of supplies and control of demand
through rationing. In fact, in such commodities
as wearing apparel and household goods, the
cooperative trade showed a decrease greater than
the national average, indicating that in these lines
they had not held their own. However, increased
volume in the food departments resulted in steadily
increasing the total cooperative business through­
out the whole period of the war (table 1).

In spite of shortages of supplies and Govern­
ment controls on distribution which reduced con­
sumption, volume of business (in terms of money)
has shown an increase in all these countries.
Taking into consideration the rises in price levels,
it appears that tonnage handled by the retail
associations in Great Britain and Switzerland has
also increased, but that of the wholesales fell
somewhat. In Belgium the index of cooperative
business—both retail and wholesale— fell consider­
ably below the indexes of prices, indicating a
sharp drop in the physical volume of goods sold.
In France the wholesale maintained its volume
until the inflation of 1946. No data are available
as to cooperative retail business in France in
relation to prices, nor as to either retail or whole­
sale business in the Netherlands.
Controls on prices and decreased consumption
operated to reduce the net operating surplus in
some cases, as did also increased taxation, but
it is known that in Great Britain and Switzerland
cooperatives continued to pay patronage refunds
all through the war. Special taxation levied in
Great Britain, Belgium, and Switzerland, designed
to expropriate exceptional profits derived directly
or indirectly from the wartime conditions, did not
apply to patronage refunds. To some extent,
however, such legislation prevented or reduced
allocations to reserves, and prevented making
some necessary repairs and replacements.

Great Britain

Postwar Situation. In the postwar period, busi­
ness has also shown a continuous rise. For 1946,
a 12-percent increase in business took place, rep­
resenting a real increase in tonnage of goods
sold, as there was almost no change in prices.

Cooperatives suffered extensive damage to their
premises during the war. Some associations,
which had been bombed over and over again,
managed to repair or patch up the damage in the

T a b l e 1 .— Trend o f development o f retail and wholesale cooperatives in Great B ritain , 1 9 8 9 -4 6
T o ta l retail d istrib u tive
associations
Year
Num ­
ber

1939
1940
1941
1942
1943
1944
1945
1946
1947 ............

M em bers

.......................... 3 ,2 3 3
1,077
8,6 4
..........................
1,065
8 ,716,894
..........................
1,059
8,773,255
..........................
1,058
8 ,9 24,868
..........................
1,057
9,082,218
..........................
1,064
9 ,2 25,240
..........................
1,050
9 ,4 01,927
..........................
1,037
9,730,140
<
3)
(3)

* August,




A m o u n t of
business

£ 2 7 2 ,2 9 3 ,7 4 8
298,880,990
302,246 ,329
319,448 ,476
331,574,123
352,311,277
360,999,519
402,476 ,942
(3)

Scottish C ooperative W h olesa le
Society

E n glish C ooperative W h olesa le S ociety

M em ­
ber
T h eir
asso­
m em bers
ciations

W h o lesa le’ s
business

6 ,765,194
7,078,362
7,309,579
7,439,813
7,544,315
7 ,699,409
7,852,875
7,9 7 6 ,1 7 7
(3)

£ 1 2 5 ,0 1 5 ,3 1 6
142,693,952
144,307,408
167,395,338
166,834,649
183,714,790
182,795,036
205,957,079
223,231,506

1.009
1.009
1,008
1,005
998
1,008
1,014
1,030
(3)

’ December.

W h o lesa le’ s
V a lu e of
n e t earn­
w holesale’s
ings
production

£ 2 ,8 9 1 ,4 8 5
3,8 9 0 ,3 8 8
3,8 2 3 ,5 3 3
5,1 8 5 ,6 8 3
4,8 4 5 ,8 6 9
4,8 4 3 ,5 0 5
4 ,9 8 2 ,3 5 7
(3)
6 ,8 5 4 ,0 3 7

’ N o data,

£ 4 4 ,2 4 3 ,9 2 4
48,867,167
49,385,766
48,215,458
51,913,868
55,836,377
54,096,237
58,632,500
6 4,071,044

M em ­
V a lu e of
ber
W h o lesa le’s
w holesale’s
asso­
business
production
ciations

227 £ 2 4 ,6 1 2 ,7 1 1
225
29,038,380
221
31,395,045
33,770,149
220
35,236,977
218
215
37,677,558
39,124,249
215
216
44,031,920
<
3)
(3)

’ November.

£ 7 ,1 3 2 ,3 3 0
8,6 4 6 ,6 7 8
9 ,8 1 6 ,9 7 2
10,995,233
12,195,402
12,525,942
13,303,162
15,428,054
(3)

In d ex of—

R e ta il
prices

W h o le ­
sale
prices

1 1 0 0 .0
U 2 5 .8
2 129.7
2 129.0
2 128.4
2 129.7
2 131.0
’ 131.0
«1 3 2 .0

U 0 0 .0
2 151.5
« 1 5 8 .9
2 164.4
* 1 6 6 .6
2 170.4
2 172.8
’ 182.5
’ 186.0

’ June.

COOPERATIVES IN POSTWAR EUROPE

Whereas retail prices were 131.0 percent above
their prewar level (table 1), cooperative retail
business stood at 146.9 percent. Concern was
expressed, however, since average purchases per
member had not increased and the relative in­
creases in trade at the department and chain stores
were greater than that*shown in cooperative trade.
The “ most disturbing phenomenon of the year”
was that “ the race between rising expenses [of
operation] and rising cash sales is gradually being
won by expenses.” 2 This was the result of higher
wage costs at the same time that gross margins
were held fixed by ceiling prices.
B y mid-1946 nearly all of the cooperative
factories that had been requisitioned by the
Government for the production of war materials
had been returned and were again producing for
the cooperative membership. Some expansion of
productive capacity had taken place and more
was planned.
Other important advances were the acquisition
of 2 estates in a proposed chain of youth residences,
o f a resident cooperative college, and of more than
2 score hotels for cooperative travelers and
vacationists.
Relations With Labor. Wages of cooperative
employees are determined by the sectional councils
of the hours and wages board of the Cooperative
Union. Disputes involving cooperatives are han­
dled by a bipartisan national conciliation board
on which tbe cooperatives and trade-unions have
equal representation.
Early in October 1946, five national agreements
were reached, replacing a number of local and area
agreements, and covering the wages and employ­
ment of employees in distributive and related
jobs. The agreements provided a 40-hour week
for clerical workers and 44 hours for others, with
time and a half for overtime and double time
for Sundays and statutory holidays. Paid vaca­
tions accrue at the rate of 1 day for each month
of continuous service, subject to a maximum of 12
days. The wages set vary according to age, sex,
and area (whether metropolitan or provincial).
A comparison of the conditions set by these
agreements with those for private trade, estab­
lished through the Joint Industrial Councils, indi­
cated that the cooperative agreements were more
* Cooperative Review (Cooperative Union, L td., Manchester), January
1947, p . 3.




3

favorable for the workers— a 44-hour week as
against one of 48 hours in private trade and a
wage differential in favor of cooperative employees
ranging from 10.0 to 37.8 percent.
Nationalization. The British cooperative move­
ment has been comparatively little affected by
the program of nationalization instituted by the
Labor Government, thus far losing only the coal
mine owned by the wholesale, at Shilbottle.
Although acquiescing as to the desirability of
national ownership of such public services and
resources as mining, transport, and public utilities,
the cooperative movement has placed itself on
record as unequivocally opposed to such action as
regards provision and distribution of consumer
goods and services. At the 1947 Congress of
the Cooperative Union, the attitude of cooperators
was thus expressed:
The cooperative movement is ready to collaborate
with the Labor Government. * * * But, let
us make it clear once and for all that the cooperative
movement has no intention of merging the economic
organization it has created, or the principles and tradi­
tions which it upholds, with State or municipality—
or regarding State or municipal activity, in the sphere
in which it has concerned itself, as any substitute for
cooperative action.8

Belgium
When war broke out, in 1939, the urban Belgian
consumers’ cooperatives had just finished a com­
plete reorganization and consolidation which had
given both strength and financial stability, and
their future looked bright. They were at that
time serving about a fourth of the population
and doing about 10 percent of all the retail trade.
Immediately after the Germans occupied the
country, the economy was reorganized on the
corporate principle, but the cooperatives suffered
but little requisitioning and comparatively little
war damage. All cooperatives were placed under
the direction of a commissioner appointed by the
Nazis, and the expenses of his office cost the
cooperative associations, during the period of
occupation, over 38 million francs. Although he
made no actual change in the cooperative struc­
ture, membership meetings were forbidden, re­
sulting in loss of contact with the members, and
coordination of the various parts of the movement
* Review of International Cooperation (London), July 1947, p . 114.

COOPERATIVES IN POSTWAR EUROPE

4

was difficult or impossible. The prohibition of
gatherings of the people also had a very adverse
effect on the “ people’s houses” (maisons du
peuple)— the social centers for which the Belgian
cooperative movement has been famous. Many
of these suspended operations completely.
The retail cooperatives had great difficulty in
maintaining their position in the distributive field.
Under the strict regulation of prices and supplies,
a black market developed— at first as a kind of
patriotic defiance of the invaders—which ex­
panded until it permeated all the distributive
market. The cooperatives, all through the occu­
pation, continued scrupulously to observe all the
rationing limits and price ceilings. Since they
would deal only under the strict terms of the
regulations, numerous commodities which they
therefore could not obtain were found in shops of
less-scrupulous dealers, to whom they lost some
patronage. As a result of this and of reduced
stocks, business declined.
Other difficulties were the loss of operating staff
because of deportations of cooperative employees
to Germany, the cooperatives’ outlays to care for
the families of these workers, and the transporta­
tion problems entailed by the German requisi­
tioning of delivery trucks and by the lack of
automobile tires and petroleum products.
Postwar Situation.—By the end of the war, the
cooperatives had sustained property losses of
nearly 70 million francs, remaining plant was
badly deteriorated, and both tonnage and mem­
bership needed to be built up. In 1946 the 67
associations affiliated with the General Cooper­
ative Society (the wholesale) had a total of
405,496 members, as compared with 311,330 in
1944 and 305,726 in 1939.
The food and coal situation became worse
during the interval before a functioning govern­
ment was constituted, and the position of the
cooperative movement became even more difficult
than under the German occupation. In table 2
the effect of all the above factors is indicated, in
such scattered data as exist. No official index of
prices is available. The monthly cost of 27 ra­
tioned foods for an “ average person” was reported
to be 206.6 percent higher in February and March
1946 than in 1936-38.4 The volume of cooper­
ative business (measured in francs) had risen,
4 M onthly Labor Review, July 1946, p. 30.




in the same period, only 10.7 percent. It is
evident that the cooperative wholesale business
suffered even more than that o f the retail
associations.
T able 2.— Trend o f business o f cooperatives in Belgium ,
1 9 8 8 -4 5
Amount o f business of—

1938..................................................
1939 ................................................
1940..................................................
1941..................................................
1942..................................................
1943..................................................
1944..................................................
1945..................................................
1946..................................................
* N o data.

Cooperatives affil­
iated with Gen­
eral Cooperative
Society

Cooperative
Wholesale Soci­
ety

Francs

Year

Francs

663,073,337
661,812,680
568,936,767
476,994,966
491,205,955
523,602,863
574,000,000
8 774,900,000
1,802,621,191

164,156,000
0)
138,737,000
0)

8

135,000,000
0)
0)

8 Estimated; 36-percent increase over 1944.

The cooperatives urged that the supply situa­
tion be improved through large-scale imports, and
that the distribution of these be carried out
through “ pilot shops” whose war record had been
good. A new organization, composed of the co­
operative federations and some of the most im­
portant private chain-store organizations, offered
its services to the Government and was accepted,
but the pl%n fell through when the chambers of
commerce protested. Later the Government used
the cooperatives for the distribution, without
profit, of goods (shoes, clothes, textiles, etc.)
donated by the United States Army.
At the beginning of 1946, the cooperative move­
ment, although still greatly impoverished, felt
that it was again in condition to go forward.
Everywhere the cooperative associations were
“ rebuilding, repairing, re-equipping,” encouraged
by the fact that never in its history had the co­
operative movement so “ aroused the attention of
the mass of consumers” as in the years just passed.
Also, they had received some recognition by the
Government in being allowed 2 representatives
(of 20) on the Economic Coordination Commission
appointed late in 1946.
One favorable result of the war is stated to be
better relations among the various parts of the
cooperative movement.6 Previously, there had
6 The Belgian cooperative movement has always been divided along re­
ligious and political lines: (1) The agricultural cooperatives which were
largely Roman Catholic and adherents of the Clerical or Christian Demo­
cratic Parties, (2) the urban workers* associations which worked closely with
the Social Democratic Party and the General Federation of Trade Unions;
and (3) the cooperatives of public employees which were neutral (i. e., lacking
either political or religious affiliations).

5

COOPERATIVES IN POSTWAR EUROPE

been not only division but also bad feeling.
Evidently the common hardships endured diming
the war served to soften the animosities among the
various cooperative groups.

France
As a result of a series of amalgamations of local
associations, the French cooperative movement
had before the war been very generally consoli­
dated into a comparatively small number of large
regional associations. The first invasion of France
by the Germans, in 1940, cut off nine-tenths of the
entire cooperative movement, including most of
these regional associations. The cooperatives in
occupied France were placed under the direction
of Nazi commissars. Those in Alsace-Lorraine
were incorporated into the German Labor Front
and lost their identity. Reports from cooperative
sources state, however, that the Germans did not
seize their assets; the members’ share capital was
returned to them, and membership control of the
associations then ceased. Operations were there­
after carried on by directors appointed by the
Labor Front.
The associations in unoccupied France— only
about a tenth of the total—were permitted to
function without serious interference by the
Vichy Government, after a rather drastic re­
organization. These, however, also came under
German control when the rest of France was
occupied, in November 1942. Surprisingly, it
appears that a considerable degree of latitude was
given them, and they were even allowed to hold
membership meetings.
Postwar Situationi The final fighting that pre­
ceded liberation inflicted severe damage; and the
end of the war found large regions of France in
ruins, with buildings demolished, stocks looted,
bridges destroyed, and most of the usable trans­
port facilities carried off by the Germans. Those
consumers’ cooperatives which had been in the
path of the liberating armies were practically
destitute. Donations of trucks by the cooperators
in other countries aided in the transport problem
but the associations still had to contend with near­
famine as regards supplies.
The new government accorded the cooperatives
representation on bodies created to deal with the

794187—48------2



distribution of supplies, on the new National
Credit Council, and on the Superior Council of
Cooperation established by decree of January 16,
1947. The cooperative network was also used on
several occasions to assist in the Government
program of price reduction to combat inflation.
In the fall and winter of 1946-47, cooperatives
imported and distributed, at low prices set by the
Government, apples from Switzerland, endives
from Belgium, and (in conjunction with the
National Retail Federation) the entire crop of
citrus fruits from French North Africa.
Data in table 3 indicate that, especially con­
sidering the much-reduced territorial coverage of
the cooperative wholesale, it had more than held
its own through 1945; as compared with a whole­
sale-price index of 184.0, the index of its sales
stood at 188.4. In the inflation of 1946, however,
which sent the wholesale-price index to 796.0, the
wholesale’s business fell far behind.
T able 3.— Trend o f operations o f French Cooperative
Wholesale, 1 9 8 8 -4 6

Year

Amount of
business

1938......................
1939......................
1940......................
1941......................
1942......................
1943......................
1944......................
1945......................
1946......................

1,209,466,132
1,276,899,000
984,000,000
1,004,284,000
1,234,284,000
1,685,000,000
0)
2,405,000,000
4,976,000,000

1No data.
* August.

Francs

Net earnings Value of own
production

Francs

8,195,654
8,315,000
7,299,000
6,742,000
7,969,729
9,861,000
8
0)

Index of
wholesale
prices
(Paris)

Francs

65,582,590
81,200,085
0)

(A

54,061,977

8

(»)
(0

(0
U 00.0
*172.0
*180.0
*194.0
*194.0
0)
*184.0
4 796.0

* December.
4 October.

A t the end of 1946, the National Federation of
French Consumers’ Cooperatives had 1,201 affili­
ated associations, with a combined membership
of 2,050,066 and a business for that year amounting
to 12,558,000,000 francs; the corresponding figures
for 1938 were 1,000 associations, 2,500,000 mem­
bers, and a business of 3,500,000,000 francs. In
the interval from 1939 to 1946 the index of retail
prices (Paris only) had risen from 100 to 446.
A 5-percent price reduction on a number of
important commodities in the stores of Federation
affiliates, early in 1948, received widespread appro­
bation and forced private retail trade to do like­
wise.

6

COOPERATIVES IN POSTWAR EUROPE

Netherlands
The Netherlands cooperative movement was
well developed in many lines before the war, and
in agriculture was rivaled only in Denmark. The
consum ed cooperatives, found mainly in the
cities, were serving about 15 percent of the entire
population. Although that branch of the move­
ment was divided into Protestant, Catholic, and
neutral groups, each with its own federation, all
made use of the services of the neutral wholesale,
De Handelskamer, which was also an important
importer and manufacturer.
The Netherlands, after having been assured
that its neutrality would be respected, was in­
vaded by the Germans in M ay 1940. Except for
the destruction inflicted in Kotterdam at that
time, the cooperatives suffered little damage or
even interference.
The chief losses were incurred during the action
of the liberation. Bitter fighting took place in
the southeastern section of the country and, when
the Germans were finally driven out, many villages
(and their cooperatives) were completely des­
troyed. Others emerged untouched. Along the
coast, also, some 750,000 acres had been destroyed
by breaking the dykes and letting in the sea.
This whole section was isolated by lack of trans­
portation facilities, and an emergency wholesale
organization had to be created. The area that
suffered most severely was eastern Holland, where
“ practically everything” was destroyed or heavily
damaged. The extreme northern Provinces which
were not liberated until April 1945 received no
damage, and the cooperatives, of course, continued
to function. The whole country was cleared of
the invaders early in M ay, but communication,
especially between east and west, continued to be
very difficult and whole sections of the country
were practically at the point of starvation when
the Allied Air Forces began to drop thousands of
tons of food in packets.
Postwar Situation. Although no exact statistics
are available, it appears from reports that, not­
withstanding the loss of life and the tremendous
shifts in population, both the number of local con­
sumers’ cooperative associations affiliated to the
wholesale and their membership remained almost
the same as before the war.




The cooperators wasted no time in getting
under way again. By the early fall of 1945, the
wholesale was back in business and its flour mill
was again in operation. B y mid-1946 the coop­
erative factories were working at capacity, and
it was reported that the cooperative movement
was playing an important part in the reconstruc­
tion of the country. The chief problem was that
of the coal supply.
One of the cooperatives’ first acts was to secure
the abolition of the council the Germans had
created and to reestablish the original National
Cooperative Council (National Cooperatieve Road).
The Council reported, early in 1947, that plans
were in “ an advanced stage of preparation” for
the consolidation of the Catholic, Protestant, and
neutral federations into one consumers’ coopera­
tive federation which would also include the whole­
sale, De Handelskamer. A t the end of the year,
290 associations with 282,913 members were
affiliated to the Council, indicating that this
consolidation had been carried out.
Toward the end of 1947, the Central Union of
Consumers’ Cooperatives— then representing 10 to
12 percent of the population and 8 to 10 percent
of the national retail trade in groceries— started a
campaign for lower prices, the results of which
“ far exceeded expectations.” This campaign
created much good will for the cooperatives among
the consumers, with a probable increase in coop­
erative membership as a result.

Switzerland
In 1940, the consumers’ cooperatives handled
10 to 12 percent of the total retail trade and served
about a fourth of the population. About 60
percent of the consumers’ cooperatives were mem­
bers of the Swiss Cooperative Union and Whole­
sale (VSK) and these associations accounted for
nearly 87 percent of the total consumers’ cooper­
ative business. The wholesale owned and oper­
ated the largest flour mill in Switzerland, several
farms, a printing plant, and factories producing
various food products. It also operated a testing
laboratory, and was part owner of plants making
cigars, furniture, shoes, and cheese.
As a result of wartime conditions, Switzerland
had to transform its economy from one highly
specialized, and largely dependent on foreign

COOPERATIVES IN POSTWAR EUROPE

markets for both its exports and imports, to a
more or less self-sufficient, State-directed regime.
It had already (during the decade of the 1930’s)
inaugurated a policy of import control, rationing,
and increased taxation.
The cooperative wholesale which, prior to the
war, had ranked among the nation’s foremost im­
porters, had the volume of its imports reduced to
little or nothing. The output of its factories and
those in which it had a financial interest was re­
duced substantially because of difficulty in ob­
taining raw materials. Nevertheless, the total
volume of business of both VSK and its member
associations rose steadily. The cooperators did
their utmost to keep down prices, by organizing
the distribution of certain key foods at reduced
prices and selling potatoes at cost.
Hemmed in on all sides by the belligerents in
the war, Switzerland had a very difficult time as
regards supplies. Some of this had been fore­
seen by the wholesale and its members, and they
had accumulated large stocks of goods which
enabled them to supply the members for some
time.
Recognizing that the food situation might be­
come critical, VSK was instrumental in starting a
movement among the cooperatives, for the inten­
sive cultivation of land not previously in use.
Cooperative associations, individually and col­
lectively, as well as their members, entered this
movement, and several new associations were
created for waste-land cultivation. At the peak
(1942), 418 of VSK’s 548 member associations
were participating. The idea was later taken up
on a nation-wide basis, and proved to be of great
economic value as the war years lengthened.
Postwar Situation. When the European war was
over, Swiss cooperators collected funds for aid to
cooperative associations in countries devastated
by the war. Over a million francs had been raised




7

by the middle of 1945. Practical aid had al­
ready been given to the inhabitants of frontier
towns bordering on Switzerland.
The liberation of France had brought renewal
of contacts with the Allies but did not improve
the food situation of Switzerland, and the emer­
gency gardening and farm projects were con­
tinued. As soon as possible, large orders were
placed in foreign countries by YSK, and these
gradually began to filter into Switzerland as ports
were opened by the armies of liberation. Coal
was a real problem, and attempts were made to
solve it, for the cooperators, by VSK’s purchase of
some peat bogs and of the operating rights in a
coal mine. On a number of staple items, VSK
and its members continued to keep their prices
below those set by the Government.
On the basis of indexes of retail and wholesale
prices (table 4) it appears that the retail associa­
tions have been handling a larger volume of
business than before the war, but that the whole­
sale has lost some ground.
It was estimated that, at the end of 1946,
about 42 percent of the 1,150,000 families in
Switzerland were members of local consumers’
cooperatives.
T able 4.— Trend of membership and business of Swiss
consumers1 cooperatives, 1 9 8 9 -4 6
Retail consumers’ cooperatives
affiliated to VSK
Year
Num­ M em ber­
ber
ship

1939.........
1940_____
1941.........
1942.........
1943_____
1944.........
1945_____
1946_____
1947..........
i August,
a December,
a No data.

545
546
546
546
548
549
552
552
549

427,166
430,315
443,000
461,000
468,608
473,492
481,162
489,159
502,934

Amount of
business

Francs

326,439,731
350,191,461
373,200,000
406,100,000
(3
)
453,727,506
470,703,191
533,825,524
605,849,740

Central
Union and
Wholesale
(V SK ):
Amount of
business

Index of—
Retail W hole­
sale
prices prices

Francs
227,869,001
247,083,976
244,235,946
263,690,875
267,339,610
275, 572,268
289,209,000
358,656,000
418,300,000

1100.0
* 117.0
2 134.0
a 146.0
2 150.0
2 152.0
2 151.0
2 155.0
2 163.0

*100.0
a 152.5
a 185.1
2 200.2
3 204.7
2 206.0
a 199.3
2 197.0
2 209.0

Cooperatives
in Postwar Europe
Part 2.— Scandinavia and Finland

I n all of S candinavia, the cooperative move­
ment played an important part in the economic
life of the countries before W orld War II. The
population served by the consumers’ cooperatives
constituted over a fourth of the total population
in Norway, about a third in Denmark and Sweden,
and nearly half in Finland.
During the war, Sweden remained neutral and
uninvaded, and of course suffered no physical
damage from the hostilities. Denmark, Finland,
and Norway were invaded, and all three countries
sustained destruction of property. Cooperatives
lost some of their premises and factories, and some
of their leaders and employees in both countries
were killed in resistance activity or were deported
to work or prison camps. Nazi measures were
most strongly resisted in Norway. In Denmark,
although cooperative membership meetings were
forbidden and the cooperatives were subjected
(as in Norway also) to drastic regulation, the con­
sumers’ cooperative business activities went on
without much interruption, largely because of
their close connection with the powerful agri­
cultural cooperatives which the Germans did
not wish to antagonize.
In Denmark and Norway, the cooperative
wholesales, foreseeing at the outset of hostilities

8




probable interference with or cessation o f over­
seas commerce, had accumulated great stores of
goods with which to supply their members.
However, in Denmark the Germans compelled
the cooperative wholesale to share its supplies
with private dealers and in Norway they sus­
pended the legal requirement that cooperatives
deal only with members.
In Finland, the war and the territorial changes
resulting from the defense against the Soviet Union,
first alone and later with Germany, involved
property damage and dislocations of population, as
well as great reparations obligations. Although
these conditions affected the cooperatives, their
membership continued to grow, except in 1944
when large areas of Finnish territory had to be
ceded to the Soviet Union. B y 1945, however,
the total had climbed to a point higher than in
1943.
In the other three countries cooperative mem­
bership has expanded steadily since 1939.
In Sweden the money volume of business also
showed an almost unbroken rise, although some of
this was due to increased prices. In Denmark and
Norway, business fell off somewhat during the
middle war years, partly because of supply diffi­
culties. The cooperative wholesales, which in all
these countries had been important importers and
manufacturers, expanded into new lines of pro­
duction in order to supply their member associa­
tions, and this expansion continued into the post­
war period.
In all four countries the cooperative movement
emerged from the war intact, although with equip­
ment and plant deteriorated, and in some cases
means of intercommunication (such as periodicals,
educational activity, and transportation facilities)
had to be built up again. The postwar problems
of these countries have been largely those resulting
from the world trade situation, as all are greatly
dependent on international trade. In all, there is
still a good deal of Government regulation and
control of trade and commerce.

Denmark
In probably no country in Europe before the
war had cooperative associations played a greater
part in raising the level of income and living than
in Denmark. This fact, as well as the powerful
influence of the cooperatives among the people

COOPERATIVES IN POSTWAR EUROPE

and the wish of the Germans to utilize the output
of the agricultural associations for Nazi purposes,
may account for the rather mild treatment of the
cooperative movement when Denmark was in­
vaded in April 1940.
Probably the greatest difficulties encountered
b y the distributive cooperatives arose from the
supply situation and allocation procedures. The
economic life of the country was geared to its
foreign trade. In an effort to meet war condi­
tions, Government quotas were imposed but,
being based on 1931, made no allowance for the
very considerable growth that had taken place in
the consumers, cooperative movement— a much
greater increase than had been shown by private
trade. The cooperative business in produce
(largely imported and increasingly scarce) fell in
volume but in such items as textiles and hardware
(which could be obtained from Germany) in­
creased considerably. Although no attempt was
made to obtain new cooperative members, mem­
bership continued to grow slowly.
Even before the war, the cooperative wholesale—
Faellesforengen for Danmarks Brugsforeninger
(FD B )— had been a large manufacturer. Its pol­
icy, however, was to undertake production only
when forced to do so by unduly high prices, diffi­
culties in obtaining supplies from private sources,
etc. As imports were cut off, the wholesale began
to experiment in new fields. Substitutes were
resorted to in some cases. It created new types
of low-cost wood furniture. Its production of
coffee, chocolate, tea, and margarine stopped com­
pletely during the early war years, for lack of raw
materials. In other products, such as confection­
ery, rope, twine, soap, shoes and leather, the raw
materials for which were domestic in origin, it
could maintain or even increase output. Its flour
mill, the largest in the country, continued to oper­
ate practically at capacity. Late in the war, the
Germans ordered from it large quantities of groats
and flour, “ but only small quantities were de­
livered.” 7
A factory for the processing and spinning of flax
was started in 1941, and in the same year the
wholesale acquired a publishing plant. The for­
mer was undertaken largely out of regard “ for the
social economy” and to provide new raw material,
? Danish Consumer Cooperative Societies During Five Years of Occupation
(Copenhagen, Faellesforenger for Danmarks Brugsforeninger), p. 4.

---- 3

794187—48




9

the latter to make good books more widely avail­
able and to break a booksellers’ monopoly.
One effect of the supply difficulties was to keep
down inventories, preventing losses from slacken­
ing demand for wartime substitutes and resulting
in improved liquidity of assets and solvency of the
cooperatives. Outstanding debts were reduced by
about a third between 1939 and 1944. The co­
operatives continued to make patronage refunds
all during the war, although the average fell from
6.7 percent (of sales) in 1939 to 3.9 percent in 1944.
It appears that membership, which rose steadily
through 1945, dropped in 1946. The business of
both the local associations and the wholesale de­
clined in 1945, but that of the wholesale rose con­
siderably faster than the cost of living in 1946 and
1947, indicating an increase in tonnage of goods
sold. There was nearly a 50-percent increase in
the value of goods produced by the wholesale in its
own factories.
T able 5.— Trend o f membership and business o f coopera­
tive wholesale o f Denm ark ana its affiliates, 1 9 8 9 -4 5 1
Associations affiliated
with FDB

Cooperative
wholesale, FDB

Indexes of
prices

Num­
ber

Mem­
bers

Value of
Busi­
own
Busi­
ness (in ness (in produc­ Retail W hole­
tion (in (food) sale
thou­
thou­
thou­
sands) sands)
sands)

1,870
1,868
(*)
1,944
1,943
1,871
1,885
1,959
(2
)

392,000
403,000
412,000
420,000
424,000
427,400
435,400
395,100
(2
)

359,000
387,000
395,000
398,500
395,000
418,300
395,000
(2
)
(2
)

Year

1939...............
1940...............
1941...............
1942...............
1943...............
1944...............
1945...............
1946...............
1947...............

Kroner

Kroner

216,200
221,600
225,500
209,900
203,600
213,100
191,300
259,903
289,000

Kroner
65,100
62,100
48,700
46,300
51,600
57,900
52,700
77,084
(2
)

106
129
157
162
161
162
163
163
170

99
145
171
179
180
182
179
176
195

i Data are from Statistisk Aarbog (Denmark, Statistiske Department);
despatches from United States representatives in Denmark; Review of
International Cooperation (Denmark); and United Nations M onthly
Bulletin of Statistics.
* N o data.

In 1946, the economy of Denmark was still suf­
fering from the diminution of the overseas trade,
especially with Great Britain (with resultant de­
crease in national income), from depletion of agri­
cultural land for lack of (imported) fertilizer, and
from dearth of many necessary commodities.
In Copenhagen, alleged discrimination against
cooperatives by the building-materials cartel led
to the formation of a cooperative organization to
act as wholesaler and importer of building mate­
rials and home furnishings. Other developments

10

COOPERATIVES IN POSTWAR EUROPE

included the establishment of a petroleum coopera­
tive, of a network of 85 cooperative laundries in
various sections of the country, of a cooperative
theater organization, of an association to import
farm machinery, and of a factory to manufacture
penicillin.

Finland
Less than 3 months after the outbreak of World
War II, hostilities began between Finland and
"Russia. B y the peace treaty signed in March
1940, Finland ceded about 14,000 square miles of
territory (of a total of 148,000) to Russia. The
ceded land contained about a tenth of the whole
Finnish consumers’ cooperative movement and a
number of cooperative productive enterprises.
Nearly half a million inhabitants from this region
had to be assimilated into the rest of Finland.
In June 1941, Finland joined Germany and went
to war against the Soviet Union, and in November
of that year the ceded territory was again in­
corporated into Finland.
The cooperative movement continued to grow
during this period and by 1942, counting members
and their families, was serving over half of the
population. An increasingly difficult supply situ­
ation—with a corresponding decrease in the physi­
cal volume of goods handled—was more than
counteracted by increased prices, with the result
of substantial increases in the money value of
business done. Although, by the end of 1942,
the productive plants regained from Russia had
been put back into operation, total cooperative
production showed a considerable decline from
1941.
Conditions grew worse again in 1944 when
Finland lost to the Soviet Union about a ninth of
its whole territory and had to absorb into the re­
mainder of the country some half million Finns
displaced under the treaty. Nevertheless, the
consumers’ cooperative business continued to
grow. B y the end of the war, savings deposits
(always a substantial factor in the funds of the
cooperative movement) which had been with­
drawn in great amounts during the early years of
the war, began to flow back into the associations
in an increasing stream. During the whole time
of hostilities, also, educational and other meetings
of members continued to be held and the volume
of cooperative publications actually increased.




Since shortly after the First W orld War the
consumers’ cooperative movement had been di­
vided into two branches: (1) The politically “ neu­
tral” associations in small towns and rural areas,
federated into the General Union of Consumers’ Co­
operatives (called “ YO L” from the initials of its
Finnish name) and having their own wholesale,
“ SOK” ; and (2) the “ progressive” associations,
consisting mostly of workers in urban areas, with
their own federation, Central Union of Finnish
Distributive Associations (“ K K ” ), and wholesale,
“ O TK .” 9
T a b l e 6 .— Trend o f membership and business of consumers’
cooperatives in Finland , 1 9 8 7 -4 6 1
Y O L (“ neutral” ) group
Local associations

Indexes of prices

Wholesale (SOK)

Year
Num­
ber

1937-----1939.......
1940.......
1941.......
1942.....
1943.......
1944.......
1945.......
1946____
1947.......

417
418
(2
)
00
(2
)
412
375
373
370
372

Mem­
bers

Business
(in thou­
sands)

Markka

280,000 2,823,000
317,652 3,208,379
295,124 3,555,823
3,973,500
(2
)
360,000 4,400,000
380,400 5,523,000
372,000 5,541,800
397,858 9,385,300
416,313 16,872,300
444,511 23,590,000

Business
(in thou­
sands)

Markka

1,520,074
1,645,935
1,168,900
1,170,000
2,153,000
2,006,000
3,780,200
7,158,600
9,151,523

Value of Retail W hole­
own pro­ (food)
sale
duction
(in thou­
sands)

Markka

315,869
356,425
(2
)
(2
)
344,200
(2
)
(2
)
759,900
1,634,900
1,933,000

100
105
128
151
177
197
200
312
491
719

100
98
132
161
199
226
250
359
562
676

100
104
128
151
177
197
200
312
491
719

100
98
132
161
199
226
250
359
562
676

K K (“ progressive” ) group
Local associations
1937— . .
1939.....
1940.......
1941.......
1942.....
1943.......
1944.......
1945.......
1946.......
1947.......

122
127
119
(2
)
(2
)
129
(2
)
120
130
120

282,600 1,860,000
323,081
317,158
(2
)
336,672 3,079,300
358,279 3,295,000
363,267 3,919,000
342,090 4,254,000
369,699 7,105,000
425,073 12,560,000
448,500 18,000,000

Wholesale (O TK )
1,094,751
1,257,262
1,610,800
1,612,000
1,094,751
2,034,000
3,638,400
7,067,000
9,675,000

(2
)
243,259
(2
)
289,900
239,600
366,000
(2
)
743,000
1,448,000
2,200,000

1 Data are from Review of International Cooperation (London), Coopera*
tive Information (Geneva), and United Nations M onthly Bulletin of Sta­
tistics.
* No data.

Conditions during the war compelled the two
to collaborate more closely than they had ever
done before. This resulted in greater efficiency
and the introduction of an “ active price policy”
throughout the whole cooperative movement,
thus reducing margins and lowering patronage
refunds to 1 to 2 percent of sales.*
* Both wholesales had gone into production. SOK manufactured hosiery,
chemical products, chicory, flour, macaroni, bakery goods, preserves, mar­
garine, matches, paper, lumber, bricks, and brushes; it also roasted coffee.
OTK made fertilizer and chemical products; and also pickled herring and
roasted coffee.

COOPERATIVES IN POSTWAR EUROPE

Inflation and the prevalence of black markets
have been among the chief problems that Finland
has had to meet. The extent of the rise in the
price level has been reflected in the reports of co­
operative business done, but actual tonnage has
also increased somewhat. Official statistics com­
piled from tax returns indicate that the share of
the cooperative movement in wholesale trade rose
slightly from 34.5 to 34.6 percent, in the period
1942-45, and in retail trade from 30.1 to 33.5 per­
cent. The money value of retail cooperative sales
increased by 68 percent from 1944 to 1945 and
by nearly 80 percent from 1945 to 1946 (table 6).
At the end of 1946, so great had been the develop­
ment of cooperatives that a director of the Bank
of Finland called Finland “ the most cooperatively
organized country in the world.”

Norway
Before the outbreak of the war there were in
Norway 1,080 consumers' cooperatives. Of these,
659 were members of a national federation, Norges
Kooperative Landsforening (N K L). The latter
manufactured margarine, tobacco products, soap,
shoes, flour, candy, woolen goods, and leather;
about 40 percent of its annual business con­
sisted of goods made in its own plants.
When Norway was invaded, in April 1940, the
cooperative warehouses in the harbor of Narvik
were destroyed and the margarine factory dam­
aged; nevertheless, the cooperatives were at first
able to supply their members with most com­
modities. Eventually, scarcity of goods and
drastic rationing decreased the cooperatives' vol­
ume of business, although the local associations'
business held up better than that of the wholesale
(table 7).
The retail associations were scattered through­
out Norway. Even in peacetime, communica­
tion and transport were difficult because of the
extremely mountainous character of the country.
Some of the most northernmost associations could
be reached only by boat. However, one result of
their isolation was that the local cooperatives
carried larger inventories and undertook to an
unusual degree the production of such things as
bakery and meat products, cheese, margarine,
leather products, etc. In 1938, the local associ­
ations were operating over 200 productive plants.




11

Their self-sufficiency was, of course, an advantage
under wartime conditions.
The wholesale's annual reports indicate the
difficulties under which it, like other businesses,
had to operate. From a prewar volume of over
62 X million kroner, its business declined steadily
each year through 1944, to only slightly over 37
million kroner. In 1944, it sustained a loss on its
operations for the first time, amounting to 9,600
kroner. The following year it had nearly a 40percent increase in business but again a loss,
amounting to 1,135,900 kroner, was incurred,
attributed to a narrowing of gross margins on the
goods handled and a general increase in operating
costs. Its affiliated associations fared better,
their operations in 1945 resulting in combined net
earnings of 7.3 million kroner on a total volume
of 212 million kroner.
Efforts to nazify the movement were stubbornly
resisted all through the occupation, and “ the
Nazis did not succeed in any of their attempts to
impose the ‘fuehrer' principle on cooperation,
perhaps * * * because the Germans were
afraid that encroachments on the rights of co­
operation should lead to trouble all over the
cou n try .''1
0
M any cooperatives suffered damage to premises
and plant, which they have had to replace or
repair. This was especially true in Finnmark and
Troms (in the most northern part of the country)
where the Germans destroyed everything in their
retreat, when the Russians liberated that part of
Norway in the autumn of 1944. Almost imme­
diately the cooperators opened their stores, in
sheds, cellars of ruined buildings, and anywhere
they could find shelter. Rehabilitation is going
on all over the country, financed in part from a
fund instituted by N K L to which undamaged
associations have contributed.
Despite the scarcity of goods, many new associa­
tions have been formed and “ new members crowd
to the societies.''1 B y the end of 1946, N K L had
1
in affiliation 1,001 associations— a 20-percent gain
over the previous year. These associations had
an aggregate business in 1946 of 314 million kroner,
a volume attained in spite of the fact that supplies
were still being allocated on the basis of the pre1 People’s Yearbook (Cooperative Wholesale Society, Manchester, Eng­
0
land), 1947, pp. 114,115.
1 Statement by chairman of N K L, in People’s Yearbook, 1947, p. 117.
1

12

COOPERATIVES IN POSTWAR EUROPE

war business, although the movement is now
serving nearly a third of Norway’s population.
The business of the wholesale also increased to
over 80 million kroner (from 52 millions in 1945).
N K L decided to start manufacture of radios and
other electrical apparatus and to start district
associations for the distribution and servicing of
these appliances. A clothing factory was also
opened.
T a b l e 7 .— Trend o f membership and business of cooperative
wholesale o f N orw a y and its affiliates, 1 9 8 9 -4 6 1
Associations affiliated with
NKL
Year
Num­
ber

1939.............
1940.............
1941.............
1942.............
1943.............
1944.............
1945.............
1946.............

Members

659
(*)
666
673
693
727
832
1,001

181,050
(*)
196,234
200,490
201,736
206,359
225,738
239,854

Business
(in thou­
sands)

Kroner

195,246
(*)
210,021
200,691
193,530
185,600
212,000
314,000

Indexes of
Cooperative
prices
wholesale,
T TT •
VT T
JNivL:
Business
(in thou­ Retail Whole­
sale
(food)
sands)

Kroner

62,650
(*)
53,162
49,835
44,401
37,168
51,902
80,510

106
127
152
158
160
161
163
163

100
131
160
170
172
174
174
166

* Data are from Statistisk Arboks for Norge; reports of N K L ; Review of
International Cooperation (London); and United Nations M onthly Bulletin
of Statistics.
* N o data.

An important event was the reopening, early
in 1947, of a large building constructed just before
the war, which was to have served as a cooperative
school. In order to keep the building intact and
in cooperative hands, it was turned into a chil­
dren’s home during the war.
Closer collaboration among the various parts
of the cooperative movement is also planned.
Previous to the war each section—housing, dis­
tributive, agricultural, fishery—had gone its own
way. A new organization was formed in 1946 to
serve as a central agency for the import and dis­
tribution of petroleum products, working in coop­
eration with the International Cooperative Petro­
leum Association and uniting in its membership
various branches of the cooperative movement.

increase. Their business also increased, but a
large part of the rise in the early years of the war
was attributable to higher prices. In Sweden,
however, the cooperatives, instead of selling at
current prices, have pursued an active price
policy, setting their prices at what they con­
sider to be a reasonable level, which may be under
that of private dealers. This resulted in a re­
duction in the rate of patronage refund (3 percent
is usual in Sweden) but benefited all consumers,
as the concerted policy of the cooperatives exer­
cised a considerable influence on the general
retail price level, which remained practically un­
changed through 1946 (table 8).
T a b l e 8 .— Trend o f membership and business o f consumers9
cooperatives in Sweden , 1 9 8 9 -4 6 1
Associations affiliated
with K F
Year
Num­
ber

Mem­
bers

Value of
Business Business own pro­
(in thou­ (in thou­ duction
(in thou­
sands)
sands)
sands)

Kronor

1939.
1940.
1941.
1942.
1943.

717
711
678
676
676

1944.

674

808,331

1945.

676

829,352

1946.

675

851,600

1947.

706

876,625

669,429
700,051
736,508
765,700
789,608

Cooperative
wholesale (K F )

Kronor

269,350
587,700
279,070
673,200
270,940
720,800
288,740
731,070
/* 273,100
786,600 \3475,680
928,900 J*312,000
1*515,230
980,000 J*319,000
1*534,320
1,137,264 p m , 450
1*590,210
1,278,854 P 430,760
1*656,620

Indexes of
prices

Retail
(food)

Whole­
sale

144,535
149,700
137,270
185,320
} 210,633

107
122
140
151
149

101
128
151
166
171

} 259,934

148

170

} 313,180

147

170

} 323,730

148

163

} 328,740

155

175

Kronor

1 Data are from Kooperativ Verksamhet i Sverige, Review of International
Cooperation (London), and United Nations M onthly Bulletin of Statistics.
2 Business with cooperatives.
« Business with all others.

Sweden

Over 90 percent of the retail cooperatives, with
nearly 98 percent of the total membership, are
affiliated with the wholesale, Kooperativa Forbundet (K F).
In 1940, KF, which had attained a world-wide
reputation as “ trust buster,” 1 undertook a number
2
of new ventures in production. It bought a con­
trolling interest in a large paper plant, established
a charcoal factory, a plant producing fish oil, and

During the war, the total number of cooperative
associations in Sweden increased by over a fourth.
Large increases took place in the number of hous­
ing associations and electricity associations and
small increases in the number of cooperative res­
taurants. The distributive cooperatives declined
somewhat, owing to amalgamations of local asso­
ciations, but their membership showed a steady

12 B y going into production, it had been able to reduce the retail prices of
such things as margarine, soap, vegetable oils, flour, superphosphate fertilizer,
various rubber products, cash registers, crisp bread, electric-light bulbs,
porcelain products (dishes, bathroom fixtures, etc.), and artificial silk. As a
result of its successes, it was able to obtain price reductions in certain other
lines merely by threatening to go into production. Other products of its fac­
tories before the war included shoes, coffee, leather and leather goods, pre­
served fruit, men’s shirts and other clothing, insulation material, agricultural
implements, and limestone. Its own production was and is larger, in pro­
portion to its total business, than that of any other national cooperative
wholesale.




COOPERATIVES IN POSTWAR EUROPE

one making synthetic rubber (the last-named
using only Swedish raw materials). It also under­
took, jointly with several private textile firms, a
factory for the production of cellulose (rayon); it
already had one such plant of its own, as well as a
plant making artificial wool. An unusual venture
was the patenting of a machine for railroad
tickets which, operated by the traveler, yielded
a ticket showing destination and price.
Sweden had no problem of reconstruction of
damaged property. Its problems have been those
arising from national conditions resulting from
world trade disorganization.
The local consumers’ cooperatives in 1945 and
1946 increased their resources by an amount larger
than was accumulated during the whole first
quarter o f the present century. They likewise
showed a remarkable increase in volume of busi­
ness, as did the wholesale also. The latter organi­
zation has been particularly active since the end
of the war. In 1945, it had taken the lead in the
formation of a cooperative for the import and
distribution of petroleum products; by January
1947, the latter was reported to be handling about
10 percent of the petroleum business in Sweden.
In M ay 1946, K F bought a half interest in a
13,500-ton tanker, to transport petroleum prod­
ucts purchased from Consumers Cooperative
Association (Kansas City, M o.). A year later it
purchased the nation-wide network of gasoline
facilities owned by Shell Oil of Sweden. Reports
indicate that the cooperatives hope to prevent the




13

proposed nationalization of the petroleum industry
by a demonstration of efficiency and a reduction
of the price level.
In 1947, K F acquired a factory to make boilers
for house heating, oil burners, and drainage tile,
and bought out the Swedish branch of the German
electric-bulb trust. In 1940, a threat to start
production of linoleum led to an agreement with
an international trust by which the latter reduced
prices 15 percent. This agreement seems to have
lapsed during the war, for K F recently has been
reported as girding for another attack, having
bought 25 percent of the shares of the Swedish
branch of the cartel, which it will use to force a
reduction in prices.
Although the membership of the Swedish
cooperative movement includes persons from all
walks o f life, over 40 percent are industrial and
other workers. Also, as K F alone employs over
35,000 workers, its labor policies affect a great
many persons. It is of interest, therefore, that
in June 1946 K F and the Confederation of TradeUnions signed a new collective agreement, whereby
K F bound itself to provide in its factories and
shops wages and working conditions at least as
good as those in “ well-run” enterprises in the same
field and to work with the labor organization in
obtaining security in employment and good work­
ing conditions. The confederation, on its part,
agreed not to press for wage levels and other con­
ditions better than obtained from “ capitalistic
enterprises.”

Cooperatives
In Postwar Europe
Part 3.— Central Europe.

T he four countries of Austria, Czechoslovakia,
Germany, and Italy were subjected to totalitarian
practices, and saw their consum ed cooperatives
captured by the authorities for their own Party
purposes.
In Italy, the cooperative movement lost its
freedom with the rise of Mussolini, during which
at least half of the consumers’ cooperatives were
plundered or destroyed. Those remaining were
made part of a Fascist organization which still
included the word, “ cooperative,” although mem­
bership control and democratic practices were no
longer permitted. Once in control, however, the
Fascists even showed favor towards the cooper­
atives in various ways. In Austria and Germany,
the Nazis in 1941 incorporated the whole con­
sumers’ cooperative network into the Labor Front.
Share capital and members’ savings deposits were
refunded, but the other assets (about seveneighths of the total) were confiscated. The dis­
tributive machinery was reorganized into “ supply
rings” (each being the retail supplier for a large
region) which were served in each country by a
wholesale organization. Operations of this dis­
tributive system (called the Gemeinschaftswerk,
or GW) were kept distinct from the other enter­
prises of the Labor Front. The Czechoslovak co14




operative movement was halved by the events fol­
lowing the Munich agreement. Those coopera­
tives that were left were allowed to operate but
were strictly controlled. In all four countries,
Fascist or Nazi Party members occupied all the
important cooperative posts.
Only the consumers’ cooperatives were dealt
with severely; the other parts of the cooperative
movement were hardly touched, although subject
to Government regulation. However, because of
the fact that the distributive machinery of the
consumers’ cooperatives was necessary and there­
fore had been retained in some form in each coun­
try, at the end of the war there was still a struc­
ture which could be used in building a new co­
operative movement.
In Germany, this reconstruction has taken
place under military government and with the
country divided into zones; in Austria, Italy, and
Czechoslovakia, under a recreated democratic
government of the people. (In Czechoslovakia, of
course, the situation has since been changed.)
Spontaneously in all but Germany, democratic
practices were reestablished in the cooperatives;
in Germany, this was done by military govern­
ment order, which also forbade any restriction of
membership on the basis of race or religion.
The scarcity of leaders and managers imbued
with cooperative ideals is a handicap. In both
Germany and Austria, it appears that a certain
proportion of the cooperators remained faithful
throughout the Nazi regime. However, they are
now elderly; the younger men, who would ordi­
narily be assuming leadership, are of the genera­
tion most strongly tainted with nazism. In Italy
the present situation is even worse. A whole
generation has grown up in the atmosphere of
totalitarianism and has never had an opportunity
to learn anything about cooperatives. The pres­
ence of a few—now aged—cooperative leaders, the
bad price and supply situation, and the traditional
love of freedom of the Italian people have com­
bined to produce a wave of cooperative enthusiasm
which is, unfortunately, for the most part without
knowledge of cooperative principles or practice.
The Czechoslovak movement has been in the most
advantageous situation in this regard, as the
period of German occupation was not long enough
to age the cooperative leadership greatly or wipe
it out completely. Even before the end of the war

COOPERATIVES IN POSTWAR EUROPE

a plan had been evolved, in the “ underground,”
for the revival and unification of the cooperative
movement, and this plan has since been put into
effect.
In Germany and Austria, old-time cooperators
have been appointed as trustees to operate the for­
mer cooperative plants and shops, pending clearing
and transfer of legal title to new associations.
B y the end of 1945, unity had been achieved in
the Czechoslovak cooperative movement in the
so-called Protectorate (M oravia, Bohemia, and
Silesia), whereas before the war there were reli­
gious, political, functional, and geographic divi­
sions. (This unity is threatened by the Commu­
nist coup of February 1948.) In Austria and
Germany the pre-Nazi federations have been
recreated, but zonal barriers prevent their effective
functioning. In Italy, the old pre-fascist political
and religious schisms have already begun to appear.
The Austrian and Italian cooperatives are
financially weak, and in Italy (as has always been
the case) the associations are also for the most
part small and poorly supported. The Czecho­
slovak movement appears to be soundly organized
and fairly stable financially. It is too early to
judge the small new growth in Germany. In all
the countries the cooperatives share the difficulties
inherent in the economic and monetary situation
there.
Italy and Austria have regained their member­
ship in the International Cooperative Alliance,
which had been withdrawn when they lost their
democratic character. Czechoslovakia, regarded
as a victim of German aggression, never lost its
membership.

Austria
Cooperatives lost their autonomy after the
Dollfuss coup of February 1934, when a “ trustee”
was appointed as general director.
After the Anschluss, when the Germans occupied
Austria, although the cooperatives were subjected
to an “ adjustment,” their structure was not
destroyed and the associations even enjoyed some
degree of autonomy. Early in 1941, however, the
consumers’ cooperatives were turned over to the
Labor Front, to be “ managed or disposed o f” by it.
The cooperative stores became outlets for 28




15

“ supply rings,” and the cooperative wholesale
(known as GoC) was changed into a commercial
organization.
Many of the former cooperative leaders and
managers took secondary positions in this Nazi
organization, in order to “ preserve something of
the cooperative organization which would facilitate
the rebuilding of the movement after the collapse
of the National Socialist regime.” 1 Several of
3
these cooperators were appointed as interim
trustees to administer the Gemeinschaftswerk
stores and plants, immediately after the cessation
of hostilities in April 1945.
Substantial cooperative progress has been made
since then, but has been hampered by the diffi­
culties arising from the division of the country into
zones. Early in 1946 it was reported that 30
percent of the total cooperative membership was in
the British Zone, 15 percent in the Russian Zone,
10 percent in the U. S. Zone, and 5 percent in the
French Zone; the Vienna Cooperative Society
(always the largest in Austria) accounted for 35
percent of the total. The Vienna association had
nearly 95,000 members and 173,000 registered
customers (about 8 percent of the city’s popula­
tion) as of January 1, 1946.
In M ay 1946, the old Central Union of Austrian
Consumers’ Societies and the wholesale (GoC)
were reestablished. B y the end of 1946, nearly
700,000 families were members of 22 district
associations federated into 9 organizations (cor­
responding to Austria’s 9 Provinces), which in turn
were affiliated with the Central Union. The
wholesale’s plans for aggressive development of
cooperative production1 have been retarded by the
4
financial weakness of the whole Austrian co­
operative movement.
It was reported, near the end of 1947, that both
Houses of the Austrian Parliament had passed a
bill providing for the restitution of cooperative
property taken over by the Labor Front. This
bill was approved by the Allied Control Council on
December 4 and the law was promulgated on
December 19, 1947.
1 Review of International Cooperation (Condon), March-April 1946, p. 56.
3
1 A t the end of 1945 it had 7 productive plants manufacturing, respectively,
4
soap and soap powder, chemicals, foodstuffs, cocoa and chocolate, meat
products, clothing and underwear, and printing. In addition, the wholesale
was part owner of a slaughterhouse and a soy-flour m ill, besides having a lease
on another flour m ill.

16

COOPERATIVES IN POSTWAR EUROPE

Czechoslovakia
The events following the signing of the Munich
agreement halved the size of the cooperative move­
ment in Czechoslovakia, reducing it from 14,915
associations with 4 million members to 8,646 asso­
ciations with 2.4 million members. The Germans
allowed those that were left to continue operations,
but under Nazi commissars and only after “ rob­
bing all the financial funds.” 1 Nearly 60 percent
5
of the resources of a new “ cooperative” bank estab­
lished by the Germans in 1942 had, by the end of
that year, been taken for investment in noninterest-bearing loans and treasury bonds of the
Reich and in loans of the Protectorate. The num­
ber of cooperatives in Bohemia and M oravia had
fallen to 7,310 and the members to 2.3 million.
Czechoslovakia was liberated in the spring of
1945. B y the end of that year the number of
cooperatives in Bohemia, Moravia, and Silesia
had risen to 9,675. In addition, there were about
2,000 cooperatives in Slovakia—making a total for
the whole republic of about 12,000 associations
and approximately 2.5 million members. In the
first half of 1946, more than 700 new associations
with some 100,000 members were formed in Bo­
hemia and Moravia.
Democratic practices were at once revived in the
cooperatives throughout the country, and coopera­
tive education, especially of young people, was
undertaken vigorously.
Immediately after liberation, all branches of the
cooperative movement united to form a new fed­
eration, the Central Cooperative Council. This
organization received recognition by the Govern­
ment, was given representation on the National
Economic Council, and became its consultant on
all cooperative matters. (The chairman of the
Cooperative Council was later made Minister of
Domestic Commerce.)
Cooperatives have participated in the govern­
m ents Two Year Plan, started in January 1947.
The main task of the distributive associations
(whose members with their families constitute
about a third of the population of the former Pro­
tectorate) has been to assist in raising the standard
of living. The cooperative wholesale has been
w United Cooperative Movement in Czechoslovakia (Central Cooperative
Council, Prague, 1946), p. 6.




bending its efforts toward increasing the produc­
tion of its own goods.1
6
The above data relate only to the area of the
former Protectorate. In Slovakia the coopera­
tives had apparently continued operation all dur­
ing the war and expanded considerably, though to
what extent membership participation or control
was permitted is not known. The complete sev­
erance of contact between these associations and
those in the Protectorate, and the differences in
national viewpoint and temperament, made diffi­
cult the resumption of joint activities. However,
in M ay 1948 the Central Council reported that
“ complete agreement” on the affiliation of the
Slovak associations with the Council was expected
to be reached soon.
According to information recently received by
the International Cooperative Alliance from
officials of the Central Council, the Communist
coup in February 1948 has had no very adverse
effect as yet on the cooperative movement.
“ There are no fundamental changes and no inter­
ference from outside.” However, “ the situation
* * * has deteriorated” as a result of the
injection of politics into the cooperatives by
Communist officials who were also cooperative
officials. The new constitution of Czechoslovakia
nationalizes all industries except those owned by
the State, by cooperatives, and by individuals,
T able 9.— Trend o f membership and business o f consum­
ers9 cooperatives in Czechoslovakia , 1 9 8 7 -4 7 1
Retail distributive asso­
ciations
Year
Num­ Mem­
ber
bers
1937:
German un­
ion *...........
Czech union.
1941...................
1942
........
1943
........
1944
........
1945
........
1946 (first half
year)................
1947)__________

Indexes of
Cooperative
prices—
wholesale,
VDP:
Amount of Retail W hole­
Amount of
business
business
(food)
sale

Koruny

140
743
(»)
167
(*)
(’ )
67

8

238,525 465,944,542
739,434 1,314,319,000
(3)
(8
)
529,778 1,611,539,551
(8
)
(*)
608,750 2,065,946,694

8

Koruny
295.938.000
638.500.000 }
713,395,138
696,117,067
652,772,997
670,633,742
846,159,064

<725,814 2,930,107,077 1,261,029,950
6810,000
(8)
(8)

100
151
155
154
155
160

100
147
150
152
153
170

342

297

1 Data are from report of Central Cooperative Council of Czechoslovakia;
Cooperative Information (Geneva); report from United States Embassy;
and United Nations M onthly Bulletin of Statistics.
* Data are for 1935-36.
* N o data.
« December.
1 June 30; approximate.
i« The goods produced consist of food products (oleomargarine, chocolate,
soap, fish, and preserved and canned goods), textiles, and shoes.

17

COOPERATIVES IN POSTWAR EUROPE

but even in areas reserved for State monopoly,
actual operation may be delegated to cooperatives.

Germany
After a long period of Nazi vacillation between
tolerance and violent suppression, all the consum­
ers’ cooperatives were incorporated into the
Labor Front in 1941. The cooperative stores
were attached to 135 supply rings, each supplying
a whole region. Included in this machinery were
bakeries, meat-processing establishments, and
many productive plants, as well as a wholesale.
When Germany was conquered, in the spring
of 1945, the “ ring” stores were allowed to con­
tinue operation in all the four zones into which
the country was divided, and the authorities,
after a time, adopted an official policy of per­
mitting the formation of new, genuine coopera­
tives to replace them.
The greatest encouragement was given— and the
greatest progress made— in the British Zone.
A former director of the old cooperative whole­
sale was immediately appointed as trustee over the
GW enterprises in the zone 1 and manager of
7
the wholesale; and former cooperative leaders
were installed as “ custodians” of the ring stores,
pending establishment of legal title to them.
A year later the Nazi laws and regulations re­
garding cooperatives were annulled.
As a direct result of the favorable attitude of
the British M ilitary Government, 150 new co­
operatives had been formed in the British Zone
by the fall of 1947. None of the property for­
merly owned by their predecessors had, however,
been legally transferred to them nor had they been
successful in obtaining authorization for the
establishment of a cooperative bank in which to
centralize members’ savings deposits.
In the Russian Zone an order of the military
commander, on December 18, 1945, authorized
the reestablishment of the consumers’ coopera­
tives throughout the Russian-controlled territory,
and the transfer to them, “ free of charge,” of all
cooperative property administered by the Labor
Front. In the spring of 1947 it was claimed that
This man told a delegation from the International Cooperative Alliance
that “ throughout the whole of the years of misery there have been meetings
of old cooperators at least once a week. A t these meetings we have exchanged
the news—which we learned from the English broadcasts.” (Review
of International Cooperation, M arch-April 1946, p. 60.)




25.3 percent of the population was receiving its
supplies through the cooperatives.
In the U. S. Zone at that time all the former
cooperative properties were held by the Property
Control Branch of the United States M ilitary
Authority. An official directive, however, author­
ized the formation of cooperatives, providing
they were democratic and had voluntary mem­
bership. A total of 17 associations had been
formed in Wuertemburg-Baden and in Hesse.
Although these were still largely “ paper” organi­
zations,. they had a total reported membership of
over 300,000.
Very little information is available regarding the
French Zoney except that it is the policy to en­
courage the formation of cooperatives there.
T a b l e 10 .— Distribution o f ltsu pply ring” facilities in Ger­
m any, 1 94 5 , by occupation zone 1
Ring network

Wholesale facilities
Own production

M ilitary zone

Num­
Busi­
Busi­
Num­ ness in ber of ness in
Value
ber of 1944 (in branches 1944 (in Num­
pro­
m il­
shops
m il­
or
ber of duced
in 1944
lions) depots lions)
fac­
tories (in m il­
lions)

RM
A ll zones......................

7,800

619

14

British Zone.................
U. S. Zone...................
French Zone.................
Russian Zone...............

2,550
2,000
750
2,500

194
153
59
213

5
4
1
4

RM

115

46

23
34
8
50

17
12
2
15

RM

136
47
26
6
57

1 Data are from Review of International Cooperation (London), M archApril 1946, p. 53.

In Berlin, in the spring of 1947, 12 new associa­
tions were operating—2 in the British sector, 2 in
the French, and 8 in the Russian; there were none
in the United States sector. The Allied Command
for Berlin had approved the restoration of the
consumers’ cooperatives, as a policy common to
all the sectors.
At a cooperative congress, held in Hamburg in
March 1947, it was announced that, under an
agreement among the authorities of the British,
French, and U. S. Zones, the free exchange of
goods among those zones would be possible
thereafter; “ similar permission had not been
granted by the Russian authorities.” 1
8
The former close relationship between the labor
unions and cooperatives has been resumed. The
two large insurance associations, Yolksfursorge
1 Review of International Cooperation (London), M ay 1947, p . 74.
8

COOPERATIVES IN POSTWAR EUROPE

18

and Eigenhilfe, owned jointly by the two move­
ments in pre-Nazi days, were returned to them
in the fall of 1947 by the Allied Control Authority
under an order issued April 27, 1947T able 11.— Trend o f m embership and business o f consumers'
cooperatives and o f Usu pply rin g s" in G erm any, 1 9 8 1 - 4 ? 1

Y ear2

Associations affiliated with
GEG and GEPAG
Whole­
Total .
sale
consum­
business
ers’ coop­
Mem­ Business (in thou­
eratives Number
(in thou­ sands)
bers
sands)

Rm

1931.............
1933.............
1934.............
1937.............

1,695
1,606
1,634
1,488

1944.............
1945.............

(3
)
12,537

1,231
1,154
C
O
1,162

Rm

(*)

3,765,919 1,340,541
818,489
3,334,400
3.210.000
660,100
2.010.000
532,069

498,743
279,941
295,266
330,009

100

619,000
0)

7,800
(»)

1946.............
1947.............

Indexes
of retail
(food)
prices

115,000
81,314

113
115

705,000
42,001,332 1,535,000

112,000
160,000

120
*121

1 Data are from Zentralverband yearbooks, People’s Yearbooks, reports
from United States consular officials, Review of International Cooperation
(London), and United Nations M onthly Bulletin of Statistics
2 Data for 1931-37 are for wholesales, of GEO and GEPAG combined; 1944
and 1945 for GW and supply-ring network; and 1946 and 1947 for coopera­
tively controlled establishments.
3 No data.
4 British and Russian zones only.
5 September

Early in 1948 it was reported that the property
of the wholesale, GEG, in the western zones was
expected to be restored in a few months; although
that in the Russian zone had been “ safeguarded,”
it had not been tinned over to the wholesale.
The matter of a cooperative bank still had not
been settled. B y that time the wholesale had
acquired a part in (1) a preserve factory, (2) a
deep-sea fishery enterprise (jointly with the
General Federation of Trade Unions), and (3)
(jointly with five retail cooperatives) a company
to operate department stores.

Italy
When Mussolini began to rise to prominence,
about 1922, there were, among the Italian co­
operatives, associations with affiliations or lean­
ings toward the Socialists, “ Nationalists,” Cath­
olics (People’s Party), Republicans, Communists,
and Fascists, as well as those of trade-unionists,
ex-servicemen, and independents. The Socialist
group was the largest, with some 3,986 affiliates,
and the Catholic group the next, with 2,940. The
“ Fascist cooperatives” at that time numbered
only 36.
The assumption of power by Mussolini was
accompanied by violence against the consumers’



cooperatives, especially the Lega Nazionale (So­
cialist) and its members, which had in their 1920
congress denounced the “ reactionary violence”
of the Fascisti. From 1921 to 1922, the number
of cooperatives of all types dropped from 19,510
to 8,000. The Fascists transformed what was left
of the consumers’ cooperatives into a purely Fascist
system, with Party members in all the important
positions.
When Mussolini was overthrown on July 25,
1943, the Fascist cooperative officials fled north
with the others. Immediately, steps were taken
toward making the cooperative movement demo­
cratic again. The Fascist organization, Ente
Nazionale, was dissolved by the United States
M ilitary Government on June 13, 1944, a few
days after the liberation of Rome, and this was
confirmed by the new Italian Government. In
the ensuing wave of cooperative enthusiasm many
new associations were formed. Two months after
the liberation there were 800 consumers’ coopera­
tives in operation in Rome alone, and in Florence
120 with a combined membership of about 80,000
families. The sudden upturn in associations,
membership, and sales is indicated in table 12.
Unfortunately, it appears that some of the mis­
takes of the past are being repeated. B y the end
of 1946, the cooperatives had already split into at
least four groups (Socialist, Catholic, free, and
ex-servicemen’s), each with its own federation.
The first three of these federations had formed a
new cooperative wholesale in Milan.
T able 12.— Consumers' cooperatives in free and Fascist
Ita ly , 1 9 2 1 -4 6 1

Group of associations

Year

Lega Nazionale members___________
Ente Nazionale fascista members___

1921
1929
1937
1942
1943
3 1946

Total, affiliated and unaffiliated____

Num­
ber of
Busi­
affili­ Members ness (in
ated
millions)
associ­
ations

Lire
3,986
3,168
3,500
2,851
2,893
3,744

997.000
1,000.0
1.362.0
(2
5
800.000
1.500.0
527.000
1.716.0
600.000
00
1,520,043 *1,395.9

1 Data are from Review of International Cooperation (London); consular
report of M ay 27, 1943; Foreign Economic Administration Report of April 17
1945; and United Nations M onthly Bulletin of Statistics.
3 No data.
3 As of September.
4 Per month.

The cooperatives have received Government
recognition in various ways and have been used
as the channel for the distribution of relief goods
from abroad, sent by official and other agencies.

Cooperatives
in Postwar Europe
Part 4.— Eastern Europe

O f the eastern E uropean countries covered

by this article (Albania, Bulgaria, Estonia, Greece,
Hungary, Latvia, Lithuania, Poland, Rumania,
Soviet Union, and Yugoslavia), in all but one
(Albania) the cooperative movement was first
subjected to increasing pressures of authoritarian
practices in the 1930's, and then utilized by the
Government or the invaders for their own purposes
during the Second W orld War. A t the end of
hostilities, nevertheless, there was in all these
nations at least a cooperative structure, however
great its loss of independence and however far it
had departed from recognized cooperative practice.
The regaining of cooperative freedom (in most
regions) was followed by vigorous growth, but the
cooperatives have now become subject to single­
party totalitarianism under a different name.
Estonia, Latvia, and Lithuania have disappeared
behind the “ iron curtain," and all of the other
countries, except Greece, are either strongly
influenced or dominated by Russian practices and
policies.

Prewar Situation
Cooperatives had attained a considerable degree
of success, in most of these countries, before the
war. In Bulgaria, about 15 percent of the popu­




lation belonged to some type of cooperative; in
Greece and Poland, cooperators and their families
constituted about 20 percent of the population,
in Rumania about 30 percent, in Yugoslavia
about 40 percent, and in Estonia about 50
percent.
In Russia, the fate of the cooperatives had de­
pended on the policies of the Government, which
had ranged all the way from a grant of monopoly
to outright suppression. In 1935, urban co­
operatives were absorbed into a system o f State
stores and ceased to exist. After that time
(until November 1946) consum ed cooperatives
were found only in rural districts, where they had
become the predominant factor in retail trade.
Central federations (and wholesales) of con­
sumers' cooperatives existed in all countries but
Greece. In Bulgaria, Estonia, Hungary, and
Poland, the cooperative wholesale had become
the largest commercial organization in the country,
was an important importer and exporter, and
produced in its own plants from 10 to 20 percent
of all the goods it handled.
W ith the growth of totalitarianism, changes in
government began to occur which had their effects
upon the cooperatives. Hungary had become
an authoritarian economy as early as 1920, under
the Horthy regime which, at first hostile to the
cooperative movement, had later found it useful
and even went into partnership with the wholesale
in a trading and export subsidiary. Lithuania
had established a single-party dictatorship in 1926.
A similar system was adopted by Esthonia in
1933. In most of the other countries, also, it was
the middle thirties which saw the gradual rise of
totalitarianism.
In Latvia, the new corporative Government
came into power in 1934, and the next few years
were spent in “ adapting" the local cooperatives
to the new ideology. The cooperative wholesale
was forced to vote its own liquidation and to
transfer its assets to a new State-owned com­
mercial stock company with which the local
cooperatives were required to affiliate. B y 1939,
although the business of the local distributive
associations had increased, the whole cooperative
movement was reported to have been “ changed
beyond recognition."
In Bulgaria, Rumania, and Yugoslavia, also,
the Governments, although well-disposed toward

19

20

COOPERATIVES IN POSTWAR EUROPE

cooperatives, began to assume a greater and
greater degree of control over them. In Bulgaria,
contrary to the usual situation, only the agricul­
tural cooperatives were subjected to interference.
The cooperative movement in Rumania had
always had close relationships with the Govern­
ment; in fact, this dependence had been one of the
principal factors retarding sound and sturdy
growth. This long-time trend was merely accel­
erated by the abolition of constitutional govern­
ment in that country.
Poland seems to have been an exception among
the eastern European countries; the cooperatives
were allowed to flourish and expand under a liberal
cooperative law, without official interference,
right up to the outbreak of war.

Situation During the War
The Baltic countries (Estonia, Latvia, and
Lithuania), occupied by the Russians (in 1940)
and then by the Germans (1941), suffered enor­
mous property losses, first by war and then by
looting by the occupation authorities, as well as
complete loss of autonomy. The Germans, how­
ever, recognized the efficiency of cooperative
leaders by requisitioning their services for the
direction of State-owned stock companies and
other enterprises.
The partition of Poland and Yugoslavia reduced
the cooperative movement in both countries to a
shadow of its prewar size. Croatia, previously
part of Yugoslavia, became a Nazi puppet State.
In the other parts of Yugoslavia that came under
German rule, the associations with Yugoslav
membership were either destroyed (and their
assets confiscated, as in Slovenia) or were placed
under German commissioners for nazification;
associations with German membership were
allowed to continue operation and were even
favored in some ways. Later, as the authorities
recognized how useful the cooperatives could be,
they not only tolerated them but even helped to
start new ones to assist in carrying out govern­
ment measures.
In the areas of Poland ceded to the Soviet
Union, the urban cooperatives were dissolved, but
the rural associations were allowed to continue.1
9
In German-held regions the cooperatives were left
» Following the pattern adopted in 1936 throughout the Soviet Union
itself.




in operation, but as part of a State-controlled dis­
tributive machinery, and in some instances were
even expanded. The one form of nonclandestine
action open to Polish patriots during the war was
participation in the cooperative movement, in
which they continued to fight for independence of
action, evading German orders as much as pos­
sible Under these conditions, the cooperatives
quadrupled in number.
Although Rumania became a satellite of Ger­
many, it nevertheless lost substantial amounts of
territory to Bulgaria and Hungary, and there was
a corresponding loss of cooperatives. Those in
the remaining areas were largely ignored as co­
operatives, but were so overwhelmed in the new
machinery created by the Government to carry
out its wartime control and rationing measures
that it became difficult to determine where volun­
tary cooperation ended and mandatory collective
effort directed by the State began.
The Hungarian cooperative movement, already
influential, was expanded by the reacquisition of
associations in territory that had been lost after
World War I ; and the close relationships between
the cooperatives and the Government continued.
A dilution of cooperative ideals and a definite
taint of anti-Semitism were all too evident, how­
ever, in statements attributed to the general
manager of the cooperative wholesale.

Postwar Developments
When the Baltic countries were “ liberated” by
Russian forces in 1944, they had been so pillaged
and destroyed that whole industries had been
wiped out, livestock had been reduced by as much
as 50 percent, about a third of the housing had
been destroyed or made unfit for habitation, and
the food ration was said to be the lowest in
Europe. The Russians treated these countries
leniently in two respects: They increased the
bread ration; and although nationalization of
industry (started in 1941) was reintroduced, only
partial measures were taken. Politically, how­
ever, these countries became an integral part of
the USSR, as “ constituent republics.” No infor­
mation is available regarding the cooperatives
since that time. That organizations of coopera­
tive form exist is indicated by the proposal of
Russian delegates to the International Coopera­
tive Congress of 1946 that the cooperative move­

COOPERATIVES IN POSTWAR EUROPE

ment of each of the three former nations be ad­
mitted to membership in the International Co­
operative Alliance. This proposal was referred
to the executive committee of the Alliance for
further study.
The end of the war found at least the machinery
of cooperation in existence in all the other coun­
tries except Albania (where none had existed).
In Hungary, Bulgaria, Rumania, and Poland, the
cooperative network was more extensive than
before the war (see table), but in the first three of
these countries it was dominated by the State and
its operations interwoven with those of Stateowned business organizations. In Yugoslavia,
the consumers’ cooperatives had expanded con­
siderably faster than most of the other types of
cooperative associations and constituted 70 per­
cent of the total.
In Poland, the movement was said to be func­
tioning without interference with either its
democratic practices or its autonomy. The co­
operatives were reported to be vigorous in recon­
struction and efficient in operation. Many of the
former leaders were still at their posts, and mem­
bership contacts had continued throughout the
war period. Shortly after the end of the war, a
cooperative congress in Poland decided that there
should be only two cooperative federations—
Spolem (the central union and wholesale) and
the auditing union; before the war there had
been 30 such federations.
In the early postwar period the cooperative
movement was highly regarded by the Polish
Government, and the cooperative wholesale and
its members were designated as channels for the
distribution of U N RRA relief supplies. With
the rise of communism, however, cooperatives
began to be criticized for their “ inefficient per­
formance in comparison with their great tasks,”
and a “ ruthless purge” of all the “ antidemocratic
elements” that had crept in was demanded.2
0
B y the end of 1947, Communists and their sup­
porters held 14 of 27 positions on Spolem’s board
of directors, and they had been instrumental in
obtaining a reorganization which placed the
wholesale under the (Communist) Minister of
Industry, and divided up its activities among
several newly created central organizations. On
the new supervisory council—whose decisions
20 statements quoted in News Digest (London), M ay 6,1946.




21

could be suspended by the Government— Govern­
ment representatives (as well as cooperative
delegates) were to sit, in order to link the council’s
activities “ closely with the economic policy of
the State.” 2
1
In Hungary, one of the first acts of the constitu­
tional government that ended the thousand-yearold Magyar monarchy was to establish a Ministry
of Commerce and Cooperation. About 18 months
later (Apr. 10, 1947), a new cooperative law was
passed which laid down, as the primary requisite
of cooperatives, “ open membership without dis­
tinction of religion and nationality,” and which
affirmed the equality of all members within the
associations. What, if any, effect the Commu­
nist coup, in the summer of 1947, may have had
upon the Hungarian cooperatives is not yet known.
Cooperatives in Bulgaria had taken part in
the underground and liberation movements, and
one of their first demands after the war was for
the restoration of the democratic membership
control and independence of action taken from
them under the “ dictatorial regime.” Coop­
erators in the 1947 cooperative congress pro­
tested against State invasion of retail and whole­
sale trade, under the nationalization program,
but were told by officials of the “ State of the
People’s Front,” who were present, that the
state had as much right in these as in other fields.
These officials also pointed out that the cooper­
atives still had a “ vast field” for their efforts
and that they were regarded not only as “ one of
the principal pillars” of the government, but also
“ a most important factor in the recovery of the
national economy.” 2
2
As a result of the land-reform laws in Hungary,
Poland, and Yugoslavia, which parceled out the
former large estates into small holdings for peasant
families, a new type of cooperative came into exist­
ence. This was an association to own and utilize,
on a cooperative basis, the buildings, agricultural
machinery, and equipment formerly belonging to
these estates. Such associations have become an
increasingly important feature of the postwar agri­
cultural cooperative movement.- In Yugoslavia,
an attempt has been made to use these and the
agricultural-labor cooperatives as a means of
gradual collectivization of farming, on the Soviet
ft Review of International Cooperation (London), February 1948, p. 33.
22 Review of International Cooperation (London), December 1947, pp.
226,227.

COOPERATIVES IN POSTWAR EUROPE

22

“ kolkhozy” pattern. However, the Yugoslav
peasants, in spite of their tradition of common
tillage and labor on their farms, have always
owned the farms individually, and have an un­
swerving belief in private property. Therefore,
the attempt to merge their individual holdings into
a single “ compound” collectively held and worked
is reported to have been “ rather successfully
resisted.” The effect upon the consumers’ coop­
eratives of the recent nationalization o f the re­
tail trade in that country is not yet known.
T a b l e 13.— N um ber and membership o f consumers7 cooper­
atives as compared with prewar , by country 1

Country

Bulgaria: Associations affiliated with the whole­
sale, Napred..........................................................

Num­
ber of
Year associ­
ations

Their
mem­
bers

1945
1938

111
66

260,000
80,478

1944
1937
Poland: Associations affiliated with the whole­
sale, Spolem........................................................... 1945
1939
Rumania: A ll consumers’ cooperatives................ 1945
1937

5,000
1,481

7,000,000
630,000

6,574
1,871
293
379

2,293,000
440,000
349,570
69,352

Hungary: Associations affiliated with the whole­
sale, Hangya—.....................................................

i This table is based on information from Review of International Coopera­
tion (London); Cooperative Information (Geneva); and reports from Amer­
ican consular and embassy officials.

In Greece, most of the present consumers’ co­
operatives were formed during the German occupa­
tion or since expulsion of the Germans. The
movement is reported to consist of a multiplicity
of small, weak, badly undercapitalized associations.
The membership consists for the most part of the
employees of a single business enterprise, and the
m ajority of the associations (because of the ex­
treme difficulty of obtaining supplies) operate only
intermittently, as goods are received. In 1947,
they complained of discrimination in the distribu­
tion of machinery and relief supplies from abroad,
and of the fact that legislation detrimental to
cooperatives was still in force.
Among the countries which had a cooperative
movement prior to the war, Greece alone had no
central cooperative federation or wholesale. Steps




to remedy this situation were taken in 1945, when
a federation was formed which hopes eventually to
undertake wholesaling.
The movement in Albania dates only from Sep­
tember 1945, when the first consumers’ cooperative
was formed. B y the end of 1947, the 25 consumers’
associations had 46,467 members (said to consti­
tute, with their families, 85 percent of the popula­
tion in the districts which they serve) and were
doing an annual business of 734,000,000 leks.
They had already acquired a number of productive
enterprises (making bakery goods, meat products,
canned goods, and preserves). The 2,458 members
of the 89 workers’ productive associations were
stated to include 72 percent of all the artisans
in Albania. The Government was reported to be
relying heavily on the cooperatives in its attempts
to develop commercial activities throughout the
country.
In the Soviet Union, where, since 1935, consum­
ers’ cooperatives had been forbidden to operate
in urban areas, an order of November 9, 1946,
removed this prohibition. They were ordered to
extend their operations to the cities and to compete
actively against the State-owned stores in both
prices and the purchase of agricultural products.
Workers’ productive associations (artels) were
ordered to expand their production of consumer
goods. Materials, equipment, and transportation
facilities (railroad freight cars and trucks) were
made available to them. Under this stimulus, by
mid-1947, all types of cooperatives had established
retail outlets in urban districts, and in the larger
cities “ they even operate department stores.” 2 In
8
the 4-month period, December 1946 through
March 1947, it is reported that 17,660 new
cooperative stores were opened in towns and
workers’ settlements. “ A considerable number of
Soviet and party officials” had been directed to
work in cooperative enterprises.2
3
2
4
2 Foreign Commerce W eekly (U. S. Department of Commerce, Washing­
3
ton), June 28,1947.
2 Cooperative Information (Geneva), No. 10,1947.
4

U. S. GOVERNMENT PRINTING OFFICES IM S