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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