Coöperation in the West
SINCE the flannel weavers of Rochdale began the work which has made them famous, it is to be doubted if there has been a coöperative movement which has been more successful than that of the coöperative creameries developed in the last ten years by the farmers of certain of our Western and Northwestern states. What these farmers have accomplished deserves attention for its significance, and still more for its promise.
Their business, which amounted at the beginning of the decade only to a few hundred dollars, has so grown that it now involves millions of dollars ; yet they have had none of the benefits of the composite coöperation of the great wholesale societies of England and Scotland. They have had, to be sure, some measure of benefit from the little information that they had about these bodies, but in the main they have been forced, unaided, to solve the serious and important problems which have confronted them.
The individual coöperators as well as the individual coöperative societies of Great Britain have had the stimulus of composite coöperation. The growth of the English and Scottish societies, which remains one of the marvels of coöperation, has been most pronounced since the “ wholesales ” were founded. The two wholesales — that of Manchester established in 1864, and that of Glasgow in 1868 — have not only been a great common bond between the individual members, but, joining the many thousands of coöperators in a close and sympathetic union, have handled a volume of business amounting in 1898 to ninety million dollars. In a certain sense, these wholesales stand as the parent bodies. Each individual society has a direct interest in the wholesale, and may be said to be tributary to it. Just as union in America and federation in Canada have brought common strength through the exercise and resulting development of the powers of state and province, so strength has come to these coöperative bodies through further combination.
In our Western states coöperation has advanced with none of this composite influence. The farmers have engaged as individuals. Probably they have never had any general interest in coöperation as it is practiced in Great Britain : first, because, with few exceptions, they have never given it study; and secondly, because they have been absorbed with their own problems. While in the English and Scottish societies many different lines of commerce and manufacturing are represented, uniting diverse interests and giving a greater total strength, these creamery coöperators have been confined to one product. What these farmers shall accomplish when coöperative in many branches is quite out of estimate. Lord Rosebery, in an address before the cooperative congress in Glasgow, in 1890, used an expression which has since become very popular among English and Scottish coöperators : “ The number of your members, the extent of your capital, and the great principle of the union of interests which guides the movement, in my opinion, constitute nothing less than a state within a state.”
If the other departments of the farm, the shop, and the store shall ever be placed on as stable a coöperative foundation as the one on which many hundreds of Western creameries now rest, we shall have in this country a state within a state that will be of colossal proportions.
It was not an atmosphere of sentiment, or even of philanthropy, in which the coöperative creameries were begun. Their organizers did not begin as disciples of Bellamy, or followers of the Oneida and Amana communities ; it is probable that very few of them had ever heard of Brook Farm. But the fact that their plans were almost devoid of theory suggests a reason for the success which has been reached.
This coöperative movement in the West has made most rapid progress in the states of Minnesota, Wisconsin, Iowa, and Illinois. Dairy farmers in other states have been testing it, and as the advantages of the system become more widely appreciated, and the slight chance of failure, when sound business principles are followed, becomes more apparent, wider areas will be covered. Exact data are not available as to the number of coöperative creameries in the Western dairy districts, nor are official figures obtainable to show the output and the value of the product, but, speaking broadly, the volume of business transacted in the year 1898 was upwards of thirty million dollars. In view of the fact that the movement is less than a decade old, and that there has been but one branch of enterprise, the efforts of these farmers will bear comparison with the British wholesales.
The value of the creamery products of the United States, it may be noted in passing, amounted in 1895, the latest year for which national statistics are available, to over five hundred million dollars. A very large amount of butter is still made, in some of the states, on farms, under the old individual plan ; but should the ratio of coöperative creamery increase shown in several of the Western states continue, and the coöperation spread more widely, the entire production of the country must be largely influenced.
As a further indication of the magnitude of this movement, it may be noted that in the state of Minnesota, where ten years ago there were no coöperative creameries, now, out of a total of six hundred and fifty, four hundred and fifty are coöperative ; that in Wisconsin about one thousand out of sixteen hundred are coöperative ; while in Iowa, despite the fact that unsound business principles have here and there prevailed to the detriment of coöperation, more than one third of all the creameries of the state are coöperative at present.
In some of the Western states jointstock companies carry on the business, the stockholders not necessarily being residents of the community. They may or may not include the patrons of the creamery among their stockholders. In some cases the coöperative plan is adhered to, the creamery being established as a joint-stock company, but conducted along coöperative lines.
Mr. Henry E. Alvord, chief of the dairy division in the bureau of animal industry of the Department of Agriculture in Washington, in a letter to the writer speaks of the subject of coöperation among creameries from the national point of view. He says : —
“ There are now about ten thousand creameries and cheese factories in the United States, and the number is gradually increasing. The rapid growth in the new territory west and south of Minnesota is partially offset by the discontinuance and consolidation of creameries in the older and more thickly settled dairy districts. The tendency in Minnesota and the Dakotas seems to be towards organization upon the coöperative plan, which to my mind has very great advantages. In Nebraska and Kansas there is a decided preference for the proprietary system, stock companies establishing a central manufacturing plant, and then a number of outlying skimming stations, which can be reached usually by rail. In Iowa, although the dairy industry was there mainly developed through coöperative creameries, there seems to be a reaction, and the establishments are passing into the hands of single proprietors, partners, or stock companies. This does not seem to be because there is any real advantage in the proprietary system ; and indeed, I still argue that the coöperative form is the more truly economical for the farmer. But the trouble seems to be that some of the farmers cannot or will not pull together, and lack the business experience and capacity necessary to successful management.”
These coöperative creameries have had other influences than those strictly commercial. The necessity, for one thing, that there should be an absolutely pure and cleanly supply of milk has stimulated a better order of affairs on the farms and in the farmhouses. The increase in the revenue of the farmer, and the regularity and constancy of this increase, have helped him to give his family added comforts hitherto beyond his reach. Before the establishment of the high creamery standard, there were nearly as many kinds of butter as there were farmers, and almost as many prices. All this is now changed, and the butter made in the flourishing coöperative creamery of to-day, whether sold for the European market, for the critical cities of the East, or for consumption at the country crossroads, is pure, sweet, and rich, — as was not always the case in the days of farm churnings.
The organization of a typical Western coöperative creamery is very simple. Prospective members meet at a convenient farmhouse or town hall, adopt a constitution and enact by-laws. The best results seem to be reached in districts of a radius not exceeding five miles, the creamery being established near a railway station and near the centre of the district. Usually from thirty to fifty farmers sign the registration agreement, and these pledge the number of cows from which they will supply milk. It has been found that a capital of from two thousand to three thousand dollars is ample for the average coöperative creamery, larger capital being unnecessary and tending to unsatisfactory results.
The organization agreement is direct and clear. It sets forth the object, — to manufacture butter, though cheese-making is also provided for, the manufacture to be at actual cost; names the officials, as president, secretary, and so on ; provides for a board of directors, consisting of the officers and three trustees, and this body is also a board of audit. The by-laws fix the bonds for the treasurer and provide for the sinking fund, which is maintained by setting aside a uniform sum each day, usually five cents for every hundred pounds of milk received. In a creamery using two million pounds of milk a year, this ratio yields a sinking fund of a thousand dollars for general repairs and the like, which at any time may easily be reduced if found too large.
At least twice a month the milk from the cans of each farmer is tested as to the amount of butter fat it contains, and the result determines the farmer’s credit upon the books of the secretary. The test also serves to show if there has been any adulteration. Should a farmer be found adulterating his milk with water or anything else, or should he be found guilty of skimming it, he is fined : for the first offense, ten dollars ; for the second, twenty-five dollars ; for the third he forfeits all interest in the association and all claims for milk theretofore delivered, having, of course, sufficient time and opportunity in which to offer defense.
While this new and powerful cooperative element has been making remarkable progress during the decade soon to close, it would be unfair not to note the reverses it has encountered. In most of the states it is impossible to obtain any clear data as to the number of failures, but in the state of Minnesota, where some effort has been made to collect such material, they appear to have been about twelve per cent of the total. These failures, however, should be charged up mainly to the earlier years of the decade, when the enterprise was so largely tentative, and when some of the farmers had not yet learned the necessity of maintaining strict business principles. I think it is but fair to say that, where ordinary sagacity and business sense have been applied, the failures in coöperative creamery work in the West have been fewer than in any other line of business.
The situation in one of the larger counties of Minnesota illustrates the practical character of the movement. The introduction of the coöperative creamery has practically revolutionized the financial transactions of the county. There are in the shire twenty-nine creameries on the coöperative plan, having a membership and patrons numbering about twenty - seven hundred farmers; also one creamery on the stock-company plan, and two cheese factories. The cash receipts from these creameries aggregate perhaps a million dollars a year.
When the first of them was established, about ten years ago, there were twenty-four mortgage foreclosures in the county in one year. In 1894 there was but one, in 1895 none, in 1896 three. In 1897 the delinquent tax list was only one fifth as large as in 1887. The average deposits of the farmers in the banks of one of the towns of the county in 1886 were fifty-six thousand dollars, while the average in 1896 was three hundred and twenty thousand dollars. These do not include the deposits of the creameries of the vicinity ; the latter, in 1898, averaging sixty thousand dollars. In 1889 farm lands sold at from ten to thirty dollars per acre ; in 1898 they sold at from twentyfive to sixty dollars per acre.
The county depends wholly upon agriculture. About the time these coöperative creameries were established, the successive failures of the wheat crop had left the farmers in a deplorable condition. There were no manufacturing plants to which they might look for relief, and there was no raw material to dispose of had there been manufacturing plants. With no outside aid of any kind, in spite of coüperative failures among Western farmers in other lines, relying solely upon one another and their belief in the virtue of genuine coüperation, these farmers undertook the experiment. They have since proved to their own satisfaction the practical benefits of businesslike coüperation, while all unconsciously they have given the rest of the world’s toilers an object lesson and an inspiration.
But no consideration of this form of coüperation in the United States is complete or adequate without recognition of the coüperation of the East, and more particularly of the New England states. So far as the writer has been able to ascertain, coüperation in dairying in New England began in the year 1879, when a number of farmers gathered in the town of Hatfield, Massachusetts, and, under the supervision of Mr. Henry Alvord, chief of the dairy division of the Department of Agriculture, established a coüperative dairy. It became operative the following year, and was swift to demonstrate its fitness to be recognized as a pioneer in an important field of economic endeavor.
Associated dairying had flourished in the state of New York for some years prior to this, having much the same form and spirit; indeed, as early as the year 1860 the farmers of that state united in groups in the manufacture of cheese on an association basis.
From the time the Hatfield coüperators began their work the movement steadily gained in scope and power, and it is not too much to say that out of it has grown one of the most important features of the industrial life of New England. Very much the same methods are here followed as those which are practiced in the West. In point of fact, the West has drawn liberally upon the East for suggestions. Here, as in the West, success has invariably followed when to honesty of purpose have been added business sagacity and an insistent recognition of the rights of others.
Recently, while making a study of a phase of English coüperation in Rochdale, the home of the movement, my attention was called to a novel feature, — or rather, an attendant feature, since it was not a part of coöperation, — the competition of cooöerative organizations in like lines of effort. This novel element has appeared in America, also, and an interesting example of it is shown in Vermont. There are over two hundred and fifty creameries and cheese factories in that state, many of which are coüperative. A well-informed gentleman residing in Vermont, who is much interested in the coöperative movement, has called the writer’s attention to the competition which has sprung up among the coüperative creameries there; noting the fact that, in a state no larger than Vermont, so many creameries introduce unfortunate conditions through the sharp competition among them.
In any study of coöperation, this feature of what might be termed internecine or abnormal activity, no matter what the form of coöperation, has unusual significance.
Vermont furnishes an excellent illustration also of the remarkable growth of the coöperative movement. One of the first coöperative creameries in the state was established in 1880. It now uses the cream from the milk of some three thousand cows, making from eight to ten tons of butter per day under one roof, a total output for the year of upwards of three million pounds.
Doubtless this form of coöperation would be still more widely extended in New England but for the amount of milk shipped to the large cities. In Connecticut, for example, over three hundred and fifty million quarts of milk are annually produced, very much of which is not available for creamery use, as it goes direct to the city consumer in the form of milk. There are, however, over fifty creameries in the state, and of this number about forty are coöperative. Incidentally, it is of interest to note that, through the advanced methods of modern dairying made possible by the agricultural education of the latter part of the present century, the average yield of milk from a single cow in Connecticut has increased from 277.2 gallons in 1860 to 425.4 gallons in 1898.
Massachusetts is known, at home and abroad, as a manufacturing state, and yet the value of the agricultural property of the commonwealth had reached, in 1895, the enormous sum of two hundred and twenty million dollars, two thirds of the value of all the manufacturing plants in the state. The value of the product of her creameries increased from eighty thousand dollars in 1880, the year that coöperation in creameries was introduced into New England through Massachusetts, to nearly two million dollars in 1895 ; and I presume the figures for the past year, 1899, will, when available, show a still more significant contrast.
Out of forty-one creameries in Massachusetts at present under the authority of the commonwealth, thirty-four are cooperative. An interesting fact in connection with the butter trade of this state is that, according to the estimate made by the dairy bureau, the amount of butter consumed was larger in the year 1898 by nearly two hundred and forty-five thousand pounds than it would have been but for the stringent laws enforced against fraudulent butter. That is to say, the consumption was that much larger than it would have been had imitation butter been allowed full and free sale.
In all the New England states the farmers have been as keenly alive to the dangers of fraud as the farmers of the West, and in each state stringent laws are in force providing severe penalties for the sale of fraudulent butter. It is of interest to note in this connection that the average annual production of oleomargarine in the United States is now less than fifty million pounds, while from 1886 to 1897 inclusive over five hundred million pounds of it were made, representing a value of nearly thirteen million dollars.
In the New England as well as in the Western states, the coöperative movement has received a substantial though indirect impetus from the great agricultural colleges and experiment stations. Very many of these institutions hold what are known as dairy schools for farmers. Once a year, for six weeks or two months, either in winter or in summer, the farmers gather at these institutions, and are taught how to make butter, or how to make better butter than they have ever made before, how to care for their stock in more sensible ways, and the like. Quite naturally, a similar impulse, only more clearly defined, is given to the dairy interests by the young men who graduate from these institutions, and who take back to the farms so many new and sensible ideas ; but these dairy schools for the farmers themselves are of large practical value in that they deal directly with the materials at hand, and present definite results in dollars and cents.
Broadly speaking, agricultural education is less than half a century old. Its influence upon the farm life of America, steadily increasing, has never been so large as at the present time, and in no department of farm life has it been more effective than in that of dairying. These dairy schools for farmers are in active operation now in thirty-one states. Not only is instruction given in the making of butter and cheese, teaching how the butter may be made so that it will yield invariably a higher market price than under old methods, but there are practical exercises in the testing of milk, a condensed study of the bacteriology of the dairy, with valuable lectures on the breeding and feeding of dairy cattle. Such instruction as this, on so large a scale, has never before been possible: it is a trustworthy handmaiden of coöperation.
Lord Rosebery’s “ state within a state ” is not necessarily located in Utopia. Should coöperation be extended among the farmers of the United States as successfully in other lines as it has been carried on in the manufacture of butter, the state within a state will be more powerful in America than in Britain. Should this businesslike coöperation be expanded, until it embraces the production and the marketing of grains and grasses, the raising and selling of cattle, sheep, and hogs ; should it indeed include at last the loom, the mill, and the shambles, there must come a readjustment of our entire economic relations, at once important and unique.
There have been coöperative efforts along other lines in this country : some of them successful; others, through a lack of that business sagacity the creamery coöperators have shown, failures. But while there has been a good deal of serious coöperative effort, there yet remains unoccupied the vast open field of national endeavor. From 1861 to 1899 the trade of all the coöperative societies in Great Britain has amounted to over one billion fifteen million dollars, while the net profits during that period have been upwards of sixteen million dollars. There appears to be no reason why, in a country whose people are as sympathetic with reforms as are our own, — or better, as sympathetic with readjustments, — success should not attend general, sensible coöperation.
While we need not look for any immediate readjustment of our industrial relations, simply because certain farmers have successfully demonstrated the value of sensible coöperation, — not ignoring, however, the chance that such readjustment may be nearer than we think, — let us give our attention to the ease with which all lines of farm life lend themselves to this form of enterprise.
You can scarcely mention a department of farm activity not adaptable to coöperation, when it is based on sound business principles. Take, if you will, wheat-raising, one of the chief industries of agriculture. While it is conducted by individuals on a larger scale than the creamery industry, with relatively larger losses and gains, there appears to be no valid objection to general coöperation in wheat-growing. A dozen or even twenty farmers, in a given locality, might readily unite their forces in this occupation. In no sense need the idea of communal life be admitted, nor would there be need of any merging of ownership in lands : the coöperation would consist in the common buying and planting of seed, the joint ownership of the more expensive machinery, the establishing of an overseeing board, with a general superintendent of operations, a clerical official, and perhaps a treasurer. When the threshing stage was reached the question of fair market would arise. How would these coöperators be able to meet all the incidental expenses from seedtime to harvest, and secure a fair value for their wheat, no matter what the current market price ? This might be difficult if there were but one or two such coöperative centres in a given state; but there appears to be no sound reason why each coöperative centre should not articulate with others in a given county or state, or group of states, for that matter. Nor is there any sound economic reason why these farmers, thus organized, should not maintain their own storage places: farmers have already shown that they are able, under the most distressing competition, to hold their wheat in their own elevators.
In short, the same kind of sensible coöperation that has been so successful among the creamery men may be adapted to the raising of sheep and cattle, to market gardening, be the scale large or small, to horticulture, to the raising of corn and of cotton. In any successful coöperative movement there must be thorough confidence, absolute honesty on the part of officials, a free and full understanding by all concerned of the problems arising, and a firm determination to keep the business within the control of its membership.
The farmers who are so successfully manufacturing butter have not only shown the financial soundness and the commercial importance of their effort, but they have demonstrated in a peculiarly interesting way the claims of a writer on coöperation : that it “injures no man’s fortunes, causes no disturbance in society, needs no trades union to protect its interests, subverts no order, expects no gift, and asks no favor.”
A little over a half century ago, the flannel weavers of Rochdale, holding to the “ ready money ” principle and maintaining that credit was a social evil, began, on a capital of twenty-eight pounds, a coöperative enterprise that has been as great a surprise to statesmen and economists as it has been a boon and a stimulus to laborers. In this thriving English city one may note certain tangible proofs not only of the power of coöperation, but of its vigor and endurance. While untoward conditions surrounded the handful of men who initiated modem coöperation in Rochdale ; while, as they advanced so slowly, failure seemed so often imminent; while foes and lukewarm friends each exerted their baleful influence, yet the coöperation of the weavers made progress, until to-day, as you pass up and down the streets of the rushing city, and bear in mind its condition when the coöperative movement was here instituted, you marvel at the civic as well as the individual and personal proofs of the splendid strength of this great industrial enterprise. In the year 1844 this society had twenty-eight members ; it now has over twelve thousand. In 1844 it had a capital of one hundred and forty dollars ; in 1900 it has assets amounting to nearly two million dollars, while the profits of the business amount to upwards of three hundred thousand dollars a year. The creamery coöperators of our Western states have followed closely in the path of the weavers, from the hour when many of them saw, as did the men of Rochdale, distress and privation ahead, with little hope of relief under existing circumstances.
In the preface of his edition of the History of the Rochdale Pioneers, issued in 1892, George Jacob Holyoake says: “ The Italians have a proverb of unusual sagacity for that quick - witted people, namely, ‘ They who go slowly go far.’ Coöperation has gone both slow and far. It has issued like the tortoise from its Lancashire home in England; it has traversed France, Germany, and even the frozen steppes of Russia ; the bright-minded Bengalese are applying it, as is the soon-seeing and far-seeing American ; and our own emigrant countrymen in Australia are endeavoring to naturalize it there. Like a good chronometer, coöperation is unaffected by change of climate and goes well in every land.”
In view of the success of the farmers of the West as well as those of the East, and of the vast field before them, in common with the toilers in many lines of effort, it seems temperate to say that American coöperative industries may become one of the great standard business activities which register the rise and fall of national prosperity.
W. S. Harwood.