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The nonpartisan leader. [volume] (Fargo, N.D.) 1915-1921, April 05, 1920, Image 8

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Persistent link: https://chroniclingamerica.loc.gov/lccn/sn89074443/1920-04-05/ed-1/seq-8/

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In last week's Leader Professor Roylance told of the
condition of Europe in the middle of the nineteenth cen
tury, before the beginning of the modern co-operative
movement. In the new industrial age agriculture was
forgotten and abandoned. The farmers were separated
from the laboring classes and separated from each other.
Only a small group of public-spirited men were interested
enough to try to save the situation.
IS not strange that some of the men
who had concerned themselves with
the revival of agriculture should have
given way to profound discourage
ment. Fortunately some of these
courageous men were wise enough to
find in the very isolation of the villages the ele
ments out of which the new industrial and social
fabric could be constructed. They found the village
The rural reformers therefore began
with the local communities. They or
ganized them into mutual credit societies,
which received the savings of members
and made loans out of this capital, sup
plemented with whatever it was possible
to secure outside, on the pooled credit
of the entire group. In some instances
help was extended by the church or by
private philanthropists, and in a few in
stances by local or state governments.
But on the whole credit societies depend
ed upon their own associated strength.
The principle of unlimited liability for
all obligations was almost universally
adopted, each member being liable to
the extent of his entire property, what
ever the size of his loan, and even
whether he received any loan or not.
This was deemed necessary to protect
their own savings and to give each mem
ber of an association that vital interest
in all of its business that alone would as
sure its success. As the founders of the
movement predicted, the fact of unlimit
ed liability established a confidence in
the association so strong that rarely was
any one ever called upon to make good
losses due to the failure of another to
pay his loan and on the other hand the
association soon found-that it could se
cure outside money solely upon its bare
promise to pay, sustained by the pledged
unlimited liability of its members and
the fact that the joint productive ability
of the community was always greater
than its joint obligations. The villagers
simply capitalized their own average
honesty and efficiency. The European
group a compact social unit, and made this fact association kept open the channels of credit and
the basis of the new industrial system they aimed trade for all, affording to each the opportunity to
to create. They saw that the basis of successful use them to the extent of his ability. The indi
co-operation is confidence among the co-operators, vidual epjoyed separate control of capital insofar
and that confidence would necessarily be
confined within the village limits, as. the
acquaintance of the villager did not ex
tend beyond them. An individual vil
lager could not secure financial assist
ance from without, for the very good
reason that no one able to extend as
sistance knew anything about hiiii.
ing is by individuals, without regard to shares, and
incidental profits are distributed according to the
business done through the association. That is,
if it had been decided to pay 3 per cent on deposits
and to charge 4 per cent for loans to members, and proportionately to the use made by each of the
it turned out that the cost of the business was only
one-half of 1 per cent, the remaining one-half of
1 per cent might be returned pro rata to depositors
and borrowers. In like manner where an associa
tion bought or sold products for its members, if a
margin of say 10 per cent had been allowed to
How the Experience of Foreign Co-Operators May Be Applied
in Our Own Country
turned to the. purchasers in proportion to the re
spective amounts of their purchases.
Therefore there were two principles underlying
these credit organizations—that of equal service
and that of mutual and unlimited responsibility.
These two principles can really be reduced to one—
that of mutuality. There were mutual responsibil
ity and mutual benefit. For the purposes of the
association capital was regarded as essentially a
community possession. Each individual pledged
therefore the entire property of the co-operative
community was pledged. But each man benefited,
not in proportion to the amount of his property,
but in proportion to the amount of business trans
acted through the association on his behalf. The
—Drawn expressly for the Leader by W. C. Morris.
When illegal business gets too big to be handled by ordinary methods
there is one thing left to do and that is to devise new methods. It has
been proved, conclusively enough, during the past few months that
existing methods are unable to handle the profiteering problem. A few
petty suits against price-raising grocers and milk dealers will not
accomplish anything fundamental reforms are what is needed. Pro
fessor Roylance shows in his article how European farmers met some
what similar difficulties by co-operation. Co-operation and political
action combined are being used by the farmers and workers today.
rural co-operative associations are never operated only as he used it himself. In addition he received who happens to be a wheat grower, may be in like
on the profit basis. In other words, they are real whatever rate of interest on his savings, over and manner associated with other wheat growers, none
co-operative organizations. Many issue no shares, above what he had use for, the co-operative asso- of whom are members of his community.
while others issue shares that have merely a moral ciation agreed upon. The commumty fixed the val- Mutual confidence is the basis of co-operation
value, as indicating in each case the amount sub- ue of capital, and exercised all the power incident and mutual confidence grows out of a community
scribed for the support of the association. The vot- to the possession of capital. Individual initiative, of interests. Conversely, mutual confidence is nec
enterprise, invention, skill, labor are left free, and essary to the successful working out of common in
are rewarded according to what they accomplish, terests. Once mutual confidence is established
facilities supplied through co-operation.
In other words, the benefits of individually used
capital are assured to the individual while the pow
er that goes with combined capital is taken by the
community and used for the benefit of all individ-
cover expenses, and it turned out that the cost was uses the accumulations of all individuals to finance In all co-operation there must be mutual liability,
only 5. per cent, the remaining 5 per cent was re- the industry of each and all. It at the same time ». (Continued on page 14)
Marketing in Europe
his support to the extent of all his property, and ters, and, what is still more important, they have
confederated the local associations and founded
regional banks and central buying and selling
agencies. They have in many instances become
financially stronger than any private organizations
operating in the same territory, and in some cases
their securities have sold higher than the bonds
of the governments themselves. They have
built up and extended mutual confidence, until
it has become nation-wide.
There is a premium placed upon exceptional ability with rejgard to certain common interests it is much
to the extent that incidental profits are distributed easier to reconcile conflicts in other interests and
uals, separately and associatively. The community a choice between several methods of co-operation.
protects individual industry and secures to the
whole people safety from want that would result
from a decline of individual efficiency.
By adhering closely to these principles the Euro
pean co-operative associations have been almost
universally successful. Nor has their success been
limited to separate village communities in which
the movement began. By means of their asso
ciated responsibility they have obtained access to
the great reservoirs of credit in the financial cen-
They have done more. In some in
stances, as in that of the Danish Co
operative Wholesale society, they have
successfully established trade with other
countries, in the face of the most stren
uous opposition from great monopolistic
joint-stock concerns, operating for prof
it. They have proved that the principles
of co-operation are of nation-wide, and
may be of world-wide application.
In applying the experiences of other
countries to our own problems, the first
thing to be recognized is that there is
nothing in the underlying principles of
co-operation that makes it necessary to
confine operations to local communities.
There is no fundamental reason why we
should begin at the bottom instead of at
the top. There is no fundamental prin
ciple according to which we need be
bound by territorial considerations at all.
All that is necessary is community of in
terests and the ability of the individuals
concerned to recognize its existence.
Common interests may exist between
next-door neighbors, or between persons
separated from each other by thousands
of miles between persons who never see
each other, and between persons who
have other interests entirely in conflict.
Complete community of interest is not
necessary to successful co-operation.
'Catholics and Protestants may and
often do associate together for the estab
lishment of common credit, for the mar
keting of farm products, for the building
of roads or the maintenance of schools,
and still remain as separate in religious
belief and observance as they were be
fore. Two neighbors may be members
of a co-operative creamery association,
and be ready to fly at each other's throats
in a quarrel over a division fence. A
fruit grower may associate with other
fruit growers scattered all over the
country for the co-operative marketing
of fruits, while his nearest neighbor,
thus to increase the scope of co-operative action.
In other words, common interests and confidence are
reciprocal. They co-exist and develop side by side.
Recognizing that common interest and mutual
confidence are the basis of co-operation, it will be
seen that we may have, under different conditions,
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