The Rise of Co-operation in Canada

The Rise of Co-operation in Canada written by Charles Bruce Sissons

From The Canadian Forum, October 1920. Template:PD-Collective

The co-operative movement is really a protest against the specialist. The Western World has been passing through an age of specialist worship. A good many people, often possessed of more wealth than wisdom, are still devotees. They allow one group of specialists to carve their bodies at will; another group to supervise the welfare of their souls; another to regulate those intimate affairs for which they have no time and which they call politics. Their buying and selling they would not think of controlling themselves. In their view, the Manufacturers' Association, the Retail Merchants' Association, the Wool Growers' Association, Associations without number, can be trusted to produce and distribute and set successive prices. Business, they hold, must be left to those who have made a study of it. If their persons or purses suffer, these good souls bear the loss with fortitude, repeating the formula conned at school, "Every man to his trade".

But the Canadian citizen of average means, learning from Dame Necessity, is abandoning implicit confidence in specialists in general and especially in those who have been supposed to know best how to provide the public with food and raiment. He has discovered that there is danger in following the precept which his American cousin, apt in idiom, has expressed in the phrase, "Leave it to George". George has a curious way of becoming a capitalist. Now the capitalist is an unexceptionable person if only he retains humility and humanity. But he has a fashion of gaining a little wealth, then a little more, till he gets to a point where he fancies himself a super-man, takes unto himself a super-automobile and considers the working class neglible beings of a distinctly lower plane. In time, if the "pub" is closed, the worker may begin to wonder what would happen if the super-man changed the mind of a master for that of a servant. In order to bring this to pass he may decide to revert to more primitive ways. Conspiring with his neighbours he may determine to secure his own necessities. If he has charity enough to regard every man as his neighbour, even the super-man, he has become a co-operator.

From such an impulse the great co-operation movement had its rise in the old world. In England within seventy-five years it has spread till it embraces half the heads of families in the land and distributes goods to the value of nearly two million pounds a week. It organizes stores, builds warehouses and factories, owns tea plantations and wheat-fields, and even builds model towns for its members. In fact nothing could better illustrate the spirit of the movement than a town like Hampstead where the plain workman dwells side to side by the well-to-do professional or business man, the one paying eight shillings a week in rental, the other two hundred pounds a year, all fellow-members of the same society and joint owners of the houses they occupy.

In Canada we have been slower to cultivate the co-operative spirit. The early stages of the economic development of a country are like the early stages of a horse race; there is a good deal of jockeying for position. The mere fact that wealth increases so rapidly entices men to its pursuit, regardless of whether others suffer from their aggressions. In recent years, however, co-operation has established itself so firmly that its success even in our individualistic society can no longer be denied.

In endeavouring to describe the progress of the movement we may dispense with statistics, for the simple reason that reliable statistics are not available. Canada has no federal co-operative act, and no federal department collecting figures and relegating them to blue-books. Such statistics as we have in the several provinces cannot be accepted without examination, since so-called co-operative societies do not always exactly conform to the cardinal principles of co-operation, namely, one man one vote, a fixed rate of interest on capital, and the division of any surplus for social purposes. In default of statistics it may be possible to gain a fair idea of the spread of the movement by three sketches of different co-operative societies.

Twenty-five years ago a Hansard reporter named Alphonse Desjardins began to study co-operative banking in Europe. Five years later he called together a few friends at his home in Levis and outlined a proposal which led to the organization of the first Caisse Populaire. This People's Bank was thoroughly co-operative in form and spirit. It neither asked nor desired Government assistan. It was [p. 9] simply an association of neighbours for mutual advantage. The manager was to be a resident of the parish, known to all. The shareholders and recipients of loans were to be residents of the parish, and character was made the basis of credit. The members of the three committees, administrative, credit, and supervising, must all be residents of the parish, chosen by men familiar with their daily life and their ability. Deposits were received and the rate of interest paid was higher than the current rate. Loans were made to people of modest means, always for definite purposes of production, at a rate lower than the current rate. The policy was to reduce the margin between the rate charged on loans and the rate paid on deposits, as the bank prospered and reserves were built up. Expenses were reduced to a minimum. The People's Bank did not compete for a site of high speculative value, affect marble columns, or attract officers by princely salaries. Mr. Desjardins' house was the first bank building and his wife kept the first set of books. An original method was adopted of dealing with reserves. It was provided that they should not be divisible among the shareholders, but that in the event of the closing of the bank they should be at the disposal of the Lieutenant-Governor-in-Council for some useful purpose in the parish. Thus all temptation to reap a profit by winding up the bank was removed from the shareholders.

Some years passed before the founder of the Levis bank would give his approval to the establishing of a second Caisse Populaire. Only when the experiment had proven an unqualified success were other banks established. Now their number is nearly two hundred, and they are to be found mainly in the Province of Quebec but also in French districts of Ontario and the United States. Commencing with a capital of $26.40 in 1890, the parent bank at Levis now has assets of over $1,000,000. Prosperity has not altered its policy. It still prefers small to large loans, and while it accepts the business of the municipality, it leaves the business of manufacturers and merchants to the chartered banks. The claim is made that no one of these banks has lost a dollar for its shareholders nor suffered through the failure to repay on the part of those to whom loans have been made.

The coal fields of Nova Scotia afford an illustration of another type of co-operative enterprise. Fourteen years ago the working men of Sydney Mines, many of whom were familiar with old world co-operation, founded the British Canadian Co-operative Society Limited. A general store was opened in the hope that it would assist in the filling of the dinner pail. The twenty-seventh half-yearly report of this society indicates sales for the year to the amount of $1,011,007.87. The members of the society number 1,910; this in a city with a population of some 15,000. The average share and loan investment is $87.90. In addition to interest on investment, the members receive under the Rochdale system a purchase dividend, which during the last half year amounted to twelve per cent. on general purchases and ten per cent, on meat purchases. Non-members, comparatively few in number, are allowed half this percentage. The average amount returned to members as a discount on current prices is about $60 a year. Idealism shows itself in the accounts of the society, sums being set aside for education and for stock in the British Co-operative Wholesale Society.

The Sydney Mines Society controls the largest of Canadian co-operative stores. But a good many towns and hamlets, east and west, have been establishing co-operative stores in recent years. Even Ontario with its devotion to traditions has a score of such societies. The strongest of these was organized in Guelph some fifteen years ago as a protest against prevailing bread prices. The early history of this prosperous society under the presidency of Mr. Sam Carter, manufacturer and radical, is one of constant struggle against strenuous opposition from hostile interests.

The farmers of Canada as all the world now knows have also been organizing for commercial purposes. Any account of co-operation would be incomplete without some description of their activities. Here again a truer idea of this great movement, which promises to revolutionize country life, can be secured from looking at a small corner of rural Canada, than by displaying figures mounting to a hundred million and more. Six years ago a few farmers met in a school-house in Brant County. One of them at least, Mr. W. C. Good, a distinguished graduate of the University of Toronto, had been a careful student of co-operation. It was in this school-house that the provisional directors of the United Farmers' Co-operative Company were chosen. The by-laws were drafted by Mr. George Keen, the General Secretary of the Co-operative Union of Canada, a resident of Brantford. It was the vision of these men that the new company should act mainly as a wholesale company while local organizations should attend to the retail business and control the wholesale company by taking stock in it and sending representatives to the annual meeting. In fact, a federal system would be followed, similar to that followed in England and elsewhere in Europe. This policy has not been exactly followed. The tendency towards centralization, so marked in the modern economics, has shown itself in the business of the United Farmers, with the result that within the movement at the present time there is a sharp difference of opinion between the advocates of union and the advocates of federation. But this is by the way. In the meantime the Brant Farmers proceeded with their county association. One who was present at the organization meeting could not fail to be impressed with the ability shown by the leading spirits in the enterprise and with the [p. 10] general intelligence and evident prosperity of the shareholders. The Society has prospered. An enthusiastic co-operator, Mr. George Bellachey, who was prevented by the loss of a hand from continuing active farming operations, was chosen manager. The sales for the six months ending May 31st, 1920, were $80,620.52, almost double that for the same period of the previous year. So secure does the society feel that it has purchased a valuable business site, and is now selling stock and bonds among the farmers of the county to the amount of $80,000 to cover the expense.

The Brant Society affords an example of the kind of rural organization which may be expected to evolve as the movement grows and as the principles of co-operation are more clearly understood. Meanwhile in all the provinces of Canada thousands of groups of farmers are selling produce and purchasing supplies through the great Farmers' Co-operative Societies. The strong class consciousness developed in struggles with elevator, and railway, and mercantile, and manufacturing interests, when capitalized as good will, creates immense assets at the command of the United Farmers. But no co-operative movement can be firmly established in class spirit. The motto of co-operators "each for all and all for each" requires universal neighbourliness. The present farmer-labour coalition in Ontario gives promise of a wide application of the principles of co-operation. Indeed at the present time organized labour in Toronto is actually selling stock for the setting up of a U.F.O. co-operative store. The Farmers' Company is to provide the management and the greater part of the capital while the labour people provide the constituency and an advisory committee. An interesting and probably unique experiment it is. According to precedent it would be more likely to prove successful, if the shareholders had sufficient confidence in themselves to appoint and control their own manager, using the farmers simply as friendly wholesalers. But the experiment well illustrates the serious mistrust of the business methods developed under a competitive system and the eagerness with which Canadians are reaching out to co-operation as a possible solution to intolerable conditions.

C. B. Sissons