The Principles of Co-operation (1937)

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    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
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                         November 1996

Source : The Present Application of the Rochdale Principles
          of Co-operation, Studies and Reports, ICA, London, 1964, 3-5.


   The Principles of Co-operation

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At the London Congress of the ICA in 1934, the Special
Committee appointed to enquire into the Present Application of
the Rochdale Principles presented their Report on the first
part of their task, that is to say, on the enquiry into the
historical facts and their present application by Retail
Distributive Societies (Consumers' societies). It had been
agreed in the early days of the enquiry that this
investigation was fundamental, and by reason of the greater
extension of consumers' co-operation within the International
Co-operative Alliance in comparison with the other forms -
viz., Co-operative Wholesale Societies; Workers' Productive
Societies; Agricultural Productive Societies; Credit
Societies; and Co-operative Banks - constituted at least half
of the task of the Special Committee.

Certain of the proposals of the Special Committee having been
received with opposition on the part of some of the delegates,
the congress eventually decided to adjourn their decision upon
the recommendations until the work of the Special Committee
had been completed. For this purpose, the Report was remitted
to the Special Committee, who took up the enquiry again and,
as a preliminary step, decided the issue of separate
Questionnaires to each of the five remaining groups above
mentioned. The original Questionnaire being adapted to each
group ensured that the main lines of the enquiry were
identical in all the types. It must be admitted at the outset
that the responses to our enquiries have been disappointingly
few, and in many instances too vague to provide the basis of
sure conclusions. They have, however, been sufficient to show
that considerable variations exist in respect of the practice
in different countries, but not sufficient in many to
constitute serious abrogations of Co-operative Principles.

The method of the Committee's enquiry and the results obtained
from the original Questionnaire addressed to Consumers'
societies were set out in the Report to the London Congress,
and are available both in the Agenda and Report of the
Congress proceedings. Similar details concerning the other
groups have been submitted to the Special Committee in several
reports. It does not, therefore, appear necessary that they
should be reproduced here.

We, therefore, propose to submit the results of the combined
enquiries under three aspects: 1. The Principles of Co-
operation as practiced by the Rochdale Pioneers; 2. Their
Present Application; and 3. Conclusions and Recommendations.

1.   The Principles of Co-operation

The Rochdale Society of Equitable Pioneers was registered
under the Friendly Societies' Acts of 1829 and 1834, the basis
of which was the provision of Mutual Benefits. The creation of
Friendly Societies, their organization and control, was
provided for in a whole series of legislative enactments
adopted between 1790 end the present time. The Societies were
formed to provide the members with financial aid or
`Benefits,' in a word - insurance against sickness, old age,
infirmity, and death. The Act of 1834 contained the provision
that Societies might be formed for the foregoing purpose `or
for any other purpose which is not illegal.' The Rochdale
Pioneers with native shrewdness and intelligence, sharpened by
their conflicts with the regime under which they lived and
suffered and by their studies of economic and social
solutions, found legal authority and protection for their
society in these Acts. The evolution of the co-operative
legislation which followed fully justified their confidence
and acumen. The Act of 1846 contained a new and enlarged
statement of the purposes for which a Society might be formed,
including `the frugal investment of the savings of the members
for better enabling them to purchase food, firing, clothes or
other necessaries....with or without the assistance of
charitable donations.' This latter phrase rather suggest that
the legislature had not, up to that point, realized even the
elementary possibilities of Co-operative Societies as trading
concerns.

By 1852, some glimmering of potentialities of Co-operative
Societies, or at least the direction of their evolution, had
seized the minds of legislators, and the Industrial and
Provident Societies' Act of 1852 was introduced and passed
into law. This was the first Act of Parliament which specially
provided for the formation of Co-operative Societies, taking
them henceforth out of the sphere of Friendly Society
legislation, or at least giving them separate legislative
authority.

Meanwhile, the twenty-eight Weavers had established their
Store in Toad Lane, and commenced their heroic attempt to stem
the tide of competition and exploitation that threatened to
overwhelm them, by the simple process of uniting in the common
purpose of efficiently doing for themselves, upon a basis of
mutuality and self-help, what had hitherto been inefficiently
done for them at a cost which impoverished their families but
provided wealth for the individual captains of industry and
trade.

It will be observed, however, that at the time the Pioneers
opened their store in 1844, and, indeed, until 1852, there was
no possibility of their Society being registered as a Co-
operative Society, as its legal existence was only assured
under the authority of a law that provided for mutual
benefits. This fact doubtless accounts for the name given to
their Society, the reason for which has been the subject of
much conjecture on the part of the curious and of students.
There is another point in this connection worth noting,
especially by those who seek in the `Laws and Objects of the
Rochdale Society of Equitable Pioneers' a completed
constitution and the expression of the entire philosophy of
co-operation. Only eight years after their start was the
legislation adopted which gave Co-operation, as an economic
system, legal recognition. The idea of `associated effort' on
the part of the working population, whose first co-operative
manifestation appeared in Great Britain, as early as the third
quarter of the Eighteenth Century, was slowly crystallizing,
not only in the minds of the workers themselves, but also in
those of the politicians, statesmen, and publicists, who were
led in this direction by a choice band of enthusiasts who have
always been recognized as the literary exponents and animators
of the earlier efforts in Co-operation.

It is, therefore, not to be expected that the Weavers of
Rochdale should produce their whole policy in a night, or even
in a single document. The `Laws and Objects' of the Pioneers
contained the main part of their plan, but it is necessary to
study at least the first ten years of their development to
obtain a comprehensive notion of the system which they
founded. During that period, modifications and definitions of
their plan emerged form their minutes of proceedings; their
practice; and the decisions of their general meetings.

In this enquiry, the Committee have taken into account only
those things which appeared to them essential and of permanent
value. They have disregarded a number of other elements in the
early History of the Rochdale Pioneers which seemed to have
only a transitory importance.

After careful study of the available facts the Special
Committee have come to the conclusion that the following seven
points may be considered from the historical point of view as
the essential Principles of Rochdale and the characteristics
of the autonomous system founded by the Pioneers, for each of
which justification can be found in the constitution, rules,
and practice of the original society, founded at Rochdale in
1844:

i.   Open Membership,
ii.  Democratic Control,
iii. Dividend on Purchase,
iv.  Limited interest on Capital,
v.   Political and Religious Neutrality,
vi.  Cash Trading,
vii. Promotion of Education.