University of Wisconsin Center for Cooperatives
Happy Anniversary - 250 years of Cooperation in America
By David J. Thompson
This year, 2002, marks the 250th anniversary of the first successful form of cooperative organization in America. In 1752, Benjamin Franklin initiated the first successful cooperative in America, "The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire".
"The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire" continues to serve members in Pennsylvania and additionally provides term insurance in New Jersey. The "Contributionship" is the first mutual in the USA, the oldest continuing fire insurance company and the third oldest corporation in the country. 2002 marks 250 years of mutuals and cooperatives serving Americans who band together for economic benefit. Let’s give Benjamin Franklin a big hand for fostering economic democracy in America.
Another mutual fire insurance company had been started in 1735 Charleston, South Carolina but had been bankrupted by a fire in 1740 which had raged throughout the city burning down hundreds of buildings. Their mutual insurance company did not have enough equity to cover the losses. The Philadelphia and Charleston models were based upon mutual insurance companies which had been developed in England.
With fire a perpetual threat in colonial Philadelphia, safety was a necessity. The cause of and the prevention of fire were great interests of Franklin. In 1736, Franklin initiated the Union Fire Company as a company of thirty volunteer fire fighters to assist in putting out fires. In his call for members he first used the phrase, "An ounce of prevention is worth a pound of cure". Initially, the Union Fire Company was made up of volunteers who only helped save the houses of their thirty members. By 1752 there were eight other volunteer fire fighting companies throughout Philadelphia. Between 1738-40 they all converted to volunteer fire companies that helped put out any fire. The Contributionship did require fire marks to be put thinking greater care might be taken in extinguishing the fire.
Through his study of the consequences of fire Franklin had researched other organizations. It is quite likely that Franklin or one of his colleagues copied the documents of an organization formed in London, England in 1696, the "Amicable Contributionship for Insuring Houses from Loss by Fire, known there by its Fire Mark as the Hand-in-Hand (two hands clasped below a crown). That company insured the home and a later company called the "Union" (1717) insured the contents. When they merged they adopted four hands together as their fire mark. Members of the various mutuals displayed the Fire Mark of the company they belonged to on the front of their buildings above the first floor. A similar Fire Mark with four hands clasped together was adopted by the new Philadelphia mutual.
Franklin called upon the citizens of Philadelphia to subscribe to membership in the mutual and to meet on April 13, 1752 where the Deed of Settlement would be adopted. On that day the subscribers who had signed the articles gathered at the Philadelphia Court House to elect the Board of Directors. The first meeting of the elected Board of Directors was held on May 11, 1752. Thus began the first formal successful cooperative and mutual organization in the Colonies. Just like the Rochdale Pioneers, the first effort to form a cooperative in the 1830’s had failed but the second effort was to be successful and to make history.
Today, over 100 million American households are members of mutuals, cooperatives and credit unions. Like Ben Franklin’s mark by clasping our hands together we enjoy the strength of unity and the power of numbers. Throughout the rest of this year, "The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire" is celebrating the birth of their organization 250 years ago.
Benjamin Franklin like Charles Haworth of the Rochdale Pioneers and Father Arizmendiarrieta of the Mondragon Cooperatives was an institution builder. Time after time, Franklin gathered people together to form new institutions to meet citizen needs. One after the other, Franklin founded the; Library Company (1731), Union Fire Company (1736), American Philosophical Society (1743), University of Pennsylvania (1749), Pennsylvania Hospital (1751), and The Philadelphia Contributionship (1752). Each one of them was formed from a call to public participation. None would be private and all of the institutions he founded continue to be open to and to serve the public. The Union Fire Company is the only one of Franklin’s institutions not in existence today. However, the Union Fire Company is credited by the Philadelphia Fire Department as being the initiator of public fire fighting in the city.
Franklin’s commitment to cooperative organizations and mutual economics were to have unseen influence upon the founding of the United States of America. When the first Continental Congress met in Philadelphia in 1774 they chose to use the ground floor of Carpenter’s Hall. The Hall was owned mutually by its member carpenters. At that time Carpenter Hall had rented out the second floor to the Library Company (18 Library Company members were also members of the Carpenters Company). Samuel Adams complemented the Continental Congress site selection committee for having taken a "view of the Room and of the Chamber where is an excellent Library." At the end of the meeting, Congress expressed its thanks to the Library Company for the use if its books. When the Second Continental Congress met again in 1785 the Library again offered its books for the gathering. Nine signers of the Declaration of Independence were also members of the Library Company. The Library Company was in effect the First Library of Congress. Both Carpenter’s Hall (in 1774) and the Library Company (when it owned its first building in 1790) were insured by the first formal mutual in America, "The Philadelphia Contributionship".
Thus, the beginnings of freedom in the United States of America were assured through mutuals and cooperatives. They met in a building mutually owned, they used the books of a cooperative library to confirm their future and all around them was insured by the "The Philadelphia Contributionship". At hand during the proceedings was the wisdom of Benjamin Franklin who at the sunset of his life helped usher in the sunrise of a nation.
As cooperators we have the opportunity to commemorate and reflect upon an idea brought forward in the United States by one of our nation’s founding fathers. Benjamin Franklin, over 100 million households’ thank you for initiating the enduring idea of mutuality and cooperation. You contributed not only to the birth of a nation but to a democratic and economic tool that serves millions of people in many different ways.
David J. Thompson is a co-op activist and historian and is author of Weavers of Dreams. He is a member of the Board of Directors of the Davis Food Co-op and President of the Twin Pines Cooperative Foundation. With thanks for the review and assistance of Carol Smith, consulting historian and archivist of, "The Philadelphia Contributionship". Copyright 2002.