Consumers' League of New York City

“ A group of younger men and women with a broad background, an intense interest in cooperation and a capacity of growing up with the business is working now to make these cooperatives even more successful. The cooperative movement is likely to grow in pretty close proportion to the ability of these leaders and the men and women they can attach to themselves. Heretofore the greatest handicap of the cooperative movement in this country has been the lack of trained and able leaders.
A third significant development is the adoption by cooperatives of the best methods of management and accounting. ”

“ Down on the first floor the retail bakery is so immaculately clean that you would be willing to defy anyone to find one speck of dust in the place. Every article of food is under shining glass. The floor is white tiled. But the food is what attracts one. ”

“ No complete tabulation has been made of the total business of all these cooperative groups, but in 1921 the five largest cooperative societies among the city consumers, with an average membership of 1,800 persons, all located in New York City, did a total business of approximately one million dollars. These societies and many others are prospering. On the other hand there are many cooperatives which have failed. Whether they have failed or succeeded more knowledge of practical cooperation can be gained from their experience than can ever be learned from books. ”

“ In this particular business the margin of profit is so small that only the most skillful and economical management can bring success. A recent survey of all the private grocery stores in one city showed that the average annual profit was only $400 per grocer.
There is no longer any excuse for cooperatives to follow the blind into the pit. There are many sources of information and advice available to cooperatives that should be fully utilized before any money is spent in a cooperative enterprise that promises only failure. ”

“ In going into these businesses where profits are greatest they are not only prospering themselves but they are performing one of their most legitimate functions, that of protecting the consumer from extortionate profits. ”

“ Like other cooperatives, the cafeteria has found the need for expert and trained workers in place of the hard-pressed volunteer. Much of the work on education and cooperative organization is carried on by trained members of the staff. This interest of the paid employees in things other than mere technical efficiency contributes much to that friendly spirit which makes Our Cooperative Cafeteria unique among the restaurants of New York. ”

“ Each separate business, the bakeries, the pool room, the meat shop, was put on a cost accounting basis and the manager knew just which one was making or losing money.
All the branches of the business, however, have made money. Over $12,000 in net earnings, after allowing for interest on the investment, have been made since the business started. Last year the bakery did business to the extent of $135,000, the meat market and grocery $58,000, and the pool room $12,000. Already the business has outgrown its quarters. A new oven has been added to the bakery. ”

“ The membership of the society had increased to 750. The business for the year had been $190,000 and the net earnings were $12,000.
The cafeteria now employs sixty-eight workers, most of whom are shareholders and vote as such in membership meetings. The worker receives the same food as the patrons, served at the same counter. Against all restaurant traditions the worker is served before the meal so that she may have the best there is and have it before she is too tired to eat it. The minimum wage is higher than the customary rate for restaurant workers in New York. ”

“ In the United States cooperation has had an erratic development. Within the past seven years, however, there has been a rapid increase in new societies until today it is estimated that there are about three thousand with a membership of half a million. In number of societies New York is far behind most of its sister states. It has one hundred and twenty-five genuine consumers' cooperative associations, seventy-five of which are among farmer groups and the remaining fifty among city consumers. ”

“ Actual organization of the society consists of incorporation, election of officers, the adoption of by-laws, and the immediate adoption of a sound system of bookkeeping. No action undertaken before incorporation has any legal effect on an incorporated body, so early incorporation is desirable. The New York State law requires that all firms using the word "cooperation" incorporate under one of the three state cooperative laws. ”

“ In this store the purchaser can find all the articles carried by a first-class grocer, canned goods, green goods, dairy products and, in addition, a complete supply of baked goods, baked by the cooperative society itself.
The bakery is to be found behind the grocery. Large, high windows throw a flood of light into the mixing room. The oven is of a modern type, large, easily controlled and economical. Five men work at the baking and a boy wraps bread in waxed paper with a mechanical device which automatically folds and seals. ”

“ Overtime is one thing that the management has not yet been able wholly to eliminate.
It has been found that the policy determining function of the stockholders and Board of Directors cannot operate independently of the plans of the management. The two in a business organization must be closely inter-related. The stockholders have not tried to supervise the details of the business, as has sometimes been done to the disaster of cooperatives. The general manager instead has gone to the Board of Directors and sits there practically as a full member. ”

“ The membership of the Trading Association alone is eighteen hundred and forty.
The employees of the association work among almost ideal conditions. The twelve bakers are all union men and members of the cooperative association as well. They work seven and one-half hours a day and are paid from forty-five to fifty dollars per week. The light, airy bakery is always kept spotless. Adjacent to it is a commodious room with lockers for each man and two shower baths make it easy to keep clean. ”

“ Now for five years they have had the same manager. He insists upon scrupulous bookkeeping methods, careful buying, close supervision of his work by the board of fifteen directors, strict regard for the needs and desires of the membership, and exceptional precautions against waste and leakage. The president, a man having a private business of his, own, has an idealism almost religious in quality. These two men cooperate closely on matters of policy and provide much of the leadership which has brought success. ”

“ It is probable that cooperatives which lack some of the incentives of the ordinary commercial business will be compelled constantly to adopt the most efficient and advanced type of machinery. In setting this up as a definite standard they will escape the inertia and conservatism that ordinarily characterize large groups, a condition which at the present time is retarding the British cooperative movement. Two years ago accurate accounting was an unusual thing among cooperatives. ”

“ Cooperation cannot be developed downward from a central wholesale organization with a corps of organizers, nor will it grow when built upon mercenary motives. In this case organized labor in the state was partly to blame for not heeding the warning of a few groups of cooperators who were aware of the nature of the concern early in its history. But the ultimate blame lies with the individual men and women who joined the corporation without looking carefully into its organization. ”

“ In these brief stories are written a hundred lessons that cooperatives should heed.
SUCCESSFUL COOPERATION
The Utica Cooperative Society.
At the corner of Court and Schuyler Streets in Utica stands a grocery store which is different from an ordinary store. It is different because it is a cooperative store and it belongs to those who buy as well as to those who serve. There is no need for the purchaser to be on guard lest the bargain be to his disadvantage, for he is dealing with friendly clerks who are there to help him find what he wants, not to sell him something he cannot use. ”

“ Early in 1920 a group of three or four private business men in Buffalo established a promoting corporation and then set out to organize a cooperative wholesale which was to be a separate concern from their promoting enterprise but was to be controlled by it. The promoters sold shares in the Buffalo Wholesale to individuals in fifteen or twenty cities and towns all the way across the central part of the State. ”

“ To look at the bread and rolls makes one hungry and to smell them hungrier still. This, you are told, is because only the purest ingredients are used. Many bakers use powdered eggs for baking, commonly imported from China; this cooperative uses only fresh eggs. They buy a better grade of flour than their competitors do. ”

“ The largest of these is the Finnish Cooperative Trading Association, Inc. The restaurant is operated as the Workers' Cooperative Restaurant, Inc., and the housing association as the Finnish Homebuilders' Association, Inc.
The restaurant is the oldest. Seven years ago a group of Finns in this locality boarded together. Their capital was a hundred dollars which some one had loaned to them. They ran their little business on a cooperative basis, paying for the meals and putting back any surplus into a reserve. No one contributed anything, but before long they paid back the one hundred dollars. ”

“ Up to the present time they have never paid any dividends. It has been explained to them, as their manager says, that if the business is to serve them properly it must grow, and in order to grow it needs all the surplus earnings for expansion. ”

“ Switzerland, in 1920, boasted three hundred and sixty-two thousand members and a third of the Swiss people bought goods through their own societies. Cooperation is still alive in Russia in spite of its unsettled economic conditions. In 1920 there were twenty-five thousand societies with twelve million heads of families. ”

“ It employs a business manager, who supervises the plant and does everything from keeping the books to collecting the laundry in a pinch, a work manager, a washer, a sorter and marker, four ironers and a delivery boy. It still holds hard to the policy of putting out the very best kind of work and economizing in every particular. ”

“ They do not aim to make money on their meat. Their sole aim is to sell only the best. This policy has been so popular that the quantity sold the first three months of 1922 was almost treble that for the same months in 1921. And the meat store, too, has made substantial net earnings. ”

“ Recently a group of business men, several of them builders, went through the buildings and many expressed the wish that they could get similar apartments for three times the money that these cooperators were paying. ”

“ They are used in the morning for the delivery of baked goods and in the afternoon for the delivery of groceries. It keeps three boys busy all day covering the territory between the cooperators' homes. ”