John MacLean Internet Archive                                                    From the Scottish Republican Socialist Movement

Cooperation And Rise In Prices

Delivered: Speech to the Renfrewshire Co-operative Conference, 25 November 1911
Transcription\HTML Markup: Scottish Republican Socialist Movement Archive in 2002 and David Walters in 2003
Copyleft: John MacLean Internet Archive (, 2003. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License

The times, we live in are so stirring and full of change that it is not impossible to believe we are in the rapids of revolution. Truly, the development in every branch of industrial, commercial, political, social, and intellectual activity is so apparently quick that even the dullest must admit that the old order of society is passing away, to give place to one that with our aid will eradicate for ever the inequalities, the injustices, and the oppression that characterises the present. We have but to think of the increasing thousands of inventions and discoveries that facilitate production; of the swift spread of the most perfect modes of transit and communication; of the amazing expansion of capitalism through the export of capital from developed to underdeveloped countries; of the unprecedented grabbing of occupied lands for the extension of trade and of empires; of the sudden arrival of mammoth trusts controlling colossal masses of capital and slaves; of the tremendous uprise of the masses in the co-operative, the trade union, and the socialist movements, to find a growing expression in productive and distributive activity, economic revolt, and political agitation; of the modern political upheavals, starting six years ago in Russia, and passing in rapid succession through Turkey, Persia, Portugal, and Mexico, to find a momentary culmination in China, in what may ripen into the most magnificent and dramatic transformation ever witnessed by man—I say, we have but to think of all this to catch but the faintest outline of a world change that is so truly indicative of the triumph of knowledge and its application over the chaos of the past, and of the ultimate ascendancy of the organised masses over the forces and resources of the world. These are but a few of the outward and visible signs of the evolution of capitalism—an evolution so fraught with impending dangers to the co-operative movement that it is our imperative duty to investigate from all possible standpoints the nature and the extent of these dangers, and thus prepare to adopt such new methods and agencies as will enable us to survive under the new commercial conditions so rapidly rising above the economic horizon.

The better to understand the present and the tendencies towards the future, let us glance backwards for a moment. The industrial revolution towards the close of the eighteenth century, when machinery sprang into use, saw the birth of the factory and the rise of the capitalist class enriched by the wholesale spoliation of the new poverty-stricken wage- slave class. One of the capitalist class was Robert Owen who, taking pity on his workers at New Lanark, established a store that led to his future attempts at productive and distributive co-operation. Failures though these may be considered by many, yet they led up to the Rochdale system that holds the field today. The successful start and development of this Rochdale system is explicable in the petty nature of the businesses carried on forty or fifty years ago by shopkeepers, who had in consequence to levy large profits to make a living. Charging the same prices and obtaining the same profits, the early co-operators were encouraged to go on themselves and pull others into partnership. The timidity and the poverty of the workers, however, for a long time made the competition hardly felt by the old-fashioned traders, who largely profited by the rapid increase of the town population and the slight increase of their purchasing power, due mainly to advancing wages and dropping prices. The fall of prices from 1876 to 1896 certainly had an effect on the people who, under such favourable conditions, were less inclined to leave retailers for whom they had a personal liking. Certain it is that the rivals both flourished during that period, if the number of shops be any index of development, for between 1875 and 1897 the number of shops rose from 295,000 to 408,840 -an increase of almost 39 per cent in 22 years. Under the circumstances, it was impossible for private traders to build up such an efficient organisation as could crush out the co- operative stripling. When they did get alarmed it was too late; co-operation had struck its roots too deep and spread its branches too wide. Their onslaught but fostered our growth. Today they are sinking to their doom, whilst co-operation is flourishing like the green bay tree.

But the opposition has not ceased with their demise; it cannot, this side of the establishment of the full co-operative commonwealth, social democracy. Whilst the private traders were waging their war against us there appeared in their midst far-seeing men who learned from us the lesson of owning many shops. These saw that if one shop could only afford a tenth of a living, then they must own at least ten. Hence, by adaptation to a new environment, they developed the multiple-shop system. Through lack of capital and experience, the application of this system was practically local at first; today, its extent we know. In 1896, whilst this new departure was in its infancy, a change had also manifested itself in the price of commodities. From the seventies till the nineties prices had steadily fallen, as already indicated, but by 1896 the tide turned, and from that date till this prices have steadily risen, till at present they are from 15 to 20 per cent higher… At first the rise was not felt by the working class, because from 1895 till 1900, a period of expanding trade, wages rose. But since 1900 prices have gone up 10 per cent whilst wages have dropped over £92,000 per week and unemployment has become more prevalent. This means that the workers’ purchasing power within the first decade of this century has considerably declined, a situation accentuated by a rise in rents and rates of 40 per cent in many cases. And, as we know, this year of grace (1911) is experiencing exorbitant prices for sugar, eggs, butter, cheese and other commodities, with little or no relaxation in those of the remainder.

Whilst I admit the drought of this summer explains, or is used to explain, the present year’s rises, yet, apart from this operation of the law of supply and demand, there still remains the steady upward tendency of prices. Many are the explanations of this. One thing is certain, the rise is worldwide. It follows that a universally applying cause must be sought. The trusts, say some. Personally, I think many trusts have actually been forced into existence by the rise in raw materials, aided by growing competition. There, then, but remains the rapidly growing output of gold, especially from the Rand…

I hold that one result of the intensified poverty of the people, due mainly to rising prices, has been the crushing of the private trades, whose customers have either come to our societies or gone to the multiple shops…. The keener struggle to make ends meet has submerged the old sentiment binding the housewife to the retailer. As we have seen, with the fight sentiment is going the retailer too.

As hinted above, many have been attracted to our movement but certainly not by prices lower than those obtaining amongst private retailers, for our prices have risen with the rest. Of that I have ample proof…. There only remains the dividend as an explanation of the influx of members, aided, no doubt, by the superiority of our products. Whatever the explanation, the movement has rapidly grown between 1900 and 1908…. Our members and our sales have increased, but the growth of the multiple system has been more rapid…. It is noteworthy that multiple companies often do their own manufacturing and wholesale work, and that manufacturers also tend to open shops to dispose of their specialities. Alongside the multiple shops spring up into pre-eminence the universal providers, with many departments concentrated under one roof, and supplying wide areas by train and motor….

Whilst we were yet young and growing the private traders also grew, but the turning- point came as we well know today. To leave well alone in face of a rapidly growing menace, assisted by rising prices, is nothing short of suicide. What the upholders of this slothful policy fail to grasp is that the multiple shops are spreading more rapidly than ours…. Instead of giving way to fear or despondency, let us more rigorously analyse the situation and plan out what may be attempted to attain yet grander and grander successes. I, for one, feel triumphantly hopeful as I recognise that the coming conflict between the capitalist trusts and co- operation will be but another aspect of the great class war that inevitably must lead to the victory of the workers by the overthrow of capitalist predominance. That co-operation is going to play a great historical part in the ultimate transformation of society I am convinced, or it would have little of my time.

The growth of the great American trusts throws light on the methods of those determined to freeze out or squeeze out dangerous rivals. Capture the raw materials, get rebates from sellers and railway firms, cut prices below cost on the basis of a large reserve fund. Such are a few of the ways adopted by capitalist against capitalist. Do you imagine similar tactics will not be used against us by the growing distributive-productive capitalists? If so, you have not grasped the import of the boycott and of the exclusion from sections of the Glasgow Meat Market.

The fleecing of the Canadian farmers by the railways and the owners of elevators has urged them to demand the national ownership of these parts of capital. It would be easy to manipulate the railway and ships against us in the interest of our opponents. Hence it is that we should fight for the national ownership of the means of transit by land and sea. Carnegie was forced into the Steel Corporation of America because it owned the raw material requisite for his works at Pittsburgh. Others have been treated similarly by those holding the sources of supply. It follows that we ought to take warning, and demand the national ownership of land and all its mineral wealth.

As grain, corn, and other products have on occasion fallen into the hands of manipulators to the detriment of farmers and public alike all the world over, it should be our duty to get started everywhere co- operative associations of farmers pledged to trade directly with us. Such independent sources of supply would enable us to escape agencies that might naturally ruin us by exorbitant demands. All the suggestions hinted at are broad and general, but are necessary if we wish to secure raw material at favourable prices.

Next, we must extend our production by hook or by crook. As I have said, manufacturers are beginning to retail their own products, and large retailers are tending to produce their principal articles of sale. That being so, we must see to it that we are not cut off from manufactured articles, for that would be just as fatal as a drying up of the sources of raw material…. As the movement contains many highly skilled men in every branch of industry carried on within our isles, and as such men would be only too willing to render first aid to the directors and officials of the Wholesale in any venture, it now lies with the directors to take speedy though safe steps in the extension of production. Grow or go under is the alternative. We must grow.

Suppose that we succeed in getting our raw materials to our factories there to be prepared for sale, we shall still have to face the enemy in the retail market as before alluded to. Here the fight is one of prices. We have seen that both the multiple firms and our societies have benefited by the rise in prices at the expense of the single shopmen. The bait of the multiple shop has been the cutting of prices in certain articles and the sale of inferior qualities of articles at reduced rates…. So sharp is the struggle that some managers have been enticed to pass the Wholesale for cheaper articles bought elsewhere…. Some of these opponents cut prices not only in leading articles but in others as well, for profit can be assured by faking and adulteration, one of the characteristic fine arts of this free-trade capitalism of ours…. So extensive is adulteration that we need spend no more time on it, except to emphasise its importance in baiting people who find it increasingly difficult to make ends meet….

What should we do to meet all possible types of opposition? So far as adulteration is concerned we should help on any movement compelling government to intervene on behalf of innocent purchasers and of the health of the community. Suffice for that.

Next, I strongly hold that the depreciation of plant and property should be increased at the expense of a reduced dividend. Some of us years ago howled at the Wholesale on the trust question, and the outcome was increased depreciation. Since then managers and Society directors have demanded a reduction of this rate of depreciation so as to get a bigger dividend from the Wholesale… The Scottish Wholesale gives 8d per £ dividend whereas the English Wholesale only gives 4d. I would advise the Scottish directors to gradually reduce theirs to 4d as well, and use the difference to hasten depreciation. They should also clear out surplus capital by reducing their various rates of interest and thus set the example to retail societies…. Over and above that the reserve funds should be more speedily inflated so that ultimately interest-bearing capital may be dispensed with. The ideal is thus property absolutely free of charges and a further capital free of interest, able to be used at any moment for extension purposes or making good any losses incurred by selling under cost price.

And yet all this could not save separate societies when facing a national trust, as the latter is a higher form of co-operation than ours. We must, in consequence, also evolve such a higher form by the ultimate establishment of a National Co-operative Society. None comprehend the dangers to democracy in such a proposal more clearly than I do, but I am confident that the suggested co-operation of co-operative organisations could ultimately be founded on a democratic basis. An attempt has been made in Glasgow to weld the respective societies. The sooner this is done the better, and the sooner the Glasgow Society evolves into a West of Scotland one the better still.

The ultimate abolition of dividend I hold to be the natural consequence of our evolution. City societies have to put up with smaller dividends than country societies, in some cases only half. It follows then that dividends could easily be lowered still further…. The argument that the dividend is excellently suited for paying rent I trust will soon receive its quietus by the passing of the House Letting Bill. When the Bill becomes law, weekly rents will take the place of quarterly ones, and under such new circumstances I should imagine that the abolition of dividend would enable housewives better to pay the weekly rent.

I am out, then, for the abolition of interest and dividend, with free capital and a national Society, as the basic condition in the struggle. I am out for high wages and short hours to all workers as long as capitalism lasts, and, therefore, if we are going to do justice to our servants we must have a fusion of the two trade unions and the growth of a Workers’ Federation. By such means will we prevent the enemy beating us through sweated labour. Lastly, we will have to bring our methods up-to-date. A national society could do this better than individual ones, and hence I am confident that when we reach this stage of our development we will not be defeated by the enemy carrying on trade at a less expense.

Sufficient for the day. Let me conclude by hoping that I have induced no trace of fear into the minds of my hearers. Potential dangers lie ahead. My purpose has been to indicate these. Call me alarmist if you will, I have quietened my conscience, and therefore am satisfied. Bear in mind I have no fear of the future. The working class is going to win by the establishment of socialism even were co-operation to go under. But the working class cannot afford to let this great popular movement sink before the opposition of a class that, having performed its work in history, must inevitably yield supremacy to ours, the last class to attain freedom. In my eyes, just as trade unionism is playing its part, so also must co-operation in the great human impulse towards that time when, the world- wide Co-operative Commonwealth having been established, man for the first time shall rise dictator over the forces and resources of nature, and ensured through life of the material, mental and moral requisites of a grand and noble existence, shall also for the first time cease from robbery and cease from conflict.