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The Question of
Harmonious Co-operation,
By PETER PAPIN, S. M.
"I believe that co-operation will lead to the regeneration of the popular masses, and through it, the whole of society." — John Stuart Mill.
"He who does not work neither shall he eat."
It is of no practical use here to pass in review the history of the struggle of Labor against the blood, caste or class legislation and privileges of the past. Time is the great reformer for their gradual banishment from the dark pages of human history — although we are doing away with blood and caste aristocracies, another no less formidable aristocracy is springing up from their ashes no less destructive and powerful against the liberty and welfare of Labor, by false application of their rights: the commercial and moneyed aristocracy preying alike as an Octopus upon the blood, resources, and controlling the liberties and destinies of nations, of families, and of individuals.
The manufacturers, merchants and capitalists of the past, have fought their way for liberty through the prejudices of the blood self-constituted aristocracy, when it was dishonorable to be a worker, mechanic, artist, merchant or money lender, or educated in whatever sciences or arts — ignorance, idleness, cruelty, insolence and the spear were the titles to blooded aristocracy. The industrious classes have overcome and buried their ignorant, dissolute land destructive antagonists, and raised from their full to become the aristocracy of the present civilization; but when aristocracies, either of blood, cast or class over-reach their rights by disregard, abuse or ignorance of others' rights, sooner or later they are to fall, and more equitable power raised over the iniquities of the past ruling aristocracy — Progress being the law of Nature.
The laws of commerce and of the social institutions to this day have consecrated the rights for the acquirements of wealth in the hands of the privileged few, and no man or legislature has the right to stigmatize nor deprive or find fault in the possession and enjoyment thereof; but it is the right and duty of every man to prevent, by the abolition of the causes which produce them, that no more scandalous wealth could be acquired, nor such misery and injustice in the uncertainty of the comfort of life could ever exist in the future, — and to establish the relations of capital, of employers and employes upon the basis of an equitable distribution of the products of their co-operative industries, according to actual services performed by each — when no more antagonism, nor losses, bankruptcies or social disturbances can ever exist, as labor produces always more than it consumes, if equitable distribution is made of its fruits, thus being made attractive and dignified instead of repulsive and degrading, as it is under the present time-serving wages system.
The late organizations and agitations of the Trade and Labor Unions have taught the imperious necessity for them to unite for the protection of their rights against the encroachments from unscrupulous employers, as did the manufacturers of old against the exacting barons. Now that
labor is united for mutual protection and advancement towards still higher enfranchisement from the hour or time-wages servitude, the next practical step to conquer their complete rights and liberty, is to organize themselves into Co-operative Associations, whereby the time-serving wages will disappear fully without strikes, riots or revolutions, and be replaced by the regenerative system of co-operative labor and interest in productive industries, wherein labor will receive compensation, according to the full worth of services performed, without any abatement whatever, and wherein capital and intelligence or employers will likewise receive full compensation according to actual services performed by them in their co-operation with labor or their employes.
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Since half a century, the industrial progress made by inventive machinery has so much revolutionized and increased the means of production, that the organization of labor is to be established upon the most attractive and equitable basis as required by the time, of the most multifarously productive mechanism, and be carried out with the most perfect means of economy, so as to increase the remuneration of labor upon an equitable share of compensation for capital co-operating therewith.
Co-operative manufacturers, although not yet established upon the most perfect basis, those organized under strict regulations are most successful in Europe, as well as the few that are now in working operation in the United States, although located among antagonistic enterprises working under the time-serving wages system, to the exclusive benefit of capital and employers.
The manufactures established under the hour or time-serving, or even piecework wages, cannot compete in production, skill and economy with co-operative manufactures, where the mechanics are directly and individually interested in producing the most, the best and the most economically possible, where they can reduce their cost of production at pleasure without injuring themselves, where no drones or loafers can be admitted, only the most active and skillful mechanic, ambitious of bettering his condition and to procure the greatest comfort to his family, by free and self-interested labor, are those only who will and can be admitted into such associations of independent and productive industries. Co-operative labor will produce more, better and more economically, realizing at least 50 per cent, over and above the highest wages system, and can therefore reduce by as much the cost of production, which system will be a safe-guard for the investment of capital to enter into harmonious and equitable co-operation with ambitious labor. In one word, while labor is made attractive instead of repulsive, as it is under the hireling wages system, cause of so much ruinous and demoralizing antagonism existing between Capital and labor.
A misnomer has been applied in the formation of Joint Stock Trade Associations, insurance and other speculative schemes, under the title of Co-operative Associations, which has cast a cloud and prejudice against the true principle of Social Economy in Co-operative Associations as presented by Mr. Peter Papin.
So called co-operative associations have been formed among mechanics by each member taking one or more shares of stock to supply the working capital, which joint stock system has led to inevitable failure for the reason that the largest shareholders were not workers at the bench and without producing by labor they had the largest dividend in the profits realized from the actual workers, which made these as being the smallest shareholders although the only producers, discontented and discouraged to see that however hard and conscientiously they were working, the largest share of profit went over to the non-producing shareholders. There are some such associations among mechanics in Chicago, but all seem to be established and regulated upon the joint stock principle in the same manner as are all capitalists associations. It is therefore a misnomer to apply the title of co-operation to such associations, however composed of mechanics they may be, capital invested, only shares in the profits, while labor proper, usually representing the minority or even having no share in the stock, has no say nor share in the profits realized by his labor over his scanty day's wages or piece-work, just as it is carried in ordinary wages factories.
These are not co-operative associations, and by their wrong principles, their inevitable failure sooner or later is a hindrance or prejudice against any practical system of co-operation which may be presented to the public, however well founded may be the principles of management and equitable distribution between the productive elements.
George Jacob Holyoke, the reputed English Economist, in his history of co-operation, states that capital having so long taken the advantage of labor, it is time that labor would lead capital and share all the profits, but he forgets that society exists, and that we must take it just as it is.
It would be at this present juncture, as unjust to say to Capital, we want your help, but you are not to share in the profits that your capital will enable us to
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realize by our labor, than it is now for Capital to say to Labor, I want your labor, I pay you the lowest possible wages, but you will not share in the profits realized over your ordinary day's wages. Therefore, in order to obviate to such inequitable monopoly of Capital or Labor over one another and to benefit each of them according to services performed, the system of social economy in co-operative industries, as presented by Mr. Papin, would be the following: Acknowledging three productive forces in industries, viz: Capital Money, Intelligence and Labor, without which both of them being united, nothing can be produced successfully. Capital can produce nothing without Labor, and either or both of them can produce nothing without Intelligence to direct them, as Intelligence without both Capital and Labor cannot produce. These three productive forces are naturally linked with each other for their mutual success in all productive industries, for instance:1st, CAPITAL. — Suppose that $200,000 capital money were required to build up and supply a factory with machinery, raw materials and working capital. If capital was invested in government bonds or loaned on mortgage, it would receive, say 8 per cent, interest per annum, the equitable worth of the services performed by the investment of capital in the enterprise would therefore be $16,000 per annum, as representing the services or wages of capital.
2nd, INTELLIGENCE. — Requiring education and experience to manage the affairs of the enterprise, if such manager was employed on salary at any other factory, his salary or wages might be worth $5,000 per annum, thus representing the services or wages of intelligence.
3rd, LABOR. — It would require, say 400 mechanics to carry the labor of the factory, if such were working on wages in other factories, they might receive on an average $2 per day during 250 working days in the year, or $500 each per annum; among the 400 mechanics, their wages would amount to $200,000 a year, thus representing the services or wages of labor.
Now, at the end of the year, after that all the general expenses, wear and tear of buildings, machinery, insurance, taxes, wages of capital, of intelligence and labor are paid, a balance of $100,000 was left, representing the nett profits realized by the enterprise during the year, the distribution of such nett profits would be made as follows:
| CAPITAL. — Proportional share to Capital, according to services performed, being represented by $16,000 a year, the share of profits above the said services or wages would be | $ 7,240 |
| INTELLIGENCE. — Proportional share to Intelligence, according to services performed being represented by $5,000 a year, the share of profits above the said services or wages, would be | 2,262 |
| LABOR. — Proportional share to Labor, according to services performed by each, being represented by $500, or for the 400 being represented by $200,000, the share of profits above the said services or wages of each, would be $226.25, or, upon the whole, 400, the proportional share would be | 90,498 |
| Equal | $100,000 |
It is understood that should the capitalist be able to act as manager of the factory, he would receive due compensation, according to services performed by both his Capital and his Intelligence.
Now, the capitalist may make the objection, that in case the enterprise was not a success, who should compensate him for the loss sustained, if any, as none but himself is making any investment pf capital money? This objection can easily be met, and settle, that both Capital, Intelligence and Labor, being co-operating to share pro rata to their services in the profits, are also to share likewise in the losses, if any; and a provision made to meet any emergency, by laying aside every week, month or pay-day as they choose, say 10 of 20 percent, out of their respective wages to meet with the losses, if any, and the settlement of that fund to be pro rated accordingly at the end of the year, and if any losses sustained, they would thus be shared equitably by both Capital, Intelligence and Labor.
Strict relations would govern the associations and the president or manager should have full authority to manage the affairs of the concern just as if he was the full owner, subject to ratification by a Board or Executive Committee in which labor would be represented in proportion to services performed.
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A Committee on Labor would be appointed to regulate the grade or worth of each member's labor, just as it is carried out in ordinary factories under the wages or piece-work system, as mechanics are classed by order of skill and are paid accordingly.
Beside the co-operation in production, the co-operative manufactures established under the proposed system would also co-operate in supplying themselves with all articles of consumption through co-operative stores of their own attached to their respective factories, whereby they would pay the wholesale cost price only, for all their articles of consumption, such as flour, groceries, dry goods, shoes, coal and generally all that each member and family would require, which combination would at least save 25 per cent, and even 60 per cent, upon many articles, upon the cost of living, thus realizing from 75 to 100 percent, out and out over and above the highest wages or compensation they might obtain in wages' factories, and under those general advantages, who can say that co-operative manufactures cannot outbid any competition from any other system of labor, and therefore control the markets of the world for their products? And is not that system demonstrative of the safest and most remunerative investment of Capital with Labor.
In Older to carry on practically the system of co-operative industries, as introduced by Mr. Papin, and to organize and promote their working operations, the above Company has been organized under the laws of Illinois for the following purpose, as embodied in its charter:
"The object for which it is formed, is for promoting the interests of Co-operative Industries, in enabling mechanics and others to locate and own their own homes, their own supply stores, and their own factories, and to act as fiduciary agents or trustees for their co-operative credit."
Whereby each co-operative mechanic is, 1st, to own his own lot and cottage adjoining his factory, and be independent from landlords; 2nd, to have a share in a co-operative store, and do away with street-corner grocers and retailers — wherein to supply himself and family at wholesale cost; 3rd, to own one share or more in the co-operative factory, wherein he is supplied with permanent and remunerative employment.
The above Company is organized to act also as trustees for the issue and countersigning of stock, bonds, or other evidence of debts, of the different Co-operative Associations organized under their supervision, and to solicit and receive subscriptions to their stock or bonds, thus supplying the means of credit required for their working operations.
In order to give the highest security and remuneration for the investment of capital in such co-operative manufactures, more particularly from the small investors or working people, who now loan their savings to employers or invest in low interests, Government bonds, or worse, in crumbling or unsafe savings or other banks, the Organising Improvement and Trust Company will not admit of any mechanic to join any co-operative factory, unless he pays a certain amount cash on account of his lot and house, his share in the co-operative store and in the factory, and to pay the balance by light monthly installments out of his labor — not to exceed the rent paid for his present tenement rooms. So that these Associations will be organized upon a permanent and reliable business basis, offering all the security to investors desirous of co-operating with them, and share the profits of their capital according to full services performed.
Contrary to all other Joint Stock Companies, the basis of compensation for capital is fixed at 8 per cent. per annum, and, in addition to pro rate share in the most profits according to the services rendered by capital jointly with intelligence and labor, which combined compensation will always be higher and more reliable than in any speculative joint stock companies.
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Under the wages system, labor is hired at the lowest possible figure, and reduced the more according to competition or the law of supply or demand of the labor market, just as were sold the slaves of old — whereby a man is compelled to accept the employers' terms, because he must eat, and of course, such compulsory labor cannot be made attractive nor encouraged in producing the most, the best, and the most economically, as he would receive no better compensation. Consequently, under such repulsive condition of labor, man will try to work the less hours per day; but as he requires the whole of the low wages allowed him for his and family life sustenance — he cannot reduce them — and he will require the same wages for eight than for ten hours, or more, which claim seems to be unjust by the employers, and lead to strikes by labor or lockouts by employers, if the difficulty does not turn out into riots and bloodshed, as it has often been the case, and not only labor and employers, but society at large is injured by such antagonism and unreliability of business.
Now, from the scanty wages of the mechanic must be deducted, 1st, the landlord's exactions for his tenement stifling shelter; 2nd, pay heavy tribute to the street-corner grocers and retailers, in the high prices, bad quality, and short weights or measures of the articles daily required for the supply of his family, and third, to share with his fellow worker in supplying his employer with all the comforts of life, and even luxury and wealth, as illustrated by A. T. Stewart and others — such men being described as self-made men; could they accumulate millions by their own individual labor, however high wages they would receive during a lifetime, if not realizing profits over their employes between the wages paid and the actual services rendered by said labor? But the employers or capitalists are not to blame for such modus operandi in the way that business is carried on; the system had its beginning from the time a man could employ another, then two, ten, twenty, hundreds and thousands — his wealth increased in proportion to the number of bands he employed, just as the comfort and luxury of slaveholders of old increased in proportion to the number of slaves owned. Labor being thus considered as chattel or merchandise, and not as an intelligent free producer deserving to receive compensation according to full services performed.
From the above conditions of wages-labor, after that the mechanic has paid his landlord, his street-corner grocer and other retailers, and paid the lion tribute to his employer, he has nothing left at the end of the year, and is compelled to begin life again and may, perhaps, continue to work until he is 50 years old, at which age, if he has been unable to save for the rainy days, his labor is no more wanted at the factory, as younger men can do more work and are employed in preference.
Although the basis for the compensation of labor is established upon the actual current rates in wages-factories, the co-operative mechanics here are induced by their self-interest in producing the most, the best and the most economically, as in thus doing they will increase their compensation by at least 40 and 50 percent over the highest wages-system, with no more exertion and with higher spirit of encouragement by such attractive and independent labor.
By the association of several mechanics under the co-operative system and regulations presented by Mr. Papin, they can procure all the financial credit required for acquiring their own homes, to have a share in a co-operative store wherein they supply themselves with all the necessaries of life at wholesale cost, and thereby increase the productiveness of their wages or nett labor compensation, and also can have their share of their own factory, machinery, raw material and working capital, and thus securing themselves with permanent, free, independent and the most remunerative employment, and realize the profits of employers without fear of lockouts or forced idleness.
Which combination, in comparison with wages daily labor, would not be less than the proportion of $2.00 for the wages-factory hand and $4.00 for co-operative mechanic. So that, whatever may be the circumstances which would reduce the compensation of wages-labor, co-operative labor could always produce cheaper and realize double compensation and comforts than the wages labor.
Therefore, by the co-operation of capital and intelligence with labor, no losses can ever be sustained, and larger profits realized and higher security given than under the best managed wages manufactures.
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Organization and Practical Operation.
In order to carry out the system of harmonious co-operation between capital, intelligence and labor into practical operation, it is proposed by the Co-operative Industries' Improvement and Trust Co. to build up an exclusively co-operative city in the healthiest and most appropriate suburb of Chicago, fronting upon over five miles of navigable stream and crossed by several railroads, and to have as many different co-operative factories established as will supply free, independent and permanent employment to any number of skilled mechanics with their families, and also for the safe and remunerative investment of several millions of capital in equitable co-operation with labor — where no strikes, hard times, lockouts, antagonism and losses can be resorted to nor known. No other, permanent resident will be admitted to acquire property or open business at the new Co-operative City except by being an active member of any co-operative factory or be a stockholder therein, and the establishment or keeping of any liquor store to be strictly prohibited, where the mechanic will not have the opportunity to waste his time, his money and his reason and family comfort, to enrich and fatten unscrupulous saloon-keepers, but every man will be at liberty to keep at home what he please, if of any comfort to himself and family. Each co-operative mechanic is to own a lot of 25x125 feet, and to have a house or cottage of five rooms built thereon in order to be his own landlord, and save rent. By the combination of co-operation, the Improvement and Trust Company is enabled and proposes to the first thousand co-operative settlers to deed the lot and cottage for $250, to be personal property and to receive part cash payment, and the balance in monthly instalments as best convenient to the mechanics. Each co-operative mechanic is also to own at least one share of $25 in the co-operative store, in order to keep always sufficient supply of groceries and other articles of consumption and requirement for at least a month stock supplies — to be bought and sold at wholesale cost — such share to be paid cash, in order to do away with the immense profits realized by the corner retailers, thus increasing the nett earnings of labor, when saving is made upon living expenses. And also each co-operative mechanic is to own at least $100 stock in the co-operative factory in which he is employed, and to pay a portion cash and the balance by monthly instalments out of his earnings, as will be most convenient.
The co-operative mechanic being thus the owner of a lot and house for permanency, and freeing himself from rents, and also the owner of shares in the co-operative store as well as in the co-operative factory, thus assuring his permanent settlement and production at the Co-operative City, and the factories being composed of fifties, hundreds and thousands of co-operative workers and property holders being associated together for mutual benefit according to services performed by each, with life insurance if required upon each head of family as additional security for any personal indebtedness. Where could capital find better, safer and more remunerative investment than in such practical bona fide productive associations of labor.
In order to procure the additional credit required for carrying on the business of the different branches of co-operative industries at the new city, each association is to be incorporated and organized under the laws of the State they are to locate and issue a sufficient amount of bona fide stocks in shares of $10 or $25 each, for subscription and investment by small capitalists, tradesmen, mechanics, or others, as the fund will be required, but not a share to be issued except for payment in full at its par value, the same to bear a preferred dividend or interest of 8 per cent, per annum; with additional share in the profits according to services rendered, based upon the amount of preferred dividend or interest. The Promoting Improvement and Trust Company acting as financial agent for countersigning the stock, bond or certificates of indebtedness of any of the co-operative industries organized under their patronage, is not to receive any loan or deposit on its own account, being acting as agent only for said co-operative associations of labor, and see that the funds so invested are properly applied to the object for which the stock is issued, on behalf of inventors as well.
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In the first place capital receives 8 per cent. as basis of its services, and shares proportionally in the nett profits of the enterprise engaged in. The risks of investment by capital are reduced to the proportional share of service or interest, as labor contributes a larger share towards the losses, if any, in proportion to its basis wages. Employer controls the affairs, and receives a satisfactory basis of compensation for his services, and runs no risks comparatively to the responsibility he is now assuming under the wages system — Employer is thus assured that if Capital and Labor receive one dollar for their services, that he is to have his share as well and can sustain no losses whatever.
Now, let us compare the present difficulties and uncertainties over which capitalists and employers are undergoing in carrying out the business by hired labor. That labor cannot be made attractive and the mechanic is working because he must eat, but does the least, the worst and the less economically that he can to prevent him to be kicked out from his bench, but no sooner is a workingman at his wages' bench by the hour, that he is anxious for the shop bell to ring to get out, and of course he is trying to reduce his hours, of which seem to him of compulsory slavery for the time being; but he cannot consent to reduce his wages, because he requires the whole and more for his and family life-sustenance, and the exactions of landlords street-corner grocers and retailers, more particularly if he cannot pay cash for his supplies, which difficulties between employers and employes lead to strikes, lockouts, antagonism and bankruptcy. But now, let us compare that system of wages by the hour or piecework with the co-operative system, where a mechanic will be induced by self-interest to produce the most, the best and the more economically possible, when no more claims for shortening the hours of labor, nor raise of wages, where no strikes can ever exist; where a man will be interested to work ten, twelve or fifteen hours, as then he will receive according to full services rendered; where it will be unnecessary to raise the wages — as the increase will always be distributed to each according to actual worth, thus increasing the nett profits of the concern. If the mechanics realize higher wages, the capital invested and the employers will receive larger compensation. Under such combination, who can say that both capital, intelligence or employers, and labor or employes will not realize more profits, and with more security and stability, than under the wages system by the day, hour or piece-work, where all the best endeavors will be exercised by all in producing the most, the best and more economically possible; where only the most skillful and ambitious mechanics can be admitted in co-operation with capital and intelligence; where a factory can take contracts for delivery at any time without fear of strikes from labor — to the contrary of what exist now under the present irrational wages system.
In addition to the co-operation in production, the mechanics will have their own co-operative store whereby they will supply themselves with all the requirements at wholesale cost, thus realizing the profits of retailers and increasing the efficacy of their wages or productive compensation, thus enabling them to reduce the cost of production and realize more profits yet than if they received the highest wages outside.
Capitalists, employers and employes are, therefore, respectfully invited to study and investigate thoroughly into the practical merits of the new system of social economy presented by Mr. Papin, for their harmonious and remunerative co-operation in productive industries.
The Co-operative Industries' Improvement and Trust Company is prepared to organize skilled mechanics into cooperative industries, according to trades, and locate them at the new proposed Co-operative City adjoining Chicago and to have them own their own homes, their own co-operative store, and their own factory, and be supplied with all the credit necessary to carry their business most successfully and enjoy the full worth of their industries.
Sites for factories will be given free to the first ten established at the new city, as well as ground for churches, public buildings, parks, etc.
Workingmen, be awake to your interests! do away with antagonism against capital and your employers; try to harmonize their interests with yours, but; if they decline to join with you, go ahead and be independent for your future comfort and enjoyment of life, according to your own individual and co-operate exertions, and a new era will be open to labor.