Maynard's Co-operative Associations (part 1)

Share certificate for Kaleva Co-operative Association,
 dated 1915 (Click on photos to enlarge)

Maynard’s various histories name eight co-operative associations or societies; six of these co-existed in 1917. The oldest was Riverside Co-operative Association (1875-1936). The longest duration and largest was United Co-operative Society, initially named Kaleva Co-operative Association (1907-1973). A U.S. Department of Labor report for 1947 mentioned that United was one of the top ten co-ops in the country for oldest, membership and annual sales. More than half the households in Maynard were members. This column is the first of a three-part series on the history of co-operatives in general and specifically in Maynard.  

To get back to the origins of the co-operative concept, in 1844 a group of 28 weavers in Rochdale, England, organized the Rochdale Society of Equitable Pioneers, “…and opened their first store, with a small stock of flour, oatmeal, butter and sugar.” Soon added tea, tobacco and candles. Their guidelines formed the basis for the principles on which co-operatives around the world continue to operate. The Rochdale Pioneers became highly successful, with 1,400 members by 1855 and 5,560 members by 1870, able to shop at many stores.

Share certificate for Russian Co-operative
Association (dated 1917)

There had been earlier attempts to establish co-operatives that were basically buyer’s clubs, which by pooling their purchases were able to buy at wholesale prices and sell to members at below retail prices. The Rochdale Pioneers were one the early co-operative efforts to add profit-sharing to members based on a percentage of the cost of the goods the members purchased, i.e., a patronage dividend. The seven Rochdale Principles:

   Open membership,

   Democratic control,

   Distribution of surplus,

   Limited interest on capital,

   Political and religious neutrality,

   Cash trading, and

   Promotion of education.

 

Open membership: Although co-operatives often started as groups of workers within one laborer profession (weavers, miners…) or group (Finns, Italians…) membership was not limited. Membership was also voluntary, meaning that members of a union could not be required to also join an affiliated co-operative. Non-members could shop at the stores at the same prices as members, but would not get the additional benefits. United’s start in Maynard was fomented by immigrants from Finland, working in the woolen mill, but non-Finns could join, and by 1947 outnumbered those of Finnish heritage.

Democratic control: All shareholders had one vote regardless of how many shares they owned. Typically, membership shares in the early twentieth century cost $5 (equivalent to $125 now), and members were limited to 20 or 40 shares. Shares could be sold back to the co-operative, but not to other people.

The Maynard Co-operative Milk Association merged into 
Kaleva,which in 1921 became the United Co-operative
Society (from collection of Maynard Historical Society)

Distribution of surplus: At the end of a fiscal year, profits were distributed to members based on the amounts of goods they had purchased during the year. In a pre-computer era, members saved their receipts, then brought all receipts to the co-operative. Staff checked their totals. For Maynard’s Riverside and United, depending on how well the year had gone, members got a cash payment equal to one percent to as high as ten percent of their year’s purchases. If the co-operative had operated at a loss for a year, no refund that year.

Interest on capital: In addition to reimbursements, shareholders got interest on their investment, typically five percent. Share value did not change. When a co-operative voted to dissolve, shareholders expected to get their original investment back.

Neutrality: Co-operatives were supposed to operate neutral to issues of religion, race or politics. The American reality was that co-ops were started by immigrant groups – in Maynard, English, Finnish, Polish, Russian – and often conducted business meetings in their native language.  

Cash only: Many early efforts at establishing co-operatives were under-capitalized, and foundered when members were allowed to purchase goods on credit. Two of Maynard’s co-ops failed in the Great Depression for this reason. Credit unions were separate entities, better capitalized, designed to serve as banks but return profits to members.

Kaleva (founded 1907) became the
United Co-operative Society in 1921

Education: Programs were conducted to educate members and non-members on co-operative principles. Maynard’s United Co-operative Association had adult classes, Young Co-operators’ Club, and Co-operative Day Camp.

United added an eighth principle, which was continuous expansion. Over the initial 50 years membership grew from 184 to 2,960 members as bakery and dairy delivery, coal, firewood and fuel oil, appliances and hardware, and a Gulf automobile gas/service station were added.

United's By-laws had an interesting clause: On the occasion of dissolution of the co-operative, which required a 3/4 majority of votes at a meeting, the assets would be used to pay the purchase value of the outstanding shares. Any surplus would go to the  Co-operative League of the United States rather than to members. 

The International Co-operative Alliance (ICA), founded in 1895, adapted the Rochdale Principles of Consumer Co-operation in 1937, then amended the list in 1966. A major addition was the concept of cooperation among cooperatives but without crossing lines into price-fixing or monopolizing markets. A subsequent revision in 1995 added autonomy from governments and concern for community. The ICA represents millions of co-operatives worldwide, and through that, more than one billion people who are co-operative members. Its purpose, in part, is to work with global and regional governments and organizations to create the legislative environments that allow cooperatives to form and grow.