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ADDENDA ET ERRATA.

Page 17, after second marginal note, add "instruments."

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21, Add to note (f), "see Queenshead Industrial Society v.
Pickles, 35 L. J., Exch. 1; Law Rep., 1 Exch. 1."
44, Add to note (e), "and see Gray v. Raper, Law Rep., 1
C. P. 694, as to the individual liability of the members
of the executive committee of an unregistered society,
on a promissory note signed by them."

62, line 6 from bottom, for "his affidavit" read "their
affidavit."

79, Add to note (f), "S. C. 35 L. J., Ch. 546, 809."

The Law

OF

INDUSTRIAL AND PROVIDENT

SOCIETIES.

INTRODUCTION.

co-operation.

THE system of co-operation in its present form has Principles of only arisen within the last few years. Its advantages are daily becoming better understood, and more made use of, not only by the working classes, but also by those of a somewhat higher station in life, who cannot afford to run up accounts with their tradesmen, knowing that they would have to pay handsomely for such questionable accommodation. It may not be out of place to notice very briefly the principles upon which co-operation is founded.

Under the usual system of long credit, a tradesman must, of necessity, more or less frequently, make bad debts, and the only method by which he can, and in fact does, ward off the loss from him

I.P.S.

B

self, is by adding a certain percentage to the price of his wares, thus making those who do pay their bills pay for themselves and for those who do not pay. During the time that a bill remains unpaid, the tradesman is losing the interest of his money, and incurring expenses in providing and keeping a number of account-books. If ready money be paid for purchases, a liberal discount will, in most cases, be allowed to the buyer, so that cash means cheapness, whilst credit implies large prices, heavy interest, and paying other people's bills. Of course this is a serious consideration, even to those who are comparatively well off, but to a poor man debt means ruin. When once he becomes indebted to his tradesman, he is completely at the mercy of the latter, and must buy just what he chooses to give him, at the retailer's own prices, and retail prices are always much greater than wholesale. The first co- Some poor men at, I believe, Rochdale, were the

operative society.

first to find a mode of escape from the evil. They determined to be their own tradesmen, realizing a moderate profit, giving no credit, and making no bad debts. Twenty-eight of them clubbed their pence, set to work, bought their goods at wholesale prices, and, at a little more than wholesale prices, distributed them amongst themselves. The undertaking throve amazingly, as may be gathered from the fact that in a single year, recently, they sold nearly 200,000l. worth of goods, obtaining a profit of more than 20,000l., which was distributed

among the members. And this, with various minor modifications to suit the circumstances of each individual case, is the whole plan of co-operation.

co-operation.

tages.

To buy at wholesale prices, for ready money, and Theory of divide the articles purchased, is the whole theory, a theory simple and easy in practice, and not new, and yet one the application of which, on a large scale, has only recently been adopted. Every time a member purchases goods at the shop of the society, in addition to obtaining the utmost value for his money, he is laying by a portion of the money paid for his own future benefit. Besides the Its advanpecuniary benefits, these societies have a good moral effect in discouraging the practice of running into debt as far as possible, though by the rules of some societies, a member can have credit for a limited time, and to a limited amount. They also offer inducements for saving, by having their capital divided into shares of a small amount, payable by weekly or monthly instalments; upon which, if the affairs of the society are in a thriving condition, a good rate of interest is payable.

lation on the

The advantages of the plan did not escape the Early legisobservation of the legislature, and accordingly, in subject. "The Friendly Societies Act, 1850" (a), it was declared that a friendly society might be formed for, amongst other purposes, "the frugal investment of the savings of the members for better enabling them to purchase food, firing, clothes, or (a) 13 & 14 Vict. c. 115, s. 2.

Not suffi

cient privileges given by early acts.

other necessaries, or the tools, implements or materials of their trade or calling, or to provide for the education of their children or kindred," provided (amongst other things) that the interest of the members should not be transferable. This act was extended and amended by "The Industrial and Provident Societies Act, 1852" (b), to include any society formed for the purpose of raising by voluntary subscriptions of the members thereof a fund for attaining any purpose or object for the time being authorized by the laws in force with respect to friendly societies, or by this act, by carrying on or exercising in common any labour, trade, or handicraft, except the working of mines, minerals, or quarries beyond the limits of the United Kingdom, and also excepting the business of banking (c). This act, and the acts to amend it (d), although conferring extensive privileges and powers on the societies, did not remove several serious objections to them which already existed, such as the unlimited liability of the members, and their inability to transfer their interest, although they might withdraw, if they wished, whilst their liability as past members continued for two years after leaving the society. It was also necessary that all property belonging to the society should be vested in trustees, by and against whom

(b) 15 & 16 Vict. c. 31.

(c) Sect. 1.

(d) 17 & 18 Vict. c. 25; 19 & 20 Vict. c. 40.

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