The Present Application of the Rochdale Principles of Co-operation (1937)

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1. The Principles of Co-operation as practiced by the Rochdale Pioneers

The Rochdale Society of Equitable Pioneers was registered under the Friendly Societies' Acts of 1829 and 1834, the basis of which was the provision of Mutual Benefits. The creation of Friendly Societies, their organization and control, was provided for in a whole series of legislative enactments adopted between 1790 end the present time. The Societies were formed to provide the members with financial aid or `Benefits,' in a word - insurance against sickness, old age, infirmity, and death. The Act of 1834 contained the provision that Societies might be formed for the foregoing purpose `or for any other purpose which is not illegal.' The Rochdale Pioneers with native shrewdness and intelligence, sharpened by their conflicts with the regime under which they lived and suffered and by their studies of economic and social solutions, found legal authority and protection for their society in these Acts. The evolution of the co-operative legislation which followed fully justified their confidence and acumen. The Act of 1846 contained a new and enlarged statement of the purposes for which a Society might be formed, including `the frugal investment of the savings of the members for better enabling them to purchase food, firing, clothes or other necessaries....with or without the assistance of charitable donations.' This latter phrase rather suggest that the legislature had not, up to that point, realized even the elementary possibilities of Co-operative Societies as trading concerns.

By 1852, some glimmering of potentialities of Co-operative Societies, or at least the direction of their evolution, had seized the minds of legislators, and the Industrial and Provident Societies' Act of 1852 was introduced and passed into law. This was the first Act of Parliament which specially provided for the formation of Co-operative Societies, taking them henceforth out of the sphere of Friendly Society legislation, or at least giving them separate legislative authority.

Meanwhile, the twenty-eight Weavers had established their Store in Toad Lane, and commenced their heroic attempt to stem the tide of competition and exploitation that threatened to overwhelm them, by the simple process of uniting in the common purpose of efficiently doing for themselves, upon a basis of mutuality and self-help, what had hitherto been inefficiently done for them at a cost which impoverished their families but provided wealth for the individual captains of industry and trade.

It will be observed, however, that at the time the Pioneers opened their store in 1844, and, indeed, until 1852, there was no possibility of their Society being registered as a Co- operative Society, as its legal existence was only assured under the authority of a law that provided for mutual benefits. This fact doubtless accounts for the name given to their Society, the reason for which has been the subject of much conjecture on the part of the curious and of students. There is another point in this connection worth noting, especially by those who seek in the `Laws and Objects of the Rochdale Society of Equitable Pioneers' a completed constitution and the expression of the entire philosophy of co-operation. Only eight years after their start was the legislation adopted which gave Co-operation, as an economic system, legal recognition. The idea of `associated effort' on the part of the working population, whose first co-operative manifestation appeared in Great Britain, as early as the third quarter of the Eighteenth Century, was slowly crystallizing, not only in the minds of the workers themselves, but also in those of the politicians, statesmen, and publicists, who were led in this direction by a choice band of enthusiasts who have always been recognized as the literary exponents and animators of the earlier efforts in Co-operation.

It is, therefore, not to be expected that the Weavers of Rochdale should produce their whole policy in a night, or even in a single document. The `Laws and Objects' of the Pioneers contained the main part of their plan, but it is necessary to study at least the first ten years of their development to obtain a comprehensive notion of the system which they founded. During that period, modifications and definitions of their plan emerged form their minutes of proceedings; their practice; and the decisions of their general meetings.

In this enquiry, the Committee have taken into account only those things which appeared to them essential and of permanent value. They have disregarded a number of other elements in the early History of the Rochdale Pioneers which seemed to have only a transitory importance.

After careful study of the available facts the Special Committee have come to the conclusion that the following seven points may be considered from the historical point of view as the essential Principles of Rochdale and the characteristics of the autonomous system founded by the Pioneers, for each of which justification can be found in the constitution, rules, and practice of the original society, founded at Rochdale in 1844:

1. Open Membership
2. Democratic Control
3. Dividend on Purchase
4. Limited interest on Capital
5. Political and Religious Neutrality
6. Cash Trading
7. Promotion of Education.