# The Russian Review/Volume 1/April 1916/Fifty Years of Co-operative Movement in Russia

Fifty Years of Cooperative Movement in Russia.
By A Russian Observer.
I.
The economic life of Russia has, at this moment, a peculiar interest for the United States. Everything that characterizes this side of Russia's life should, it would seem, be carefully studied by Americans, and understood as clearly as possible. There is a promise of advantage and prosperity for both sides in the friendship which is now being rapidly brought about between the great Empire and the great Republic. But such friendship will scarcely be consummated unless Russia and the United States come really to know and understand each other. At the present moment, every indication seems to show that both countries are eagerly seeking to bring about close mutual friendship.
Of course, to know Russia means to learn something more about her than merely her economic life. In Russia's peculiar civilization there are numberless traits of extreme interest and highest fascination. But the friendship between the two countries must necessarily begin with an economic, financial, and commercial rapprochement. After this will stretch the strings of more delicate interests and, with them, other rapprochements. But first of all, Russia must show herself before the United States in the light of her potential economic possibilities.
And it must be the whole of Russia that should thus present herself, if the impression desired is to be complete. The information that is needed must characterize not a separate group, or a single class of the population, but the whole vast country with its enormous population, especially from the point of view of the economic forces that the Russian people potentially possesses. It is necessary to know Russia's millions of consumers, for, after all, it is the consumer, his interests and ​his purchasing power, that determine the economic potentialities of any country.
From this point of view, there is not another body of facts that would give a more interesting and important representation of Russia's economic side than the data concerning the cooperative movement in the country. A short time ago, Russia celebrated the fiftieth anniversary of her cooperative movement, and the results of the movement, brought together during the celebration, afford us an opportunity to look into the very face of economic Russia. The stages of the movement, the character and the tempo of its development, speak of the progress made by the whole country. After fifty years of her cooperative movement, Russia found within the country over thirty-five thousand cooperative organizations, with a membership of almost twelve millions. If we recall the fact that cooperation is most prevalent among peasants, and that, therefore, every member of a cooperative organization represents a whole family, we cannot but accept the estimate offered by one of the most competent students of the Russian cooperative movement, who places the total actual membership of the Russian cooperative organizations at sixty millions. Modern armies, which are numerically much smaller than the above figure, are often, and quite justly, spoken of as an "armed people." What shall we say then about the army of the Russian cooperative movement, which numbers in its ranks one-third of the great country's total population!
The Russian cooperative movement was born on October 22, 1865. Its birth was really almost contemporaneous with the birth of modern Russia. The shackles of serfdom fell off the limbs of Russia on February 19, 1861. This was the greatest reform in Russia's history, prior to October 17, 1905, and it was accompanied by a whole series of great reforms. Every great reform was followed by a record of brilliant achievements on the part of the liberated country. To the reformed statutes of 1864, which introduced in Russia "just, rapid, merciful and equitable dispensation of justice," Russia responded with a galaxy of brilliant jurists and lawyers. Russia's response to the liberation of millions of peasantry from the bonds of serfdom, was her cooperative movement. And this response is one of the brightest pages in the history of Russia's culture.
The abolition of serfdom brought Russia to a new economic ​road. The peasants, who were, until their liberation, entirely dependent economically upon their masters, now became independent, and were consequently compelled to seek their own salvation. After the abolition of serfdom, capitalism began to develop rapidly in Russia, and the capitalistic system set up before the producing peasant a whole series of most difficult economic problems. It became necessary to adapt production to the needs of the market, and the need of increasing the productivity of labor and land became fundamental in the rural economy of Russia. In order to achieve this, it was necessary to have loan and savings associations and credit societies. Moreover, it was essential for peasants to unite into cooperative groups for purposes of buying and selling.
It was, therefore, not merely an accident that the first Russian cooperative institution was a loan and savings association, which was formed in 1865, only four years after the abolition of serfdom. It came into being in an out-of-the-way, obscure corner of the government of Kostroma, and from there spread throughout the length and breadth of Russia. A short time after this, the first consumers' league was formed in Siberia.
Before long, Zemstvos began to be interested in the movement. Through their assistance many cooperative dairies, blacksmith shops, tar-works, and shoe-shops were organized during the period from 1866 to 1874. Cooperative credit institutions were developing at the same time. Between 1873 and 1877 about one hundred and fifty loan and savings associations were established annually. The Zemstvos alone established over eight hundred such associations between 1870 and 1877. In 1895 a new type of cooperative credit institution came into use. This was the credit society, in which there are no shares or stock, the capital being a loan from the State Bank, or from local Zemstvos. At the present time, loan and savings associations are most numerous in the western part of Russia, where the peasant population is more prosperous, while the credit societies are more common in the provinces of eastern Russia. On July 1, 1913 there were in Russia 12,225 loan and savings associations and credit societies with a membership of 7,649,192, and the total amount of loans 519,400,000 roubles. On January 1, 1916, the number of these organizations reached 15,450.
Although the first consumers' league was formed almost at the same time with the first loan and savings association, the development of this phase of Russia's cooperative movement proceeded much more slowly. Still, the average number of ​consumers' leagues, formed annually before 1892, was fifty. After this date, the tempo of the development became more rapid, and the average number of charters granted annually during the last decade of the nineteenth century was over one hundred. The development was even more rapid during the first decade of the present century, so that by January 1, 1913, the number of consumers' leagues in Russia was 7,578.
In the course of the last ten or fifteen years, the separate cooperative organizations began to unite into larger groups. The largest of these associations of cooperative groups was the Moscow Union of Consumers' Leagues, which, by July 1, 1915, was made up of 1,390 member leagues, with a total capital of 345,761 roubles. The business done by the leagues in 1915 amounted to 22,855,407 roubles. In 1911 the Warsaw Union of Consumers' Leagues was organized, and in 1912, the Perm Union. The center of the cooperative credit organizations is the Moscow People's Bank, the business of which, in 1914, amounted to 110,221,081 roubles. Compared with the business done in 1913, the above figure shows an increase of 54,214,911 roubles. The business done during the first nine months of 1915 amounted to 141,513,030 roubles.
II.
Among the factors that were responsible for the rapid development of the Russian cooperative movement, were the two All-Russian Cooperative Congresses. The first was held at Moscow in 1908, and was attended by 1000 delegates; the second was held at Kiev, in 1913, and was attended by 1,500 delegates. At both of these Congresses it was definitely shown that the Russian cooperative movement had already outgrown the obsolete legislation which is still applied to it. The two Congresses thus pointed out precisely the weak spot in the organization of the Russian cooperative movement. It is interesting to note that the model for the first Russian cooperative organization was brought over from Germany at the time when the ideas of Schulz-Delich were still popular there. But, while Germany passed, in 1868, an imperial law providing that a mere declaration is sufficient for the formation of a cooperative organization, or a union of such organizations, Russia still has an absolutist system, and no cooperative society can be established without permit. Not very long ago such permits were not granted, in many cases, until three or four years after the ​application was made. It is true that at the present moment permits are granted more readily. Recently, seventeen permits were granted en bloc, but there are even now over seventy applications pending.
As was pointed out at both Cooperative Congresses, the absolutist system of establishing cooperative societies and unions hampers the great work of organizing the economic forces of the country. A new law concerning the formation of cooperative societies is imperatively demanded by the existing conditions. Such a bill has already been worked out, and it was introduced in the Douma during the last session (August 1 - September 16, 1915). The bill was endorsed by a large majority of the Douma, the Left, the Constitutional-Democrats and the Center being heartily in favor of such a reform.
There is no doubt that this bill will soon become law, and then new perspectives will open before the Russian cooperative movement. Yet, even in the present stage of this movment, we are dealing with an extraordinary economic organization.
It is customary to think of Russia as a land rich in opportunities which she does not turn to account. This opinion is correct if we take it cum grano sails. And yet, when we take it as a generalization it must be considered as unjustified.
In the "Board of Trade Labour Gazette," for September 1915, we find interesting data concerning the cooperative movement in Great Britain. It appears that, by the end of 1914, there were, in the United Kingdom, 1,524 cooperative organizations of all kinds, with a total membership of 3,096,314. From these figures it would seem that economic self-government is better developed in politically backward Russia, than in Great Britain, the home of political self-government. As we have already shown, Russia had, by the end of 1915, 35,000 cooperative organizations, with a membership of 12,000,000. And this, as we have also already seen, means that the influence of the cooperative movement extends over almost 60,000,000 persons, or one-third of Russia's total population.
What is most important is that this is the most prosperous third of the population. An examination of the social and economic status of the membership of the Russian cooperative societies shows that the poorer peasants and workingmen do not participate in them. Thus, the Siberian dairy cooperatives consist mostly of fairly well-to-do peasants, each family possessing, on the average, six or seven cows. An investigation, conducted in the government of Oufa, showed that the average ​family among members of cooperatives is 6.15 persons, as against 5.8, which is the average for the whole population of the government. The amount of land held by members of the cooperatives is 7.26 desiatinas, as against the average of 5.45 desiatinas. The members of the cooperatives have 3.25 heads of cattle, as against the average of 2.74 heads.
The amount of a loan in the loan and savings associations is determined by the standing of the applicant. Therefore, only fairly prosperous peasants can make use of these associations. For example, in the Moscow ouyezd, the membership of the credit cooperatives contains a smaller percentage of peasants owning no horses, than the percentage for the whole population. The percentage of those owning one horse is still lower than for the whole population. It is only for the group of peasants owning more than two horses that the percentage becomes the same as for the whole population. In the southern part of Russia, in the governments of Ekaterinoslav, Kherson, and Taurida, most of the members of the credit cooperatives own two horses or more, while the percentage of those owning no horses is very small.
During the half century of its development, the Russian cooperative movement has selected,—and, in fact, it could not help doing this,—those elements of the population which are capable of energetic, independent activity, the elements which have some economic foundation to work on. Therefore, the fiftieth anniversary of the Russian cooperative movements is a triumph for the whole of economic Russia. The development of the movement has proceeded on such a mighty scale, because the whole country is economically powerful, young, full of inexhaustible economic might. Russia is on the threshold of a new historic epoch.