New-York tribune., 1870-01-15
PRICE FOUR CENTS.

increasing the capital and extending the trade 10
uOn-customeTs. II was resolved to develop the bust
ness and increase the capital by admitting Others.
The shares increased TO 50 of the par value Of
So, each shareholder restricted 70 share, and
| sinking fund established. Tic business at once
grew in proportions. When the capital had in
creased 70 $4,000 and the shares had reached 500
! in value it lunwisely, pcrhaps) decided TO in
crease the business further. and cash dividends
| have since been made On the $4,000 capital
Mr. Pratt informs me that an annual business Of
sl7SCCO has been done for years. The 80 stock
holders have received for three years past their
groceries at cost and cash dividend Of so per share
Of tho profits Of the custom to nonstockholders. in
oil about 81 per cent saved on their expenditures.
Tho advantages to the non-s;ockholding customers
have bccn before stated, the very great but ndi
rect ones arising from the regulation Of prices in tho
county. This regulation Of prices effect extends
not merely to the stores in Worcester, but TO the
country trade also farmers in the vicinity huckster
ing their fresh eggs and vegetables and fruits about
the streets find tho rates fixed for them by the Union
store, and many Of them find it more convenient and
profitable TO do business through the Union store.
The constitution Of tho club amended in 1865 to
suit the new law. and practically. with the exception
that members got goods at actual cost the store
is now conducted on the cooperative system.
The South Weymouth Union Store in 1851 adopted
the same system virtually and rs its profits during
the war, when prices were continually advancing,
large, tho shares have advanced from $25 until
they are now worth $50. | have not visited
this store; my informant, however, is excellent
authority on tho subject The ChaIlcstown
store, established in 1864, on the Protective
plan. reorganzed in 1865 on the Co-opcra-
tive systcm, and has been one Of the most sue
1. 4 r,
and not protective store aud illustrates the advan-
tages Of the system, shall reserve the details for
future letter. Tho Lynn Grocery Company has in
creased its shares from par value Of $40 to $l7 90
employing capital of 5000.
PROFrTING BY EXPERIENCE.
The defects Of the old system were discovered only
! after many failures. At length the coopcratyes
were educated by sad experience TO perceive that
the difficulty lay in the uOn-rcstrc.on Of shares per
| person. the nOn-extcEsiOu Of trade aud the non
increase Of cap,al-it is a grand mistake IN any
business private, corporate, or cooperative TO allow
one partner to mon0poizo the capital to rcpcl Gus
tom or to distribute or divert the profits INTO other
channels. All successful merchants will swear to the
truth Of these propositions. If he Worcester Union
or the ChaIlestown store with the start which they
now have were 10 carry ont the true principles Of
cooperation for twenty-five years they would con-
troll or at least regulate tho entire trade Of their conn
ties when the Massachusetts cOopeTatves had dis
covered their mistakes they went before the Legs
aturo, and obtaining in 1896 new law, organized
new associations more perfectly cooperative
plan. Although the law framed for the benefit
and has been taken advantage Of Jy all classes and
trades Of people, its passage was chiefly due, am
assured to the Order of the knights Of S. Crispn.
\ uoverful trade organization Of this State having
III lodges. 10000 members and casting at the last
| State election a vote Of l4CO0. Upon this law tho
new system of cooperation is based. give below -
| SYNOPSIS of this law, as believe 1t ~
strange TO the statute books of most States. and
since il las been found admirably suited TO Us pur-
DOSE it may DO worthy the study Of legislators aud
! co.onerators. II will be seen that the important
features of the law arc: J. 1t fixes the capital stock
at large limit $4,000 .. 1t limits each shareholder
In 81 Geo value in Stock thus preventing the absorp
ton of the business by one or two capitalists D. IL
limits each stOckholder TO vote, thus regulating
the direction h. II authorizes dividends 10 be pad
70 non-stockhoding customers as well as 70 stock
holders thus encouraging the former to trade Win
tbe ossociation g. II prevents the scattering Of the
profits by providing against any payment OF oI''-
dends until after 10 per cent Of the profits shall have
been laid aside rs contingent fnnd said fund to nc
emulate until 1t is 30 per cent Of the capital stock
|
SYNOPSIS OF TIE LAW.
The act is headed Law of Massachusetts,. IN rela
ton TO the formation of Cooperative Associations"
SECTION / Seven or more persons male ferae. 81
LEGAL age are necessary form au assoc t'1n. lHe
n1Tnose NAV he trading Manufacturing on agricultural
Psf Provide thai business hlusl be douc only IL the
! place named IN the articles Of agrea amnnt. - .
SFC 3 Provides Board OF Managers, 10 ronsiSt ~
n President Treasurer and NJ least three directors u"
sEc j. Each ASSOCIATION can make s bylaws regulate
The amount Of capal stock of snh association
shall be fixed and limited In itS articles n association
snd NAV be any SUN not exceeding $1,000 The a,-J
citation may incrca Sc diminish its amouu ana IL number
of shares at any meeting ~ the stockh'he,- t'.'.y
called for that purpose and within thry d9yS amer ts
passage Of any vote increasing or diminishing i,s oSp
stock shall cause such vote to be recorded l ie ele
Office OF tie place whore its business II carried " Dut d"
share shall be issued for less than its par value
| srC G. Requires annual statements OF cohdlion ..
associatlon showing amount Of stock, par t'Ine q.
shares number of shares issued names ana e'delces ~
stockholders. aud number oi sha' o'H'N uJ ,, ~
has been found that great dIlhcil arises llol tis
failure of the law TO prescribe ioi .or ol r
hardly any alike, aud the aggregate i'su'r ""
10. sr lin min such association may take. hold ard
convey such real aud personal estate hS j.
bc n,;rnoes OF its organization, and may sue td De
sued in It's associate name; ana 10 neinpts 'l,', ]
iLg the sum OF 81 oOO shall any menDer upoo any
SUI I'm ful No certificate shares shall be Issued
IN any pcrson until the fun amount thereof hh1l haN'
been paid in cash. No person shall be allowed 10 "coo
shareholer such association except by TIE CONSENT
SIC O. Board OF Managers made liable Tor all deots IN
| cas-. of failure To make returns ,.
syc 10 describes how judg against associations
| may be recovered ,,.--,.-,, l.. .......,.tt,, IL.
sfC II din fulB No shareholder shall DC personally na
bile for any debt Of the Association after me il a13'
NJ the capital stock paid M and eerpedtes is"' ""'
| for. - 81, -. .,,h 1t-,rI,,u,iop of th.
nrunts ar earnings Of such Association among to "oA
men purchasers. and stockholders as sha DC %
by the bylaws, at such times as therelh pFeIS' ht
a. often AZ least IN twelve mSnths PVe"' ' @
ijstrihutiou shall he declared aud pad upth su'
% ~ Last to no per cent Of the net pfOhts HhA ~ ap
a"riated for contingent sinking mud, nhtu lhcIo
| shai have accumulated sum equai W ~ p'i ''' "
| cess OF such capital stock
| A., iDnortent amendment TO the law. designed TO