Consumers' Cooperative Societies in New York State — Edition Insights

The Rochdale Principles as a Yardstick

The report grounds its analysis in the principles established by the Rochdale Pioneers in 1844. These include limiting earnings on capital stock, returning surplus earnings to members in proportion to patronage, and granting one vote per member regardless of stock ownership—no proxy voting. The text adds that most successful societies also adhere to cash-only business, selling at current market prices, and providing education in cooperative principles. These criteria serve as a consistent benchmark throughout the study, used to distinguish genuine cooperation from fraudulent schemes.

Two Cautionary Case Studies

The report devotes substantial space to two failed or fraudulent enterprises. The Glynn System in Buffalo, started in 1920, was a promoting corporation that sold shares through labor unions, promising local autonomy and low prices. In reality, control remained with a few promoters who exacted a five-dollar organizing fee from each member and took commissions on wholesale business. By spring 1921, members discovered gross mismanagement: a manager absconded with $600, organizing expenses reached 33 percent, and a $10,000 deficit emerged. Bankruptcy followed, and the promoters vanished. The Cooperative Society of America, led by Harrison Parker, operated in Chicago and then New York City, selling stock through scores of salesmen. The report notes that within two weeks, agencies organized to fight this fraud, and the Attorney General appointed a special deputy to prosecute. These detailed narratives illustrate the report's argument that cooperation cannot be built on mercenary motives or top-down organization.

Voice and Structure: A Blend of Advocacy and Investigation

The report's language shifts between neutral exposition and pointed criticism. The opening sections present international statistics in a straightforward, informative tone. But when describing the Glynn System, the prose becomes more vivid and judgmental: the promoters were 'uncommonly shrewd,' the principal organizer was 'completely duped,' and cooperation was 'put in disrepute.' The report also uses direct quotations from participants, such as an office worker who 'confided to a friend that there was a ten thousand dollar deficit.' This blend of data and narrative gives the study a dual character—part investigative report, part advocacy document. The structure moves from principles to extent to case studies to practical guidance, creating a logical progression that builds the case for careful, principled cooperation.

Readers should note that the report's evidence is drawn from a limited period (1920–1922) and focuses on failures rather than successes. The excerpts do not include the sections on successful cooperatives or the practical guide for starting a cooperative enterprise. The study's value lies in its detailed documentation of how fraudulent schemes exploited the cooperative label, and in its insistence on the Rochdale principles as a safeguard. For a fuller picture, one would need to consult the complete text, including the bibliography and the sections on successful cooperation.