DANISH CO-OPERATION.

Taranaki Daily News, Volume LI, Issue 320, 11 January 1909, Page 4

DANISH CO-OPERATION.

AN INTERESTING SIDE-LJGUT. The co-operative movement may be I said to have begun in Denmark,' some i] thirty years ago, when the lirst co-opcra-ative creamery was started. Since this time the number of creameries have in- n creased throughout the whole country, t and not only these, but also co-opera- a live bacon factories, egg and butter ex- t port associations, feciling-stull's import ] associations, and co-operative stores. 1 The financial principle at the root of i this co-operative inurement is unlimit- < ed responsibility for its shareholders. A ' creamery is proposed for ail Agricultural i parish. The principal farmers call a i meeting of their neighbours and discuss i the question, and if the desirability of i the factory is agreed upon, a committee' . is appointed to work for the matter. They promulgate a form of association which each fanner signs, by which he pledges himself to deliver all the milk of so many cows, and by which lie becomes a .partner in the proposed factory. When these lists come in, if a sullieient number of cows are signed, the co-operative association legalises itself by calling a general meeting at which, the laws of the company arc framed, and by which the liiisincss Committee is authorised to raise the capital by loan for the erection of the creamery. This is done by EAOH FARMER BEINT! JOINTLY AND SEPARATELY RESPONSIBLE to the Business Committee, and tile Business Committee in their turn jointly and separately responsible to the bank for the money advanced. The milk delivered is paid for either by measure . or by weight, but it is so calculated that it leaves a fair margin to pay working expenses, interest, sinking fund, and depreciation. At the end of the working year anything remaining over is paid to the farmer as profit, at so much per pound of milk received. This financial principle of unlimited liability is the foundation on which all the co-operative factories are built, whether they he . creameries or bacon factories. As' long > as the creameries sold their butter for , cash to the exporting merchant this lin- , bility could not he accounted dangerous , to their shareholders, as control under I such sale circumstances does not present ,■ any great dillieulty. Also co-operation for ihe production of butter is undoubtedly the best method to make a high- . class article, but when such creamerhs s go over to do the inerchanting direct ; they go outside the point of utility, and ill striving for the last farthiii" of nro- . fit " ' ■ THEY OPEN THE AVENUES e OF Rr.SK. '- When 1 say open the avenues of risk you must remember that I write of fanners 0 who, though they may be tile most enlightened in the world, yet in thei r efforts to pull at both ends of the rope find that they have to entrust that other t end to others, and therefore they are obliged to place their confidence in II people who are chosen in many cases b2i cause of their political opinions. .1 say, then, that co-operative bacon factories, co-operative, egg exportation, butter export associations, feeding import associations, en-operative stores, can never show better results thaii their best " leaders arc capable of bringing forth, e but they run the risk of being led by e bad managers, and by dishonest dircc--1 tors, whereby the damage and loss to the' farmer becomes incalcuable, and spells ruin. Farmers, not content with running above named businesses, have also ventured into hank business; particularly to be mentioned in this connec--9 tiun with the Zealand Peasants' Savc ing Bank, the financial foundation of this bank being the guarantee of 000 farmers at CUO each—£»!),ooo—no 11 paid-up capital, but just this guarantee, v which the guarantors never expected to "' be called upon to pay. On this basis the paid-in savings of this bank were some n £'2.01)0.000 at" the conclusion of the last 11 balance-sheet, 1007. ALBEKTTS CAIiEEI!.

About the year 188!) Peter Alberli became the starter and director for an association of creameries, sonic ninety in all, who determined to export dicir own butter. Being successful butter-makers, they thought that, helped by such a man, they could compel the highest prices the market could give, and thereby save the merchants' prolit. Tliis man, l'eter Adler Alberti, was also the managing director of the Zealand Peasants' Saving Bank, both with offices in Copenhagen. In lilfH Alberti became Justice Minister, retiring in July, IPOS, On September S last tliis man gave himself up to the police on the self-given charge of embezzlement. In his career of manager for the Butter Export Association and director of the Zealand Feasants' 'Savings Bank he had developed gambling instincts and lost immense sums of money, which he covered by manipulating the bank accounts (bankers also for the Butter Export Association) and the Butter Export Association accounts, so that at the moment it would seem that he has swindled these confiding farmers for some .CI.IIUO.IHIO, divided about as follows :—Savings Bank, £(Hili,()00 ; Butter Export, .U3-1.-000.

This is a very severe blow to the country, but it is the natural corollary of unlimited conlidenee in the management of one for many, and in the shortsightedness of the policy which, not content with the prolit of the producer, demands also the prolit of the banker and the merchant.

WHAT HAS HAPPENED UNDER Till' AIJIEBTI M AXAf i EMENT.

is (piite possible under the management of similar associations in which farmers can be highly involved, Well were it for the farmers'if they had kept within the bounds where co-operation is to their well-known benefit—say, butter producing, pig-improving stations, ami such like ; but when they exceed these prudent bounds, and that in conjunction' with unlimited liability, then surely the pre-ent case exemplifies the saying, Ne snlor ultra cropidam. Let us now examine the depth of the injury to the farmers concerned in Alberti's management of their concerns. I say " management " with a purpose, as I would point out that until he gave himself up he was sole manager, although his greatest claim to the name of manager was in covering his embezzlements, as to the nominal (trices which he paid for the butter left much to be desired, as witnessed by tho number of his creameries being now down to about thirty-two. ' THE DEPTH OF THE INDIVIDUAL INJURY, is difficult to fathom, and this is only an attempt. Ist.—Farmers who have mortgage* on their farms held by the Peasants' Saving Bank : likely to be called in. '2nd.—Farmers who are, guarantors at CHO each in Zealand Feasants' Saving Bank. 3rd.—Farmers who have their savings in this bank. 4th.—Farmers' Insurance Company with money in the bank. oth.—Members of a sick club with savings in this bank. (Ith.—Shareholders in a creamery who have their current profits placed in this bank. 7th.—Co-operation bacon factories, etc with similar deposits. Bth—The shareholders in the creameries which were members of the butter export association will doubtless sustain a loss estimated at some ,C 8 per cow—that is, some 42,000 cows in connection with the fifty-two creameries will almost certainly be taxed at this rate to cover the loss of OJM.OOO. 1 This surely is a sidelight with a vengeance, and we must truly hope that sidelights of this nature may not be periodical in the future of Danish cooperation. But what guarantee is there that history will not repeat ilselfV Where is the necessary control, and how can Hie single farmer who, as member of his creamery, his butler export association, his cooperative bacon factory, his export egg association, his grocery store, his feeding stuff association, his bacon agency, his saving bank and other co-operative forms of this almost co-opcr-alive agricultural country be assured that he is not living on a slumbering volcano which some day may "albertise" him into economical ruin?