IRC

Celebrate Cooperatives
The Spirit of Togetherness

The principles of credit union philosophy and operation are grounded in the principles of the Rochdale pioneers. One member, one vote, member ownership, cooperation and education are all essential parts of the credit union ideal. In celebrating Credit Union Day and week during cooperative month, credit unions honor their cooperative roots.

The Welsh social reformer, Robert Owen, pioneered cooperatives in the British Isles. In 1821, he launched his magazine The Economist, bearing his cooperative motto, "Each for All and All for One." His dream was to establish a cooperative society, operating on cooperative principles. New Lanark, Scotland offered him the setting in which to attempt his experiment.

As manager of the cotton-spinning mill in the town, he was in a key position to influence the whole community and introduced reforms to the factory, including better housing for workers, good ventilation in the workplace, rest periods and education for employees, and clean, well-lighted rooms in the factory. He also set up a company store and put the profits to work in the community. With the assistance of a Quaker industrialist, William Allen and his associates, Owen built New Lanark into a model of his dreams for cooperative communities. Eventually he took his ideas to the United States where he spoke to presidents and congressmen, civic leaders and industrialists about his ideas. He established his ideal community at New Harmony, Indiana.

While his ultimate goals were never realized, Owen's ideas had a tremendous impact on reformers during the 1830s, particularly in Britain. Dr. William King of Brighton started a cooperative store in that town and published The Cooperator, which had an immense influence on the spread of cooperative principles and ideas. The times were ripe for change. Industrialization in England added new elements to the already existing social unrest. Child labor, long working hours under poor conditions, the displacement of cottage industry and the famine years of the 1840s produced conditions demanding reform and revolution. To some, cooperation seemed the answer to alleviate these ills.

In Rochdale, near the heart of industrial England, the changes threatened a whole way of life. Many displaced cottage workers in the town were weavers and other artisans who saw a bleak future as they watched the spread of machine-driven production and the vanishing of hand-driven looms. They viewed the growth of nearby industrial cities, like Manchester and Leeds, with alarm. In defense of the livelihood and their way of life, some of them joined the Chartist movement, whose members were demanding a secret ballot, universal suffrage and no property requirements for members of Parliament. Others sought reform through strikes and riots.

In Rochdale, a group of 28 weavers and artisans turned to cooperation. Some of them were Chartists, many were Owenites, all of them were committed to establishing a cooperative experiment based on sound principles. In 1844, they formed the Rochdale Equitable Pioneer's Society. Together, they laid down the principles of the Society and rules for operating the store. On August 11, 1844 the Rochdale Society was formally established. The executive committee consisted of Miles Ashworth, president, John Holt, treasurer and James Daly, secretary. In addition to these officers, there were three trustees and five directors, all elected annually from among the members. Officers held quarterly meetings to give an account of their performance.

The Rochdale Principles included

• Open voluntary membership.
• Democratic controls, limited return, if any on equity capital.
• Net surplus belongs to user/owners.
• Continuing member education.
• Cooperation among cooperatives.

The community store would be their first endeavor. On Saturday, December 21, 1844, the store opened at 31 Toad Lane in Rochdale for 8-10 p.m. Two rooms on the ground floor with bay windows fronting on the lane were the rooms where the cooperators conducted business. Flagstone floors and white-washed walls and ceilings provided a bright interior, though the local gas company refused to provide gas for lights, so they had to depend on candles. The store was sparsely furnished with benches for customers and a small desk for transacting business. Commodities sold included butter, flour, sugar, oatmeal and tallow candles.

Promptly at 8 p.m., James Smithies took down the shutters, and the shop was open for business. The first customer was a local woman who came to buy sugar. Samuel Ashworth had the honor of making the first sale. He was so nervous that he couldn't get the sugar properly wrapped, so the customer carried it home in her apron.

At first, sales were slow and customers few, but by March 1845, they were able to expand the shop's hours to all evenings but Tuesday, and added daytime hours on Saturday. At the end of the first year, the Society had 74 members, sales of £710, capital of £181, and a profit of £22. The store survived and grew. It became a model for other cooperative ventures in England and elsewhere.

The Toad Lane building is now a museum commemorating the cooperative principles of Rochdale.

Social conditions, similar to those that produced the cooperative movement in England, also produced the Raiffeisen and Schulze cooperative societies in Germany. Poverty, poor working conditions, low wages, famine and ultimately active revolution inspired Freidrich Raiffeisen in rural districts and Hermann Schulze-Delitzsch in an urban setting, to organize credit unions among rural farmers and urban workers. Credit unions eventually became a vital part of the cooperative movement. They are still upholding the Rochdale Principles of cooperation.

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