constant source of small expenditures, and the items of dress, fuel, and other necessary living expenses, mount to totals which would surprise farmers.

Now in a modest way the principal employees of cooperative societies must be able to enjoy reasonably what are considered to be the necessary comforts of life by the class among whom they should mingle, or they will cease to associate with that class; their general knowledge of affairs and their touch. with them will become impaired, and their usefulness lessened. If they are able men they are likely to abandon cooperation for the greater prizes of competition and the society will incur the expense of constantly breaking in new men and paying for their mistakes. There will be discontent among the employees and their families, and strong temptations to dishonorable means of increasing their income. By some of these methods, any attempt of cooperation to reduce the salaries of employees below cost of acquiring and maintaining the necessary standard of efficiency, will certainly lead to trouble. If the employee is able he will not permit himself to suffer; if he lacks ability he is unfit for responsible service. Gratuitous or half-paid service of able men can be counted on but for a short time. They will soon tire of it and refuse to serve. At the same time it is unnecessary to say that all these matters should be settled in the light of common sense, and conservatism, and with no tendency whatever to extravagance or foolishness. The employees of a cooperative society can never expect to receive the financial reward open to the high grades of ability in competitive business. A large part of the compensation received by the managers of important cooperative societies must be in the respect and esteem of the community. This respect and esteem, when assured, have a commercial value of which the society may avail itself. doubtful if there is a lawyer in the country who would refuse an appointment to the bench of the Supreme Court of the United States, although the salary is far less than those fitted for it can earn in private practice; but the honor attached to it is immense, and this consideration suffices to procure for the service the highest ability which the country affords. The

It is

same principle applies to the smaller affairs of life. If fidelity and ability in important positions in cooperative business are assured of the reward of public approbation, and the tenure of position made as secure as that customary in private business, a high grade of ability can be retained at a cost far less than competitive business will pay for it; but if such positions are permitted to become the reward of intrigue, and the incumbents subjected to suspicion and distrust, and no permanence of position opening the way to a career is assured, bright men will be driven from the service, the costly experience of paying for the mistakes of new men will follow, and cooperation will not be so well served as competition.

Influences to be Guarded Against.-Economists fear that cooperation on any extensive scale will be wrecked on the rocks of selfishness and jealousy. They expect their first manifestation to appear in insufficient provision for the salaried staff, coupled with such grumbling and fault-finding, if no worse, as will tend to drive capable men out of cooperation and into competition. They fear that while, at the beginning, able men, under the influence of a generous enthusiasm, may give bountiful service either freely or for less than its market value, they will soon tire of it, or will die and leave no successors, and that the management will drift into incompetence. This is predicted by those opposed to cooperation.

As good management is essential to success, and as there is at present greater personal advantage to men of ability in competitive than in cooperative service, it is necessary that important positions in cooperative service be made to approach the comfort of similar positions in competitive service, in security of tenure, and in general respect. As it stands now, no man can engage in cooperative service without falling in the esteem of many having important favors to bestow; they will distrust either his ability or his honesty, because competitive service being obviously the most desirable, men will be slow to believe that one having the ability to succeed in competitive life should for any good purpose engage in cooperation. The influences of stinginess and suspicion should therefore be avoided.

The influence of sentiment can never be relied never be relied upon; whatever the race may sometime become, it can not now be governed, in business affairs, by anything but selfishnessnot, of course, using the term in its offensive sense, but meaning the general desire of personal advantage. Many very estimable persons expect successful cooperation based on the idea of brotherhood. This, when analyzed, is found to mean that a few persons should do the necessary work of a community for nothing, or for less personal advantage than competitive business would afford. This analysis may not be at first apparent to some, but it is exactly what "brotherhood" in business affairs means. The influence is dangerous, for the business will not long be done except for full payment in money, as far as the necessity of the individual requires, and the remainder in honor, which has, as already stated, a market value in a good sense, as well as a bad one. Cooperation based largely on sentiment will fail.*

There will invariably be more or less intriguing for place and power in important cooperative enterprises, just as there is in political affairs, and precisely of the same character. In one cooperative society of large membership to which I belong, I note at each annual meeting the effort of tradesmen competing for its business to influence the choice of directors who may be favorable to one or the other party, and to displace those in the management whom the interfering parties deem undesirable, and I sometimes see those efforts in a measure successful. It must be expected and guarded against.

In general all influences must be considered which can be supposed to have effect upon men in charge of large interests in which, as individuals, their share is small, and who receive little or no compensation for their service. Adequate compensation either to directors or management is the most certain insurance of faithful service. Directors usually should not be paid in money, but they may be well paid in the esteem and loyalty of their associates.

* Incidentally it may be said that a community which will on the pretense of "brotherhood" accept continuous gratuitous or insufficiently-paid service in business profitable to the community, is as despicable as any other mendi

cant.

I

CHAPTER VII.

THE ECONOMIC GAIN OF COOPERATION.

T is doubtless true that the popular imagination exaggerates the possible economic gain of cooperation. The reasoning

in regard to this and all other socialistic and semi-socialistic problems assumes certain conditions in the nature of mankind which do not exist. It is assumed either (a) that mankind is moved by a desire for the general good, or (b) that by legal enactment men can be made to act as if they were so moved; while, as a matter of fact, (a) mankind is moved by the desire of personal advantage, and (b) no legal enactment can produce any other condition.

I have no occasion here to consider the effect of this undermining of premises upon the doctrines of pure socialism, which have been expounded with clear and perhaps unassailable logic if all the premises are accepted, but all reasoners are aware of the fatal effect upon logical edifices of any insecurity in the premised foundations. Illustrations occur everywhere. For example, all engineers know that but for one thing hot air is a far more economical and safer source of power than steam, and one of our greatest engineers, in ignorance of that one thing, devoted years of his life, and several fortunes, to the construction of hot-air engines; the one fatal defect, which experiment only could demonstrate, was the fact that under the high rate of temperature necessary, the working parts of the engine could not be constructed of iron and operated profitably, if at all. Hot-air engines of high power are therefore impossible until science shall disclose some new methods of dealing with iron, or the use of some other metal becomes economically possible. In like manner I am sure that those who have had most experience in concrete dealings with mankind in business affairs will agree that many plans of social reform which seem perfectly feasible to many

earnest enthusiasts will be found practically unworkable until social evolution has wrought decided changes in human nature.

And yet I am convinced that, after making all allowances, there is a residuum of economic gain in cooperation quite sufficient to justify its application in many cases, and it also seems to me certain that as years go on the tendency to cooperation will increase, as the art of practicing it becomes better understood, and that it will become economically gainful over a gradually-increasing area of usefulness, all of which will be simply a manifestation of a social evolution which is leading us we know not where.

Promoters of cooperation commonly err not only in overestimating the present cooperative power of human nature, but also in overestimating the profits of competitive business. Having constantly before them the few great fortunes which have been the reward of exceptional ability, they forget the innumerable instances of failure which investigation would disclose. The so-called Bonanza mines of Nevada yielded great fortunes to a few men, but it is doubtless true that more money has been expended in the district around Mount Davidson than was ever taken out of it. It would not be difficult with sufficient study to make a fair estimate of the average profits of competitive business, and it has probably been done, although I have not met with it, but it is unquestionably true that cooperation offers no such possible field of economic gain as the popular mind pictures to itself. I have known enormous gains to cooperative societies in single seasons, as compared with the returns which competitive methods would have brought to the members, and I have known of small losses in other seasons; but it must be remembered that in the long run cooperation will have to deal with average conditions, and it will tend to solidity and permanence if those engaging in cooperation do not do so with expectations that can not be realized. It must never be forgotten that exceptional fortunes gained in competitive business are invariably the result of exceptional ability joined to the accumulating instinct, and that cooperation offers no inducement to those capable of such accumulations to engage in its service, or if in it, to devote to