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manner; five per cent. per annum is allowed as interest on the shareholders' capital, and the remainder is divided among the purchasers, each customer receiving an amount proportionate to the sum which he has expended in purchasing commodities at the store. The Rochdale Pioneers' Society, which was started by workmen, and began in 1844 with sufficient capital only to buy one chest of tea and a hogshead of sugar, now does a business of £250,000 a year. There can therefore be no doubt that, when skilfully managed, co-operative stores are capable of achieving very striking financial success.

The advantages which co-operative stores afford to their customers are undoubted. It is therefore probable that the principle of ready-money payments, the main cause of the success of co-operative stores, will, in time, become general in many branches of trade.

QUESTIONS ON CHAPTER IV. Trades' Unions, Strikes,

and Co-operative Societies. 1. What is a trade's union?

2. What two functions does a trade's union usually fulfil?

3. Why are trades' unions unpopular with the capitalist classes ?

4. What is the connection between trades' unions and strikes?

5. What is a strike? 6. Can it be shewn that men have no right to strike?

7. In what respect has the conduct of trades' unionists frequently been blameworthy?

8. Explain some of the rules by means of which trades' unionists have endeavoured to raise the wages given in their own employments.


9. Describe the similarity between the rules of trades' unions and the etiquette of the medical and legal professions.

10. Give an instance of the combination of employers, and shew that their right to combine for the protection of their interests is as incontestable as that of their employés.

II. Shew that no good can be done by attacking the right of combination.

What is the real cause of strikes and lock-outs? 13. How can this cause be removed?

14. Describe co-operation, and give an example of its successful working.

15. What is copartnership? Give an illustration.

16. Do copartnerships involve any pecuniary sacrifice on the part of the employers?

17. What are the special advantages of copartnership?

18. What is a co-operative store? Upon what principle is it based?

19. Why can lower prices be charged in a co-operative store than in an ordinary shop?

Give a brief account of the Rochdale Pioneers' store.



1. Write an exercise describing the advantages which workmen obtain from combination, and point out that in driving a bargain with their employer it is only by means of combination that they can place themselves in a position fully to protect their own interests.

If you were a member of a trade's union, and a strike were resolved upon, would you advise that the strike should be commenced when trade was active or when it was dull?

3. Do you think co-operative stores do harm to the interests of the community because they injure the retail grocers and other tradesmen? And if not, why not? F.



On Foreign Commerce, Credit, and Taxation.

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This section comprises chapters on Foreign Commerce; Credit and its influence on prices; and Taxation. It will perhaps appear that foreign commerce and credit should have been explained in the section headed “The Exchange of Wealth.” It however seems that in a short and elementary treatise there are many advantages in séparating the subjects usually comprised under the head "Exchange of Wealth.” A knowledge of the meaning of value and price, of the causes which regulate the prices of commodities, and of the true nature of money, is essential to a right understanding of the causes which determine the respective amounts of rent, wages and profits. At the same time the subjects of foreign commerce and credit, if introduced prior to the consideration of the distribution of wealth, might have wearied and perplexed the beginner. These subjects have therefore been reserved for the 4th and last section.

CHAPTER I. On Foreign Commerce. A development of Foreign Commerce ensures division of labour. The great advantage derived from foreign commerce is that which is obtained by division of labour. If countries trade freely with each other, the natural consequence is that each nation gradually increases the production of those commodities for the manufacture of which circumstances have specially adapted it ; at the same time it decreases the manufacture of those commodities which it has no particular facilities for producing. In this way the cost of production is diminished, and capital and labour work with their maximum efficiency. Take an example : France has great natural advantages for the manufacture of wine; her climate and the habits of her people cause the cultivation of the vine to be car. ried on with great success. Such countries as France, therefore, produce not only sufficient wine to supply their own wants, but also enough to satisfy the demand of countries like England, the climate of which is unsuited to the cultivation of the vine. The advantage of foreign trade is that we get from foreign countries either what we could not produce at all for ourselves; or else we get commodities in exchange for a smaller expenditure of labour and capital than it would cost us to produce them ourselves.

Protection is disastrous to the general interests of the Community. The West Indies, and some of the Southern States of the American Union, have special advantages for the cultivation of sugar. Were foreign commerce unrestricted these countries would probably grow sugar for the whole of Europe. In France, however, the duty on imported sugar is so heavy as to prevent its consumption. This duty is levied with the view of “protecting" the home industry. The French protectionist would say, “There is a large class of industrious people in France employed in making beet-root sugar. The cost of producing this sugar is greater than the cost of producing sugar in the West Indies from the sugar-cane. If the West Indian sugar were freely imported into this country, it would be sold for a smaller price than would recompense the producers of the beet-root sugar. It is therefore expedient to levy so large a duty upon the West Indian sugar, as would raise its price above that of the homegrown sugar, and thus effectually prevent its importation. By this means, the industry of France will be encouraged and the interest of the beet-root sugar-growers will be protected.” Such an argument may at first sight appear plausible, but it quite overlooks the fact previously demonstrated, that a demand for commodities is not a demand for labour. If the sugar-growers of France were undersold by the sugar-growers of the West Indies, the former might for a time suffer pecuniary loss; but the ultimate result would be that they would gradually withdraw their labour and capital from a comparatively unremunerative trade, and employ them in some other industry, such as the cultivation of the vine, for which France possesses exceptional advantages. Thus there is no loss, but a transfer of capital and labour from a comparatively unremunerative employment to one in which they would work with greatly increased efficiency. In such a case, the total production of wealth is increased, and the national capital consequently augmented.

The effect of Protection on Wages. But there is still another view of the matter. In the argument which we imagined a French protectionist would use to justify the prohibitive duty on imported sugar, the interest of one class was entirely overlooked; this class is one for which protectionists have usually no consideration whatever. They busy themselves much in protecting the producers of commodities, but they never consider the consumers of commodities. To return to the illustration of the sugargrowers. Sugar is so universally used as to be almost a necessary of life. Any circumstance which reduces the price of sugar tends to increase the real reward of the labourer, and confers a direct benefit upon thousands of people. If any necessary of life is cheapened one of two

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