Chapter VII

FREEDOM FROM DEBT


A principle of cooperation is cash business. This is essential to the success of cooperatives. An original slogan of the founders of the cooperative movement was, "A plan to get us out of debt." This policy applies to the individual carrying goods away from his retail cooperative store, and to the wholesale requiring cash from the retail society which distributes the goods. While there are violations of this rule, still cash business is insisted upon as a principle.

In profit business we see the tendency to pile up debts as a determined policy. "Your credit is good here" is a common store invitation. Installment buying prevails. This expands until it be- comes international. International indebtedness spread across the world now represents staggering figures. Most of this will never be paid. It is, moreover, a constant source of international animosity. On some occasions, gunboats are sent to take possession of customs houses to collect debt owed by one country to another.

International trade in some fields may promote international friendship, but international debts are common causes of hostility. Cash policy of cooperatives is a step toward justice in business. When one takes goods or services, he should leave something of equal value, otherwise the transaction is in a state of unbalance. Out of that unbalance hostility arises. Surpluses which cooperative societies develop, by shunting into their own treasuries the difference between the cost price and the selling price, are bulwarks of strength. These united funds are made available by one society to another. They are not used for purposes of competition and hostility among these societies.

Pacifists have taken a page out the cooperative book by proposing the "cash and carry" plan, which requires that any nation at war shall pay cash for what it buys in other countries and carry the goods away in its own vessels. Since profit commerce is war, peace might be promoted if such cash business were a universal rule.

Cooperative banking, which is now developing on a large scale, offers peace possibilities. It strengthens the cooperative movement locally. It is making cooperative societies independent of capitalistic sources of credit. It supplies means whereby members of cooperative societies may protect their surplus savings. Already it is making notable contributions to expansion of cooperative business. For example: The Cooperative Wholesale Society's Bank, of Great Britain, has total resources exceeding L150,000,000. Its annual turnover is L1,334,000,000. These vast funds are available for stabilizing the business of cooperative societies. This is different from capitalistic banking, which is notorious in financing wars. These cooperative funds are administered without profit. This banking system is banking in the interest of depositors and borrowers. It is a factor in the stabilization of society and an aid in production and distribution for service.

In all the forty cooperatively organized countries, cooperative banking is developing. It serves not only to promote distribution of commodities, but cooperative insurance also is closely allied with this banking. Both of these are moving on toward expanding international cooperative organization. Cooperative banking helps to supply people with things they need to consume. It makes no profits from their wants. Armaments and materials of war, which spring largely from the profit urge, are not among the things people most need to consume.

The cash practices of cooperatives make for security in business and in the national economy. This is in contrast with the piling up of debts that characterizes profit capitalism. While many profit businesses are conducted on a cash basis, credit is offered everywhere. When periodic waves of deflation come and there are more goods than customers, the merchant goes out on the streets and urges customers to buy on credit. The prevalent way of business begins with the individual in debt. In the master country of the world, the arsenal of finance, the workingman is in debt to the merchant, municipalities are so in debt that they can not pay schoolteachers decent wages, and the national debt approaches the total value of all the property in the country. It was this condition of universal indebtedness that created the unbalance and discontent that precipitated the last great wars. Cooperation points to a way of solvency and of peace.


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