The Co-operative News (07/Oct/1871) - Origin of Dividend on Purchase at Meltham Mills

The following is a transcription of a historic journal article and may contain occasional errors.

ORIGIN OF DIVIDEND ON PURCHASE AT MELTHAM MILLS.

In the last number of the Co-operative News we promised to continue this subject, and to give an account of our visit to this society and district, and the result of our investigations. We now proceed to do so. No one ever set out on a journey to discover facts with a stronger prejudice against them than we did. We had so long been accustomed to attribute the success of modern co-operation to this equitable mode of dividing profits, and for an equal time had thought so highly of the two claimants to its discovery, that we were wishful even that our journey would prove fruitless.

Proceeding from Oldham by early train through Greenfield to Marsden, where we alighted, we had a hard but comfortable walk of nearly four miles over the hills through Meltham (a pleasant little village situated on a hill within a valley) to Meltham Mills. On our journey we were accompanied by a native who had started from Meltham at three o’clock on Sunday morning, walked to Manchester and beck again to Oldham, and from Marsden to Meltham, a distance of 30 miles before noon, simply to give a pigeon a twenty miles fly before service. We have known many good co-operators go this distance to a co-operative conference, but never for such an empty unprofitable purpose as this. However, our companion knew sufficient of Meltham Mills to direct us to the co-operative store, and to the house of its secretary. On arriving there we found what a mistake we had made by not informing him of our intended visit, for this worth officer, who joined the society in 1883, at the age of 23, and who has been in office from then till now — with one slight intermission — had taken his better half to enjoy the sea breeze, and would not return for some days. Not to be disappointed, however, we enquired for and found a director, whose term of office nearly equalled the secretary, and whose father was one of the originators of the society. This worthy friend took us to another director, with both of whom we spent the remainder of the day in making numerous inquiries as to the origin and progress of the society, but more especially as to the main object of our journey — the origin of dividend on purchase. Our friend the first director could repeat a verse or two of a ditty, which he could remember singing forty years ago when a boy, and in one of which verses the “just and true” mode of “dividing profits” was named. He could also firmly state that dividend book was now in use, and had extended at least six years beyond the period when the Rochdale Pioneers’ Society was originated. Every effort was made to procure this book, or to see some of the older shop books of the members wherein their dividend and purchases were entered, but all of no avail. Learning that one of the originators (an old man of 73) was still living within the neighbourhood, we expressed a strong desire to see him, but found it impossible. The day we had chosen was the only one at our disposal, but still was an unfortunate one for obtaining information from some of our Meltham co-operators. Every possible oral proof was offered by those in our company; still it did not satisfy their enquiring visitors, and nothing seemed likely to do so except their own eyes. It was therefore arranged that an early visit be paid to Oldham when the dividend book should be produced, which would place the matter beyond further dispute. Accordingly, a short time ago, the whole of the present directors and their secretary took a run over and produced the long looked for. With the consent of these gentlemen we are enabled to furnish the following list of members, amount of purchases, and dividend declared due to each member during the year 1840. These particulars are taken from the book itself, and in our opinion set the matter entirely at rest for the present as to when and to whom the credit is due of inventing or adopting this mode of diving profits:—

Purchases for the year 1840 Dividend at 1s. 4d.
£ s. d. £ s. d.
David Redfeam 34 4 0 2 5 11
Jonas Hirst 75 18 4 19 10½
John Wood Smith 45 9 1 2 18
Moses Worsley 51 0 11½ 3 8
Joseph Woodcock, junr. 93 10 2 6 4 8
Thomas Heptonstall 55 13 3 14
Thomas Westerman 88 8 4 5 11
Samuel Brook 89 2 0 5 17 10
John Wood, twister 90 1 5 18
John Broadbent* 48 4 1 3 4 3
John Quarmby 67 0 4 8 11½
John Sanderson 91 10 9 6 2
Elijah Hirst 36 8 2 2 8
John Redfearn, jun.* 48 1 5 3 4 1
John Crowther 40 4 10 2 13
Samuel Waterhouse 36 15 6 2 7 11½
Samuel Hirst 19 6 1 5 9
Joseph Sykes, twister. 58 9 1 3 17
Joseph Bastow 86 1 0 5 14
George Shaw 45 18 3 1 3
James Taylor 72 9 0 4 16 7
George Hirst 54 19 4 3 11 11½
William Kenyon 75 2 4 19 2
William Taylor 14 2 0 18 10
Jonas Redfeam 62 6 4 3 1
Joseph Sykes, spinner 87 10 5 14
John Kenyon* 69 2 2 4 12
George Brook 58 19 3 18
Thomas Beaumont 75 2 2 5 0
William Brook 39 2 5 2 12 2
John Nuttal 69 5 4 12 4
Joseph North 33 19 2 5
Benjamin Denton* 55 18 3 14
Samuel Dyson 36 14 2 8 11
Jonathan Wadsworth 78 13 5 4 0
John Wood*, weaver 110 13 7 6
Robert Lockwood 53 4 3 10 11
Jonas Taylor 57 9 3 3 16
Joseph Littlewood 52 0 11 3 9
Samuel Mellor 40 3 4 2 13
William Mellor 46 10 3 2 0
Daniel Mellor* 108 15 11½ 7 5
James Johnson 53 11 11½ 3 11 5
Doctor Taylor 33 3 2 4 3
Robert Wilson* 41 14 2 13 0
William Taylor, bleacher 70 13 10 4 14 3
James Hirst*, Greave 87 7 7 5 16 6
John Patterson 54 5 3 6 10
James Preston 96 2 7 6 8 2
Enoch Dyson 48 0 3 2 8
Joseph Bottomley 35 8 7 2 7
James Redfeam 39 16 8 2 13 1
John Redfeara, senr 44 4 3 2 18 11
George Redfearn 83 17 5 11
John Smith 61 0 4 1 4
Daniel Wood* 40 6 1 2 9 11
William Wood 40 16 2 2 13 5
Joseph Brook*, farmer 26 6 0 1 5 0
Robert Lunn 61 2 4 1
Philip Shaw 62 0 6 4 2 8
John Carter 55 18 7 3 14 7
Henry Worsley* 40 16 8 2 14 5
Samuel Stead 75 2 2 4 16 0
Uriah Woodhead* 35 18 2 1 5
Edmund Redfearn 38 7 6 2 11 2
George Barrowclough 46 10 10 3 2
John Barrot* 22 8 5 1 9 10½
Joseph Woodcock, senr 44 9 11½ 2 16 6
David Shaw* 34 2 9 2 5 6
George Stead* 33 1 2 3 0
Samuel Lockwood* 61 5 1 4 1 8
James Houghton* 16 5 1 1
Joseph Smith* 19 11 1 6 1
Charles Taylor* 9 8 6 0 12
Mrs. Hinchliffe 66 6 8 4 8 1
Sarah Littlewood 11 9 7 0 15
Sarah Brook 18 8 1 4
Kitty Manchester 78 5 5 4 4
Barbary Hirst* 9 18 9 0 13 3
Jane Beaumont* 28 1 8 1 17 5
Martha Reynor 84 19 5 12 7
Sarah Wood, Folly 25 9 1 13 11
Sarah Shaw 28 6 2 1 17
Sarah Bottomley 45 17 3 1 2
Nancy Walker 19 18 1 1 6 6
Sarah Lockwood 59 3 3 18 11
Sally Whitwam 97 4 8 6 7
Betty Donkersley 71 13 4 8 11½
Mary Oldham 37 5 10 2 9
Charlotte Patterson 44 19 2 2 14 11
Joseph Brook, Fluckhollings 21 4 8 1 8 3s
John Taylor, Greave 35 11 8 2 6
Archibald Quarmby 11 6 7 0 15 1
Hannah Quarmby* 4 19 1 0 6 7
* Still living

Of the members comprised in the above list, there are still 21 living, all of whom can testify that dividend was paid on purchase as far back as 1840. The eighth rule of the society, which the secretary assures us remains as it was in the beginning, reads as follows :— "That all moneys arising from the contributions shall be laid out in the purchase of goods for the shop, and the profits arising therefrom shall be equally divided amongst the members according to the amount each purchased at the shop." Not content, however, with this testimony, we have been kindly favoured with the following certificate, drawn up by the secretary, and signed by the old member to whom we have already referred:—

To all whom it may concern.

This is to certify that when the Meltham Mills Co-operative Store was established, in 1827, it commenced paying profits on the amount of each member's purchases at the store.

Witness my hand, this 30th day of September, 1871, as one of the founders of the said store,
JOHN BROADBENT.

This document, coupled with the dividend book still existing (and which ought to occupy the first place in our contemplated co-operative museum), places the matter beyond dispute, and until some other co-operative Tichborne, not only jays claim to being the originator of this principle, but proves it, we must award the palm to Meltham Mills. We cannot account for the fact of this society being entirely lost to the co-operative view for so long a period — and especially during those periods when a variety of claims have been put in for the credit and honour of inventing the dividend idea — on any other ground than that the society was never certified, and to some extent was consequently unknown to any except its immediate neighbours.

The following figures, which are compiled from the dividend book, show the dividends declared on purchase during each year from 1840 down to 1870 inclusive. Since 1958 two separate and distinct accounts have been kept of groceries and corn, and the profits realised from each divided on the amount of purchases of each. This step was deemed indispensable to the success of the society, inasmuch as purchasers of the latter alone received a large amount of profit made from and belonging to the purchasers of groceries. If it were not for the immense labour involved, it would be desirable to carry this principle out at other places, and upon many other articles:—

Years Dividend per £ on
Groceries Corn
£ s. £ s.
1840 1 4
1841 1 7
1842 1 4
1843 1 7
1844 1 6
1845 1 9
1846 1 10
1847 1 5
1848 1 8
1849 1 3
1850 1 6
1851 1 7
1852 1 6
1853 1 5
1854 1 0 0 6
1855 2 8 0 5
1856 2 6 0 4
1857 2 7 0 5
1858 3 2 0 7
1859 3 3 0 9
1860 3 5 0 11
1861 3 9 1 0
1862 3 10 1 0
1863 3 10 1 0
1864 3 11 1 1
1865 3 9 1 1
1866 3 8 1 0
1867 3 1 0 10
1868 3 8 0 11
1869 3 8 0 10
1870 3 9 1 0

When one considers the mode in which their business at Meltham is conducted, it leads irresistibly to the conclusion that the dividing profits on trade is but the natural outgrowth of an old custom. Every ore knows that the old ‘badgers’ who gave credit furnished each customer with a small shop book, in which all his purchases were entered until a settlement took place, which varied according to the general condition of the people, the period between pay days, &c., some paying weekly, others fortnightly, and others never. The Meltham people adopted this principle of entering purchases in small books, and allowing fortnightly credits. At the year’s end, finding a profit, decided to apportion it according to the purchases of reach, member during the year, as shown by his. purchase book.

In order that the society might be well protected against losses, their rules require each member to pay within the fortnight, or to sacrifice the dividend made upon such overdue account. This society appears to have a great liking for fortnightly clearances. It not only compels payment for goods within that period, but according to rules 18 and 19 provision is made, "that if any member or shopman use abusive language to each other he shall, on proof being offered, be fined not less than 6d., nor more than 5s., provided complaint be made within fourteen days."

Credit being permitted and practised, every protection afterwards appears to be made to keep the society in smooth water, or from leakage. If any member suspect dishonesty on the part of the board, he can call a special meeting of the whole body of members, and have a thorough investigation made. If the shopman permits credit to any non-member, he does so at his own risk, and the amount of loss must be taken from his wages by the board ; but if the board omit to do this, the secretary is compelled to take it from the board's profit or capital. Any contribution due from a member, and not paid within proper time, is deducted from his profits, and a corresponding sum is deducted from the amount of his annual trade, dividend being paid on the remainder only. Although dividends are declared but annually, yet an account is prepared quarterly, showing the gross profit that ought to be made. This result is obtained by casting out the goods at cost and se prices, and after making what is considered a reasonable percentage of allowance for loss in selling out, the shopman is held responsible, and expected to account for the remainder.

The shopman is elected by the members in general meeting, or, with the consent of a general meeting, the board may appoint him. He has the power to elect all necessary assistants, subject to the approval of the board, and is held responsible for the proper performance of their work. The directors are elected annually, one retiring each year, but contrary to the usual practice of co- -operative stores, the retiring one is not eligible for re-election. There have been times when a good and highly respected director was retiring, that the members have set this rule at nought, and maintained that rules were made to be broken, and have consequently re-elected him. When more than one person is nominated for office, the elections take place by ballot, thus proving that even Meltham co-operators are favourable to this mode of voting.

A distinction is made in the rules of this society such as is seldom met with in any other. All male members are required to take up at least six £1 shares, paying sixpence per week contribution until it is paid up, while female members (if not married nor householders) are required to take up only three £1 shares, paying half this rate of contribution. If any member desires to leave the country or is unable to pay up his shares, he may withdraw from the society, when he | is entitled to receive a dividend on the amount of his purchases made so far during the year, the rate of such dividend being calculated upon the average of the past three years.

Lancashire co-operators frequently urge that a committee of ten or twelve is too large to manage a business well, and that we ought to reduce all our committees to six or seven. In some societies and companies this has already been done. Our Meltham co-operators however had but seven of a committee for many years, and found this number too large, and consequently reduced it to three and secretary, and they assure us this now works well. Unlike some other districts where political feeling runs high, these ancient co-operators do not form new societies on political grounds, but either accidentally or otherwise they elect an equal number of our two extreme parties. The present committee consists of two Radicals and two Tories, and are as agreeable a quartet as Yorkshire can produce.

The last annual] balance sheet of this society — the 42nd — shews that the members number 99, against 94 of the previous year, and that the sales were £5,088 for the year. The share capital is £854, including interest, and the profit payable is £670, being dividend £3,169 of groceries, at 3s. 9d, in the pound, and on £1,525 of corn, at 1s. in the pound.