F 834 .L5 G374x| 1917 ■vrf / > LIBRARY Brigham Young University 9 / 7c THE QUARTERLY JOURNAL or ECONOMICS VOLUME XXXI CAMBRIDGE, MASS., U.S.A. PUBLISHED BY THE HARVARD UNIVERSITY PRESS 1017 COOPERATION AMONG THE MORMONS ^ SUMMARY Introduction; importance of cooperation in the early economic his- tory of Utah, 461. — I. Aasociative enterprises in colonization, 463. — Mormon colooieation policy, 463. — Cooperative building of irrigation Bystema, 466. — Division of the irrigation water acquired, 468. — Other kinds of eouc^rted community effort, 472. — II. Cooperative stores; causea leading up to their establishment, 473. — Zion's Co6pen^ tive Mercantile Institution, 475. — The smaller retaU stores, 489. — III. Industrial co6peration. Woolen raills, 490. — The beet sugar industry, 490. — C<>n8olidat**d Wagon and Machine Company, 493. — Beneficial Life Insurance Company, 494. — Hotel Utah, 495. — IV. Present status, 498. When the Mormons entered Utah in 1847, they found themselves in what they regarded as virtually a desert. Sage brush, interspersed with bunch-grass, covered the hills and valleys, leaving only a green fringe of willows, wild rose bushes, and cotton wood trees along the few small creeks. Scattered tribes of Piutes — destitute nomads — were the only inhabitants. True, the moun- tain scenery impressed its rugged grandeur on the pioneers, but that did not reheve the desolation of the land itself. It cannot better be described than in the words of Captain Howard Stansbury, of the United States .Army, who surveyed the Great Salt Lake Valley in 1849. One of the most unpleasant characteristics of the whole country . . . is the entire absence of trees from the landscape. The weary travel- ler plods along, day after day, and week after week, his eye resting upon naught but interminable plains, bald and naked hills, or bold ' Th« writer irishea to ezpr«a> hisainoere appreoiatioo for the lundneM of Mr. Joha CirmhAin Brooks, who ba* m«de numrrou* h«lpful •ligs^^tiooe coocerniac thi* artici*. 461 462 QUARTERLY JOURNAL OF ECONOMICS and rugged niountaixi8: the shady grove, the babbling brcx^k, the dense and solemn forest, axe things unknown here; and should he by chance light upon some solitary oottonwood, or pitch his tent among some stunted willows, the opportunity is hailfti with joy, as that of unusual good fortune.* To reclaim this cheerless region, the pioneers diverted the water of the mountain streams to the parched ground, thereby being the first among Anglo-Saxon people to practice irrigation, which has later proved to be the very economic salvation of the arid West.* Gradually, but not without tremendous difl5culties and hardships, the work of reclamation was extended and an increasing area of arable land acquired. Where formerly existed only a l)arren waste, now flourished thriving cities and towns; in place of the sage brush grew waving crops and verdant orchards. Nothing could be more eloquent of the industry and persever- ance of the pioneers of Utah than the manner in which travelers, from 1850 to the present time, in describing their impressions of the state, have used the Biblical phrase, " made the desert blossom as the rose." WTiat were the economic forces which brought about this transformation — the methods used, the under- lying social causes ? Too httle consideration has been accorded these questions. True, the Monnon religion has received ample attention. But in all the voluminous mass of labored explanation, partisan propaganda, sincere criticism, zealous defense, confessed antagonism, and dishonest villification which constitute the litera- ture of that subject, the meageniess of scholarly effort to understand the economic life of the founders of Utah is a'^touishing. " Is it not worth while," asks Professor ' Captain Howard Staosbury, I,' !s. A., Kxplorations and Surv«y of the V»lley of the Great Sail Lake Frintt-il by order of the United States Senate, 1862, p 12». > Chiiriea Uillman Brough, Irritcatiun in Utah. Johoe Hopkiua Uaiveraity Studies in HifttoricaJ aud Political Science, Baltimore, 1S9S, pp. 1-3. Digitized by tine Internet Arciiive in 2009 witii funding from Briginam Young University littp://www.arcliive.org/details/cooperationamongOOgard COOPERATION AMONG THE MORMONS 463 Ely, in one of the initial ventures into this field, " to pass over the religious controvereiee connected with Mormonism and their outcome and examine into the achievements and manner of life of the Mormons, so far as these things relate to economic and social matters? " * Within the limits thus laid out, one phase of such activities of the people of Utah stands out as more important and significant than the oUiers — namely, their practice of cooperation. Not only did codperation enter vitally into the economic life of the first settlers, but it has had a most far-reaching effect on their subsequent commercial and industrial affairs. With the nature of the Mormon system of cooperation, its characteristics, effects, and present status, this article purposes to deal. The cooperation practised among the Mormons is found to be of three kinds, each distinct from the other, but each a logical development of the preceding type. They are: first, a period of informal but nevertheless highly effective and efficient cooperation, extending from 1847 to 1868; second, the foundation and growth of cooperative stores from 1868 to approximately 1890; and third, the development of a system of cooperative industrial enterprises, beginning in 1890 and continuing until the present time. If the term cooperative colonization appears at first glance to be a misnomer, it nevertheless accurately exprttwee the means by which the early settlement of Utah w at* effected. A brief survey of the Mormon policy in colouiring the territory is necessary in order fully to • •• EooocHMc A«pM>t* oi Mormonlwn.- H»rp«r« MacmIm. April, 1908. toJ. ovi. 464 QUARTBRLY JOURNAL OF ECONOMICS realiie the truth of this. The first great fundamental fact from which all study of the jjeriod must proceed i« that the Mormons were in Utah to build a home. The settlers of neighboring states were drawn west by pros- p>ects of mineral wealth or to engage in trapping or stock raising; but the Mormons made their memorable trek across the plains in search of a permanent abode where they could remain without further molestation. ' Hence their scheme of colonization was one of home building. The towns and villages in Utah, therefore, were not established inadvertently or by individual initiative. On the contrary, they were a result of very de^ite plans. When the first settlement had been made on the shore of the Great Salt Lake, parties were immediately dis- patched into the neighboring valleys to discover other sites available for colonies. If a place was approved. » group was detached from the old settlement, whj«7fa migrated bodily to the new location. Having rearh«d the designated spot, the members did not then separate, but built their log houses together, often in the shape *ii a fort. Thus instead of isolated individual farms, as in the Middle West, there grew up a system of compact village communities. The cause was twofold. " Whan the settlers first occupied the land, it was necessary for them to remain in communities suJ0&ciently large to repel Indian attacks and it was a policy of the church to encourage the building of compact towns rather than detached ranches, thereby enabling the people to meet mcHre often socially — an antidote for nostalgia and a > " Lb CaliforoiA, in Colorado, in Nevkda. is Idkho, *ad in MontAn*. minraa. rsther thaa acnouituTe, wa» the motive wioeh indaoed tb« otiffXkMl aetUement by Aatmrionam Mad irr^tion grew up only as rb MljnDct to the iniiih>t oamp. In Wjrooainc . . . ■teek miaut w«a tb« firtt pursuit. . . . In WMhington Mtd Oregon the 5rgt wttU mitta wmn nmdt *loa( th« Kamid c>oa*t. . . . But in Ut«h tha motire waji bom* bvBdiac tiad Htm pwrwuit wa« kchoultuna for its owa a«ke." Wil]i»ai K. Smythe, TIm Coaqoaat et Arid Anwicft, New York, 1906. pp. 61-^2. -^ COOPERATION AMONG THE MORMONS 465 great assistance in maintaining interest in the church." » The efTect of such a system was a more sensitive com- munity consciousness, greater cultural activity, and an easier adaptability to follow leadership in a common enterprise. The leadership was ready at hand in the ecclesiastical officers, and the peculiar physiographical and climatic conditions of the new country soon demon- strated that common and united effort was essential if the people wished to survive. In the very nat^ire of things this first common effort had to be agricultural. The immediate need was to provide a food supply, llie pioneers had brought only a meager store of provisions with them, because of their hasty enforced departure from Illinois. The hazardous journey of tliree months across a thousand miles of prairie precluded any reliance upon the East for susten- ance, nor did the Mormons, remembering their recent experiences, wish to be thus dependent. They nmst feed themselves or starve. Accordingly, Brigham Young advised his co-religionists to attach themselves at once to the land and raise their owti food. He exhorted them strictly not to attempt at first any min- ing enterprises, for he reahzed that as conditions then existed such pursuits would separate and demorahze the people, thereby endangering the identity and per- manence and even the temporary existence of Mormon colonization.* As a colonizer, facing a strictly practical question, he perceived what has since been so plainly evident to the sociologist and the historian — that the > R. 8 B*ker. " The Vitality of Moftnoiiism," Centuo M»«*riD«. Juof itt04 p. 171. ' ' « The MormoQ people ao a whyle foUowed this advice undeviatingly. Obedient to orders, they p^d no attention for many yeai* to the vaet mir.eral wealtli lying in the mountaiM at their doora. but rji.tevxM themscKeo with aaaxiring their future by agriculture. It remained for suUn-wu-nt iwm- Mormon settlers to open up the nch Utah mines Later, however. Mormone entered the .'mniii« field and today among their number are many of the leading numiig men in ihe etate. 466 QUARTERLY JOURNAL OF ECONOMICS stability of character of any people goes with foothold on the soil. The vital need of food crops being so acute, the prob- lem was reduced to one of production. And the new conditions made that an issue of such magnitude as to stagger a people less determined than the Mormons or a leader less resourceful than Brigham Young. Accus- tomed to the methods of farming used in the Mississippi Valley, they found here a mean annual rainfall of ten to twenty inches only. A new system of agriculture had to be devised; that system was irrigation. It is fairly certain that Brigham Young knew nothing of irrigation before reaching Utah. WTiether he acquired a knowl- edge of it from the Indians, or indirectly from the Mexi- can Spaniards, or otherwise, is immaterial. The thing of importance is that it proved precisely the method to solve the problem which confronted the pioneers. After the first experiment with irrigation proved successful in Salt I.»ake City in 1847. all the settlements made it the basis of their farming. Wlien a colony had been located, the very first mea-sure was the construction of the canals and ditches to carry the water from the mountain streams to the fields. In many instances it had to be brought a considerable distance, and only the simplest hand tools were available. The indi\'idual could not expect to cope with such a formidable task successfully. Only by the concerted effort of the whole community could the farmers secure the water needed to irrigate their crops. So " a destitute people, having no resources save the genius of their leader and the labor of their own hands, resolved to associate and organize their efforts to bring the water on, as the people of Holland were compelled to cooperate to keep the water out." ' Thus the Mormons began the practice of that 1 ClMriai H'ti'T'*" Brouch, Irricfttion in Ut»h, pp. 12-13. COOPERATION AMONG THE MORMONS 467 great system of cooperation which has since proved to be their economic salvation. Acting as a unit, the whole colony built the irrigation system. First, the dams to store the water in an arti- ficial reservoir, or the headgate to divert it, were con- structed; next, the canal itself was dug; and finally, the ditches and subditches leading to the individual fields were made.' If the work was unduly extensive or diffi- cult, all assisted in each of these separate phases, but usually some division of labor was possible. Generally the bishop of the town, who was the ecclesiastical exec- utive officer and chief spiritual adviser, acted also as supervisor of this important practical part of colonizing. He it wa^ who assigned the men to their various ta«?ks and exercised a general oversight as to the entire opera- tions. That such a method succeeded was due in no small part to the remarkable efficiency of the Mormon church organization « with its ingrained habit of impUcit obedience to authority. Of the effect of tliis influence Professor Ely says: " Individuafism was out of the question, and in Mormonism we find precisely the cohesive strength of religion needed at that juncture to secure economic success." « It was no uncommon thing, -> 'The Kre«in<»* of tbi« Uwk apjx-are from the folJowin« descnption of irri«»tiou by Brou«h- •• The methods of irri«iiUon pursued by th«ded into branch canals, and the« a«ain divided into laterals leading to eTery f^nj so K.n« as there was water to be distributed. Eftch farmer had canal* U»din« from the aiain on.- to every field, and gcneraUy along the whole length of the upper side ol eacJ. field. Each field had bttle furrow, a foot or n.ore apart and parallel with each other, ninnin* either lenKthwiae ..r c.roMwi^ or diayor^nlly acrois as th. slope at the land required Into th-se furrowii the water was turned, one or more at a tune. M the quantity perD.ated. until it had flowed nearly to the other end. when it wa« tamed into the next furrow, and so on until all were waUred." Irrigation in I Uh, pp. ^10. « " So far as I can judge from what I hare seen, the organisation of the Mormons iS the mo«t nearly perfect piece of sociaI mechanism with which I have ever, in any way. eome in conUct. excepting alone the Gennan army." R T. Ely. " Eooaomio Aspeet. ol Mormonisin." Harper's Magazine. April. 1003, p. 668. • Ibid., p. 960 468 QUARTERLY JOURNAL OF EC0SnS41CS at an early day in Utah histor>% to hear the bishop in the Sunday ser\'ices order a certain number o( men and teams to report for work on the canal during the ensu- ing week. For the invariable answer to this summons economic necessity was perhaps responsible a^ well as rehgious training. In such a way the canals were provided. It need hardly be said that the pioneers performed this labor without pay. Their method of procedure was not concerned with capital or wages. By the very exigencies of the situation there could be neither. The only capital they possessed consisted of their own united strength and of this they contributed in approximately equal .shares. Each man could therefore justly antici- pate a fair proportion of the only remuneration possible to hope for — namely, the use of the water from the completed irrigation system. When the water was finally secured, the question of its distribution was settled without difficulty by the apphcation of simple cooperative principles. Each man was allowed the use of the water in such quantity and for such a length of time as was proportionate to the labor he had performed in the construction of the canal. In calculating this the use of his horses or oxen was counted in, if he had any. The right to continue utiliz- ing the proportion of water assigned was dependent upon whether the individual, with his land, could make what is now legally termed a " beneficial use " of it. If not, he must give up the unused surplus to others who needed it, the amount of compensation being based on the labor of the first in the original building. Simi- larly, when a man moved from the particular irrigation system, he disposed of his water right to those staying. At first the irrigators looked rather to the use of the water than to any vested interest in it; but when finally COOPERATION A MONO THE MORMONS 469 they secured legal title to it, as ** shares of water," (computed either according to " second feet " or to the quantity needed to irrigate an acre), the previous relative distribution remained absolutely unchanged. The general result was a practically equal di\'ision of water rights. Several causes combined to bring this about. In the first place, as has already been suggested, the cooperators all did substantially the same amount of work in the same time, because, by reason of their universal poverty, no one was equipped to do more than the man at his side. Again, they dreaded a monopoly of the water, for it was clear that their ability to farm depended upon each individual possessing the right to utiUze it. Finally, Brigham Young had inaugurated a system of land ownership which tended towards an equitable result in the ownership of the water. Under his plan each man was to receive a tract of land no larger than he could farm by the most intensive cultivation. Accordingly, when Salt Lake City had been laid out into squares, or " blocks," of equal size (the same plan was subsequently followed elsewhere) each containing ten acres, the settlers received their land on this basis. In the center of the town a few blocks were divided into lots of one and a quarter acres, these to be owned by merchants and professional men with httle time for any. fonn of agriculture e^xcept gardening, altho at first such classes constituted a neghgible part of the social body. Adjoining the center blocks was a tier in which the lots were of five acres, and formed the homes of artisans, mechanics, and laboring men, who, by devoting odd moments from their regular occupations to the cultiva- tion of their land, could materially supplement their income. On the outside, in the " Big Field," lay the real farms. Van.'ing in extent from ten to thirty acres, they were alloted to the owner according to the number 470 QUARTERLY JOURNAL OF E^OSOMICS and working capacity of his family. Those who received the larger land holdings were expected to work a pro- portionately longer time on the canals. The outcome was not only an equitable division of the realty, but alao an assurance that everyone, either by vcK'stion or avocation, should till the soil. And since, in the begin- ning, the church authority was supreme, the plan was rigidly carried out. Combined with the dread of water monopoly and the general equality of laboring capacity, it tended inevitably toward an equal distribution of irrigation rights. But did the plan of db'tribution reach the end its sponsors anticipated ? Did it actually work out fairly, as any cooperative scheme should ? What the people themselves thought of it is best shown from the fact that they have since utilized practically no other plan. Only the cooperative method has ever been popular in Utah. In neighboring states foreign capital has often been induced to construct irrigation plants with a view solely to selling the water to the farmers. Newell com- ments on the failure of such enterprises in Utah as fol- lows: " There are very few large structures built by capital obtained outside the state and so far as can be ascertained, all investments of this character have been financially unsuccessful." ^ Universal acceptance of cooperation would not long have continued if the people had not remained convinced of its inherent fair- ness as well as its practicabiUty. If defects existed, capable of being exploited by the more shrewd to their advantage and the subsequent detriment of others, none of the cooperators perceived them. " If the Mormon leaders," says Smythe, " had desired to organize their industrial life in a way to make large private fortunes for themselves, no single item in the t Newell. Irnc»tioB in the United dute^ p. 3M. COOPERATION AMONG THE MORMONS 471 list of Utah's resources would have offered a better chance for speculation than the water supply. , It was perfectly feasible under the law for private individuals or companies to appropriate these waters, construct canals, sell wat^r rights, and collect annual rental. By adopting this method, which widely prevails in other western states, they could have laid every field, orchard, and garden — every individual and family — under tribute to them and their descendants forever." ^ Yet not a single instance of such injustice has ever been pointed out. Indeed the very satisfaction of the people with their system, together with the advice of the church to avoid law suits and its practice of arbitrating disputes among its members, led to the rather curious result that the fundamental principles of irrigation law were formu- lated in California; altho irrigation was not applied in that state until 1849, two years later than among the Mormons. Of the practicability of the Utah plan the results furnish the most satisfactor>' test. Beginning with no capital whatever, inexperienced in the new kind of agriculture, entirely out of communication with the rest of the world, the pioneers in an incredibly short time had constructed irrigation systems the extent and value of which dispel all doubts a^ to the feasibility of the cooperative method. The followmg statistics Bancroft gives for a period three years before the first raih-oad reached Utah and eighteen years after the arrival of the first settlers: " In 1865, 277 [canals] had already been constructed at a cost, including dams, of 11,766,939, with a total length of 1,043 miles, irrigating 153,949 acres, and there were others in progress at this date the cost of which was estimated at $877,730." » Finally it ' Coaquest o( Arid Amerie*. p. 60. • Bancroft, History ot Utah. San Pr&acia«o, 1800, p. 722. 472 QUARTERLY JOURNAL OF ECOSOMICS can be stated that the Mormons at the present time continue to utihze in large measure the id«*titical means of securing irrigation water as at first. Long continued use and impracticability seldom go together. WTiile the acquisition of water furnished the principal reason for associated endeavor in the colonization of Utah, it was by no means the only one. In exactly the same manner the logs from the canyons and the sun- dried adobes were obtained with which to build the houses. Similarly, the community constructed the usual palisade for protection against the Indians. Last, but mc^t important, cooperation made it possible to put up at once, su6 was universally the case, the town meeting house, which served alike for religious worship, civil government, amusement center, and schoolhouse. ^,It is perhaps open to controversy whether the first Mormon system conforaos with the usual tec^uiical requirein&nts of a cooperative society. Certainly there existed na iormal associative body as such. The col- onists act^. not in pursuance of a definite code of rules and regulations previously drawn up, but l)ecau.'^, with their nature and ideals and under their environ- ment, their course was the natural and logical one to follow. But what the initial effort at cooperation lacked in formality, it made up, as has been shown, in inherent strengtli, adaptability, and eflBciency. Deter- mined as much by economic need as by conscious plan- ning, a pra<^tical rather than a theoretical scheme, it nevertheless served its purpose effectively and com- pletely. Its object was to support a people and furnish them a home; it succeeded in attaining that object. Despite its informality, this first type of Mormon cooperation approached more nearly to cooperative ideals than either of the stages which followed. It m fairly within reason and the facts of the case to concluide COOPERATION AMONG THE MORMONS 473 that it possesses the attributes which Holyoake sets out as essential to tnie cooperation — namely, it " com- mences in persuasion, it proceeds by consent, it accom- plishes its ends by common efforts, it incurs mutual risks, intending that all its members shall mutually and proportionately share the benefits secured." * II The second phase of coSperation amoixg the Mor- mons waa e\idenced in the establishment of co6pera- tive stores. For a people whose whole attempt to settle the territory was based on mutual assistance, the transition from united effort in colonization to associa- tive organization in commerce was but a logical develop- ment. The change was in no wise perplexing to them; should not the same principles of cooperation which experience had demonstrated to be vso effective in found- ing their conrniimities prove equally desirable when applied to trade ? This is precisely what happened. But a clear conception of the Mormon co6perative stores can hardly be hoped for unless they are viewed in relation to the background of early Utah commercial history. In the very nature of things commerce was non- y' existent at first. The primal necessity was to take meas- ures to survive; and, beyond that, the few needful exchanges of commodities were effected by barter. The isolation of the pioneers added another factor. No money was to be found, and, in any case it would have been valueless for lack of purchasing power. But as the settlements became more firmly estabUshed, inmiediate wants were satisfied, and a scant surplus of food supplies came into existence. This furnished a medium with which to trade for other needed articles and also a i Histoty ef Caafmmitiom in Knglfcad. toI. i, p. S. 474 QUARTERLY JOURNAL OF ECONOMICS commodity to sell. But who could buy? Purohsi»er8 appeared among the new immigrants, conipoeed of recently arrived co-religionists. Moreover, a steady stream of gold seekers passed through Salt Lake City on the way overland to California. These people gladly gave the best of their adequate supply of eastern goods for Utah foodstuffs, or else paid the highest prices, in order to hasten their arrival in the modem El Dorado. This traffic led to the establishment, in XS40, \)y two non-Mormons, of the first store in JJ^jbJa, From this time forward conunercial development was more rapid. But aside from the few local products, the whole quan- tity of goods had to be freighted across the plains. Naturally, this gave rise to extremely high prices and, at the very best, a precarious supply. Finally, the first transcontinental railroad, the Union Pacific, reached the construction stage, and by 1868 was ready to enter Utah. At this point the Mormons set up their great system of cooperative stores. The first attempt was an isolated one, typical of the others, but virtually unconnected with them. It is worthy of notice because of its priority and because of the peculiar conditions which gave rise to it. While Israel Evans of Lehi was in England on a mission from 1853 to 1857 (the Mormon Church has maintained an active propaganda abroad since its incorporation), he came in contact with the English cooperative stores and made a study of them. Upon his return home he announced his belief that the scheme could be installed among his own people to great advantage. As a result, an organisation was effected under the name of Lehi Union Exchange, supposedly of the Rochdale type. With a capital of but $350, divided into shares of $25 each, and distributed among the maximum number of i^iareholders, it opened its doors for business on July 23, COOPERATION AMONG THB MORMONS 475 1868, the first cooperative store in the Weet The enterprise met with immediate success, so much so that at the end of the first six months a dividend of ^28.20 per share was declared.' But this initial prosperity did not endure, and the following year the Exchange was merged into the state-wide structure of cooperative stores which in the meantime had been built. The very foundation of this structure was the Zion's Cooperative Mercantile Institution, familiarly called the " Z. C. M. 1." The leaders of the Mormon people estabhehed this organization by their own personal counsel and action, supervised its conduct and developH ment, and directed its affairs. It served as the great prototype to all the smaller stores throughout the Mormon domain and was closely connected with them by businees ties. It becomes essential, therefore, to know the forces and facts which brought the concern into being, for without them a correct understanding of commercial cooperation in Utah is impossible. In defining the causes which led up to the founding of Zion's Cooperative Mercantile Institution, httle assist- ance need be expected from the few investigations thus far accorded the matter, because they are so wholly at variance with each other. But whatf^ver their intrinsic merit, they at least furnish divergent paths of approach to the problem, so they must briefly be considered. What may fairly be termed the non-partisan view is set forth by Tullidge in his History of Salt Lake City. At the time of writing, the author had withdrawn from the Mormon Church, but stiU retained the confidence of his former associates. He says: It muflt be coofeseed that Utah commerce, before the opening of our minee, gave ail the money to a few hands. And this was one ot t A store whieh p*kl 113 par oent dividend od •barea — not according to the Mnouct •f good* purehauMd — micht veQ hmrt B«U>iu>h«d the Rocbda)« sodp«rstora, tStvc wboae tyiitcin it purported to be modeled, but such was tiw f»«t. 476 QUARTERLY JOURNAL OF ECOSOfdlCS the immwliate causes that brought forth Z. C. M I v« the leftders of the Churcli conceived it to be their broad duty, «■ » rjjT-h, to con- struct for the community a broader and more e ^'J.- !«ysteui of commercial existence. ... In 18iaeoui«eB (a oompilAtion o( Mormon »ennoni»), October 7, 18A8, vol xii, p. 200. 8m &1so rtp. 305-07; vaA of Bricham Younc ibid., vol. xii. pp. 301, 310, 312. 478 QUARTERL Y JOURNAL Of KO ' v - »' ' s the peculiar genius of the Mormon j>e»»p*' eople with cooperation and its palpably evident fitness for the existing conditions. A survey of the actual facts of the establishment of the institution bears out the correctness of this conclusion. Agitation of the Mormon leaders for a '' self-su3tain- ing " people was the initial step in the movement. It got under way in the early fall of 1S68, and, when the semi-annual conference met in October, formed the principal topic of discussion. Finally, Brigham Young presented the issue to the people in the form of a resolu- tion, which was adopted in the usual Mormon fashion.* Somewhat later he explained his intentions as follows: What I have in minJ with regard t/5 this cooperative buaineas ia this: — There are very few people who cannot get $26.00 to put into > " The quoktitiu U net wtwtther «r* have the ri^ht tc be B«lf-«tifit«iiiUi< or not, but will w* b« MU-«uat*uiiot Th«t ui the quMtion aad w« aay fr« will be. Wli*t do you COOPERATION AMONG THE MORMONS 479 one of theee coSperative stores. There are even himdreds and thouBftnds of women, who, by prudence, can obtain thia sum. And we say to you, put your capital into one of theae stores. What for ? . . . [They] are instituted to give the poor a little advantage as well as the rich.^ But it needed little persuasion to win approval for the proposed scheme. In less than ten days after the con- ference sufficient stockholders had been secured to make possible a temporary organization. This was effected on October 16, 1868, Brigham Young being elected president and leading Mormon officials filling the direc- torate. With such a formidable array of officers the sponsors set to work to secure further support. Their procedure in obtaining it was different from that com- mon to previous English cooperative systems. In contradistinction to the Rochdale stores, which accepted only subscriptions in money, the promoters of the Z. C. M. I. urged all Monnon merchants in Salt Lake City to become shareholders, and issued certificates in exchange for their goods and buildings on hand. By this method a stock of merchandise valued at several hundred thousajid dollars was obtained, in addition to cash from subscribers who were not merchants. During the ensuing winter the project lagged in Salt Lake City, altho smaller " coops " sprang into existence in several of the settlements at once, notably in Provo and St. George. But by early spring preparations had been completed, and on March 1, 1869, the Zion's Co6perl^- tive Mercantile Institution (called at first Zion's Whole- sale Cooperative Store), opened its doors for business. This occurred in one of the stores exchanged with the company for stock. Shortly thereafter other branches •ftjr, br«thr«D and uatan f Ail of you who aay tk«t we will b« • Mlf-twatAiiiiac people •igaify it by Um show of your right bandi. (The motion wa« put and uaiouiBouaiy e*rried.)" October 8, 1868. Journal of Disooursea, roL xii. p. 386 ■ April 6, 1806, ibid , p. 373 480 QUARTERLY JOURNAL OF 8C0HOMICS began operations in similarly tran^ferre^i estAbliah- ments. Over all these was placed the All-fieeing Evfi and the motto, " Holiness to the Lord." Within a month the institution had a stock of good- on hand worth $450,000. Finally, on December 1, 1870, the store was formally incorporated with a capital sk>ck of $220,000. The preamble of the articles of incorporation read: The inhabitants of Utah, convinced of the impolicy of leaving the trade and commerce of their Territory to be conducted by strangers, have reeolved, in public meeting a.ssembled, to unite in a system of cooperation for the transaction of their own busine'w, and for th« better accomplishment of this purpose have suiopted the following constitution : ^ Z. C. M. I. prospered from the beginning, the first year's sales amounting to $1,230,000. Altho mast of the goods exchanged for stock were taken at the high rate current in the territory' before the railroad re.ached Utah, the venture flourished nevertheleSv*?. This was not only a tribute to the principles upon which the store purported to be based, but also to the sagacity of its managers, who in general were none other than the merchants who had traded their goods into the new concern. The vitality of the Institution may be judged from the fact that in the panic year of 1873 it boldly began the construction of what was in those times an imusually large building, which was completed in 1875, bringing the heretofore scattered branches into one plant. In 1895 the company was re-incorporated with a capital stock of $1,070,000. Somewhat later the I Zioa'a GoAperatiTe Mer«Mitil« lustituticn: Ajireement, Order, OrtifioaU of IiKorporatioii, mmI By-IjiwB. Publishwi in DoMrvt Naws Book Store, 1870 Compare thi« with the obje«t« of the Roohdale Gkittitable Pioneers: " Tbe obiect* of tfaiaaocieiy are to fomi vraccementa for the peouoiary benefit and improveoiMPt of tba •oeial and domeetio oondlttons of its members, by rainng a sxifficieiit aniauat of aapital. in ahare* of one pound each, to brine into operation the fckUowing piana aad an-an(*- BMnta." Catherine Webb, Industrial Cooperation (5 ed. ). p. dS. COOPERATION AMONG THE MORMONS 481 spacious building now occupied by the home store was erected. But by far the most significant consequence of estab- lishing the Z. C. M. 1. was the universal adoption of mercantile cooperation throughout the territory of Utah. In practically everj^ Mormon city, town, and village a cooperative store was started. The move- ment spread with unexampled rapidity, the method being, curiout^ly enough, from the central body to the local branches — just opposite to the British line of development. The shares in each " coop " were held by local residents, who exercised entire control of the management, but sentimentally at lea'^t they looked to t'ne Z. C. M. I. as the head of their system, and for the ^lo^t part at first secured their supplies from it. Where- ever the colonization projects of the Latter-day Saints were carried, there wai? to be found a local " coop." At the present time most, perhaps, of the Mormon settle- ments in Utah, western Colorado, Arizona, New Mexico, southern Nevada, Idaho, southwestern Wyo- ming. Alberta in Canada, and Sonora and Chihuahua in Mexico have cooperative stores. A conservative estimate of their number would be approximately 150. » A few of these stores have ceased to operate. In the enthusiasm of initial succe.ss several proposed venturing into milling and manufacturing, but in general nothing came of it. A number were wTccked by this very exu- berance, but the management of practically all of them was so conservative and sound that they still survive. How do these outlying cooperative stores compare in plan of organization and in the manner of conducting > Tbio ia the niunber which the Z. C. M. I. gives, as obtained from their buftiocM dfaUn«B wiih the stuaaler Btortm. .\jimsUnt Church HiBtorian Andr«w Jenww. who, amon* Mormon officials, us beat quiilifiod to speak on the matter, informa the wntw that, while he d.n* not doubt the reliabJi'.y of thia estimate, he la inclined to beli«v« there wer* -^rtainly uot more than one humlred an.\0\4rrs business with well-recognized systenxs el»«»wh«>re Ruch as the Rochdale plan ? Capital was provi«it*«J by the stockholders in shares usually of $25, but not uncom- monly of $10, in order to bring the stock within almost universal reach. In general it was sought to obtain the head of each^fftgiily as a shareholder. G<>od.^ were sold at market price, but at first a not inconsj of impure goods. Thus far there is no dissimilarity between the Mor- mon and Rochdale systems. It is in the maiuier of dividing profits that (he greatest apparent difTer<'nce iR found. So far as can be ascertained, profits in the Utah cofipyerative stores were always distributed on the basis of the shares of stock held and not according to the amount of goods bought. The Rochdale device of giving metallic disks with each purchase in order to determine, at stated periods, the total quantity of trading done, was unknown among the Mormons. Nor was any fixed charge paid to capital other than the dividends. (As a matter of fact, the dividend returns have usually been at the current rate of interest in the West, from 6 per cent to 9 per cent; so they have approximated a fixed amount.) But this deviation tA division of profits from the English method did r»ot neoeesmily mean that different results were obtained. .J^^ COOPERATION AMONG THE MORMONS 483 In the first place, the shares in the store, as to most cases, were almost evenly divided among the members. Again, practically all the stockholders were farmers, each facing the frontier problems and conditions common to his neighbors. Little variation therefore occurred in the amount and kind of goods each had to buy from the store. Hence, given a certain amount of profit, substantially the same amount would be appor- tioned to each cooperator whether the division was made on shares or on purchases. This was particularly true in the years immediately following the estabhsh- ment of cooperation, but increasingly less in after years, when the economic conditions of individuals became more diversified. The method of voting was another characteristic in which the Mormon stores differed from the British type. Voting has always been based on shares, as in ordinary joint stock corporations. In the beginning this amounted \'irtually to '^ one man, one vote," because the members held the same amount of shares. With the lapse of time and the passing of uniformity of shareholding in the association, equality of voting power also ceased. No difference is perceivable between the Utah and Rochdale types as to management. The Mormon cooperators periodically elected a board of directors from their own number to control the company's general policy and a manager to have chai-ge of the business transactions. Full and complete reports were rendered to the members at stated intervals. From this comparison it is evident that the Mormon cooperative stores differed from the English consumers' retail associations in certain aspects of organization and method. But the variation was one of form rather than of substance. On the whole, each used about 4^.1 > _ H:i> c.ii-> JO(T.\Al '.'/'' L- .\ 'V'. • the same means to accomplish the same or«<.Ls a widespread ownership of the store by the purcliasers of its goods, and an equitable division of its profits. This was particularly true of the Utah concerns in the beginning. With an apprecial)le part of the population as stockholders in the town '' coop," it represented, not & business under the control of a single proprietor, nor one dominated by a syndicate composed only of a few members, but the concerted effort of a multitude of small owners to carry on trade for their common bene- fit. It seems but reasonable to conclude that the Mor- mon cooperative institutions possess the characteristics common to the Rochdale type. However that may be, there is no gainsaying that the local " coops " furnished the most suitable means for satisfying the commercial needs of the times. By their use a people with the most meager capital, acting jointly, was able to supply the settlements with merchandise to an extent not pos- sible of attainment otherwise, as conditions then existed; and at the same time to reserve all the profits to themselves. No matter how the Mormon system be classified in comparison with other types of coopera- tion, its effectiveness for the purpose at hajad remains indisputable. After the lapse of half a century certain changes took place. The idea of connecting all the local estabhsh- ments with the Z. C. M. I. has long been abandoned, and today several other wholesale houses in Utah are close competitors for their patronage. As to their methods of conducting business, there has certainly been some departure from early standards. To a limited degree the shares of the country institutions have come to be concentrated in the hands of the more shrewd, resourceful, and powerful stockholders. The existence of such a tendency is acknowledged even by COOPERATION AMONG THE MORMONS 486 the most ardent advocates of the system. In ao far as such a change has occurred, the real codperative char- acteristics of the stores have been destroyed, because the very essence of coSperation in the early Mormon stores lay in their ownership by a large number of shar^ holders who had each contributed about the same amount of capital. But the extent of these inroads on the early system must not be exaggerated. Nearly all Uie stores still have an extensive list of stockholders, so many in fact that it is probably not an overstatement of the present situation to assert that the outlying stores retain most of the benefits intended by their founders. Can a similar claim be made for the Z. C. M. I.? Beyond doubt it is a successful business enterprise. Ite capital still remains at $1,070,000, but its operations have reached gigantic proportions. The shares, which wej^ originally subscribed at $100, today have a market value of $389. The stockholders now number approxi- mately 650. From the beginning dividends on stock average 1 1 per cent, but at present are on a 20 per cent basis. To date the company has paid in total dividends $6,281,628.15. It employs 700 people, whose wa^jes make an annual expenditure of $6(X),000. Sales for the fiscal year 1915-16 amounted to $6,160,698, and total sales to date reach the sum of $176,500,000. Besides conducting the manifold activities of a modem depart>- ment store, together with an extensive wholesale busi- nees, the Z. C. M. I. manufactures shoes and duck clothing. The capacity of this one department is 500 pairs of shoes and 100 dozen " overalls " daily, the raw materials for which cost $140,000 a year. The stock still remains mostly in Mormon hands, altho some of the shares infrequently appearing on the market have been acquired by non-members of the Church. Joseph 486 QUARTERLY JOURNAL OF ECONOMICS F. Smith, president of the Church, is also president of the Institution ; and with two exceptions his ecclesiasti- cal predecessors have likewise been at the head of the company.' Perhaps most of the trade is still carried on with Latter-day Saints, but the patronage of the store, both in retail and wholesale, is far from being exclusively with Mormons. Granting the financial success of the Z. C. M. I., there still remains the question whether it is, in fact, as codperative as its name implies. Critics have not hesitated to assert that it is not in the slightest degree cooperative. Stenhouse regarded it merely as Brigbam Young's private weapon to drive the Gentiles out of busings with the ultimate purpose of clearing them out of the territory.* Albert E. Wilson, wTiting in a German periodical, designates it a " combine " and " trust " and argues that " on account of its organisa- tion and the method of dividing profits, we must deny the Zion's Cooperative Mercantile Institution its codperative character." » Even Whitney ron<^fide8: > Tbe «ichth vtiole of the pr««ant charter of tbe Z. C. M. I ststeB: " The dirwrtan •Uitd offieerB of thj» conxirfttioii shall be «ieeted by b&llot, at the general meeting oi tfa* •toekheldera, to be held on tli^ fifth day of Apnl in <«ch yetir, and the p«!reona reoiuviac « majority of the vot^oa«t at Huch me«tinc, ahall be held and decl&red to be elected. . . E«eb stoelcbolder shall be entitled to a« roany votes as he holds shares oC capital stitKik. . . ." JUon's Codperative Mercantile Institutiou: Articleo of R«-iac-<>rporst)OQ, •(«. Sftlt Lftke City, Utah George Q Cannun k Soub Co., Pristent, 1895, p. 5. * The Rooky Mountain 8aiD;«, pp. 626-27. If mtch WW* tbe purpoee, it proved a sigtM^ f^ure, for Bancroft stataa fHiatory u( Ut»h, p. 864>: " Soon, however, eve& the Moroiona began to disregard their UaJw aOJMt trading with (entile* or apostates. The spell was broken and during tfas foa- fsnoM of 1870 tbe stores of the latter, and especially of tbe Walker Brotbem, w«r* se cwwwtod vitb purchascrw that it was impoaeible for them to serve their patrons." OtM woold Miipsot that if the Mormons really started the Z. C. M. I. to rid tbomM^es of ovtrids eonpetition, tbey would have made a more determined eSTort than thsse facts iadiflste. b*esu*e in other respects at that time they exhibited no lack of r*Boar<« or * " Soweit diese Angabea sutreffeu w^lrdcn sie die Qefttalt lu einer c«w6hnli«feu Aktiengeesllsohaft stetoijelu. Angeaichts der Tatsache, daas die C^Dselgesohtft* scboa Torbar b«st*ndea, baben w\i cs seit 1848 mit einer Fusioa oder einem Trust in Utah sa tan. . . .' Angesichts ihrer Organiaatioo und der Methoden der Gewinn » ■ taUiat Mflnen wir ab«r der Zios'e Cooperative Mercantile Institution den csnoassuMkstf^ beh«n CbArak-ter absprechen." " G«aaeinwirtscbaft und Untsroehmtingsfonnsa im Momonanstaat," Jahrbuoh fOr Gesetcgebung. 31 Jahrg., 89-139, 1907. COOPERATION AMONG THE MORMONS 487 " It is true thac a large proportion of the stock has been concentrated in a few hands and that the original idea of having all the p>eople shareholders has in a certain sense been defeated." ' How do these opinions con- form with the facts ? The facts are simple enough. The original articles of incorporation, pubhshed by the promoters in pamphlet form in 1870, contain the deci- sive information. Section 24 of the articles recites: The pergoTLs whose nAmes and residences are as hereinbefore set forth, have each subscribed for the numl^er of shares of the capital stock of said Zion's Co<>perative Mercantile luf^titution as Ls here- inafter set opposite their respective names and have paid for the same in full into the treasury of said Institution, and at the par value thereof. — The names and numbers of shares being as follows, vi».: Brijchaui Young 772 177,200 George A. Snoith 3 300 William Jenning? 790 79.000 William H. Hooper 110 11,000 Da\nd Day 100 10,000 Brigham Yoimg, Jr. 53 5,300 Joseph Woodraaasee 50 5,000 * Then follow fourteen other shareholders only one of whom owns as many as 21 shares. The total is 1990 shares. From these statistics the rather surprising fact is disclosed that four men possessed 1772 of the 1990 shares which constituted the company's stock at its incorporation. In this connection it is to be noted that the Z. C. M. I., Like the smaller retail stores, divided profits on the basis of shares of stock held and not according to the amount of purchases made. Voting similarly was ' Hi»too- of UUh, V..1 li. p 294 * Zion's Cooperative .Mercantile lastitution; Asroemeat, Order, Certificate uf Incorporation, and By-Laws. Published ia Deser«t News Book Store, 1.S70, p. 7 TulUdRp (Hiatory of Sail Lnke City, p 72.5t. »ay» there is only i.Tie copy of thijs pam- phtot in exigieiioe, and that us " prcMcrved by th<^ ii<>rret«ry of the Inxtitutioii." But the writea- found another copy in the Harvard Library, from which quotutiooA in this article an made. 488 QUARTERLY JOURNAL OF ECONOMICS based on shares and not determined by the principle " one man, one vote." But the very thing was lacking in the parent institution which gave the smaller estab- lishments their distinctive cooperative aspect; and that was a multipUcity of small owners holding approxi- mately the same amount of stock. At its inception, therefore, the Z. C. M. I. was not a real cooperative store, as that designation is usually underst/xKi. Nor did the situation change materially with the lap^e of time. In 1895 the company issued copies of its articles of re-incorporation, which contain the names and hold- ings of its stockholders at that time, twenty-six years after its estabhshment. They numbered only 40, of whom five owned 8348 of the 10,770 shares, one of the five, however, holding 5833 shares as trustee.' The fact that there are today 650 stockholders shows that the ownership has lately become more distributed inste^ui of concentrated, but certainly not to a sufficient ext,ent to make the Z. C. M. I. a cooperative store of the Rochdale type. The Institution is entitled to more credit, however, than this classification accords it. Even if it lacked cooperative organization and methods, its owners nevertheless maintained a cooperative aim. The most cynical observer will hardly deny the immense good it has done for the people of the state of all classes and creeds. Not only has it provided goods at reasonable prices when local conditions made it perfectly easy to do otherwise, but it has by that very practice forced other merchants to do the same thing, to the ultimate benefit of the purchaser. Five years after its establish- ment the founders of Z. C. M. I. issued a public state- ment in which they said: " From its foundation until I EioB's Co4p«i«tiT« M«rt»ntUe Iiwtitutioa: Artielea of R».ittcorporatioa. ate.. 8«h Lftke CHy. UUh. G«orge Q. Caanoa A SoM Co., Priattn, X9M, pp. 7-8. COOPERATION AMONG THE MORMONS 489 the present it has never advanced the price of any article because of its scarcity." * The same statement might be made today with equal truth. Whether the Z. C. M. I. be regarded as a genuine cooperative store or not, that character, as has already been pointed out, cannot be denied the 150 smaller stores which followed it throu^out Utah and the adjoining states. They form a body of evidence of such reliability and of such extent as to place beyond wiy reasonable doubt the success attained by the Mormons in commercial cooperation. It is probably true that this second phase of associative activity was not as truly cooperative as the first united effort in coloniza- tion. Yet the Mormon " coops," existing still with but «Ughtly modified attributes, possessing much the same aims, methods, and functions as at first, and with their original usefulness not seriously impaired, stand today a monument to the vitality of the principles upon which they were based. Ill The tiiird type of cooperation among the Mormons is industrial. Just as the concerted efifort in colonization laid the foundation for cooperative stores, so the success of the latter led up to the establishment of associative industrial enterprise. Much the same idea of self- dependence which was noted as the immediate impetus for starting the Z. C. M. I. lay back of the entrance into the industrial field. The Mormon people conceived it to be the wisest plan to rely, as completely as possible, upon their own manufactures. Efficient irrigation systems and prosperous cooperative stores bore con- vincing testimony of the practicability of united effort; to L*tt«r-d*y 8«uite, July 10, 1875. p. 5. 490 QUARTERLY JOURNAL OF Kms ,k('rs while the ahnost unrivaled resources of rhv -tat*, both in variety and in extent, together with an adequate labor supply from the constantly increasing stream of Mormon converts, made up the elements to which the same principles could be applied in industr3^ So a campaign was instituted which in vigor and effect has steadily increased up to the present, a campaign cen- tered around the slogan, " Patronize home industry." Not only in pubhc gatherings has this doctrine been advocated, but repeatedly from every Mormon pulpit in the Rocky Mountains. The result is the formation of a vast system of industries. Perhaps the first attempt of any consequence wa« the establishment of a number of woolen mills. 1 o stimu- late this industry the legislature, in 1869, had appro- priated $5,000 with which to purchase improved breeds of sheep and bring them into the territory. The most notable concern was the Provo Woolen Mills. To quote Bancroft: " It was built in 1872, on the cooperative plan, the people of Utah County being asked to con- tribute monej' or labor for the purpose and the material obtained at small cost. . . . For several years this factorv' was the largest west of the Missouri River." ' By 1882 ten mills with an equipment of 120 looms and 15,000 spindles- produced cloth to the value of $300,000: but this supplied onl}^ one-eighth of the local consump- tion, the balance of the wool from the 450,000 head of sheep being shipped east for manufacturing. Most of these factories have been closed for many years. Even the largest, at Provo, has only recently resumed opera- tions, after having been sold to private capital. ' The greatest of the Mormon financial enterprises wa» / originated in 1890 — the beet sugar industry. As early / as 1852 machiner\' had been purchased in France, > History ot Tub, pp. 731-«a. COOPERATION AMONG THE MORMONS 491 freiglited across the plains by ox teams, and set up in Salt Lake City in an efTort to make sugar; but the attempt was premature. Over thirty-five years later several far-sighted financiers of Utah undertook an investigation into the two beet sugar factoriee then existing in the United States at Grand Island, Nebraska, and Oxnard, Cahfornia. They deemed the industry practicable for the inter-mountain region, so they incorporated the Utah Sugar Company on September 11. 1889. The original stockholders numbered 28, and they furnished a capital of $15,000, divided into shares of $10 par value. The stock issue was then thrown open for the public and a spirited campaign commenced. Not only did the incorporators themselves urge the people to invest, but the Church leaders gave the new concern their enthusiastic approval. The response was widespread, the stockholders exceeding 700, many of whom were men and women of moderate and even of scanty means. Finally, when the success of the project hung in the balance, the Church itself granted a sub- stantial sum for the purc}ia»«5e of stock. At a cost of $600,000 the first factory was constructed at Lehi, and by the summer of 1891 it was ready to commence operations. The initial campaign in the fall and winter of that year produced 1,000,(XX) pounds of refined (granulated) sugar from the first crop of sugar beets ever raised by irrigation. The factory has been opersded at full capacity every year since. Particularly in the beginning, this industry offers an excellent example of the Mormon cooperative system and its benefits. The sugar company itself cultivated practically no beets, but relied on the near-by farmers for them, many of whom also owned stock in the com- pany and therefore had a double financial interest in its success. Among the employees in the factory were also 492 QUARTERLY JOURNAL OF ECONOMICS a considerable number of small shai-eholders ; indeed, after the harvest was in, not a few of the farmers could obtain employment there. Besides impro\'ing their land by the intensive cultivation which the successful raising of sugar beets by irrigation requires, the farmers had an unfailing money market for their crop. This not only benefited them, but also indirectly the mer- chants £ind traders, by putting more money into circu- lation. Furthermore, a rise in land values always resulted. .Thus in a variety of ways participants in the cooperative system prospered. But matters remained in this desirable situation little more than a decade. In 1903 the company, encouraged by its past success and the promising future of the industry, entered upon a poUcy of expansion. It con- structed new factories in northern Utah and in Idaho, formed a new corporation, the Idaho Sugar Compaay, Mid increased its own capital stock. (I^ter all the companies were merged into one, the present Utah- Idaho Sugar Company, with a capital stock of $10,000,- 000.) These operations did not escape the notice of powerful eastern financial interests, and shortly there- after the American Sugar Refining Company secureil a majority of the stock. To accomplish this result most of the small shareholders were induced, for profitable considerations it is true, to part with their holdings. The efifect was to destroy the cooperative aspect of the industry; henceforth there was only a plain joint stock company. Nor was the original basis restored when, in 1914, Utah capital, of which the Mormon Church furnished part,' secured complete control of the com- pany by bujdng out the eastern shareholders. It is now cooperative only to the extent that its operations are > Ch*rl«s W. Nibtey, Pr«8idinc Btshc^ of the Church of Jeeua Chrict of Latterly 8«ii>t«, Faots aboat Sugar. Salt L^k* CAty. Uuh, Jus« 17. 1016, pp. 10-11. (Btekop Nibtejr is Um offieuU vho kaa dir«ot eharce of the Churoh'a financuJ opcrattoaa. ) COOPERATION AMONG THE MORMONS 403 directed by men who originally sponsored the coopera- tive idea and are still presumably in favor of it, and only so far as approximately 2000 shareholders, the present number, make a $10,000,000 corporation codpcrative. The beet sugar industry in the Great Basin, which had its origin in the Mormon cooperative system, has now developed, as is well known, to gigantic size.^ A society of landed proprietors, such as made up the the population of Utah, would natarally be confronted with the problem of providing adequate agricultural implements. The Z. C M. I. did not deal in farming t ools and vehicles, so the feasibiUty of having a separate cooperative organization to supply these articles soon became apparent. In 1883, a $100,000 company was launched, the stock subscription being thrown open to the general pubhc,- as in other Mormon enterprises purporting to be cooperative. Up to 1902 the capital st^xjk was increased annually, and by that time there were 500 shareholders. In that year the present Con- soUdated Wagon and Machine Company was incor- porated. It is a $2,500,000 concern and its letter head ' The f.->llowint Ubuktion. biwed on % prirftW letter from Mr W. T. Piper. AMMtUat iJMretary and Treaaum of the Utah-IdAho 3uc»r Compiuiy, »bow« the expanaioa ti ihm Mmdc oI f»otory Sute Built Capadty • Lehi Uuh IWl IIM OM^Und • 1903 9M Idaho F»1U Idaho 1903 941 SugM- Cu> « 1904 894 BiMkfoot • 1904 Sd6 Etainore uuh 1911 820 Pay»an • 1913 709 Sfwukh Pork « 1»1« 1000 WMt JortUn • 1916 000 BrichADa C'ity • 1916 600 GrmnU Pam Oregou 1919 600 Y»kim« Wa^. 1917 600 Totel 9U9 In 1916 the oonipany produced 174.939,800 pouad* of refined, granulated augftr. ' Tona of beeta per twenty-four houra. 494 QUARTERLY JOURNAL OF KCOSOMICS carries the claim: " largest retail implement houne in the world." Its total sales in the last year reached the Bimi of $2,750,000, and sales to date approximate $100,000,000. The company employs between :500 and 400 persons and maintains 50 branches in different parts of the intermountairi country.' It has now about 700 stockholders, which means an average holding of almost $3600. From these statistics it appears that with the growth of the company has come an ownership increas- ingly more distributed, but there has never been any practice of allowing purchasers to share in the profits or the management. A more hopeful sign to the student of cooperation is the rapidly growing number of local fanners' consumers' organizations which deal directly with the manufacturer and purchase their implements, vehicles, and supplies at wholesale. According to announced plans, these associations follow the Rochdale system rather closely, since they pay a fixed return to capital, reserve a definite percentage of the profits for improvement of plant, ajid distribute the rest to buyers pro rata according to the amount of purchases made. For a people who had adopted as a slogan and as a practice " Patronize home industry-," it became increas- ingly evident each year that millions of dollars were being sent East for life insurance which might be kept at home. Accordingly, the Church authorities took the lead in organizing, in 1905, the Beneficial Life Insurance Company, capitalized at 1100,000. Using the same well- established methods, a list of stockholders numbering 200 was obtained from all parts of the state. The capital was later enlarged to $200,000. The company has prospered from the beginning and today its business > Prom * privAtc letter from Mr. G«org« T. Oddl. U«iMnl Maa«Ker of the Coasoti- dfttad Wagca A M»ebii>e CompAoy. r COOPERATION AMONG THE MORMONS 495 operations extend through ten western states. In the annual statement issued December 31, 1915, it reported gross assets of $1 .465,440.45, surplus to policy holders of 1264,961.09, and $16,577,044 of insurance in force. The present shareholdei-s number approximately 100. This points to retrogression, rat uer than progress, along cooperative hnes. Indeed it cannot be consistently claimed that this company is more cooperative in character than most of the other hfe insurance com- panies doing business in the state, and certainly not any n:M>re than the other two local companies. The Educa- tional Director gives the following explanation of the present ownership of the company: "Of course the stock is placed on the open market and we have no way of keeping it scattered : nor has any attempt been made to concentrate beyond having suificient of it in such shape that the President of the Company is able to guide its affairs without danger of conflicting interests interfering." ^ The latest and most curious of the so-called coopera- tive concerns is the Hotel Utah. Impressed with the idea that the rapid growth of Salt Lake City warranted the maintenance of a modern hotel of metropolitan proportions and functions, the Utah Hotel Company was organized May 19, 1909, with a capital of $1,005,- 000. This with a bond issue of $1,000,000, made it possible to erect a $2,000,000 hotel. When completed, the building was leased to the Hotel Utah Operating Company, whose stockholders are practically the same as in the Hotel Company. From the original number of 72 st FVoin s private lettr.r from Mr John D. Giles, Educational Director of the Bcne- fioial Life IneuraacA Company. 49C QUARTERLY JOURS AL OF BCOSt'UlCS these figures is sufficient to show that it is not a co- operative industry.* In none of these Mormon industries has there ever been any practice of dividing profits with purchasers. Nor, 60 far as known, has profit-sharing with employees in the form of extra wages in proportion to company earnings been customarj' with them. Profits have accrued solely to shareholders. All are highly successful business institutions which have perfomied an inesti- mable part in the commercial development of the state; but they are not cooperative. In comparison, there- fore, with Mormon associated endeavors in colonization and in commerce, their so-called cooperation in the industrial field appears to disadvantage. Admittedly some industries tended tc>wards cooperative methods at their inception; but there has been a steady trend awaj' from such methods until today there remains among the Mormons not a single industry (as distin- guished from the colonizing schemes and cooperative stores), which satisfies cooperative requirements. > OtlMr ocmpAiiias la wbich th« Mornaoo Oiareti h«a b««n, (w t* at prertrDt, intf fted an the luIuMi CrynUu Salt Company, the Utah StAte N'stionai Bank. Zioo'i 'iaviaxB Bank &Bd Tmet Comp&ny, tb« Sait Lake aar) Loe .u«t IntereBting article, which does diacuas theoi, ia foood in World's Work for Deoemberr. 190a " A yucoeaaful Co<>perative Society," br Ofaa MiUer Sec alao " Proceeding be/ore the Cocuzuttee on Priv-Uaces and EleotiaiM «rf th* Cvted State* Seo^ite iu the Vlattex ol the Protests ajfaiiMt the Ri«hi of HoDorable Raed Smocit. a Senator from the State of Utah, tc Hold His Seat " d9th Coagr«H, Sctutte Doe«»nt 480, Waahinictoa. IMM, roi. i, pp iil-%7. Ib Utah are aiao a octDparati^ely large number ol buildinc *nd loan aicwaatWB. But tbajr are of a type comrooo to the whde United 8tat«a, and do not bear aay dia- tiact ratatioB to Mormon cooperation The amaO country banks in the ctato approaeb •enrvhat aear«r to t>ie usual Mormon codperatiTe type, but in general their iiiginiii- tie* smI fuetuMM are eimiiar to rvral banks elMvtaere COOPERATION AMONG THE MORMONS 497 IV Suoh is the history of cooperation among the Mor- nons. It discloses an economic phenomenon not paralleled elsewlure, for the simple reason that history has not otherwise seen a combination made up of people the Mormons and of ( f)nditions similar to those in (Ircat Basin. And it< growth has been as renmrk- u' I*' a- its umqaeneN<, From the t -\>iem of aj^ricultun'. commerce, and industry, with tl.cir ramitications over the entire arid West. Having ed this growth, it remains now. by way of con- c !u>ion. only to pohit out the chief factors responsible f..r it Ml (lie past, and to determine its present status, ri.n-e cltMiients have stood out as the underlying ,au. be the chief factor in aocouutinc for their aeeom- pliahmeots. Three Phaacs of Codperatton in the West. Amerioau £W>ooiiuo Aatooiation PubboaUooA, 1887, vol. ii. No. 1, pp. 118-19 • " The Vitality of Mormonism," Century Macasine, June, 1904, p 196. COOPERATION AMONG THE MORMONS 499 incUned to believe that the original aims had been some- what lost sight of. " The present condition of coopera- tion among the Mormons," he says, " is one which indicates retrogression rather than progress, and it is not wholly encouraging to believers in cooperative principles." ' It is hard to escape from this conclusion. Certainly the study of the three different stages of Monnon cooperation bears it out. In the first stage, that of colonisation, cooperative standards were maintained ; the second phase, which had to do with the retail stores, experienced a noticeable departure from characteristics generally found elsewhere in coopera- tive associations; while the final type, evidenced in the industrial field, was hardly cooperative at all. Yet to say that each successive stage moved farther away from cooperative requirements than its predecessor neither means that no cooperative enterprises remain among the Mormons, nor that the methods actually used were not skillfully adapted to accomplish the purposes at hand. It has already been pointed out that the Mor- mons in their colonizing schemes provide their irriga- tion systems in substantially the same manner as in pioneer times, by united endeavor. The numerous small retail stores are yet performing much the same r61e of commercial usefulness as at first. And it can hardly be denied that the Mormon industrial and com- mercial system, which largely originated in their co- operative schemes, has made them a prosperous and independent people. It is natural that the Mormons, viewing their attempts at cooperation in the light of economic results, are not disposed to be dissatisfied with them. Hamilton Gardner. HARYiJU) Law School. ' " Eioonomie A«p«eU of Monaonium," Harper'* Maca>uM, April, 1903, p. 671. '''"'^•"^0.^;:^^ Wiliiii 96 6558 T^x^ :/'-^; "x,^^