Scottish Co-operative Wholesale Society

The CO-OPERATIVE MOVEMENT

The original co-operative principle was that a group of individuals would join to purchase goods for division between them according to their contribution. These societies can be traced back to 1750. Early co-operative tokens (i.e. before 1850) could be of this form, with members recieving a token for each share they had provided money for. Others were tokens produced for members to alleviate the shortage of small change. This idea was changed into the concept of the society operating a store with the objective being to maintain reasonable prices, quality etc. The earliest recorded store in the UK was that operated by the Fenwick Weavers, which has been traced back to 1769. These original co-operatives were set up mainly for the benfit of members. This is reflected in the Friendly Society Acts of 1829, 1834 and 1846, which only allowed regsitered societies to trade with members. The Industrial and Provident Societies Act 1852 allowed registered societies to trade with non-members and to pay a dividend to members. This led to greater potential for the growth of the co-operative movement. In essence the registered societies became companies run by committees. As well as ensuring good quality at good prices, the members had the opportunity to recieve the profit from the store, the profit being divided according to the shares bought. The members also benifitted from a growth of the value of their shares as the society prospered.

Unfortunately market pressures worked against these early co-operative store, leading to many of them failing. Other store, in response to pressure from the co-operative stores, reduced their prices. Not only did the general public return to purchasing from the other stores, but the members also stopped purchasing from the co-operative store. This was seen as being a direct result of their dividend not being dependent on their purchases, giving rise to the move towards a dividend based on purchase, which became part of the "Rochdale" system. This payment of dividends to members and potentially non-members based on purchases would be in addition to dividends for shares. In addition co-operatives adopted the practice of a new member, having made an initial down payment, to purchase a share using their dividends, which would be member dividends. When the share was paid up the member would recieve the dividends.

Industrial and Provident Societies Act 1862 conferred limited liability on society members for business debt. This led to the formation of many co-operative societies, allowing people to join without fear of being pursued for debt. It also led to older societies registering to obtain the benfit of limited liability. Some of these societies created a compliant set of rules and registered. Other societies created a new society that took over all the assets of the original society. There were some societies such as the Glamis & Charleston society that did nothing, in this case resulting in members being sued for the society losses in the 1880s. There were other societies such as the Dalry Baking Company and Dumfries & Maxwelltown Co-operative Provision Society that regsitered as companies - the Dumfries & Maxwelltown Co-operative Provision Society eventually registered as a society.

SCOTTISH CO-OPERATIVE WHOLESALE SOCIETY

In 1851 the Central Co-operative Agency was started in London. This was wholesale depot started by the Christian Socialist Edward Vansittart Neale to supply co-operative stores throught the UK. Although failing shortly thereafter, it was concept that was revived later. The catalyst for the successful wholesale societies was, again, the Industrial and Provident Societies Act 1862, an act as with the 1852 Act, promoted by Edward Neale. This enabled co-operative societies to be members of other co-operative societies. The first major wholesale society to be started following the act was the the North of England Co-operative Wholesale Society, started in 1863. Originally focussing on Yorkshire and Lankashire, this society became the Co-operative Wholesale Society in 1872. The Scottish co-operative societies approached the North of England Co-operative Wholesale Society in 1866 with a view to them setting up a branch in Scotland. They were told this was not possible, so set in motion forming the Scottish Co-operative Wholesale Society, which was established in 1868 in Glasgow.

These wholesale societies were societies owned by the local co-operative societies. They grew to become multinational business, owning farms across the world, and leading to local traders claiming unfair competition. From the early 1960s the wholesale societies developed a retail branch by taking over local co-operatives that were in difficulty. In Scotland both the SCWS and CWS obtained local co-operative societies. In 1973 the SCWS had issues with the reserves for its bank. This resulted in the SCWS merging with the CWS.

CO-OPERATIVE TOKENS

The idea of issuing reward tokens based on purchases is a method of establishing customer loyalty and is one of the features of modern loyalty card schemes. In the days before many people had bank accounts or sufficient income to establish a regular saving habit, it was also a means of saving money. The earliest recorded use of rewards for purchases was by Lennoxtown Friendly Victualling Society in 1826. It is not a practice unique to the co-operative movement and may have not been started by the co-operative movement. However it grew to be a key feature of co-operative societies, with the reward being called a dividend and being based on the profitability of the store. In 1886 the average dividend was 13.3% and by 1909 had increased to 14.7%. As the graph opposite shows, there were some societies with dividends approaching 25%. This far exceeds the expected dividend for societies that were supposed to be ensuring good quality good prices.

The advert opposite, from 1949, indicates that at this date co-operative societies saw the dividend as a main source for attracting customers. Recording of purchases am/or payment of dividends are the main sources of co-operative tokens that have survived.

Many societies considered it best to pay a dividend to both members and non-members. To encourage membership, the members would recieve the full dividend for their purchases and the non-members would recieve a 50% dividend. To operate this system societies need to have a record of member sales to avoid members recieving full dividend for non-member purchases. The stores appear to have recorded member and non-member sales in a ledger while the members had a book for recording sales. This system meant that societies issuing tokens for purchases with all tokens that could not be accounted for in the ledger/book being valued at a half dividend. There are some limitted examples of societies issuing non-member tokens. It is also probable that some societies only issued tokens to non-member, with the ledger/book system being used for members.

Other societies only considered paying dividends to members. In this case societies had the option of handing out tokens for sales or of handing out tokens for the dividend. Handing out tokens for the dividend had two advantages, the divdend was alotted to the individual at the time of the dividend declaration and the dividend could only be used to purchase goods at the store. This prevented the practices of manipulating dividends - people purchasing tokens from others at a reduced rate, people holding back tokens during periods of low dividend etc. This use of tokens is the basis of the modern loyalty card systems, where everything is done electronically instead of by using ledgers and tokens.

The societies that paid the dividend as tokens would also often sell the tokens to members for use by others (e.g. for someone to give to their children or servants to make purchases for them at the store or for someone to help a friend). With higher dividends there were individuals who would make large purchases of tokens for use as short term loans, with the lender obtaining the dividend. In 1939 Bo'ness Co-operative passed a rule to expel members caught doing this. The higher value of the tokens also made them more susceptible to being forged. In 1927 a road worker and his wife were convicted of obtaining £17 by fraud. The husband forged plastic tokens for the West Benhar, Chapelhall and Bellshill & Mossend Co-operative Societies and the wife used them for purchasing goods. The charges against two accomplices were dropped. About 500 tokens were identified by the societies and some were discovered buried locally in 1930. Existing tokens from these societies or others were impressed with new values, with the colour altered if required. Tokens were also manufactured from combs and other pieces of celluloid with face values of 2/- and 5/-, with the 5/- ones being more common. There are also cases of tokens used for dividends being forged or altered.

In many cases societies did not pay a dividend on all purchases. If there was strong local competition, they would provide no dividend. Where the business pressures led to left profitable divisions, some co-operatives considered it best to have different dividends. This gave rise to tokens that were named with the division, the Butcher department being one of the more common divisions for which a lower dividend was paid. The practice of paying dividends with tokens led to another practice, of paying dividends on tokens purchased only. This meant that if members wanted a dividend they had to make purchases in tokens.

To manage the payment of dividends, it was not uncommon for societies to only redeem higher value tokens. This meant that the lower value tokens had to be exchanged for higher value tokens at the store. This is a main reason why, for many co-operatives, only the lower value tokens have survived - they were in effect valueless unless enough could be accumulated to exchange for a higher value token. For societies that only have £1 tokens surviving it is possible that these are membership tokens, £1 being a common share value. Where only higher value tokens are found it is possible that some were found in stores after the stores had stopped accepting tokens for dividends.

In addition to dividends, some societies had prepayment tokens. These were usually for coal and milk.

LISTS ON WORLD OF TOKENS

• Scottish Co-operatives - List by County

• Scottish Co-operatives - Alphabetic List of Token Inscriptions

REFERENCES

The references below are not specified in the token listings. Where tokens are listed in the Rains catalogues, the source is given as DRR. If they were removed from later catalgues, the date of publication of the last listing is given (i.e. DRR 1997 or DRR 2004).

Listings of Co-operative Tokens

Catalogue of Co-op Checks and Tokens, D R Rains, 1997

Catalogue of Co-op Checks and Tokens - 2nd Edition, D R Rains, 2004

Catalogue of Co-op Checks and Tokens - 3rd Edition, D R Rains, 2014

British Coins and Tokens 19 & 20 September 2023, DNW Auction Catalogue, 2023 - contains the Neil Beaton Collection of Scottish Co-operative Society Tokens

Historical Information on Co-operative Societies

The History of Co-operation in Scotland - Its Inception and Its Leaders, W Maxwell, 1910

Report on Workingmen's Co-operative Societies in the United Kingdom, Parliamentary Report, 1901