Helping each other through cooperatives


Through Co-operatives

Secretary Co-operative Development Society

Nihil Obstat: BERNARD O’CONNOR, Diocesan Censor

Imprimatur: +DANIEL MANNIX, Archiepiscopus Melburnensis.




Economic co-operation is an old and tried formula for bringing social justice and charity to the masses of the world’s people. It has succeeded in every country in which it has been tried and in every type of economic activity. It has worked among people of widely different political systems and cultures.

It is not surprising that where tried in Australia co-operatives have proved beneficial. This pamphlet will tell of two Christian experiments which have already had an impact on Australian life in the hope that their work will spread and its benefits will increase. Australia has its economic and social problems which, because of their depressing effect on human beings, oiler an urgent challenge to christians to find solutions to them.

We christians should be attracted to economic co-operatives as a form of economic social activity because they are designed to protect the dignity and rights of the individual and to serve the common good.

An excellent description of co-operatives has been given by the late Monsignor M. M. Coady, the world-renowned co-operative educator of St. Francis Xavier’s University, Antigonish, Nova Scotia. He said, “Co-operatives are the means to a higher end, to enable men to win by their own struggle the economic freedom and independence necessary for full christian living.”

As befits its role of Mother and Teacher, the Catholic Church has always been to the fore in teaching that economic systems must be based on christian principles, especially justice and charity.

Pope Leo XIII, Pope Pius XI, and Pope John XXIII, have in special social encyclicals, not only condemned social errors and taught principles that should apply, but have called on men of goodwill to co-operate in bringing about a christian social order.

In the encyclical, “Mater et Magistra,” Pope John goes further and says, “A social doctrine has to be translated into reality and not just formulated. . . . The transition from theory to practice is of its nature very difficult. . . . Consequently, it is not enough for this education that men be taught their social obligations. They must also be given by practical action the methods that will enable them to fulfil these duties. . . . Education to act in a christian manner in economic and social matters will hardly succeed unless those being educated play an active role in their own formation, and unless the education is also carried on through action.”

Economic co-operatives, as propagated by the Y.C.W. Cooperatives Movement in Victoria and the Australian Antigonish Movement in New South Wales, provide practical examples of methods through which people are playing a part in their own formation, are being educated through action and are applying principles to reality.


The Young Christian Workers’ Movement in Melbourne had sponsored its first co-operative society in 1945. Its initial effort in co-operatives resulted from Y.C.W. leaders carrying out social enquiries on various aspects of the economic situation of young workers. One such enquiry done in 1943 was on the savings of young workers for their future.

That enquiry brought two actions, one immediate and one more long range. The immediate one was for parochial savings schemes; the second one for investigation of practical home finance schemes.

The savings schemes got away to a good start. Housing.

The home finance study revealed the good features of cooperative housing societies as then in operation in New South Wales. The Y.C.W. movement, along with other interested organizations, sought the introduction of such legislation in Victoria.

The representations were successful and legislation was passed in the Victorian Parliament in 1944. The Y.C.W., anxious that young workers would have every encouragement to benefit by this legislation, sponsored the formation of a co-operative housing society in 1945.

The housing society quickly began financing homes. The need soon arose for a second society, and this was formed. From 1945 to 1965 the Y.C.W. group of housing societies had sponsored some 26 housing co-operatives through which over 2800 families had been financed for home-ownership.

Throughout the State of Victoria, Co-operative housing societies have been formed by other groups of people. Altogether co-operative housing has financed over 50,000 homes.

The Y.C.W. co-operative housing societies grew up in Victoria with social as well as economic purposes. Started as a service of the Y.C.W. they tried to maintain the following characteristics of Y.C.W. Services:

a) to meet a need.

b) to educate its members.

c) to seek changes or improvements for the benefit of all.

The Y.C.W. housing societies set an example in meeting members’ needs economically as their directors and members realized that grouping of societies enabled savings in members’ management fees.

Education of staff and directors was provided informally by the Y.C.W. chaplain and leaders, and was always designed to lead them to think out further solutions to members’ economic difficulties.


Such active thinking gave rise to the formation in 1948 of a co-operative trading society, to deal initially in retailing the furnishings and fittings needed in a home.

It began trading in 1949. By 1965 it had 4600 members, and in its seventeenth year the total of its retail sales to members passed the £2 million mark.

In 1960 this Society moved into new showrooms in Lombard House, Melbourne — the first building the Y.C.W. Co-operatives have owned.

In 1952 and 1953 the Y.C.W. Co-operatives had monthly education meetings which a nucleus of members used to attend. These discussions led to the formation of the following new Co-operatives:—

a building construction group (it was disbanded after two years as it was not a success); an insurance company; a central credit society.

Further discussions soon made it clear that the Y.C.W. Co-operatives saw the parish as a more suitable unit of development for the Credit Society.

Credit Societies

In 1956 a move was made to form parish credit societies.

Once three were in existence, they formed an Association of Catholic Co-operative Credit Societies to co-ordinate the policy and methods of societies; to act as a reserve banker for societies; and to foster the formation of new societies.

By 1965, the Association had 80 member societies spread throughout the metropolitan area and country centres.

Permanent Building Society

In the late 1950s finance for co-operative housing societies, which depend on long-term fixed period loans from the Government, banks or other lending institutions, had become quite inadequate to meet the demands of home-seekers. In an effort to solve the savings and house-loan problem facing the youth of the State, the Y.C.W. Co-operatives formed a Co-operative Permanent Building Society in 1957.

To help youth to save and whilst saving, to help housing funds, the Permanent Building co-operative is concentrating on getting youth, both boys and girls, to undertake set savings target tables. The tables are designed to assist youth to build up savings over four, six or eight years to enable them at that time to have enough money to buy or build a home in conjunction with a loan they will be able to get from the Society. This Society is an approved institution under Commonwealth Government’s Home Savings Scheme.

The growth of these co-operatives is itself proof that education has always been in the forefront of this co-operative movement. The first one arose to meet a need; each subsequent one arose to meet a need in the light of experience of the then existing co-operatives.


A formal educational unit was set up in the Y.C.W. Cooperative Movement in 1961. It is the Co-operative Development Society, which aims to protect and develop the idea of true co-operation as a means of bringing about a social order more in keeping with man’s dignity as a human being and as a son of God.

This inbuilt educational unit financed by all associated co-operative societies gives a permanence to education in the co-operative movement.


Rising costs of land are a serious problem for intending home builders. The new co-opcratives are endeavouring to assist some young people overcome the problem by the formation of a co-operative to buy and subdivide land.

This is their Home Land Co-operative formed in 1964. Its first subdivision is at Vermont.

The workings of some of the types of co-operatives will be covered in more detail in later chapters. But it would be fitting to conclude this brief historical report of the growth of the Y.C.W. Co-operatives by paying tribute to the late Archbishop of Melbourne, Most Reverend D. Mannix, D.D., LL.D., for the great encouragement he always gave.

The founder of the Australian Young Christian Workers’ Movement, Reverend Father F. W. Lombard, is another person who has meant a tremendous amount to the formation and progress of Y.C.W. Co-operatives. He sees them as an instrument of good for ordinary people, a means by which they can practise social charity for one another for the betterment of themselves and their community. Father Lombard uncompromisingly upholds the right of the members to control and benefit from their co-operative.


This christian experiment in Australia had its beginnings in the parish of Lidcombe, Sydney, N.S.W., in 1952.

A parish credit society was formed as a result of study-club discussions by one of the priests of the parish, Reverend Father J. Gallagher, and some of the parishioners.

Father Gallagher was keen to get laymen putting into practice the teachings of the Popes, as expressed in the social encyclicals, “Rerum Novarum” and “Quadragesimo Anno”.

He saw the credit society as an ideal starting point. It would meet a need. It would have an organic growth — a few people getting the idea first, and then spreading it to others.

Father Gallagher’s first protégés responded well. They formed their society. They developed the cottage discussion method of educating others to participate in it.

The “cottage discussion” is a discussion held in a private home amongst members or potential members of a society. An experienced member of the co-operative guides the discussion. The idea is to get everyone present thinking about his part in the co-operative.

This method has worked very well. Since they formed their first credit society in Lidcombe in 1952, this movement has been responsible for forming thirty-five more parish societies; a number of parish consumers co-operatives; a cooperative building society; a co-operative insurance agency; a co-operative trading society (operating centrally and able to be used by all credit society members); a co-operative housing commission tenants’ protection league; a number of parish community advancement societies; a State-wide community advancement society to be the “ideas protection and development unit” for the movement.

A number of local community advancement societies own cottages purchased by the co-operatives. The owning of a property brings members to appreciate the value of co-operation as a means of securing ownership and control in economic affairs.

As a number of societies were formed the development society studied the Antigonish ideas of Nova Scotia and applied to their growth in New South Wales whatever they thought appropriate.

Two main characteristics of the resultant New South Wales growth are:—

a) A vital educational body to be part of the co-operative movement at all levels — local, regional, State.

b) Co-operatives can best assist members to a realization of ownership, control and responsibility if formed locally, wherever practicable.


Both Australian movements mentioned have gained great benefit from the experience of the Antigonish Movement of Nova Scotia and New Brunswick.

In Victoria and in New South Wales the pioneers of the movements started out with social reform their objective. They soon realized that this would be possible only with the assistance of education.

In Antigonish, Nova Scotia, the St. Francis Xavier University, in the early 1920s, set out to give everyone the benefits of adult education. To get ordinary people interested in education university representatives started discussions amongst farmers, fishermen and miners on their personal economic problems.

Under the guidance of priests like Father James Tompkins and Monsignor Moses Coady, the Extension Department soon devised a practical plan to enable those people to participate in education programmes.

The plan was based on group discussions or study clubs. Practical economic troubles were the subjects. The aim was to arouse the participants to a group action to further their education. Economic co-operation was a logical and practical group action. In this way the Antigonish Movement developed rapidly, using the technique of economic co-operation and adult education.

Monsignor Coady became internationally renowned for his knowledge of co-operative principles and methods. He died in 1959 at the age of 76, fully convinced of the great power of economic group action coupled with education as a means of reforming society for the common good.

The University Extension Department, in order to meet the demand of international people who want to study its methods, has established the Coady International Institute where co-operators from any part of the world may go to further their social studies.

In the practical field, Nova Scotia boasts a large number of co-operatives, including housing, credit, credit leagues, insurance, life assurance, trading, producers and marketing. These have transformed the lives of fishermen and farmers and have given them an expression of independence they did not know or even hope for before.


The New South Wales and Y.C.W. Co-operative groups are prepared to help any groups of people who desire help or advice on economic co-operatives and, as a result of the practical experience of dedicated personnel, each is equipped to give sound guidance.

Both regard themselves as groups of people with the object of enabling people to bring about the introduction of a christian social order so that the society in which they live will assist all people to live a full christian life.

Both accept social and economic co-operation, coupled with education, as their means of operation.

Both adopt the following six principles of the Antigonish Movement of Nova Scotia as expressing the philosophy of their movements:—

(1) The supremacy of the individual.

(2) Social reform must come through education.

(3) Education must begin with the economic.

(4) Education must come through group action.

(5) Effective social reform involves fundamental changes in social and economic institutions.

(6) The ultimate objective of the movement is full and abundant life for everyone in the community.

For a statement of the basic principles of economic cooperation both movements have gone back to the principles first laid down by the founders of modern-day co-operatives — the Rochdale Pioneers, who founded a co-operative trading society in Rochdale, England, in 1844. It succeeded and its methods became standard practice for co-operatives which subsequently started in practically every country in the world.

The four main principles are:—

(1) Democratic Control. There must be one vote per member irrespective of value of shareholding. No proxy voting. In political democracy we accept one vote per person, why not in economic? This is a powerful principle. In the profit-motivated public company money invested counts and proxy voting further allows the controllers of the company to gain and strengthen their control.

(2) Open Membership. This gives everyone an opportunity to join at any time, provided he is agreeable to abide by the rules of the co-operative. In certain types of society, membership is necessarily restricted to people of a certain group—e.g., a credit society in a certain area or organization.

(3) Limited returns on capital. This simple principle stands for putting wages to men above wages to money and machines. In the capitalistic joint stock company the profit available for distribution goes to the shareholders in it in proportion to their investment. The success of the company will increase the value of his shares. This leads to speculation and the way is opened for inflation of capital. This is one cause of depressions and booms in the financial world.

The co-operative principle means that shareholders will get a reasonable rate of interest. The value of their shares will remain the same.

(4) Rebate surplus in proportion to patronage. When the operating expenses are paid, dividends paid and legitimate reserves, including provision for education, are set aside, the earnings of the co-operative are refunded to the members on the basis of their patronage. This is called a rebate. It is a most important principle. It differentiates co-operation from all other forms of business. It upholds justice. Its application in an efficient co-operative will mean every customer will buy his goods or services at a fair price.

A private business man or public company may overcharge customers to act safely. If their profit is excessive to reasonable reward for their labour and investment they neither refund it to their customers, nor reduce their prices in future. In the co-operative the rebate principle insists that the members get back their share of the overcharge. The Rochdale Pioneers also adopted the following principles or practices:

(i) Sale of goods or services at prevailing prices. It is not easy to convince members that this principle is in their interests. They usually look to the cooperative to sell them their needs at the cheapest rate. But principle four above gives meaning to the fairness of this principle. Charge what your reputable competitor is charging. He will be making a profit; your co-operative should make more profit. The member customer’s rebate will reduce the price he paid.

This principle is a warning against attracting members and sales on a basis of cheapness. There are greater issues at stake. Co-operative ownership of their own economic institutions has other values just as important as saving.

(ii) All business should be done for cash. This was a wise principle designed to uphold the independence of the customer-member. It also was to save the members money by economic administration. (In practice, with the growth of credit buying in this century trading co-operatives now provide necessary loan facilities for term buyers of larger items.)
(iii) Setting aside of reserves. This is basic to members learning to manage and build up their own economic institution.

(iv) Setting aside portion of profit for education. The Rochdale Pioneers were wise enough to realize the need for education if members were to further their progress towards control of economic affairs. It would cost money. The members would accept the responsibility of paying for it.


The brief historical sketches of three co-operative movements call for further explanation of a number of points.

When we speak of economic co-operation we mean legally incorporated co-operatives. They are people who form themselves together to run their own business in some particular field or other.

In Australia legislation exists in all States that will enable one or more types of co-operatives to be formed. Some States have special co-operatives legislation.

Anyone contemplating formation of a particular co-operative must first check on the legal requirements in his State. The Y.C.W. Co-operatives and the Antigonish Movements Headquarters can supply useful information.

Equally important is knowledge of the operation of any proposed society from both a business and a social point of view. When it comes to these aspects, a person cannot do better than look to those who have had experience.

There are pitfalls for the inexperienced in starting co-operatives and maintaining them. Where others have been through the mill as it were, seek their advice. It is no benefit for anyone if a socially well-intentioned co-operative loses people’s money on account of inexperienced management. Organizations like the Co-operative Development Societies in New South Wales and Victoria can always put enquirers in touch with the experienced people.

Whilst co-operatives are means to a higher end, it is sensible to realize that their growth is gradual. Co-operatives are people organized to help themselves. They gain experience and confidence by doing small things first.

An individual has no hope of changing conditions on his own. Collectively in a small group he cannot effect a big change. But a lot of small collective groups whilst retaining their own independence can gain united strength by forming co-operative associations.

Any group of people wanting to get into the work of economic co-operatives would be well advised to concentrate their first study on the need for a credit study.


A credit co-operative is a group of people with some common interest who form a society and have it registered with the objects of providing both a savings and lending service to its members. An important part of its work is also finance counselling.

The society is owned and controlled by the members; they adopt the rules; they can change the rules; they elect directors to manage the society for them in between annual meetings; the members fix the amount of dividend on share capital and the amount of interest charges which will be rebated out of the year’s surplus; they agree on how much money will be kept in reserve; they decide whether the directors will receive remuneration and if so how much; they appoint an auditor; they decide on how much of the surplus will be allocated towards education.

If they are not satisfied with the work of a director they can replace him. Each member is eligible to be nominated to be a director; and each member has only one vote irrespective of the amount of money he has invested in the society.


The directors appoint a secretary and treasurer to keep the books of the society. In the first few years no director or office bearer will expect any monetary reward for his services but he should be reimbursed his out-of-pocket expenses.

There has been no difficulty in Australia in obtaining members willing to fill honorary positions. Once the society gets on to a stable footing societies should give effect to a policy of paying for service or employment. In due time the co-operative may engage part time or full time employees and justice must be done always.

Co-operatives are genuine people’s businesses, creating opportunities for employment and rewarding employees justly.


This fact has a bearing on the price societies charge for loans to members. Some early credit societies in Australia simply formed a society to meet credit needs of people cheaply. As long as they charged enough to make ends meet at the end of the year they were satisfied. Such societies rarely advance from a parochial credit society — the members are not trained to handle the overall finances of the society they own. They are not building up any substantial people’s business. They are performing only part of the cooperative platform.

Australian credit societies charge a price near the ruling price for loans similar to the loans they are making. This ensures a good profit which members then have the privilege of deciding how to distribute. The amount of rebate reduces their actual charge to one that considerably lowers all private enterprise competitors.


They have money to allocate to reserve and to education. Thus is kept alive two necessary things if restoration of control of business to the people is going to be won. Growth of reserves build people’s institutions in co-operative banking, trading, insurance or anything else deemed necessary. Education expenditure prompts members to think of economic co-operative growth beyond the credit co-operative.

Members usually decide to pay slightly above savings bank interest rates for share dividends or interest on deposits.


Members are entitled to apply for loans for useful or necessary purposes. Valid purposes include:—

Emergency expenses;

Emergency purchases;

Annual rail tickets;

Dental and medical expenses

School fees and uniforms;

Household furniture and equipment;

Repairs and renovations to the home.

A member suffers no loss of dignity in applying for a loan from his credit society. Directors treat applications in confidence. They give helpful advice where necessary and this friendly service is of great benefit to members.

Christian co-operators maintain that a parish is ideally suited as a unit for formation of a credit society. Its membership may be open to non-Catholics.

Local independent co-operative societies, in credit or anything else, are desirable if personal responsibility and personal initiative are going to be built up. This principle of local development is in line with Catholic social teaching, which advocates that a larger organization should not be set up to do what a smaller organization can effectively do.

In Victoria a person over 18 years of age may apply to become a member by applying for five £1 shares. In some societies he has to pay a small joining fee.

He need outlay only 10/- of his share capital with his application, but naturally as a co-operative member he is expected to help build up the funds of the Society by depositing money regularly. The ability of the society to meet the loan needs of its members is dependent on the deposit support it gets from its members.


The majority of Australia’s breadwinners are wage earners. Thus the credit co-operative is a natural start. Part of its education is in helping members learn to manage their money better.

Credit co-operatives have helped many a housewife straighten out her household budgeting by getting her to be a regular budget saver in the local society. Her money can be withdrawn quite easily to meet the periodic bills when they become due.

Once people have experience of seeing how they can run their own credit co-operative and save their fair share oi the profit, they can face up to study of co-operative trading in some particular commodity or in a group of articles.

The principles of ownership and control are the same as in the credit society.

Greater initial capital is required and careful preformation investigation is essential. An education campaign amongst potential members and users as to the advantage of cooperative trading is likewise vital.

Credit societies whose members have the facilities of an existing co-operative trading society available to them have a duty to educate their members to support the existing society.

It is in consumer type of co-operatives like trading societies that co-operators begin to manipulate economic forces for their own good.

Independent trading co-operatives are desirable socially for the same reasons as are local credit societies. But the trading societies need to be able to associate with one another to really achieve full consumers’ rights for members. Association achieves better buying and distribution and can lead to establishment of wholesaling and manufacturing.


Other types of co-operatives are community advancement, community settlement, producers and investment.

The Australian experiments whose growth is recorded in this pamphlet have registered their education to operatives as community advancement societies.


It has already been stated that true co-operative societies are prepared to allocate money for educational purposes.

Through this process existing societies are paying towards expenses of forming and developing new societies.

Up till now both Victorian and N.S.W. movements have devoted most of their educational activities to furthering the knowledge of social principles and co-operatives.

Self-sacrificing directors, employees and honorary office bearers have shown their love of the cause of justice and charity by putting a tremendous amount of time into visitation of groups of people; conducting cottage discussions; attending study and administrative meetings; and participating in conferences and schools.

It will be seen that the co-operative movements place much value on personal contact and personal discussion.


Literature is important too and the range of it is constantly being extended.

The Y.C.W. Co-operatives publish a quarterly magazine on co-operative news and topical subjects as a medium of giving members a greater sense of being in a christian social movement. They also provide a quarterly discussion bulletin for directors and employees.

Great importance is placed on annual meetings of societies because these uphold the economic democracy of co-operatives.

The Antigonish Movement in New South Wales has produced a film depicting its varied achievements.


In due course the movements will grow to more specialized courses of an adult education nature. In the meantime they are happy to keep on applying their educational philosophy that wherever a group of people with some common problem get together to seriously discuss it they will come up with the solution.

These two examples of social activity already have hundreds of directors competent at managing credit societies and a number at handling other types of co-operatives. This is a grand achievement educationally for the personnel are drawn from all walks of life.

They have achieved a practical method of social charity which enables all classes of people to combine with one another with the objective of helping everyone.


The spirit of selfishness is rampant in commercial and industrial life. Co-operatives initiated by these two christian growths are spreading not only the spirit but the practice oi unselfishness.

The drastic and unsocial effects of the aftermath of the Industrial Revolution increased the propertyless people of the world. Monopolistic capitalism is on the increase in Australia. All-out socialism fortunately is not so far an accepted alternative in this country. As a remedy the ramifications of the welfare state are on the increase.

People can build a middle course, upholding the rights of the individual and serving the common good. Co-operatives give them the means of building.

It should be stated that co-operators do not believe only in economic co-operation. They want a balance of private ownership, socialized ownership where justified, private enterprise and co-operative enterprise.


This story concerns only two particular co-operative efforts in Australia. It makes no attempt to cover the good work of a variety of other co-operatives which also deserve praise for their attempts to bring christian principles into economic affairs.


The stimulating activity of helping build a better Australia through the forces of economic co-operation is something anyone can do provided he is prepared to make the effort of joining with others to overcome common problems.

It is appropriate to conclude this story by quoting from an address of congratulation to the Y.C.W. Co-operatives in Melbourne in July 1960 by the “present Archbishop of Melbourne, Most Reverend J. D. Simonds, D.D., Ph.D.

“Co-operative effort is sound social theory, in harmony with the teaching of the Holy See. It enables people to steer a course between the monopolists who exploit their needs, and the type of socialism which depresses their personal initiative.”

Have you read “Invest in the Future-of your Credit Society”, available from “Advocate Press” ?

For further information regarding Co-operatives, write to—



157 a’Beckett Street Melbourne, C.1. Phone 329 6477

Registered at the G.P.O., Melbourne, transmission by post as a periodical